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	<title>The Freeman &#124; Ideas On Liberty &#187; welfare state</title>
	<atom:link href="http://www.thefreemanonline.org/tag/welfare-state/feed/" rel="self" type="application/rss+xml" />
	<link>http://www.thefreemanonline.org</link>
	<description>Ideas on Liberty</description>
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		<title>The Mobility Gap: What Does It Mean?</title>
		<link>http://www.thefreemanonline.org/columns/tgif/the-mobility-gap-what-does-it-mean/</link>
		<comments>http://www.thefreemanonline.org/columns/tgif/the-mobility-gap-what-does-it-mean/#comments</comments>
		<pubDate>Fri, 06 Jan 2012 13:02:36 +0000</pubDate>
		<dc:creator>Sheldon Richman</dc:creator>
				<category><![CDATA[Headline]]></category>
		<category><![CDATA[The Goal Is Freedom]]></category>
		<category><![CDATA[corporate state]]></category>
		<category><![CDATA[corporatism]]></category>
		<category><![CDATA[income inequality]]></category>
		<category><![CDATA[income mobility]]></category>
		<category><![CDATA[upward mobility]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9359033</guid>
		<description><![CDATA[“Americans enjoy less economic mobility than their peers in Canada and much of Western Europe.”]]></description>
			<content:encoded><![CDATA[<p>“Americans enjoy less economic mobility than their peers in Canada and much of Western Europe.” That’s how the <a href="http://www.nytimes.com/2012/01/05/us/harder-for-americans-to-rise-from-lower-rungs.html?ref=todayspaper&amp;pagewanted=all"><em>New York Times</em></a> began a page-one news story yesterday.</p>
<p>It is a thoughtful story that offer a variety of explanations &#8212; some of them mitigating &#8212; for the so-called “mobility gap.” This subject merits attention because we should aspire to live in a society in which someone born in (relative) poverty can work his or her way up to better material circumstances, even if lower-income people are richer than their earlier counterparts.</p>
<p>Those who advocate the freeing of markets have no reason to receive the news of the gap defensively. If we are right about the breadth and depth of bureaucratic interference with the peaceful, creative activities of individuals, as well as the extent of government privileges for the well-connected – <em>and we are</em> – then drags on mobility are at least partly the consequence of that interference. In other words, the mobility gap can’t be the result of the free market <em>because there isn’t one</em>. The economy is systematically misshapen by intervention. (The <em>Times </em>cites concern about the gap among some conservatives.)</p>
<p><strong>The Minimum Wage and Public Schools</strong></p>
<p>When I think “limits to mobility,” two phrases immediately occur to me: minimum wage and public schooling. If you <em>wanted </em>to impede upward mobility, there could hardly be better ways than to scuttle job creation for the unskilled and to give poor people a bureaucratically produced “education.” Those are not features of the free market.</p>
<p>Nor are these the only ways government throws sand in the eyes of the those who start out with little. In the current issue of <em>The Freeman</em>, Gary Chartier discusses this matter at length: <a href="http://www.thefreemanonline.org/featured/government-is-no-friend-of-the-poor/">“Government Is No Friend of the Poor.”</a> (For more, see Charles Johnson’s <a href="http://www.thefreemanonline.org/featured/scratching-by-how-government-creates-poverty-as-we-know-it/">“Scratching By: How Government Creates Poverty as We Know It.”</a>)<strong></strong></p>
<p>This will be readily conceded by free-market advocates, but some harbor a belief that the U.S. economy is much freer than Europe’s and Canada’s socialistic welfare states and so to make negative comparisons with those countries is to cast aspersions at freedom. Not so. The economies of America, Canada, and Europe are all variations of corporatism, in which government power primarily benefits the well-connected and well-to-do, with <a href="http://www.thefreemanonline.org/featured/free-market-reforms-and-the-reduction-of-statism/">secondary interventions intended in part to ameliorate</a> some of the harsher consequences of the primary interventions. As <a href="http://www.thefreemanonline.org/columns/tgif/whos-afraid-of-socialism/">I wrote</a> on another occasion:</p>
<blockquote><p>In reality the debate [between America and Europe] is not between socialism and free enterprise.  Rather it’s between two forms of corporatism, America-style and European-style.  I don’t want either, but it’s not obvious to me a priori that the American variant is superior in <em>every respect </em>to the European variant. . . . One variant may indeed cushion the victims of political privilege-granting better than others. Considering who writes the rules over here, I see no grounds for thinking that we necessarily have it better than the Germans do in every possible way.</p></blockquote>
<p><strong>The Gap</strong></p>
<p>Here are some particulars in the <em>Times </em>story:</p>
<blockquote><p>At least five large studies in recent years have found the United States to be less mobile than comparable nations. A project led by Markus Jantti, an economist at a Swedish university, found that 42 percent of American men raised in the bottom fifth of incomes stay there as adults. That shows a level of persistent disadvantage much higher than in Denmark (25 percent) and Britain (30 percent) &#8212; a country famous for its class constraints.</p>
<p>Meanwhile, just 8 percent of American men at the bottom rose to the top fifth. That compares with 12 percent of the British and 14 percent of the Danes. [The study, in PDF format, is <a href="http://ftp.iza.org/dp1938.pdf">here</a>.]</p>
<p>Despite frequent references to the United States as a classless society, about 62 percent of Americans (male and female) raised in the top fifth of incomes stay in the top two-fifths, according to research by the Economic Mobility Project of the Pew Charitable Trusts. Similarly, 65 percent born in the bottom fifth stay in the bottom two-fifths. [See PDF <a href="http://www.economicmobility.org/assets/pdfs/EMP_FamiliesAcrossGenerations_ChapterI.pdf">here</a>.] . . .</p>
<p>While Europe differs from the United States in culture and demographics, a more telling comparison may be with Canada, a neighbor with significant ethnic diversity. Miles Corak, an economist at the University of Ottawa, found that just 16 percent of Canadian men raised in the bottom tenth of incomes stayed there as adults, compared with 22 percent of Americans. Similarly, 26 percent of American men raised at the top tenth stayed there, but just 18 percent of Canadians.</p></blockquote>
<p><strong>Not the Whole Story</strong></p>
<p>As usual, the statistics don’t tell the whole story, and <em>Times</em>man Jason DeParle acknowledges this.</p>
<blockquote><p>Skeptics caution that the studies measure “relative mobility” &#8212; how likely children are to move from their parents’ place in the income distribution. That is different from asking whether they have more money. <em>Most Americans have higher incomes than their parents because the country has grown richer.</em></p>
<p>. . . A Pew study found that <em>81 percent of Americans have higher incomes than their parents</em> (after accounting for family size). There is no comparable data on other countries. [Emphasis added. PDF <a href="http://www.economicmobility.org/assets/pdfs/Family_Structure.pdf">here</a>.]</p></blockquote>
<p>Higher U.S. rates of poor single motherhood and of incarceration could also help explain the relative lack of mobility.</p>
<p>DeParle notes further that 1) “[s]ince they require two generations of data, the studies also omit immigrants, whose upward movement has long been considered an American strength,” and 2) “The income compression in rival countries may also make them seem more mobile.”</p>
<blockquote><p>Even by measures of relative mobility, Middle America remains fluid. About 36 percent of Americans raised in the middle fifth move up as adults, while 23 percent stay on the same rung and 41 percent move down, according to Pew research. The “stickiness” appears at the top and bottom, as affluent families transmit their advantages and poor families stay trapped.</p></blockquote>
<p>Any way we slice it, the mobility gap impugns economic intervention by the bureaucratic State. We have every reason to think that mobility would be maximized in a freed market.</p>
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		<title>Back on the Road to Serfdom: The Resurgence of Statism</title>
		<link>http://www.thefreemanonline.org/book-reviews/back-on-the-road-to-serfdom-the-resurgence-of-statism/</link>
		<comments>http://www.thefreemanonline.org/book-reviews/back-on-the-road-to-serfdom-the-resurgence-of-statism/#comments</comments>
		<pubDate>Wed, 30 Nov 2011 16:00:17 +0000</pubDate>
		<dc:creator>George C. Leef</dc:creator>
				<category><![CDATA[Book Reviews]]></category>
		<category><![CDATA[big government]]></category>
		<category><![CDATA[depoliticization]]></category>
		<category><![CDATA[Per Bylund]]></category>
		<category><![CDATA[political solutions]]></category>
		<category><![CDATA[road to serfdom]]></category>
		<category><![CDATA[socialism]]></category>
		<category><![CDATA[statism]]></category>
		<category><![CDATA[Sweden]]></category>
		<category><![CDATA[Thomas Woods]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9358180</guid>
		<description><![CDATA[Since the housing bubble burst in 2007, America’s social and economic troubles have mounted rapidly. Unemployment remains high, saving and investment low. The federal government is desperate to suck in enough money to pay its enormous tab for welfare and warfare a bit longer. Our politics have become increasingly vicious. About two-thirds of the people [...]]]></description>
			<content:encoded><![CDATA[<p>Since the housing bubble burst in 2007, America’s social and economic troubles have mounted rapidly. Unemployment remains high, saving and investment low. The federal government is desperate to suck in enough money to pay its enormous tab for welfare and warfare a bit longer. Our politics have become increasingly vicious. About two-thirds of the people say that the country is on the wrong track.</p>
<p>The great battle is to persuade those people that our ills are rooted in statism—that is, reliance on government to do things that should be left to voluntary action. Back in the 1930s most Americans also thought the country was on the wrong track, but unfortunately they blundered into the wrong conclusion—that a great expansion of government power was what we needed. The challenge today is to convince them that government is the problem, not the solution.</p>
