Thomas Friedman agrees in his New York Times column “The Earth is Full” (June 8, 2008), in which he says, “[P]opulation growth and global warming push up food prices, which leads to political instability, which leads to higher oil prices, which leads to higher food prices, and so on in a vicious circle.”

In his article “What Nobody Wants to Hear, But Everyone Needs to Know,” University of Texas at Austin biology professor Eric R. Pianka wrote, “I do not bear any ill will toward people. However, I am convinced that the world, including all humanity, WOULD clearly be much better off without so many of us.”

However, there is absolutely no relationship between high populations, disaster, and poverty. Population-control advocates might consider the Democratic Republic of Congo’s meager 75 people per square mile to be ideal while Hong Kong’s 6,500 people per square mile is problematic. Yet Hong Kong’s citizens enjoy a per capita income of $43,000 while the Democratic Republic of Congo, one of the world’s poorest countries, has a per capita income of $300. It’s no anomaly. Some of the world’s poorest countries have the lowest population densities.

Planet earth is loaded with room. We could put the world’s entire population into the United States, yielding a density of 1,713 people per square mile. That’s far lower than what now exists in all major U.S. cities. The entire U.S. population could move to Texas, and each family of four would enjoy more than 2.1 acres of land. Likewise, if the entire world’s population moved to Texas, California, Colorado, and Pennsylvania, each family of four would enjoy a bit over two acres. Nobody’s suggesting that the entire earth’s population be put in the United States or that the entire U.S. population move to Texas. I cite these figures to help put the matter into perspective.

Let’s look at some other population density evidence. Before the collapse of the Soviet Union, West Germany had a higher population density than East Germany. The same is true of South Korea versus North Korea; Taiwan, Hong Kong, and Singapore versus China; the United States versus the Soviet Union; and Japan versus India. Despite more crowding, West Germany, South Korea, Taiwan, Hong Kong, Singapore, the United States, and Japan experienced far greater economic growth, higher standards of living, and greater access to resources than their counterparts with lower population densities. By the way, Hong Kong has virtually no agriculture sector, but its citizens eat well.

One wonders why anyone listens to doomsayers who have been consistently wrong in their predictions—not a little off, but way off. Professor Paul Ehrlich, author of the 1968 bestseller The Population Bomb, predicted major food shortages in the United States and that by “the 1970s . . . hundreds of millions of people are going to starve to death.” Ehrlich forecasted the starvation of 65 million Americans between 1980 and 1989 and a decline in U.S. population to 22.6 million by 1999. He saw England in more desperate straits: “If I were a gambler, I would take even money that England will not exist in the year 2000.”

Expert Poverty

By a considerable measure, poverty in underdeveloped nations is directly attributable to their leaders heeding the advice of western “experts.” Nobel laureate and Swedish economist Gunnar Myrdal said (1956), “The special advisors to underdeveloped countries who have taken the time and trouble to acquaint themselves with the problem . . . all recommend central planning as the first condition of progress.” In 1957 Stanford University economist Paul A. Baran advised, “The establishment of a socialist planned economy is an essential, indeed indispensable, condition for the attainment of economic and social progress in underdeveloped countries.”

Topping off this bad advice, underdeveloped countries sent their brightest to the London School of Economics, Berkeley, Harvard, and Yale to be taught socialist nonsense about economic growth. Nobel laureate economist Paul Samuelson taught them that underdeveloped countries “cannot get their heads above water because their production is so low that they can spare nothing for capital formation by which the standard of living could be raised.” Economist Ranger Nurkse describes the “vicious circle of poverty” as the basic cause of the underdevelopment of poor countries. According to him, a country is poor because it is poor. On its face this theory is ludicrous. If it had validity, all mankind would still be cave dwellers because we all were poor at one time and poverty is inescapable.

Population controllers have a Malthusian vision of the world that sees population growth outpacing the means for people to care for themselves. Mankind’s ingenuity has proven the Malthusians dead wrong. As a result we can grow increasingly larger quantities of food on less and less land. The energy used to produce food, per dollar of GDP, has been in steep decline. We’re getting more with less, and that applies to most other inputs we use for goods and services.

Ponder the following question: Why is it that mankind today enjoys cell phones, computers, and airplanes but did not when King Louis XIV was alive? After all, the necessary physical resources to make cell phones, computers, and airplanes have always been around, even when cavemen walked the earth. There is only one reason we enjoy these goodies today but did not in past eras. It’s the growth in human knowledge, ingenuity, and specialization and trade—coupled with personal liberty and private property rights—that led to industrialization and betterment. In other words human beings are immensely valuable resources.

What are called overpopulation problems result from socialistic government practices that reduce the capacity of people to educate, clothe, house, and feed themselves. Underdeveloped nations are rife with farm controls, export and import restrictions, restrictive licensing, price controls, plus gross human rights violations that encourage their most productive people to emigrate and stifle the productivity of those who remain. The true antipoverty lesson for poor nations is that the most promising route out of poverty to greater wealth is personal liberty and its main ingredient, limited government.

The Act contains two important provisions. Section 1 outlaws contracts and conspiracies in restraint of trade. Section 2 prohibits monopolization and attempts to monopolize.

Most people have a knee-jerk response to monopoly and collusive agreements and condemn such behavior out of hand. Before making a broad condemnation, we might consider the behavior more generally. The Bible’s book of Exodus gives us the Ten Commandments. The first two, and presumably most important, are: “Thou shalt have no other gods before me,” and “Thou shalt not make unto thee any graven image, or any likeness of anything that is in heaven above, or that is in the earth beneath, or that is in the water under the earth. Thou shalt not bow down thyself to them, nor serve them: for I the LORD thy God am a jealous God.” These two commandments establish God as a monopoly and to reinforce the monopoly, there shall be no God-substitutes. I do not think that many would condemn Christianity on the basis of its monotheism.