<p>Among the most stalwart opponents of big government and its apologists is historian Thomas Woods. His 2009 book <em>Meltdown</em> explained why the housing bubble and its aftermath were caused entirely by politics, not the free market. With this book he and his essayists indict statism generally and argue strongly in favor of radical depoliticization. In his introduction Woods identifies a key element in our national malaise: “The more functions the state usurps from civil society, the more the institutions of civil society atrophy. Once supplanted by coercive government, the tasks the people used to perform on a voluntary basis come to be viewed as impossible for society to manage in the absence of government. . . . The spiritless population comes in turn to look for political solutions even to the most trivial problems.”</p>
<p>The book consists of ten essays. In the first, Brian Domitrovic gives a useful history of the growth of the American State over the last two centuries. Carey Roberts follows it with an essay showing the continuing damage we suffer due to the statist thinking of Alexander Hamilton. Swedish economist Per Bylund then demolishes the notion, so often uttered by advocates of the welfare state, that Sweden proves how effective the “third way” (a welfare state neither capitalist nor socialist) can be.</p>
<p>Those three essays establish a solid framework for thinking about the impact of government interference with society’s spontaneous order. Woods next places Anthony Mueller’s essay exploring the true causes of the recent financial crisis, offering a corrective to the desperate scapegoating we’ve gotten from the politicians responsible for it. Mueller’s essay is followed by one by Mark Brandly, who reasserts the case for free trade and the international division of labor, which is under attack by statists who would have us believe that free trade hurts workers in poor countries. Dane Stangler next shows how entrepreneurship is threatened by the ever-encroaching power of government and how foolish it is to think that the State can perform the entrepreneurial function.</p>
<p>Journalist Tim Carney contributes the next essay, eviscerating one of the great myths of modern life: that big business is opposed to big government. The truth, Carney shows, is that big business is extremely cozy with both “liberal” and conservative politicians. As a result America’s economy is steadily drifting toward a syndicalist system dominated by politically favored firms.</p>
<p>Two essays deal with the interface between religion and the politicized society. Gerard Casey examines the traditional hostility many Christian clerics have toward capitalism and finds that it is without any foundation in the Bible. John Larrivee also evaluates the religious arguments against the free market. In his view those arguments are not only naive but ultimately undermine both faith and civil society.</p>
<p>In the book’s final essay Paul Cantor shows how government intervention in culture, specifically television, substitutes bureaucratic directives for the spontaneous origins of true culture. If you ever wondered why the boat on the series Gilligan’s Island was named “Minnow” you’ll find out by reading Cantor’s essay.</p>
<p>These are all splendid pieces, but I am especially drawn to Per Bylund’s. In it he demonstrates the truth of Hayek’s argument that socialism destroys the foundation for prosperity by gradually changing the character of the people. Bylund observes that young Swedish adults today are far different in their outlook from their grandparents. Whereas Swedes had once been known for their solid work ethic, after many years of the welfare state and its numerous entitlements, it is largely gone. Young Swedes are known for taking as much time off as they can while collecting as much as possible in government benefits. The nation’s standard of living is falling and must continue to do so.</p>
<p>I have just one tiny quibble with the book’s title. When were we ever off the road to serfdom?</p>
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		<title>Why the Titanic Is Sinking</title>
		<link>http://www.thefreemanonline.org/headline/why-the-titanic-is-sinking/</link>
		<comments>http://www.thefreemanonline.org/headline/why-the-titanic-is-sinking/#comments</comments>
		<pubDate>Wed, 23 Nov 2011 05:00:28 +0000</pubDate>
		<dc:creator>James L. Payne</dc:creator>
				<category><![CDATA[Guest Column]]></category>
		<category><![CDATA[Headline]]></category>
		<category><![CDATA[government spending]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9358064</guid>
		<description><![CDATA[The Declaration of Gratitude would destroy the assumption that government spending harms no one.]]></description>
			<content:encoded><![CDATA[<p>Washington is now deep into the process of attempting to deal with the budget deficit, an exercise that leaves experienced observers with a sinking feeling. Presenting plans to cut spending and balance the budget is like the proverbial activity of rearranging the deck chairs on the Titanic. It involves a lot of busyness but does not address the real problem.</p>
<p>After all, we’ve been enacting plans to control spending and balance the budget for generations. One of the first efforts was the 1974 Budget and Impoundment Control Act passed in the Nixon administration.  Then we had the Gramm-Rudman-Hollings Act, signed into law by President Reagan in 1985. A few years later, in 1994, feisty Republicans took over both houses of Congress and provoked a government shutdown in the crusade for fiscal responsibility.</p>
<p>The lesson of history, then, is that you can’t cut spending by trying to cut spending. It’s a hard point for budget makers to digest, because it seems to defy the rules of arithmetic. Well, when it comes to national budgeting, these rules don’t apply. What matters are the rules of political perception.</p>
<p>Most Americans perceive that government is an effective provider of valuable services. They see it as a super store that supplies education, medical care, retirement income, housing, assistance to the needy, safe drugs, safe foods, scientific research, and so forth. That’s why spending cuts can never be more than temporarily effective. As soon as the specifics of the cutting become apparent, the public will be reminded how very much it <em>likes</em> government programs. As people learn about the autistic child who will be left unassisted, the hospital that will close, and the food inspectors who will be laid off,  the public clamors to fund these functions, and the campaign to cut spending falters. We’ve been through this cycle many times.</p>
<p>The lesson is clear: The real cause of red ink is the widespread belief that government programs are effective responses to national needs.  If you don’t counter this belief, you can never really cut government spending.</p>
<p><em> </em></p>
<p><strong>Faith in Government</strong></p>
<p>Where does this confidence in government come from?  One possible answer is that it is based on reality and that we have numerous careful, unbiased, scientific studies that prove government is a cost-effective provider of services.</p>
<p>There are several difficulties with this position. The first problem is there are <em>no</em> such studies. There are studies that purport to evaluate government programs, but they <em>never</em> include <em>all</em> the overhead costs. By my count, there are 14 overhead costs in the typical government transfer program, seven involving taxation and seven involving disbursement. Such cost-benefit studies as have been done include, at best, only three or four of these costs. The reason why evaluations of government action are shallow and incomplete is the bias of the researchers. Before they attempt their study they already believe government action is beneficial. In other words, the cart—the belief that government is effective—comes before the horse—the evidence that it is.</p>
<p>Historically, too, confidence in government has preceded the evidence that might justify such confidence. The modern faith in government as a problem-solving machine emerged in the late nineteenth century, decades before any interventionist policies had been attempted. For example, in 1888 Edward Bellamy published a hugely successful utopian novella, <em>Looking Backward</em>, which posited a federal government in charge of everything, and solving all problems of poverty, unemployment, old-age assistance, and so on. Bellamy and the thousands who formed “Bellamy Clubs” all around the nation had no way of knowing if government programs in these spheres would be cost-effective solutions. They took it on faith.</p>
<p>The belief in government efficacy is not empirically based. It is the product of illusions. When they first notice government, children tend to see it as a super-parent, an authority figure that has many virtues &#8212; including great wealth, foresight, objectivity, and maturity &#8212; and is without ugly vices such as selfishness, irresponsibility, callousness, and a tendency to violence. This benign impression forms the basis of the popular view of government. Over time, as the result of actual experience with government, people begin to overcome this naïve faith, but in most cases they do not move far beyond the child’s view. They continue to see government as a machine that can fix everything &#8212; if only the right people are put in charge. Telling a public with this naïve confidence that spending should be cut is like trying to tell a child that a birthday cake should not be eaten: It has no understanding of, or sympathy for, the recommendation.</p>
<p><strong>Toward a Solution</strong></p>
<p>To restrain spending, therefore, one needs techniques that counteract the mistaken, illusion-based view of government. These measures will not resemble traditional spending reforms. They will not be laws that address the <em>amount</em> of spending. Instead, they will address the <em>perceptions</em> underlying spending, since once those attitudes are corrected, the pressure for spending will abate. To illustrate this approach, consider the simple idea of reminding people where government money comes from.</p>
<p>One misunderstanding that gives the public a false view of government is the <em>philanthropic illusion</em>. This is the idea that government <em>has money</em>, that it is like a wealthy philanthropist with extra cash to give to needy people and worthy causes. In fact government has no money of its own. The money that it spends has to be first taken away from taxpayers, and if you do the arithmetic carefully, tracing out all the indirect and shifted burdens of taxation, you will discover that <em>everyone</em> is a taxpayer. Therefore, to get money for its spending programs, government inflicts privation on <em>everyone</em>, including low-wage workers, college students, the homeless, and so on, and it drains resources from vital activities like technological innovation, medical care, job creation, and so forth.</p>
<p><strong>Declaration of Gratitude</strong></p>
<p>Under the spell of the philanthropic illusion, politicians and the public downplay or forget the harm and injury of taxation. A simple device that will help counteract this myopia is the “Declaration of Gratitude.” Everyone who receives government money would be required to sign this statement:</p>
<blockquote><p>I realize that the funds I am about to receive come from the nation’s taxpayers, and I am grateful for the sacrifices they are making on my behalf.</p></blockquote>
<p>Its administration is simple. When you fill out the paperwork for any government grant, subsidy, or payment, you also must sign the statement, whatever the benefit: food stamps, cotton subsidy, small business loan, government paycheck, research grant.</p>
<p>In monetary terms, signing this statement doesn’t change anything: Everyone gets whatever government dollars he was going to get. No one can be accused of starving grandma. What it does do is change the psychological climate. It destroys the assumption that government spending harms no one. This frank reality is covered up today. Take the Earned Income Tax Credit. This is a $50 billion welfare program, yet the people receiving this benefit call it a “tax refund” when they get their check. Most of them have no idea that this is a subsidy paid for by taxpayers. Well, if they had to sign the Declaration of Gratitude, they would know.</p>
<p>There is likely to be a lot of resistance to the Declaration of Gratitude idea. Most Americans seem to feel themselves “entitled” to whatever government funds they get, and are loathe to recognize their dependent status. This entitlement mentality produces the bizarre contradiction of a country with a national debt of $15,000,000,000,000 whose citizens believe they are paying their own way.</p>
<p>But resistance or no, reforms that change the perceptual climate are essential for national economic health.  Sound fiscal policy will not be achieved until the public attains a disillusioned view of government.</p>
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		<title>Dusting Off a Man and His Classic</title>
		<link>http://www.thefreemanonline.org/columns/ideas-and-consequences/dusting-off-a-man-and-his-classic/</link>
		<comments>http://www.thefreemanonline.org/columns/ideas-and-consequences/dusting-off-a-man-and-his-classic/#comments</comments>
		<pubDate>Wed, 21 Sep 2011 15:00:37 +0000</pubDate>
		<dc:creator>Lawrence W. Reed</dc:creator>
				<category><![CDATA[Ideas and Consequences]]></category>
		<category><![CDATA[character]]></category>
		<category><![CDATA[civility]]></category>
		<category><![CDATA[hard work]]></category>
		<category><![CDATA[human nature]]></category>
		<category><![CDATA[independence]]></category>
		<category><![CDATA[integrity]]></category>
		<category><![CDATA[Samuel Smiles]]></category>
		<category><![CDATA[self help]]></category>
		<category><![CDATA[thrift]]></category>
		<category><![CDATA[virtue]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9356988</guid>
		<description><![CDATA[In 1870 the sultan of Turkey gave a book by a Scotsman to his entire entourage of top-ranking officials. The Khedive of Egypt had the same work inscribed and painted on the wall of the Royal harem. Two years later the Meiji dynasty ordered the book to be issued throughout Tokyo’s school system. Eventually every prefecture [...]]]></description>
			<content:encoded><![CDATA[<p>In 1870 the sultan of Turkey gave a book by a Scotsman to his entire entourage of top-ranking officials. The Khedive of Egypt had the same work inscribed and painted on the wall of the Royal harem. Two years later the Meiji dynasty ordered the book to be issued throughout Tokyo’s school system. Eventually every prefecture in Japan followed suit. General George Custer described the volume as his favorite text. Many people kept it next to their Bibles.</p>
<p>What was this book, and who was its author? It was called, simply, <em>Self-Help</em>, and its author was a man named Samuel Smiles.</p>
<p>When he died at the age of 86 in 1904, only Queen Victoria’s funeral cortege three years earlier was said to have surpassed in recent memory that of Samuel Smiles. He was loved not only for his book but also for a wealth of other works that celebrated the virtues of independence, thrift, civility, character, and hard work.</p>
<p>Robert L. Bradley, in his 2009 book <em>Capitalism at Work: Business, Government and Energy</em>, calls Smiles “the father of the self-improvement movement.” Bradley notes:</p>
<blockquote><p>Motivational self-help books were not new, but Smiles’ 400-page opus was systematic, combining age-tested wisdom with knowledge of the industrial present, and profusely illustrated with stories of individuals-made-good in industry, engineering, the arts, and music. Samuel Smiles, a medical doctor turned newspaper editor/political reformer turned businessman/moralist, would become the Adam Smith of applied commercial capitalism.</p></blockquote>
<p>The cover of the 2002 Oxford University Press edition of <em>Self-Help </em>declares that the book “is the precursor of today’s motivational and self-help literature” and that it “awakens readers to their own potential and instills the desire to succeed.” In his lifetime the author inspired riots in Belgrade, carnivals in Milan, and plaudits from leaders the world over. But sadly, just a century since Smiles died, he is largely unremembered in his native Scotland. Needless to say, decades of the British welfare state have not been kind to a man who preached personal independence and entrepreneurial capitalism.</p>
<p>Dipping into the pages of <em>Self-Help</em> is a curious experience. You travel back in time to Smiles’s mid-nineteenth-century experiences and perceptions. To Smiles, the son of a poor farmer, human nature was both timeless and locationless. It is as good, he felt, for a Japanese man of commerce to exhibit the plain virtues of honesty, punctuality, diligence, and energy as it is for a Swede or an American.</p>
<p><em>Self-Help</em>, which appeared in 1859, had the most humble of origins. It began as a series of evening lectures to apprentice engineers in Leeds. A kind of Victorian Dale Carnegie, Smiles thumped his message home in a way that moved and inspired almost everybody of his time. Live and trade with integrity and you lift all you meet, not just yourself, he argued. Character, the sum of one’s choices and actions, is of paramount importance; indeed Smiles called it “the crown and glory of life” and the very thing on which “the strength, the industry, and the civilization of nations” depend.</p>
<p>To Smiles the road to riches was not paved with overreaching ambition, disregard for others, or cutting corners when it came to matters of truth. It didn’t mean securing favors from government at the expense of the competition.</p>
<h2>Welfare and Poverty</h2>
<p>The welfare state was anathema to Smiles. He felt it was a woefully ineffective substitute for personal charity. “The value of legislation as an agent in human advancement has usually been much over-estimated,” he wrote. “No laws, however stringent, can make the idle industrious, the thriftless provident, or the drunken sober.” What he said about poverty legislation a century and a half ago would be a fitting description of the results of the welfare programs of today:</p>
<blockquote><p>We have tried to grapple with the evils of [misery] by legislation, but it seems to mock us. Those who sink into poverty are fed, but they remain paupers. Those who feed them feel no compassion; and those who are fed return no gratitude. There is no bond of sympathy between the givers and the receivers.</p></blockquote>
<p>The books of Samuel Smiles are full of inspiring stories of nineteenth-century entrepreneurs who often rejected the easy path of unprincipled compromise and the fast buck, and instead treated others according to the Golden Rule and went to their graves with their character and integrity intact.</p>
<p>In painstaking detail he explained why keeping high our standards of speech and conduct was not just worthwhile but also an indispensable ingredient of freedom and progress. Life to him was not an ego trip. It was not about calling attention to oneself but rather about being the best one can be in all endeavors. The fame and fortune that might follow were secondary and imposed additional responsibilities to foster virtue in others.</p>
<p>The final chapter of <em>Self-Help</em> is titled “Character—The True Gentleman.” It’s full of examples that illustrate Smiles’s belief that nothing is worth sacrificing one’s character. From proper manners to truthfulness to self-respect, Smiles laid forth the attributes that, if pursued widely and personally one individual at a time, would surely produce a far better world. Here’s a passage most readers will especially appreciate:</p>
<blockquote><p>There are many tests by which a gentleman may be known, but there is one that never fails—How does he exercise power over those subordinate to him? How does he conduct himself toward women and children? How does the officer treat his men, the employer his servants, the master his pupils, and man in every station those who are weaker than himself? The discretion, forbearance and kindliness, with which power in such cases is used, may indeed be regarded as the crucial test of gentlemanly character.</p></blockquote>
<p>Samuel Smiles—both the man and his message—epitomized the best of the capitalist spirit of the nineteenth century. This fact largely explains why he went from a well-known and respected figure by 1890 to a forgotten man by World War I. The rise of statist ideas at the turn of the century and the subsequent decline of individualism meant that a champion of such antiquated notions as self-help and responsibility had to be tossed into the closet.</p>
<p>Smiles’s message cries out for a new hearing in our times. Scandalous headlines and television spectacles that depict degraded standards suggest we would all benefit by dusting off the work of Samuel Smiles and learning again what we should never have forgotten.</p>
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		<title>Bondholders and Victims</title>
		<link>http://www.thefreemanonline.org/columns/tgif/bondholders-and-victims/</link>
		<comments>http://www.thefreemanonline.org/columns/tgif/bondholders-and-victims/#comments</comments>
		<pubDate>Fri, 22 Jul 2011 04:01:56 +0000</pubDate>
		<dc:creator>Sheldon Richman</dc:creator>
				<category><![CDATA[Headline]]></category>
		<category><![CDATA[The Goal Is Freedom]]></category>
		<category><![CDATA[budget deficit]]></category>
		<category><![CDATA[government bonds]]></category>
		<category><![CDATA[national debt]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9355448</guid>
		<description><![CDATA[Victims of the State have a stronger claim to resources in its possession than those who freely speculated in and hoped to profit from its power.]]></description>
			<content:encoded><![CDATA[<p>The raging debt limit controversy raises myriad moral issues that are of interest to libertarians but hardly anyone else.</p>