Another area of monopoly and collusion is marriage. The marriage license is in fact a collusive monopoly contract between two persons that closes—or at least is supposed to close—further competition.

The monopolistic and collusive characteristics of religion and marriage emerge naturally and benefit society. Therefore, we are faced with the question of what kinds of monopoly and collusion we would wish to restrain. I would venture to suggest that government-coerced and -encouraged monopoly and collusion should be restrained. Moreover, if the Department of Justice were really serious about Sherman antitrust provisions, it would focus on Washington as the main source of collusion in restraint of trade.

One of the most egregious examples of conspiracy and monopoly in the restraint of competition are Private Express Statutes. These are a set of civil and criminal federal laws that outlaw the delivery of first-class mail by all entities other than the U.S. Postal Service. As such they represent government coercion that bans peaceable, voluntary exchange in the delivery of first-class mail. Aside from the well-documented inefficiencies of the Postal Service, the postal monopoly should be condemned on that basis.

The U.S. Department of Agriculture (USDA) establishes fruit and vegetable marketing orders and milk marketing orders with the stated purpose of balancing the products’ availability with an adequate return to producers and the needs of consumers. Federal marketing orders are locally administered by committees of producers. Initiated by industry and enforced by the USDA, they bind an entire industry in a geographical area.

For example, there’s the Navel Orange Administration, in which growers get together and establish citrus production quotas in California and Arizona. Any citrus grower exceeding his market quota by bringing too much to market and threatening to lower prices faces fines and imprisonment. This collusion applies to nearly all commercially produced fruits and vegetables. The effect of market quotas is to generate prices that are higher than they would be without the government-backed collusion.

Mandated maximum quantities and/or minimum prices are surefire indicators of seller collusion in restraint of trade. An example of the latter is minimum wage law. The effect of a minimum wage is discriminating against low-skilled workers. What employer would find it profitable to pay the mandated wage of $7.25 to a worker capable of producing only $4 or $5 an hour?

The minimum wage can be used as a tool of collusion. For some activities low-skilled workers are a substitute for higher-skilled workers. Imagine that 100 yards of fencing could be produced per day either by employing three low-skilled workers at $13 each or one high-skilled worker at $38. A profit-motivated employer would hire the high-skilled worker because it’s cheaper. If the high-skilled worker demanded $50 a day, the employer would replace him with the three low-skilled workers. But suppose the high-skilled worker could lobby Congress to enact a $20-a-day minimum wage in the fencing industry. Now using the three low-skilled workers would cost $60. Thus the probability of the high-skilled worker getting $50 would be greater because he has been able to use government to price his competition out of the market.

The Davis-Bacon Act is a 1931 federal law that mandates that “prevailing wages” be paid on all federally financed or assisted construction projects. As such it is a union-supported super-minimum wage law. Its stated intention—as seen in the 1931 congressional testimony supporting the Act—was to price black workers out of the market. Representative Clayton Allgood of Alabama said, “Reference has been made to a contractor from Alabama who went to New York with bootleg labor. This is a fact. That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country. This bill has merit, and with the extensive building program now being entered into, it is very important that we enact this measure.”

Representative John J. Cochran of Missouri voiced similar sentiments, saying he had “received numerous complaints in recent months about southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South.” AFL President William Green made clear the unions’ interests: “Colored labor is being sought to demoralize wage rates [in Tennessee].”

The Davis-Bacon Act remains on the books today. The political rhetoric in support of the Act has changed but its effects have not. It remains an ongoing collusion against lower-skilled, non-union construction workers.

Just about every cabinet-level federal agency enforces some kind of collusive restraint on competition. Without government support, collusion has a tendency to break down primarily because what is in the best interests of an individual colluding member is not necessarily in the best interests of other members. For example, it pays a member to cheat on the agreement by, say, shading his price a bit to get more business. The members who abide by the agreement will find themselves losing business, and before long they will start cheating. The cheating becomes infectious, and the collusion breaks down. But if a federal law fixes the terms of the collusion, then to violate the terms is not simply a violation of a gentlemen’s agreement; it’s also a violation of the law, with the possibility of fines and imprisonment. In other words, effective collusion needs some kind of enforcement technique. Most often it is the threat of sanctions for noncompliance.

The bottom-line reality is that collusive monopolistic restraints on competition are deemed illegal and hence prosecutable only if the seller does not first secure Washington’s permission to rip off his fellow man.

There is very little either complicated or interesting about poverty. Poverty has been man’s condition throughout his history. The causes of poverty are quite simple and straightforward. Generally, individual people or entire nations are poor for one or more of the following reasons: (1) they cannot produce many things highly valued by others; (2) they can produce things valued by others but they are prevented from doing so; or (3) they volunteer to be poor.

The true mystery is why there is any affluence at all. That is, how did a tiny proportion of man’s population (mostly in the West) for only a tiny part of man’s history (mainly in the nineteenth, twentieth, and twenty-first centuries) manage to escape the fate of their fellow men?

Sometimes, in reference to the United States, people point to its rich endowment of natural resources. This explanation is unsatisfactory. Were abundant natural resources the cause of affluence, Africa and South America would stand out as the richest continents, instead of being home to some of the world’s most miserably poor people. By contrast, that explanation would suggest that resource-poor countries like Japan, Hong Kong, and Great Britain should be poor instead of ranking among the world’s richest places.

Another unsatisfactory explanation of poverty is colonialism. This argument suggests that third-world poverty is a legacy of having been colonized, exploited, and robbed of its riches by the mother country. But it turns out that countries like the United States, Canada, Australia, and New Zealand were colonies; yet they are among the world’s richest countries. Hong Kong was a colony of Great Britain until 1997, when China regained sovereignty, but it managed to become the second richest political jurisdiction in the Far East. On the other hand, Ethiopia, Liberia, Tibet, and Nepal were never colonies, or were so for only a few years, and they rank among the world’s poorest and most backward countries.