<p>It is assumed almost universally that the U.S. government must make its interest payment and cover its other financial obligations on August 3, the day after the drop-dead date for a debt limit increase, or suffer a severe economic and moral blow. Even a late interest payment would be economically catastrophic, we’re told. (That strikes me as fear-mongering.)</p>
<p>Thus the debate is over <em>how</em> not <em>if</em> the debt limit is to be raised &#8212; as if a $14.3 trillion debt is not enough. Some would simply raise the limit. (President Obama wants it raised by $2.4 trillion.) Most want the new limit combined with a plan to reduce the budget deficit over the next decade.</p>
<p>Shrinking that deficit can be accomplished theoretically by cutting spending, increasing tax revenues, or both. I say “theoretically” because a plan to raise revenues would likely fall short of its target: Taxpayers are adept at tax avoidance, which is why for the last several decades total federal revenues have been fairly constant as a share of GDP (at just under 20 percent) regardless of tax rates. (They are lower now because of the recession.)</p>
<p><strong>Lost Dimension</strong></p>
<p>Throughout the political hullabaloo something important – the moral dimension &#8212; has been lost. (Now there’s a first!) It is not just that the government’s commandeering of even more resources from the private sector is regarded as the “grownup” thing to do. It’s also that most people assume the government is something noble and its word must be kept at all costs. The pundits and politicians go beyond claiming that missing the deadline would bring economic calamity; they also say that a late payment  &#8212; not a default, not a repudiation, but merely a late payment &#8212; would be a <em>moral</em> calamity. This is laughable, considering the endless list of lies presidents, members of Congress, and other government officials have peddled for years. Politicians have been the butt of American humor from the beginning precisely for that reason. These are the people who gave us budget cuts that are actually only reductions in the <em>rate of increase</em>, off-budget financing, and other creative accounting. Need I cite more examples? (If you want more, check the statements made in the run-up to any of <a href="http://www.amazon.com/War-Lie-David-Swanson/dp/0983083002/ref=sr_1_1?s=books&amp;ie=UTF8&amp;qid=1311274858&amp;sr=1-1">America’s wars</a>.)</p>
<p>In truth a late payment would expose government for what it is, in case anyone forgot. The lesson would be instructive. Government is not some higher super-competent entity like the man pretending to be the Wizard of Oz wanted the people to think he was. It’s a coercive organization of limited, flawed, and essentially ignorant men and women who, having been anointed in an election after campaigns hawking snake oil, are presumptuous enough to think they are capable of making wise decisions on our behalf.</p>
<p>There’s also a forgotten moral dimension with respect to those who <em>receive</em> government payments. Not all of them are of equal moral stature. While no one (except the actual owners) can deserve government largess because it originates in taxation, some claims are superior to others. Someone who lends money to the government does so freely, knowing that <a href="http://www.thefreemanonline.org/columns/tgif/taxation-is-still-robbery/">taxation</a> will make repayment possible. (If you doubt this, ask yourself how many bond buyers there would be if government had no power to tax.) In contrast Social Security/Medicare recipients were financially raped all their working lives and pushed into dependence on government at a stage of life when earning an income is difficult or impossible.</p>
<p><strong>Weaker Claim</strong></p>
<p>If the government is going to pay somebody, whom should it be? It’s clear to me that the <em>coerced</em> creditors should be favored over the <em>willing </em>creditors. Back of the line, bondholders.</p>
<p>I am not justifying taxation to pay welfare state beneficiaries &#8212; quite the contrary. I am saying only that <em>victims</em> of the State have a stronger claim to resources in its possession than those who freely speculated in and hoped to profit from its power. (The low interest rate assumed obeisant taxpayers.) No one is punished for <em>not</em> buying bonds. Alas we can’t say the same for those who attempt to opt out of Social Security or Medicare.</p>
<p>Finally, if the government suddenly refused to pay its willing creditors (and wasn’t merely late with its payment), the world economy could be disrupted in the short term (though with big benefits later). That potential for disruption, which would surely harm innocents, might justify paying the bondholders for now &#8212; but not out of any real moral obligation to them. Among the many offenses of the political class is that finally cleaning up its economic mess is not likely to be painless.</p>
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		<title>Liberty and the Power of Ideas</title>
		<link>http://www.thefreemanonline.org/columns/ideas-and-consequences/liberty-and-the-power-of-ideas-2/</link>
		<comments>http://www.thefreemanonline.org/columns/ideas-and-consequences/liberty-and-the-power-of-ideas-2/#comments</comments>
		<pubDate>Wed, 25 May 2011 15:00:05 +0000</pubDate>
		<dc:creator>Lawrence W. Reed</dc:creator>
				<category><![CDATA[Ideas and Consequences]]></category>
		<category><![CDATA[Adam Smith]]></category>
		<category><![CDATA[arrogance]]></category>
		<category><![CDATA[coercion]]></category>
		<category><![CDATA[envy]]></category>
		<category><![CDATA[feudalism]]></category>
		<category><![CDATA[freedom philosophy]]></category>
		<category><![CDATA[government money]]></category>
		<category><![CDATA[ideas]]></category>
		<category><![CDATA[intolerance]]></category>
		<category><![CDATA[laws]]></category>
		<category><![CDATA[Marxism]]></category>
		<category><![CDATA[mercantilism]]></category>
		<category><![CDATA[Pass-a-Law Syndrome]]></category>
		<category><![CDATA[serfdom]]></category>
		<category><![CDATA[socialism]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9353750</guid>
		<description><![CDATA[A belief that I stress again and again is that we are at war—not a physical, shooting war, but nonetheless a war that is fully capable of becoming just as destructive and just as costly. The battle for the preservation and advancement of liberty is a battle not against personalities but against opposing ideas. The [...]]]></description>
			<content:encoded><![CDATA[<p>A belief that I stress again and again is that we are at war—not a physical, shooting war, but nonetheless a war that is fully capable of becoming just as destructive and just as costly.</p>
<p>The battle for the preservation and advancement of liberty is a battle not against personalities but against opposing ideas. The French author Victor Hugo declared that “One resists the invasion of armies; one does not resist the invasion of ideas.” This is often rendered as, “More powerful than armies is an idea whose time has come.”</p>
<p>In the past ideas have had earthshaking consequences. They have determined the course of history.</p>
<p>The system of feudalism existed for a thousand years in large part because scholars, teachers, intellectuals, educators, clergymen, and politicians propagated feudalistic ideas. The notion “once a serf, always a serf” kept millions of people from ever questioning their station in life.</p>
<p>Under mercantilism, the widely accepted concept that the world’s wealth is fixed prompted men to take what they wanted from others in a long series of bloody wars.</p>
<p>The publication of Adam Smith’s <em>The Wealth of Nations</em> in 1776 is a landmark in the history of the power of ideas. As Smith’s message of free trade spread, political barriers to peaceful cooperation collapsed, and virtually the whole world decided to try freedom for a change.</p>
<p>Marx and the Marxists would have us believe that socialism is inevitable, that it will embrace the world as surely as the sun will rise in the east tomorrow. As long as men have free will (the power to choose right from wrong), however, nothing that involves this human volition can ever be inevitable! If socialism comes it will come because men choose to embrace its principles.</p>
<p>Socialism is an age-old failure, yet the socialist idea constitutes the chief threat to liberty today. As I see it, socialism can be broken into five ideas.</p>
<p>1. <em>The Pass-a-Law Syndrome</em>. Passing laws has become a national pastime. Business in trouble? Pass a law to give it public subsidies or restrict its freedom of action. Poverty? Pass a law to abolish it. Perhaps America needs a law against passing more laws.</p>
<p>Almost invariably a new law means: a) more taxes to finance its administration; b) additional government officials to regulate some heretofore unregulated aspect of life; and c) new penalties for violating the law. In brief, more laws mean more regimentation, more coercion. Let there be no doubt about what the word coercion means: force, plunder, compulsion, restraint. Synonyms for the verb form of the word are even more instructive: impel, exact, subject, conscript, extort, wring, pry, twist, dragoon, bludgeon, and squeeze.</p>
<p>When government begins to intervene in the free economy, bureaucrats and politicians spend most of their time undoing their own handiwork. To repair the damage of Provision A, they pass Provision B. Then they find that to repair Provision B, they need Provision C, and to undo C, they need D, and so on until the alphabet and our freedoms are exhausted.</p>
<p>The Pass-a-Law Syndrome is evidence of a misplaced faith in the political process, a reliance on force, which is anathema to a free society.</p>
<p>2. <em>The Get-Something-from-Government Fantasy</em>. Government by definition has nothing to distribute except what it first takes from people. Taxes are not donations.</p>
<p>In the welfare state this basic fact gets lost in the rush for special favors and giveaways. People speak of “government money” as if it were truly free.</p>
<p>One who is thinking of accepting something from government that he could not acquire voluntarily should ask, “From whose pocket is it coming? Am I being robbed to pay for this benefit or is government robbing someone else on my behalf?” Frequently the answer will be both.</p>
<p>The end result of this “fantasy” is that everyone in society has his hands in someone else’s pockets.</p>
<h2>Everyone Else’s Problem</h2>
<p>3. <em>The Pass-the-Buck Psychosis</em>. Recently a welfare recipient wrote her welfare office and demanded, “This is my sixth child. What are you going to do about it?”</p>
<p>An individual is victim to the Pass-the-Buck Psychosis when he abandons himself as the solver of his problems. He might say, “My problems are really not mine at all. They are society’s, and if society doesn’t solve them and solve them quickly, there’s going to be trouble!”</p>
<p>Socialism thrives on the shirking of responsibility. When men lose their spirit of independence and initiative, their confidence in themselves, they become clay in the hands of tyrants and despots.</p>
<p>4. <em>The Know-It-All Affliction</em>. Leonard Read, in <em>The Free Market and Its Enemy</em>, identified “know-it-allness” as a central feature of the socialist idea. The know-it-all is a meddler in the affairs of others. His attitude can be expressed in this way: “I know what’s best for you, but I’m not content to merely convince you of my rightness; I’d rather force you to adopt my ways.” The know-it-all evinces arrogance and a lack of tolerance for the great diversity among people.</p>
<p>In government the know-it-all refrain sounds like this: “If I didn’t think of it, then it can’t be done, and since it can’t be done, we must prevent anyone from trying.” A group of West Coast businessmen once ran into this snag when their request to operate barge service between the Pacific Northwest and Southern California was denied by the (now-defunct) Interstate Commerce Commission because the agency felt the group could not operate such a service profitably.</p>
<p>The miracle of the market is that when individuals are free to try, they can and do accomplish great things. Read’s well-known admonition that there should be “no man-concocted restraints against the release of creative energy” is a powerful rejection of the Know-It-All Affliction.</p>
<p>5. <em>The Envy Obsession</em>. Coveting the wealth and income of others has given rise to a sizable chunk of today’s socialist legislation. Envy is the fuel that runs the engine of redistribution. Surely, the many soak-the-rich schemes are rooted in envy and covetousness.</p>
<p>What happens when people are obsessed with envy? They blame those who are better off than themselves for their troubles. Society is fractured into classes and faction preys on faction. Civilizations have been known to crumble under the weight of envy and the disrespect for property it entails.</p>
<p>A common thread runs through these five socialist ideas. They all appeal to the darker side of man: the primitive, noncreative, slothful, dependent, demoralizing, unproductive, and destructive side of human nature. No society can long endure if its people practice such suicidal notions.</p>
<p>Consider the freedom philosophy. It is an uplifting, regenerative, motivating, creative, exciting philosophy. It appeals to and relies on the higher qualities of human nature such as self-reliance, personal responsibility, individual initiative, respect for property, and voluntary cooperation.</p>
<p>The outcome of the struggle between freedom and serfdom depends entirely on what percolates in the hearts and minds of men. At the present time the jury is still deliberating.</p>
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		<title>Budget-Cutting Resistance</title>
		<link>http://www.thefreemanonline.org/columns/tgif/budget-cutting-resistance/</link>
		<comments>http://www.thefreemanonline.org/columns/tgif/budget-cutting-resistance/#comments</comments>
		<pubDate>Fri, 22 Apr 2011 10:44:34 +0000</pubDate>
		<dc:creator>Sheldon Richman</dc:creator>
				<category><![CDATA[Headline]]></category>
		<category><![CDATA[The Goal Is Freedom]]></category>
		<category><![CDATA[budget deficit]]></category>
		<category><![CDATA[dialectical libertarianism]]></category>
		<category><![CDATA[Medicaid]]></category>
		<category><![CDATA[Medicare]]></category>
		<category><![CDATA[national debt]]></category>
		<category><![CDATA[Social Security]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9353049</guid>
		<description><![CDATA[If libertarians are to expand the sphere of freedom while shrinking the sphere of force, they first need to be understood.]]></description>
			<content:encoded><![CDATA[<p>So here’s the problem: While polls show that people want the government’s budget deficit and the national debt reduced, they don’t want the biggest spending items cut. Some numbers:</p>
<p>In the latest <a href="http://www.washingtonpost.com/wp-srv/politics/polls/postpoll_04172011.html">ABC-Washington Post poll</a> (April 17), 59 percent said that the deficit should reduced through a combination of <em>unspecified</em> spending cuts and tax increases. But 69 percent opposed cutting Medicaid, 78 percent opposed cutting Medicare, and 56 percent opposed cutting the military.  Fifty-three percent said they would oppose a plan to reduce the debt significantly by “raising taxes on all Americans by a small percentage and making small reductions in Medicare and Social Security benefits.” Fifty-four percent said Medicare “should remain as it is today.”</p>
<p>In other words, cut spending but stay away from where the money is. Medicare, Medicaid (plus the State Children’s Health Insurance Program), and the military represent nearly <em>40 percent</em> of the budget. Social Security is about 20 percent more. (Interest on the debt is 4.6 percent.)</p>
<p>In the poll, 72 percent supported raising taxes on people making more than $250,000 &#8212; 54 percent “strongly.” There’s far more sympathy for raising taxes than cutting spending – not a good sign for libertarians.</p>
<p><strong>Wrong Direction</strong></p>
<p>The new McClatchy-Marist poll had similar results (link <a href="http://tpmdc.talkingpointsmemo.com/2011/04/poll-70-of-tea-partiers-oppose-cuts-to-medicare-medicaid.php">here</a>). It found that a clear majority, 64 percent, thinks the country is “going in the wrong direction.” Of those who identified themselves as conservatives, 78 percent agreed with that. Moreover, 57 percent of all respondents said reducing the deficit is the top priority, with 68 percent of conservatives agreeing. No other priority came close.</p>
<p>I point this out because in the same poll, when asked if Medicare and Medicaid should be cut, <em>80 percent</em> said no, with 68 percent of conservatives agreeing. How about reducing military spending? Fifty-four percent overall said no, including 72 percent of conservatives. (“Liberals” and moderates approved, 60 and 54 percent, respectively.)</p>
<p>Sixty-nine percent said they were against raising the debt ceiling, right after saying that they would not cut the biggest items in the budget.</p>
<p>I note for the record that of the conservative respondents, 48 percent said they support or “strongly” support the Tea Party, while 44 percent said they do not.</p>
<p><strong>Dim Prospects</strong></p>
<p>So what does all this mean? It seems to mean that despite the prominence of the Tea Party and despite the fact that the word <em>libertarian </em>is spoken in the news media more than ever before, the prospects for a major reduction in the size of government in the immediate future are dim &#8212; this at a time when there is also near-panic about the debt and the deficit. If big cuts aren’t going to happen now, then when?</p>
<p>Advocates of the freedom philosophy have their work cut out for them.</p>
<p>The political system does not reward budget cutters. There is too much to gain politically by purchasing votes through promises of largess, while hiding or deferring the costs, if they can’t be pushed onto to some unpopular group. I don’t think this means Americans are a bunch of self-conscious freeloaders. Rather, they likely (and erroneously) see any benefits they collect as simply a return on their forced tax “investment.” Social Security and Medicare have certainly been misrepresented as such. Why wouldn’t people be upset at the thought of reduced benefits? Even Medicaid, the medical program for low-income people, affects the middle class. Medicare, the medical program for all retirees, does not cover nursing-home care, but Medicaid does &#8212; if a person meets the means test. It’s an open secret that if a nursing-home resident has too much money to qualify for Medicaid, the staff will advise the family on what to do to become eligible. This involve a lot of gift-giving and other activities to reduce the resident’s assets to the acceptable level. (<a href="http://medicaidsecrets.com/">This guy</a> will tell you how to qualify for Medicaid nursing-home coverage without blowing through assets.)</p>
<p>The upshot is that even middle class younger people may well oppose cuts in Medicaid if it means they will have to pay directly for nursing-home care for an elderly parent or perhaps have him or her live in their homes. This is part of a more general consideration. Most people already on Social Security and Medicare would understandably oppose cuts in those programs. Less obvious is that their grown children are likely to take the same position, and not just because they expect to be beneficiaries someday. If those programs were to end, or even be cut substantially, the children would have to pay their parents’ living expenses out of their own pockets. Yes, they pay today through taxes, but there’s are differences: First, they don’t pay 100 percent, since other taxpayers also kick in, and second, there’s a bureaucracy between them and their parents. Libertarians may not want to acknowledge this, but most people would rather support their parents <em>through the government</em> rather than directly, and most retired people would probably prefer that too. Face-to-face dependence of aging parents on grown children who are trying to raise their own families can be a source of tension if not outright conflict.</p>
<p>Relating government programs to broader social issues reminds me of Chris Matthew Sciabarra’s writing on <a href="../featured/dialectics-and-liberty/">“dialectical libertarianism”</a>:</p>
<blockquote><p>If one’s aim is to resolve a specific social problem, one must look to the larger context within which that problem is manifested, and without which it would not exist. This is why context-keeping is so indispensable to a radical libertarian political project…. What makes a dialectical approach into a <em>radical </em>approach is that the task of going to the root of a social problem, seeking to understand it and resolve it, often requires that we make transparent the relationships among social problems. Understanding the complexities at work within any given society is a prerequisite for changing it.</p></blockquote>
<p><strong>Part of a System</strong></p>
<p>Government interventions are not isolated phenomena; rather they are part of a political-economic-social <em>system</em>, with one part often intended to ameliorate the effects of some other part. (Remember Ludwig von Mises’s “critique of interventionism.”) Thus we should not discuss any particular part in a vacuum – not if we want to say something constructive.</p>
<p>For example, it is an eminently libertarian prescription to call for the abolition of Medicare on grounds that transferring wealth by force is immoral. But left at that, the argument will persuade no one and might even discredit the speaker. Why? Because it fails to acknowledge that many current beneficiaries would be left in dire straits if the program suddenly ended. Nor would it suffice to say that once the program was gone, “the free market” would handle things satisfactorily. What free market? We have no free market in medicine. American medicine consists of a government-insurance-doctor-hospital protectionist cartel that suppresses competition and innovation in the provision services through licensing and myriad other interventions. High prices and callous bureaucracies are the rule for many people. It didn’t begin with Obamacare. Surely libertarians don’t wish to be understood as proposing—in the name of human freedom—that a vulnerable portion of the population be subjected to that gauntlet.</p>