Despite the many justified criticisms of colonialism and, I might add, multinationals, both served as a means of transferring Western technology and institutions, bringing backward peoples into greater contact with a more-developed Western world. A tragic fact is that many African countries have suffered significant decline since independence. In many of those countries the average citizen can boast that he ate more regularly and enjoyed greater human-rights protections under colonial rule. The colonial powers never perpetrated the unspeakable human rights abuses, including genocide, that we have seen in post-independence Burundi, Uganda, Zimbabwe, Sudan, Central African Empire, Somalia, and elsewhere.

Any economist who suggests he has a complete answer to the causes of affluence should be viewed with suspicion. We do not know fully what makes some societies richer than others. However, we can make guesses based on correlations. Start out by ranking countries according to their economic systems. Conceptually we could arrange them from more capitalistic (having a larger free-market sector) to more communistic (with extensive State intervention and planning). Then consult Amnesty International’s ranking of countries according to human-rights abuses. Then get World Bank income statistics and rank countries from highest to lowest per capita income.

Compiling the three lists, one would observe a very strong, though imperfect, correlation: Those countries with greater economic liberty tend also to have stronger protections of human rights. And their people are wealthier. That finding is not a coincidence, so let us speculate on the relationship.

Rights and Prosperity

One way to gauge human-rights protection is to ask to what extent the State protects voluntary exchange and private property. These signify the rights to acquire, keep, and dispose of property in any fashion so long as one does not violate the rights of others. The difference between private property rights and collectively held rights is not simply philosophical. Private property produces systemically different incentives and results from collective property.

Since collectivists often trivialize private property rights, they are worth elaborating. When property rights are held privately the costs and benefits of decisions are concentrated in the individual decision maker; with collectively held property rights they are dispersed across society. For example, private property forces homeowners to take into account the effect of their current decisions on the future value of their homes, because that value depends, among other things, on how long the property will provide housing services. Thus privately owned property holds one’s personal wealth hostage to doing the socially responsible thing—economizing scarce resources.

Contrast these incentives to those of collective ownership. When the government owns the house, the individual has less incentive to take care of it simply because he does not capture the full benefit of his efforts. It is dispersed across society instead. The costs of neglecting the house are similarly spread. You do not have to be a rocket scientist to predict that under these circumstances, less care will be taken.

Nor is nominal collective ownership the only force that weakens social responsibility. When government taxes property, it changes the ownership characteristics. If government were to impose a 75 percent tax on a person selling his house, it would reduce his incentive to use the house wisely.

This argument applies to all activities, including work and investment. Whatever lowers the return from or raises the cost of an investment reduces incentives to make that investment in the first place. This applies to investment in human as well as physical capital—that is, those activities that raise the productive capacity of individuals.

To a significant degree the wealth of nations is embodied in their people. The starkest example of this is the experience of the Germans and Japanese after World War II. During the war, Allied bombing missions destroyed nearly the entire physical stock of each country. What was not destroyed was the human capital of the people: their skills and education. In two or three decades, both countries reemerged as formidable economic forces. The Marshall Plan and other U.S. subsidies to Europe and Japan cannot begin to explain their recovery.

Proper identification of the causes of poverty is critical. If it is seen, as is too often the case, as a result of exploitation, the policy recommendation that naturally emerges is income redistribution—that is, government confiscation of some people’s “ill-gotten” gains and “restoration” to their “rightful” owners. This is the politics of envy: bigger and bigger welfare programs domestically and bigger and bigger foreign-aid programs internationally.

If poverty is correctly seen as a result of the unwise government intervention and lack of productive capacity, more effective policy recommendations emerge.

Far more worthy of our efforts is to acknowledge, not necessarily sanction, assortative behavior as natural. We should ask: How can we minimize the probability that such preferences will produce conflict?

The Marriage Market

Examination of marriage can provide concrete insights for our discussion. Like many other transactions, marriage is a contractual relationship where goods and services are exchanged under mutually agreeable terms. Most people tend to seek marriage partners similar to themselves in race, ethnicity, religion, language, and socioeconomic status. It may be tempting to dismiss marriage choices as trivial but, given their impact on society, that is utterly erroneous.

Highly educated people tend to marry other highly educated people. High-income people (or those with prospects for high income) tend to marry other high-income people. Just these two aspects of choice create an income distribution more skewed than would be the case if high-income and highly educated people chose opposites as partners. Thus marriage decisions have an important impact on society.

Despite the widespread use of race, ethnicity, religion, and other characteristics as criteria in mate selection, there is very little social conflict or controversy in the matter. It is such a nonissue that people hardly ever think of the marriage contract as an activity rooted in discriminatory choice. Moreover, if the discriminatory features of marriage were brought to people’s attention, they would probably respond, “So what!”

One suspects that marriage decisions pose few social problems because they are voluntary. Other than sanctioning the contract once it has been made, government plays only a trivial part unless there is a dispute. Interestingly enough, we only observe conflict in the marriage market when people use government or quasigovernment institutions, like the church, to impose restrictions according to race, ethnicity, socioeconomic status, or religion.

Different Preferences, No Conflict

Freedom of choice can be found elsewhere. Just as people have strong preferences in race, ethnicity, and religion, they have strong preferences in goods and services. Some people strongly prefer Cadillacs while others prefer Volvos. Despite those differences, we seldom hear of conflict between the two groups. People simply purchase the cars they prefer.

In fact free markets are a great leveler of men; personal attributes have less importance. When a person buys a Cadillac or Volvo, his least concern is the race, ethnicity, or religion of the workers who produced the car. The person’s greatest concern is likely to be whether he has gotten the highest quality car for the lowest possible price.