<p>None of this means that these programs are legitimate or should not be abolished. They require force (taxes) and induce dependence on the political class. What I’m suggesting is that libertarians need to bear these considerations in mind when making their case against such government intervention. If we are to expand the sphere of freedom while shrinking the sphere of force, we first need to be understood. We won’t be understood if we are oblivious to people’s concerns and to how they currently see government’s role in addressing those concerns.</p>
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		<title>America’s Turning Point</title>
		<link>http://www.thefreemanonline.org/featured/america%e2%80%99s-turning-point/</link>
		<comments>http://www.thefreemanonline.org/featured/america%e2%80%99s-turning-point/#comments</comments>
		<pubDate>Wed, 23 Mar 2011 15:00:09 +0000</pubDate>
		<dc:creator>Jeffrey Rogers Hummel</dc:creator>
				<category><![CDATA[Featured]]></category>
		<category><![CDATA[abolitionism]]></category>
		<category><![CDATA[Abraham Lincoln]]></category>
		<category><![CDATA[American Revolution]]></category>
		<category><![CDATA[civil liberties]]></category>
		<category><![CDATA[Civil War]]></category>
		<category><![CDATA[coercive authority]]></category>
		<category><![CDATA[government spending]]></category>
		<category><![CDATA[habeas corpus]]></category>
		<category><![CDATA[protectionism]]></category>
		<category><![CDATA[ratchet effect]]></category>
		<category><![CDATA[subsidies]]></category>
		<category><![CDATA[war powers]]></category>
		<category><![CDATA[warfare state]]></category>
		<category><![CDATA[wartime expansion]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9351991</guid>
		<description><![CDATA[The Civil War represents the simultaneous culmination and repudiation of the American Revolution. Four successive ideological surges had previously defined American politics: the radical republican movement that had spearheaded the revolution itself; the subsequent Jeffersonian movement that had arisen in reaction to the Federalist State; the Jacksonian movement that followed the War of 1812; and [...]]]></description>
			<content:encoded><![CDATA[<p>The Civil War represents the simultaneous culmination and repudiation of the American Revolution. Four successive ideological surges had previously defined American politics: the radical republican movement that had spearheaded the revolution itself; the subsequent Jeffersonian movement that had arisen in reaction to the Federalist State; the Jacksonian movement that followed the War of 1812; and the abolitionist movement. Although each was unique, each in its own way was hostile to government power. Each had contributed to the long-term erosion of all forms of coercive authority.</p>
<p>“Nowhere was the American rejection of authority more complete than in the political sphere,” writes historian David Donald. “The decline in the powers of the Federal government from the constructive centralism of George Washington’s administration to the feeble vacillation of James Buchanan’s is so familiar as to require no repetition here. . . . The national government, moreover, was not being weakened in order to bolster state governments, for they too were decreasing in power. . . . By the 1850s the authority of all government in America was at a low point.”</p>
<p>The United States, already one of the most prosperous and influential countries on the face of the earth, had practically the smallest, weakest State apparatus.</p>
<p>The great irony of the Civil War is that all that changed at the very moment that abolition triumphed. As the last, great coercive blight on the American landscape, black chattel slavery, was finally extirpated—a triumph that cannot be overrated—the American polity did an about-face.</p>
<p>Insofar as the war was fought to preserve the Union, it was an explicit rejection of the American Revolution. Both the radical abolitionists and the South’s fire-eaters boldly championed different applications of the revolution’s purest principles. Whereas the abolitionists were carrying on the assault against human bondage, the fire-eating secessionists embodied the tradition of self-determination and decentralized government. As a legal recourse, the legitimacy of secession was admittedly debatable. Consistent with the Antifederalist interpretation of the Constitution that had come to dominate antebellum politics, secession undoubtedly contravened the framers’ original intent. But as a revolutionary right, the legitimacy of secession is universal and unconditional. That at least is how the Declaration of Independence reads. “Put simply,” agrees William Appleman Williams, “the cause of the Civil War was the refusal of Lincoln and other northerners to honor the revolutionary right of self-determination—the touchstone of the American Revolution.”</p>
<p>American nationalists, then and now, automatically assume that the Union’s breakup would have been catastrophic. The historian, in particular, “is a camp follower of the successful army,” Donald wrote, and often treats the nation’s current boundaries as etched in stone. But doing so reveals a lack of historical imagination. Consider Canada. The United States twice mounted military expeditions to conquer its neighbor, first during the American Revolution and again during the War of 1812. At other times, including after the Civil War, annexation was under consideration, sometimes to the point of private support for insurgencies similar to those that had helped swallow up Florida and Texas. If any of these ventures had succeeded, historians’ accounts would read as if the unification of Canada and the United States had been fated, and any other outcome inconceivable. In our world, of course, Canada and the United States have endured as separate sovereignties with hardly any untoward consequences. “Suppose Lincoln did save the American Union, did his success in keeping one strong nation where there might have been two weaker ones really entitle him to a claim to greatness?” asks David M. Potter. “Did it really contribute any constructive values for the modern world?”</p>
<p>The common refrain, voiced by Abraham Lincoln himself, that peaceful secession would have constituted a failure for the great American experiment in liberty, was just plain nonsense. “If Northerners . . . had peaceably allowed the seceders to depart,” the conservative <em>London Times</em> correctly replied, “the result might fairly have been quoted as illustrating the advantages of Democracy; but when Republicans put empire above liberty, and resorted to political oppression and war rather than suffer any abatement of national power, it was clear that nature at Washington was precisely the same as nature at St. Petersburg. . . . Democracy broke down, not when the Union ceased to be agreeable to all its constituent States, but when it was upheld, like any other Empire, by force of arms.”</p>
<p>“War is the health of the State,” proclaimed Randolph Bourne, the young Progressive, disillusioned by the Wilson administration’s grotesque excesses during World War I. Bourne’s maxim is true in two respects. During war itself the government swells in size and power, as it taxes, conscripts, regulates, generates inflation, and suppresses civil liberties. Second, after the war there is what economists and historians have identified as a ratchet effect. Postwar retrenchment never returns government to its prewar levels. The State has assumed new functions, taken on new responsibilities, and exercised new prerogatives that continue long after the fighting is over. Both of these phenomena are starkly evident during the Civil War.</p>
<p>Before Fort Sumter national spending was only about $2.50 per person per year, or $50 per person in today’s prices. The central government relied on only two sources of revenue: a very low tariff and the sale of public lands. The war brought not only protectionist import duties but also a vast array of internal excises, the country’s first national income tax, and an extensive internal revenue bureaucracy with 185 districts reaching into every hamlet and town. Federal outlays soared from 1.5 percent of the economy’s output to almost 20 percent, approximately what the central government spends today. The national debt climbed from a modest $65 million, less than annual expenditures, to $2.8 billion. This provided the justification for replacing the antebellum monetary system of free banking and financial deregulation (which some economic historians believe was the best the country has ever had) with inflationary fiat money and nationally regulated banking.</p>
<p>Protectionism would continue to dominate U.S. trade policy mercilessly until the Great Depression and was just one manifestation of the Lincoln administration’s effort to enlist special interests through government subsidies and privileges. The Yankee Leviathan also was responsible for the first federal aid to transcontinental railroads, land grants for higher education, a Department of Agriculture for farmers, and troops to break strikes for employers. The prewar regime of Jacksonian laissez faire was effectively supplanted by Republican neomercantilism, an alliance between business and government that became so scandalous during the Grant era that it has gone down in history as, to use Vernon Louis Parrington’s label for the postwar feeding frenzy, the “Great Barbecue.”</p>
<p>Lincoln’s war delivered a blow to civil liberties as well. The Union’s resort to nationally administered conscription touched off so much resistance that the President suspended habeas corpus throughout the North. Traditional estimates are that the administration imprisoned without trial or charges 14,000 civilians during the conflict, but some historians believe the figure to be much too low. To be sure, the greater number were citizens of either the border states or the Confederacy itself, and many of those arrested secured quick release within a month or two, usually after swearing a loyalty oath. Yet the federal government at the same time monitored and censored both the mails and telegraphs and shut down over 300 newspapers for varying periods.</p>
<p>Many of these measures were of course abandoned at the fighting’s end. Federal spending fell from its wartime peak to only 3 to 4 percent of GDP. Although not a trivial decline, it still left spending at twice prewar levels, and the largest postwar expenditures were war-related. Interest on the war debt initially accounted for 40 percent of federal outlays, and by 1884 veterans’ benefits were consuming 30 percent. These benefits were so lavish that they constitute the national government’s first old-age and disability insurance and stand as a precursor to Social Security. The impact of the Civil War was even felt in the seemingly unrelated area of obscenity. Congress passed the first act regulating mail content in response to complaints that troops were ordering pornographic material, and this became the basis for the Comstock witch hunts of the 1870s.</p>