Whenever government allocates resources, there is increased potential that preferences will give rise to conflict. Education is a good typically financed and produced by government, and as such it has been the focal point of considerable conflict. Some parents prefer that their children have a morning prayer in school. Other parents have the opposite preference. Both preferences appear to be legitimate exercises of parental prerogatives.

The problem arises because when schools are publicly produced, they will either have prayers or no prayers. Parents who prefer morning prayers must enter into political conflict with those who do not. There is a lot at stake. Parents who lose will have their kids in a public school not to their liking. Then the alternative is for parents to bear the financial burden of tuition at a nonpublic school, plus be forced through property taxes to pay for public school services for which they have little use.

A conflict-reducing method, if education is publicly financed, is to have it privately produced. Each parent could be given a voucher equivalent to the per capita expenditure on education. Parents who wished for their children to have a morning prayer would simply enroll them in such a school, and parents who preferred otherwise would enroll their children in an appropriate school. There would be little scope for education conflict between the two groups of parents. Instead of adversaries, they could be friends.

The primary reason government allocation of resources enhances the potential for conflict is that most government activity is a zero-sum game whereby one person’s gain can only be achieved through another person’s sacrifice. Parents who win the political struggle for prayers in school would benefit at the expense of those who were against prayers in school, and vice versa. By contrast, with market provision of goods and services we have a positive-sum game where everybody wins. This applies to any good or service. If the choice between Cadillac and Volvo were decided collectively, we would witness the same kind of conflict that arises over school prayer. Instead of people with differing tastes in automobiles getting their way and living in harmony with one another, those with strong preferences for Volvos would have to organize with like-minded people against those who had strong preferences for Cadillacs.

Race and Ethnicity: Government versus Markets

People have racial or ethnic preferences and will seek to indulge them. They will do so whether there is market or government allocation of resources. However, there is a key distinction. With government allocation part of the costs of preference indulgence tends to be borne by people other than the decision maker. With preference indulgence under market allocation, the decision maker tends to bear a greater proportion of the cost.

Suppose for purposes of simplicity that a black worker has the same productivity as a white worker, but the black worker offers his services for $5 while the white worker demands $8. If the decision maker is a government bureaucrat, the indulgence of his discriminatory preferences for the white worker is virtually free. It is taxpayers who bear the burden of paying $8 rather than $5; the bureaucrat takes home the same pay whether he discriminates or not; his cost of indulging his racial preferences is zero.

By contrast, in the private sector, the owner paying $8 for the work that could have been done for $5 an hour means a lower residual claim of $3. The cost of racial preferences is directly borne by the decision maker. Basic economic theory postulates that the higher the cost of doing something, the less it will be done. Therefore, it follows that we expect to see less racial discrimination in the private sector than the public sector. Similarly, when the political atmosphere changes to favor discrimination in favor of blacks, we expect to see more of it in the public sector.

The fact that it costs something to discriminate explains why those who wish to engage in it typically seek some form of government intervention. Intervention makes discrimination less costly to the discriminator than otherwise. The essential ingredient of intervention that makes discrimination less costly is restriction of peaceable, voluntary exchange.

At its start in 1966, Medicare cost $3 billion. The House Ways and Means Committee, along with President Johnson, estimated that Medicare would cost an inflation-adjusted $12 billion by 1990; however, by 1990 Medicare costs topped $107 billion. That’s nearly nine times greater than Congress’s prediction. Today’s Medicare tab comes to $420 billion with no signs of leveling off. How much confidence should we have in any cost estimates by the White House or Congress?

Another part of the Medicare lie is found in Section 1801 of the 1965 Medicare Act, which reads: “Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine, or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer, or employee, or any institution, agency or person providing health care services.” Ask your doctor or hospital whether this statement contains even one iota of the truth.

Washington’s lies and deception are by no means restricted to modern times. During the legislative debate before ratification of the Sixteenth Amendment, President Howard Taft and congressional supporters said that only the rich would ever pay federal income taxes. In 1916 only one half of 1 percent of income earners were affected. Those earning $250,000 a year in today’s dollars paid 1 percent, and those earning $6 million in today’s dollars paid 7 percent. The promise that only the rich would pay was simply a lie to exploit the politics of envy and dupe Americans into ratifying the Sixteenth Amendment.

The Social Security Lie

Another big congressional lie is Social Security. Here’s what a 1936 government Social Security pamphlet said: “After the first 3 years—that is to say, beginning in 1940—you will pay, and your employer will pay, 1.5 cents for each dollar you earn, up to $3,000 a year. . . . [B]eginning in 1943, you will pay 2 cents, and so will your employer, for every dollar you earn for the next 3 years. . . . And finally, beginning in 1949, twelve years from now, you and your employer will each pay 3 cents on each dollar you earn, up to $3,000 a year”.

Here’s Congress’s lying promise: “That is the most you will ever pay.” Let’s repeat that last sentence: “That is the most you will ever pay.” That was a maximum of $90 a year. Compare that to today’s reality, which is 6.2 cents on each dollar that you earn up to nearly $107,000, which comes to $6,621. That’s $432 in inflation-adjusted 1936 dollars. And that does not include the fictional so-called employer’s share.

The Social Security pamphlet adds another lie: “Beginning November 24, 1936, the United States government will set up a Social Security account for you. . . . The checks will come to you as a right. You will get them regardless of the amount of property or income you may have.” That’s another lie. First, there’s no Social Security account for you, but more important, in Helvering v. Davis (1937) the Supreme Court held that Social Security was not an insurance program, saying, “The proceeds of both (employee and employer) taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way.” In a later decision, Flemming v. Nestor (1960), the Court said, “To engraft upon Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands. . . .” That ruling established the principle that entitlement to Social Security benefits is not a contractual right. “Flexibility and boldness” means Congress can constitutionally do anything it wishes, including cutting benefits, raising retirement age, increasing Social Security taxes, and ultimately eliminating payments for some or all Americans.

The 1936 Social Security pamphlet closes with this promise from the government: “You will always get more back from this program than you pay into it, and you will always get more with this program than you could have possibly gotten on your own by saving and investing.” That’s a lie. According to a report by Boston University Professor Laurence J. Kotlikoff (PDF), “Privatizing Social Security,” baby boomers will get a real rate of return of less than 2 percent. Generation Xers will get less than 1 percent, and today’s newborns will get a rate of return close to zero. Almost any private retirement plan yields higher returns.

Coupled with Medicare, Social Security is a disaster waiting in the wings. As the NCPA’s Pamela Villarreal writes, “The 2009 Social Security and Medicare Trustees Reports show the combined unfunded liability of these two programs has reached nearly $107 trillion in today’s dollars! That is about seven times the U.S. economy and 10 times the national debt. Unfunded liability is the difference between the benefits that have been promised to current and future retirees and what will be collected in dedicated taxes and Medicare premiums. . . . If no other reform is enacted, this funding gap can only be closed in future years by substantial tax increases, large benefit cuts,” increases in retirement age eligibility, or some combination thereof.

Why We Believe

Here’s my question: Why are so many Americans taken in by Washington’s lies? I think there are several likely answers. Man is tempted by what looks like a free lunch. He is also tempted by government’s promise to permit him to live at the expense of someone else. Some people are totally ignorant of the effects of government programs on the socioeconomic fabric of our country. There are many Americans who do understand the problem but what do they care? The primary beneficiaries of massive government spending are senior citizens. When the economic calamity arrives, they and the politicians who created all of the spending programs will be dead. Any politician who endeavors to eliminate the massive spending programs, in an effort to forestall the calamity, will be run out of office by the program’s beneficiaries. That means the status quo rules.

People might ask: What can be done to preserve American exceptionalism and greatness? My answer to such a question is a question: How do Americans systematically differ from citizens of past great nations who supported political actions that ultimately drove their nations into the ground?

Republicans have dominated both houses of Congress since 1995, a year when federal spending was $1.5 trillion. Less than a decade later federal spending in 2002 was over $2.1 trillion, a 37 percent increase. Some politicians might argue that the war on terrorism has been responsible for the massive spending increase. That’s nonsense! According to a recent report titled “Most New Spending since 2001 Unrelated to the War on Terrorism” by Brian Riedl, a research fellow at the Heritage Foundation, over half of all new spending since 2001 has been unrelated to defense and the 9/11 attacks. Just from 2001 through 2003, federal spending increased $296 billion, of which: $100 billion (34 percent) went to national defense and $32 billion (11 percent) went to 9/11 costs, such as homeland security, international aid, and rebuilding damage done by the attacks. About $164 billion (55 percent) went to spending completely unrelated to either defense or terrorist attacks. Most of the spending represents government taking the earnings of one American and giving it to another American. Such acts are little more than legalized theft. How did legalized theft become so acceptable, considering that it is not part of our history? Let’s look at some of that history.

In 1794 James Madison, the acknowledged father of our Constitution, wrote disapprovingly of a $15,000 appropriation for French refugees saying, “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” This vision was restated even more forcefully on the floor of the House of Representatives two years later by William Giles of Virginia, who condemned a relief measure for fire victims. Giles insisted that it was neither the purpose nor the right of Congress to “attend to what generosity and humanity require, but to what the Constitution and their duty require.”

In 1854 President Franklin Pierce vetoed a bill intended to help the mentally ill championed by the renowned nineteenth-century social reformer Dorothea Dix. In the face of scathing criticism, President Pierce said, “I cannot find any authority in the Constitution for public charity.” To approve such spending, he added, “would be contrary to the letter and the spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

President Grover Cleveland was the king of the veto. He vetoed literally hundreds of congressional spending bills during his two terms as president in the late 1800s. His reason, as he often said: “I can find no warrant for such an appropriation in the Constitution.”

Many Americans erroneously believe that the Constitution’s “general welfare” clause serves as justification for congressional spending on anything that can muster a majority vote. That surely wasn’t the vision of the Framers. In 1798 Thomas Jefferson wrote: “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.” “Specifically enumerated” referred to the listing of congressional powers found in Article I, Section 8, of the Constitution. James Madison elaborated on this limitation in a letter to James Robertson: “[W]ith respect to the two words “general welfare,” I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

Founders’ Nightmare

Thomas Paine said, “Invention is continually exercised to furnish new pretenses for revenue and taxation. It watches prosperity as its prey and permits none to escape without a tribute.” That observation might be a beginning to understanding today’s level of federal exaction that would have appeared as a nightmare to the nation’s Founders.

It’s tempting to blame politicians for the trashing of the Constitution, but politicians don’t bear anywhere near the bulk of the blame; it’s the American people who are at fault. Politicians are elected to office on the promise that they will deliver to one group of Americans the earnings that belong to another group of Americans or that they will confer a special privilege on one group that will be denied another. A politician who disavows this practice will not be elected, or if elected he will be run out of office.

The reason is simple. If a politician doesn’t use his office to deliver other Americans’ earnings to his constituency, it doesn’t mean his constituency will pay lower federal taxes. It only means another state’s citizens will enjoy the loot. Thus when legalized theft becomes routine, it pays for everyone to participate. Those not participating will end up as losers. While becoming a recipient of stolen property is optimal for the individual, it spells devastation for the nation as a whole.

What liberty-loving people might do about this will be the subject of my next article.

The marriage contract is essentially a monopoly document. It represents a legally sanctioned collusive agreement between two parties to exclude competitors and restrain trade. It closes the market to competition, or at least it is supposed to. This collusion has benefits as well as costs. Because I have exclusive rights to her affections and property rights to a stream of highly valued domestic services, I place a higher value on my spouse, making me willing to share with her a greater percentage of my wealth. My spouse receives a comparable set of benefits from this collusive arrangement.