<h2>The Real Turning Point</h2>
<p>This ratchet effect is a phenomenon historians frequently observe. Yet the Civil War did something more. Despite wars and their ratchets, governments must sometimes recede in reach, else all would have been groaning under totalitarian regimes long ago. Both conservatives and so-called liberals date the major political turning point in American history at the Great Depression of 1929. Previously Americans are supposed to have self-reliantly resisted the temptations of government largess and confined federal power within strict constitutional limits. Although Franklin D. Roosevelt’s New Deal is responsible for Social Security, which along with health care, now ranks as the national government’s primary expense, this legend ignores several inconvenient facts. To begin with, the New Deal simply emulated the Wilson administration’s previous war collectivism. Moreover the growth of government under the New Deal was trivial compared to its growth during the United States’ next major conflict: World War II.</p>
<p>More astute analysts push the watershed in U.S. history back to the Progressive Era. Progressivism emerged at the beginning of the twentieth century as a diverse inclination, varying in different parts of the country and including members of all political parties. But it became the country’s first dominant mindset to advocate government intervention in the free market and in personal liberty at every level and in every sphere. My contention, however, is that America’s decisive transition must be dated even earlier.</p>
<p>The Yankee Leviathan co-opted and transformed abolitionism. It shattered the prewar congruence among anti-slavery, anti-government, and anti-war radicalism. It permanently reversed the implicit constitutional settlement that had made the central and state governments revenue-independent. It acquired for central authority such new functions as subsidizing privileged businesses, managing the currency, providing welfare to veterans, and protecting the nation’s “morals”—at the very moment that local and state governments were also expanding. And it set dangerous precedents with respect to taxes, fiat money, conscription, and the suppression of dissent.</p>
<p>These and the countless other changes mark the Civil War as America’s real turning point. In the years ahead, coercive authority would wax and wane with year-to-year circumstances, but the long-term trend would be unmistakable. Henceforth there would be few major victories of Liberty over Power. In contrast to the whittling away of government that had preceded Fort Sumter, the United States had commenced its halting but inexorable march toward the welfare-warfare State of today.</p>
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		<title>Ideological and Political Underpinnings of the Great Society</title>
		<link>http://www.thefreemanonline.org/columns/our-economic-past/ideological-and-political-underpinnings-of-the-great-society/</link>
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		<pubDate>Thu, 24 Feb 2011 16:00:22 +0000</pubDate>
		<dc:creator>Robert Higgs</dc:creator>
				<category><![CDATA[Our Economic Past]]></category>
		<category><![CDATA[big government]]></category>
		<category><![CDATA[Civil Rights Act]]></category>
		<category><![CDATA[Community Action Agencies]]></category>
		<category><![CDATA[economic interventions]]></category>
		<category><![CDATA[Economic Opportunity Act]]></category>
		<category><![CDATA[Elementary and Secondary Education Act]]></category>
		<category><![CDATA[federal entitlement programs]]></category>
		<category><![CDATA[Food Stamp Act]]></category>
		<category><![CDATA[Galbraithianism]]></category>
		<category><![CDATA[government spending]]></category>
		<category><![CDATA[Great Society]]></category>
		<category><![CDATA[Henry Aaron]]></category>
		<category><![CDATA[idealism]]></category>
		<category><![CDATA[Lyndon Johnson]]></category>
		<category><![CDATA[Medicaid]]></category>
		<category><![CDATA[Medicare]]></category>
		<category><![CDATA[New Class]]></category>
		<category><![CDATA[Office of Economic Opportunity]]></category>
		<category><![CDATA[war on poverty]]></category>
		<category><![CDATA[welfare state]]></category>

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		<description><![CDATA[The surge of federal economic interventions that occurred during Lyndon B. Johnson’s presidency—the much-ballyhooed Great Society, whose centerpiece was the War on Poverty—differed from the four preceding surges, each of which had been sparked by war or economic depression. No national emergency prevailed when Johnson took office following John F. Kennedy’s assassination on November 22, [...]]]></description>
			<content:encoded><![CDATA[<p>The surge of federal economic interventions that occurred during Lyndon B. Johnson’s presidency—the much-ballyhooed Great Society, whose centerpiece was the War on Poverty—differed from the four preceding surges, each of which had been sparked by war or economic depression. No national emergency prevailed when Johnson took office following John F. Kennedy’s assassination on November 22, 1963. The nation was not engaged in a major shooting war, and the economy was on the mend after the mild recession of 1960-61. For the most part, the Great Society represented simply the culmination of economic, political, and intellectual developments stretching back as far as the nineteenth century.</p>
<p>After the Korean War armistice of July 27, 1953, the United States had enjoyed a decade of respite from the rapid growth of government power over economic affairs. The wartime wage, price, and production controls lapsed, although authority to reinstitute the production controls remained. No major extensions of the government’s economic controls were enacted. Big government did not disappear, of course; many of the controls and other interventions put in place in the 1930s and 1940s remained in force. But businessmen, according to economist Herbert Stein, “had learned to live with and accept most of the regulations.” Government spending, especially for Social Security benefits, crept upward. All in all, however, the Eisenhower and Kennedy administrations were placid in comparison with their immediate predecessors and successors.</p>
<p>Under Johnson, however, the federal government’s intrusion into economic life swelled enormously. Major events included enactment of the Civil Rights Act of 1964, the Economic Opportunity Act of 1964, the Food Stamp Act of 1964, the Elementary and Secondary Education Act of 1965, and the Social Security Amendments of 1965 (creating Medicare and Medicaid), as well as establishment of the Office of Economic Opportunity (to oversee programs such as VISTA, Job Corps, Community Action Program, and Head Start), the Community Action Agencies, and many other bureaus ostensibly promoting poor people’s health, education, job training, and welfare. In addition, broad-gauge economic regulatory measures were adopted in connection with traffic safety, coal-mine safety, consumer-products safety, age discrimination in employment, truth in lending, and other areas.</p>
<p>What accounts for this multifaceted outburst? Do its various elements have a common denominator? Some scholars point to an intellectual development that Stein dubs “Galbraithianism,” after its leading propagator John Kenneth Galbraith—a loose collection of socioeconomic analysis and evaluation hostile to the free market and favorably inclined toward more sweeping government controls. “There was,” says Stein, “no demand for a new and different economic system” in the Galbraithian view. Rather, “[t]he ideological case for the old system, the free market, capitalist system, was punctured by the demonstration of exceptions to its general rules and claims, and this opened the way for specific policy interventions and measures of income redistribution without any visible limits.”</p>
<p>Galbraithianism’s arguments and attitudes gained strength from a spreading conviction that the U.S. economy would continue to grow forever at a fairly high rate, thereby ensuring that new and costly government programs could easily be financed by drawing on the “growth dividend.”</p>
<p>Economist Henry Aaron’s description of the climate of opinion in the 1960s essentially agrees with Stein’s. Aaron traces the widely held Galbraithianism back to previous crises: “The faith in government action, long embraced by reformers and spread to the mass of the population by depression and war, achieved political expression in the 1960s. This faith was applied to social and economic problems, the perceptions of which were determined by simplistic and naive popular attitudes and by crude analyses of social scientists.”</p>
<p>At the same time, a so-called New Class—composed of scientists, lawyers and judges, city planners, social workers, professors, criminologists, public-health doctors, reporters, editors, and commentators in the news media, among others—viewed new government programs as outlets for their “idealism” and as opportunities to do well while doing good. Thus a multitude of left-leaning intellectuals and pseudo-intellectuals gave significant leadership, support, and voice to the government surge of the Johnson years.</p>
<p>More prosaic political developments also played an important role. Lyndon Johnson, who had begun his political career as a New Dealer and political horse-trader in Texas, possessed not only boundless ambition but also keen political instincts and skills; he knew how to move Congress in the direction he wanted it to go. Moreover, the elections of 1964 gave the Democrats huge majorities in both houses of Congress and brought into office an extraordinarily leftish group of freshman legislators. According to Aaron, “No administration since Franklin Roosevelt’s first had operated subject to fewer political constraints than President Johnson’s.”</p>
<p>The specific forms the Great Society took reflected the increasing diversity of animals in the political jungle. While longstanding lobbies for business, labor unions, farmers, and middle-class professional groups continued to operate, many new interest groups organized and gained political clout on behalf of women, Indians, Chicanos, students, homosexuals, the handicapped, the elderly, and many others, none of whom had been directly represented as such to an important extent in U.S. politics. These groups demanded that the federal government solve a variety of racial, urban, employment, and consumer problems, real and imagined.</p>
<p>Galbraithianism, Marxism, and other varieties of critical socioeconomic analysis also helped to justify the displacement of antiwar and pro-civil-rights enthusiasms onto a diverse set of anti-market causes, giving rise to heightened support for environmental, consumer, and zero-risk regulations. No perceived social or economic problem seemed out of bounds in this cacophonous new political environment.</p>
<p>Although the Great Society established critically important new federal powers and agencies, it did not cause federal domestic spending to increase tremendously at first. A portentous sign might have been seen, however, in the quick acceleration of federal transfer payments, which increased from $34.2 billion in 1963 to $65.5 billion in 1969. Over time this locomotive gained more and more momentum. According to Michael D. Tanner of the Cato Institute, between 1963 and 2010, “the federal government spent more than $13 trillion fighting poverty.”</p>
<p>Almost everyone now acknowledges that federal entitlement programs, crowned by the enormously costly health-care systems the Great Society spawned, have promised much greater benefits than the government can fund, and hence that many of these benefits will have to be cut, notwithstanding the political fury such cuts surely will elicit. This impending sociopolitical tumult represents one of the Great Society’s bitterest fruits.</p>
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		<title>A Pen That Turns into a Sword</title>
		<link>http://www.thefreemanonline.org/featured/a-pen-that-turns-into-a-sword/</link>
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		<pubDate>Wed, 24 Nov 2010 17:00:15 +0000</pubDate>
		<dc:creator>N. Joseph Potts</dc:creator>
				<category><![CDATA[Featured]]></category>
		<category><![CDATA[citizenship]]></category>
		<category><![CDATA[civil rights]]></category>
		<category><![CDATA[draft registration]]></category>
		<category><![CDATA[driver’s-license laws]]></category>
		<category><![CDATA[federal benefits]]></category>
		<category><![CDATA[immigration]]></category>
		<category><![CDATA[military draft]]></category>
		<category><![CDATA[Selective Service]]></category>
		<category><![CDATA[stealth registration]]></category>
		<category><![CDATA[welfare state]]></category>

		<guid isPermaLink="false">http://www.thefreemanonline.org/?p=9348793</guid>
		<description><![CDATA[It’s a promotional giveaway pen, a rather nice one by BIC, white with red and blue writing that at first I found puzzling: MEN: Don’t lose benefits! Use this to register with Selective Service. Benefits from (or through, or with) Selective Service? When I turned 18 several years before the Vietnam era I registered for [...]]]></description>
			<content:encoded><![CDATA[<p>It’s a promotional giveaway pen, a rather nice one by BIC, white with red and blue writing that at first I found puzzling:</p>
<p>MEN: Don’t lose benefits! Use this to register with Selective Service.</p>
<p>Benefits from (or through, or with) Selective Service? When I turned 18 several years before the Vietnam era I registered for the draft with Selective Service and served nine years in the U.S. Navy. Although I received many benefits, I never regarded the experience as a net benefit.</p>
<p>So I considered the possibility that the benefits of being in the military might not be (all) the benefits referred to in the enigmatic exhortation on the little red, white, and blue pen. What other benefits, then, might men lose by not registering with Selective Service? The answers surprised and disheartened me—and struck me with a vision of 51 predatory governments endlessly revolving around the draft-age (18 to 25) male in ever-tightening circles. Among those governments, it turns out, are the 50 once-sovereign states whose own powers and prerogatives are steadily being absorbed by the black hole of the federal government, which runs the Selective Service System.</p>
<p>Much of what I learned about the benefits of registration, and the consequences of not registering, are outlined on the <a href="http://www.tinyurl.com/2drrftg">Selective Service website</a>. The benefits one “gains” in many states include the “privilege” of operating a motor vehicle on the government roads. That’s right—in at least 41 states the law denies any male 18 to 25 the right to apply for issuance or renewal of his driver’s license if the SS computer doesn’t confirm that he’s registered.</p>
<p>The denial of benefits can go even deeper. Many states refuse to issue a government identification card to males who can’t prove they’ve registered with the draft board. In those states if Selective Service doesn’t know who you are and where you sleep, you’ll have no official identity. You might never become able to order a drink in a bar, for example, unless you look old—or fly on a commercial airline.</p>
<p>Of course, as Selective Service literature constantly repeats, registering for the draft (provided you haven’t yet reached 26) is as simple as checking a box on practically any of the many government forms on which you disclose your name, date of birth, and address. And it may be easier than that. Many people, such as my draft-age son, don’t even know whether they’re registered. They may have been registered by stealth, as the young customers of <a href="http://www.tinyurl.com/ybg643h">Farrell’s Ice Cream Parlour famously were in 1983</a>.</p>
<p>But I checked (that’s easy, too—just go to w<a href="http://ww.tinyurl.com/ywh5oq">ww.tinyurl.com/ywh5oq</a> and check on the men in your family), and it turns out that he is registered, which is a “good” thing, since it became impossible for him to register when he turned 26 last July.</p>
<p>That’s right—as simple as it is to register between the ages of 18 and 25, it becomes utterly impossible once your birthday cake sports 26 candles. And from this arises a Catch-22 that Joseph Heller could be proud of: Federal benefits for males of any age require proof of registration—and if you pass 25 without having registered, you’re out of luck unless you can prove either that you somehow weren’t required to register or that you somehow never heard that you were supposed to. This is, of course, all spelled out on <a href="http://www.sss.gov">an extensive website</a>, though the title of Heller’s novel isn’t used there.</p>
<p>And in this age of the welfare state, in which sustenance itself may soon be unobtainable without the favor of the State, the benefits denied may not be trivial. With some exceptions, noncitizen males are also required to register. So citizenship itself, if you didn’t inherit it, is denied those who fall afoul of the Catch-22. Depending on what other citizenship(s) you may have access to, this can be a big benefit indeed to lose, since the governments of the world have banded together to make statelessness a parlous condition for anyone who wishes to live outside a correctional facility.</p>
<h2>Immigration Statistics</h2>
<p>The statistics of the Department of Homeland Security (immigration is now chiefly a security issue to the grantor of citizenship) reveal what must be primarily the effect of the registration requirement on the male/female ratios of naturalizations. Since 2005 the lowest percentages of males have been in the 30–34 age bracket and the second-lowest percentage have been in the 25–29 bracket—every year. In the younger bracket, would-be American males have the option to cure their nonregistration in their 25th year. In the first two years of the older bracket (through age 31), as well as in the last four years of the younger, applicants must prove that they weren’t required to register, the most common reason being that they had not yet entered the United States. Some applicants simply failed to register: Ineligible. Others weren’t required to register, but can’t prove it: Ineligible. Others weren’t required to register but don’t care to go to the considerable trouble and expense that can be required to prove it. They also don’t become citizens—ever, in many cases. (Forgiveness is possible after 31.)</p>
<p>From 2002 to 2009 about 2.9 million women were naturalized, while about 2.4 million men were, roughly 21 percent more females than males. Obviously, external factors can affect the gender ratio of those who apply for citizenship and who complete the often lengthy, expensive, and demanding process. But the requirement to register for the draft, or to have registered for it, is the only citizenship requirement that impinges differently on each gender. In the world population men outnumber women in the four age brackets spanning the critical years 18–31, but over half the shortfall of about a half-million men is in these four age brackets even though only 37 percent of the women naturalized were in those brackets (compared with 34 percent of the men).</p>
<h2>Further Limits</h2>
<p>Failure to register also denies people access to many government aid programs that provide loans and grants to students for attending college or vocational schools. Yes, if you passed your 26th birthday without registering, you’ll never qualify for this benefit. This denial is echoed among the state laws with the added bite that unregistered males are barred from admission to state colleges and universities if they happen to live in Colorado, Arkansas, Idaho, Louisiana, New Hampshire, South Dakota, or Tennessee.</p>
<p>Of course, these so-called benefits should not exist in the first place, but these rules demonstrate how military considerations set the boundaries.</p>
<p>Perhaps the most lucrative “benefit” withheld from the unregistered is the right to prey on fellow citizens through government employment. The federal government and a large number of states bar you from employment if you aren’t registered. If you’re over 26 and didn’t register, you’ll need a lawyer if you wish to render “civil service.”</p>
<p>Involuntary service in the military may be the greatest abrogation of civil rights that can be imposed on the citizens of “free” countries without judicial process, but registration with the draft board, particularly the “stealth” registration that seems to be stipulated in the driver’s-license laws of many states, is yet another violation of a dwindling civil right—of privacy. Of course, failure to report a change in one’s address—or in other words to perform self-surveillance—is also a violation of the law, though so far such a violation seems unlikely to lose you your benefits short of an “activation”—that is, the issuance by Congress of a draft call-up.</p>
<p>The draft, as well as registration for a future draft, violates natural rights, the 13th Amendment forbidding involuntary servitude, and every possible conception of equal treatment before the law (in this case, on the basis of gender), notwithstanding the Supreme Court decision to the contrary. This is the answer to those who would ask why the State can’t require military service in return for its various “benefits” or even citizenship. The dozens of state laws enacted in support of this system merely extend this trampling of civil rights, simultaneously broadening and deepening it.</p>
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