This monopolistic arrangement has a cost side and perhaps some inefficiencies as well. Neither one of us is as attentive as we were before we made our contractual arrangement. For my part, I don’t open the car door for her as often, don’t use breath fresheners and colognes as frequently, am not nearly as considerate and gentlemanly as before our marriage some 42 years earlier. The reason is simply that before marriage I was competing against other men and therefore could ill afford to act as a monopolist.

Read the Old Testament’s Book of Deuteronomy, Chapter 5, where God gave Moses the Ten Commandments. The first commandment, and presumably the most important is, “Thou shalt have none other gods before me.” The second is, “Thou shalt not make thee any graven image, or any likeness of any thing that is in heaven above.” Then there’s, “Thou shalt not bow down thyself unto them, nor serve them: for I the Lord thy God am a jealous God.” If a corporation made a similar decree regarding its services, it would find itself in the sights of the U.S. Department of Justice for gross violations of the antitrust provisions of the Sherman and Clayton Acts. The Ten Commandments decree exclusive dealing and mandate neither substitutes for nor competition with God.

For one to condemn all monopolistic practices as evil, at least for consistency, he would have also to condemn marriage and the basic tenets of Christianity. I condemn neither marriage and the monopolistic tenets of Christianity nor business and labor union monopolies. The only moral argument that can be used to condemn and outlaw monopoly is when it is created through fraud, threats, intimidation, and coercion.

Our nation has a number of government sponsored, -created, or -protected monopolies and collusions in restraint of trade. One of the more egregious examples is the U.S. Postal Service. The federal Private Express Statutes, Sec. 310.2 “Unlawful carriage of letters,” says, “(a) It is generally unlawful under the Private Express Statutes for any person other than the Postal Service in any manner to send or carry a letter on a post route or in any manner to cause or assist such activity. Violation may result in injunction, fine or imprisonment or both and payment of postage lost as a result of the illegal activity.” The Private Express Statutes have the full effect of saying, “Thou shalt have none other deliverers of first-class mail before the USPS and we shall visit great pain on he who disobeys this commandment.”

The U.S. Postal Service is a government-owned monopoly; however, there are numerous privately owned monopolies and collusions in restraint of trade. In fact, nearly every federal agency is an enforcer of monopolistic collusive agreements. Until the 1980s the Interstate Commerce Commission and the late Civil Aeronautics Board enforced price-fixing agreements in the trucking and airline industries. Deregulation brought an end to those collusive agreements.

Thriving monopolistic agreements, at the federal level, are enforced by agencies such as the U.S. Department of Labor, National Labor Relations Board, Department of Agriculture, Federal Communications Commission, Department of Education, and Department of Commerce. The rule of thumb to determine whether effective collusion exists is to see whether there are mandated minimum prices, license-to-practice provisions and other restrictions on entry, and, finally, techniques to enforce compliance among the colluding members, such as revocation of license or permit to practice, fines and imprisonment, and other sanctions.

The free market, including free international trade, is the most effective protection against monopolistic abuses. In fact, in a free and open market, monopolistic companies can retain their monopoly power only if they do not fully exploit it; otherwise other companies will enter.

Let’s start by acknowledging that there is no question whatsoever that the sale and use of narcotics in our country could be virtually eliminated. It could be accomplished at a monetary cost far less than the hundreds of billions spent so far in the nation’s “war on drugs.” We could suspend habeas corpus and constitutional guarantees against unreasonable searches to more easily gather evidence on people who use or sell drugs. We could make those arrested bear the burden of proof of innocence and on conviction summarily execute them. Countries with far less wealth and far fewer police resources than ours have used that strategy to reduce drug use, and so could we. Thankfully, I think most Americans would, and should, recoil in disgust at that kind of drug-war strategy. So we have to examine less draconian measures. A few thoughts on the economics of drug trade might give us guidance.

There’s no mystery why people use mind-altering drugs: It makes them feel good, at least temporarily. That’s not only true of cocaine, heroin, and marijuana; it’s also true of mind-altering products like cigarettes, cigars, coffee, tea, wine, and whiskey. There’s considerable evidence that many people prefer their vices in a diluted form. Hence the popularity of filtered cigarettes, light beer, wine coolers, and mixed drinks. The same seems to be true, at least to some extent, about illicit drugs.

When what are seen as vices are legally prohibited, supply responses change people’s behavior. Imagine there’s a supplier of illegal marijuana. Government steps up its efforts to stop its supply by increasing interdiction efforts, along with stiffer fines and prison sentences. Which is easier to conceal and transport—a million dollars’ worth of marijuana or a million dollars’ worth of cocaine? Obviously, it’s cocaine because there is far less bulk per dollar of value. Thus one effect of prohibition is the tendency toward increased sales and use of more-concentrated forms of drugs that can include products such as crack cocaine, ice, and meth.

Another impact of prohibition is on prices. To supply the addiction needs of those who are not able to pay the prohibition-induced higher prices of cocaine, producers will seek to find cheaper substitutes such as crack. This is borne out by the fact that crack is far more popular among poorer addicts than wealthier ones.

Invitation to Make a Killing

Illegality, high prices, and high profits, coupled with greater government drug-interdiction efforts, also encourage entry by suppliers who are more ruthless and innovative, and who have a lower regard for civility and the law. Panty-waisted, petty, and otherwise law-abiding practitioners are ousted. In addition, since the courts are unavailable to enforce agreements made among traders, as in the case of legal transactions, disputes are more likely to be settled through violence.

Yet another supply response to prohibition, largely ignored in the drug debate, is the inevitable tendency toward corruption of public officials. Today’s drug trade, like the Prohibition liquor trade, could not flourish without official corruption. It’s not difficult to see how police officers, customs inspectors, and other law-enforcement officers earning $50,000, $60,000, or $70,000 a year could succumb to the temptation of $5,000 or $10,000 bribes to look the other way. No doubt there are elected officials who are also tempted by bribes. Even otherwise law-abiding nondrug-using parents are quieted by money and expensive gifts from their children who are involved in the drug trade.

The war on drugs restricts supply and raises prices. When one drug operation is busted up, another one emerges virtually overnight to take its place. When the DEA, FBI, and local police make a big drug bust, law-abiding citizens should not be jubilant. Instead, they should expect higher prices, leading to more ruthlessness among drug users and buyers, more crime and corruption, and greater social costs.

Sanctioning Civil Rights Abuses

Another very dangerous cost of the war on drugs is that it has given respectability to the violation of our constitutional guarantees. Civil-forfeiture laws have been enacted, in clear violation of the Fifth Amendment, under which property can be confiscated without due process. A parent can have his automobile or house confiscated if, even when unbeknown to the parent, his offspring uses it in connection with drug use or sales. Anti-money-laundering laws violate our rights to privacy in our transactions. Murderers and rapists have been freed from crowded prisons to make room for nonviolent drug users.

From the demand, or personal use, side of the drug issue, what should we do? Lysander Spooner (1808–1887), one of the great American thinkers of the nineteenth century, suggested that while vices may be self-destructive or offensive, like all peaceful, voluntary activities they should remain outside the province of law and government. The vices Spooner referred to include “gluttony, drunkenness, prostitution, gambling, prize-fighting, tobacco-chewing, smoking and snuffing, opium-eating, corset-wearing, idleness, waste of property, avarice, hypocrisy, etc., etc.” Spooner added that if practitioners of these and other vices cannot be reformed voluntarily, if they go on to what other men call destruction, then they must be permitted to do so. He reminds us that the maxim of law is there can be no crime without criminal intent to invade the property or person of another.

People practice vices for what they perceive as their own happiness—not to violate the rights of another. In a free society people have the right to destroy their own lives but not those of others. When government coercion is used to promote virtue, there cannot be liberty. However, there is conduct that people might engage in under the influence of narcotics, such as impaired driving, robbery and burglary to fund their habit, and other acts that threaten the rights of others. Such acts are already criminal and should be punished.

We Americans have to ask ourselves if there is a better way to deal with the drug problem. I think there is. We need to focus more on the demand side of the drug problem. After all, most people don’t use marijuana, cocaine, and heroin. The reason they don’t has nothing to do with its price or the fact it’s illegal. Their decision has much more to do with their values and common sense. Rather than near-exclusive reliance on the law and government, I believe greater and longer-lasting gains can be made through civil society, where we can cajole, admonish, and teach people about the destructive effects of narcotics—and ostracize them if necessary.

It is foolhardy to have a public policy that forces people hell-bent on destroying their own lives to become violent criminals and destroy the lives of innocents in the process. It is also foolhardy for society to create circumstances in which official integrity is compromised and our constitutional guarantees are violated.

It was not always this way. Up until the 1930s the Supreme Court ruled unconstitutional many state, local, and congressional acts. Among them: minimum-wage laws, licensure laws, and much of FDR’s New Deal legislation.

President James Madison vetoed a public-works bill, saying, “Having considered the bill this day presented to me . . . which sets apart and pledges funds ‘for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,’ I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution. . . .”

In vetoing a bill for charity relief, President Grover Cleveland said, “I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit.”

President Franklin Pierce’s 1854 veto of a measure to help the mentally ill read, “I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”

That Was Then, This Is Now

For the better part of a century Congress, the president, and the Supreme Court have run roughshod over the constitutional limitations placed on them, using the pretense that their actions are constitutional under the General Welfare Clause or the Commerce Clause. Public complicity or ignorance allows them to get away with it. Wickard v. Filburn, a 1942 Supreme Court case, is a particularly egregious use of the Commerce Clause. Filburn was charged with exceeding his wheat acreage allotment in violation of the Agricultural Adjustment Act (AAA). He argued that since the wheat he grew was for his own consumption and not involved in interstate commerce, the AAA didn’t apply to him. The Court disagreed, saying that since Filburn grew wheat for his own use, he would not be buying it in the market; therefore his actions did affect interstate commerce. That ruling made it possible for Congress to escape just about every limit placed on it by the Constitution. With such reasoning there is absolutely nothing anyone can do that does not, in one way or another, affect interstate commerce and therefore give Congress the grounds to regulate it.

By permitting Congress to regulate so much of our lives under the Commerce Clause, the Supreme Court has changed the federal government from one of limited and enumerated powers to one with few exceptions to its power.

This vision in part provides the case for Congress to control our health care system. Some supporters of mandated health insurance assert that such a mandate lies within the power of Congress to regulate interstate commerce. Others have argued that the General Welfare Clause bestows that power. Yet others have pointed out that most states require car insurance, every challenge to which has failed.

The term “general welfare,” found in the introduction to the enumerated powers of Article I, Section 8, was never intended to extend Congress’s power to regulate, tax, and spend. James Madison, the acknowledged father of our Constitution, said, in a letter to Edmund Pendleton, “If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one subject to particular exceptions.” He virtually repeated himself in a letter to James Robertson: “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.” Thomas Jefferson, in a letter to Albert Gallatin, said, “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.”

What about mandatory car insurance? To operate a motor vehicle one must obtain permission from the state, a driver’s license. One who engages in that licensed activity must comply with the conditions of the licensing body, which can include, among other things, being old enough, passing a driver’s test, and purchasing auto insurance. The driver simply agrees to the conditions. Auto insurance is a special requirement, not a general one like Congress’s mandate that everybody sign a contract with a health insurer or face fines and/or imprisonment.

What about the penalty Congress proposes for companies and individuals who refuse to provide or buy health insurance? This is unconstitutional on its face. Article I, Section 8, giving Congress the power “To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” is for the purpose of raising revenue to pay for the enumerated responsibilities of Congress. It was not written for the purpose of permitting Congress to punish those who did not establish congressionally mandated contracts.

Madison, in arguing for ratification of the Constitution, wrote Federalist 45, titled “Alleged Danger From the Powers of the Union to the State Governments Considered.” He explained, “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

That vision is completely the opposite of what exists today. One wonders, what constitution did our congressmen and President swear to uphold and defend?

For example, were there no law regarding which side of the road we should drive on, one imagines that self-interest would lead to a spontaneous emergence of a custom to drive, say, on the right-hand side of the road—at least in the United States. But there would probably be some who would drive on the left; therefore, a law, with associated penalties, is needed to enforce concurrence among would-be outliers.

There are other standards of human conduct not codified in law, such as men taking their hats off in Christian churches and wearing hats in synagogues, eating with utensils rather than one’s hands, and giving the appropriate greeting. It is tempting to trivialize these standards by suggesting they are not as important as laws mandating which side of the road to drive on. But that is untrue. A nasty remark, discourtesy, or show of disrespect that is not apologized for can lead to violent conflict.

What should be the characteristics of laws in a free society? Think about baseball rules (laws). Through no fault of their own, some players hit fewer home runs than others. To create baseball justice, how about a rule requiring pitchers to throw easier pitches to poorer home run hitters, or one that would treat a double like an inside-the-park home run? Some pitchers aren’t as good as others. How about allowing them to stand closer to the batter? Better yet, we could rule their first pitch to each batter a strike no matter what. In the interest of baseball justice we might make other special rules to level the playing field between old players and young players, black and white, and fast and slow.

You say, “Williams, you can’t be serious! Can you imagine the conflict that would emerge: players lobbying umpires, umpires deciding who gets what favor, lawsuits, not to mention fighting?” You’re absolutely right. The reason baseball games end peaceably, and players and team owners are generally satisfied with the process, whether they win or lose, is that baseball rules are known in advance. They apply to all players. They are fixed, and umpires don’t make up rules as they go along. In other words, baseball rules meet the test of “abstractness.” They envision no particular outcome in terms of winners and losers. Baseball rules simply create a framework in which the game is played.

Laws, or rules that govern a free society, should have similar features. There should be a “rule of law.” The rule of law means laws are certain and known in advance. Laws envision no particular outcome except that of allowing people to peaceably pursue their own objectives. Finally, and most important, laws are equally applied to everyone, including government officials.

Sir Henry Maine, probably the greatest legal historian, said, “The greatest movement of progressive societies has hitherto been a movement from status to contract.” In nonprogressive societies the rule of law is absent. Laws are not general. They’re applied according to a person’s status or group membership. There’s rule, not by legis, the Latin word for law, but by privilegium, the Latin term for private law. What’s lacking is the principle summarized by English jurist A. V. Dicey: “Every man, whatever be his rank or condition, is subject to the ordinary law of the realm and amenable to the jurisdiction of the ordinary tribunals.”

Consider the case of a person arrested and charged with rape. Should his status—whether he’s a senator, professor, or ordinary man—play a role in the adjudication of the crime and subsequent punishment? I’m betting that the average person would answer no.

Just about every law that Congress enacts violates all the requirements for the rule of law. How do we determine violations of the rule of law? It’s easy. See if the law applies to particular Americans as opposed to all Americans. See if the law exempts public officials from its application. See if the law is known in advance. See if the law takes action against a person who has taken no aggressive action against another. If you conduct such a test, you will conclude that it is difficult to find many acts of Congress that adhere to the principles of the rule of law.

A rule-of-law regime would require that we scrap the Internal Revenue Code in its entirety. What justification is there for the tax laws to treat an American differently because he has a higher income, minor children, or income from capital gains instead of wages? Equal treatment, at the minimum, would require Congress to figure out the cost of the constitutionally authorized functions of the federal government, divide it by the adult population, and send us each a bill for our share. You say, “What about the ability-to-pay principle?” That’s just a politics-of-envy concept that would be revealed as utter nonsense if applied to anything else, such as gasoline or food.

That Americans have become ruled by orders and special privileges helps explain all the lobbyists, money, and graft in Washington. We’ve moved away from a government with limited powers, as our Founders envisioned, to one with awesome powers. Therefore, it pays people to spend huge amounts of money to influence Congress in their favor. Privilege-granting is precisely what most Americans want, though they might disagree on who gets what privilege. Most Americans have no inkling of what the rule of law means. We think it means obedience to whatever laws Congress enacts and the president signs. That’s a tragedy.

Customs, traditions, mores, and rules of etiquette, not laws and government regulations, are what make for a civilized society. These behavioral norms, mostly transmitted by example, word-of-mouth, and religious teachings, represent a body of wisdom distilled through ages of experience, trial, and error. It’s the morality embodied in those thou-shalt-nots: kill, steal, lie, cheat, and so on. The importance of these behavioral norms is that people behave themselves even if nobody’s watching. There are not enough cops and laws to replace personal morality as a means to a civilized society. At best, the police and criminal justice system are the last desperate line of defense for a civilized society. Our increased reliance on laws to regulate behavior is a measure of how uncivilized we’ve become.

Twenty-five years ago, during a dinner conversation with Nobel laureate Friedrich A. Hayek, I asked if he could propose one law that would help restore, promote, and preserve liberty. Hayek answered that the law would read: Congress shall enact no law that does not apply equally to all Americans. Hayek’s suggestion would do untold wonders in fostering the liberties envisioned by our Founders. But I’m betting that most Americans would greet Hayek’s proposal with contempt after they realized it would mean Congress could not play favorites.