Melville’s Billy Budd: a Commentary on Burke vs. Paine?

 

Paine (left) wrote Rights of Man as a dagger against Burke’s Reflections on the Revolution in France

When I began reading Billy Budd, I established a literary and apolitical mindset, but it was an admittedly weak one that could not withstand Melville’s torrent of political references. For example, Melville named Billy’s merchant ship Rights-of-Man, which he left to board a man-of-war called Bellipotent (the names could not be more politically provocative). Because of my intimacy with both Thomas Paine’s The Rights of Man and Edmund Burke’s Reflections on the Revolution in France, I kept both men’s philosophies in mind as I read. Their opposing books, following the French Revolution, became the bases of classical liberalism and modern conservatism. In my opinion, Melville uses Billy Budd to glorify Paine’s liberal view and humiliate Burke’s conservative one.

Before explaining how their relative political philosophies fit into this story, I want to summarize briefly Burke’s and Paine’s worldviews. Burke’s Reflections emphasized the importance of traditional institutions (like church and monarchy) and the rule of law in society. According to Burke, society must run according to written law, however unjust that law may seem. Burke claimed that natural rights did not exist unless they were established by law, and only a change in the law could enable them to be practiced. Burke believed that people needed a legal ruler. In The Rights of Man, Paine exhibited enlightenment views such as individual rights inherent to human existence, peace, freedoms of expression and action, low taxation, and republicanism. According to Paine, society must run according to natural law. He claimed that it was dutiful to break unjust or unnatural laws. Paine believed that people should rule themselves.

Captain Vere shares Burke’s strict adherence to the rule of law, despite its probable injustice. Vere says, “Our vowed responsibility is this: That however pitilessly that law may operate in any instances, we nevertheless adhere to it and administer it” (2510).

Vere also holds Burke’s traditional belief that the people need a ruler. Vere says, “The people have native sense; most of them are familiar with our naval usage and tradition; and how would they take it [mitigating Budd’s penalty]? Even could you explain to them—which our official position forbids—they, long molded by arbitrary discipline, have not that kind of intelligent responsiveness that might qualify them to comprehend and discriminate” (2511).

The same tone expressed here by Vere is consistent with Burke’s Reflections. Burke believed it a bad policy to ever circumvent the law (even in a difficult case such as Budd’s), because he believed the law made people habitually virtuous, and that if the law was not enforced, the people’s habit of virtue would be broken. According to Burke, people are not intrinsically good, but have inherited a system of law and religion that molds them to be good. To undermine the structure of the inherited system, then, is also to risk losing the inherited goodness of the people (this logic also plays out in Vere’s mind, as seen above). To Burke, there are no natural laws; laws are made by men, not nature. This opposes Paine’s views that natural laws exist and should be recognized, and that people have an inherent affinity for natural laws, which gives people natural virtue.

A fundamental difference between the dueling English thinkers that Melville must have known: Paine believes man is intrinsically virtuous and Burke believes man is intrinsically vicious. Melville portrays Billy and Claggart, the master-at arms, as having beliefs parallel to these. Claggart is angry and puzzled by the unsophisticated righteousness of Billy’s character, and later, Billy is as shocked and enraged by Claggart’s evil lie. Is Claggart not like Burke–is Billy not like Paine, in their expectations of others? Claggart and Burke expect vice; Billy and Paine expect virtue. It is no coincidence to Melville that each expected from the other that which they harbored within themselves. Melville describes Billy as good and Claggart as evil—and not only evil—but abnormally so. “To pass from a normal nature to [Claggart’s] one must cross ‘the deadly space between’,” writes Melville (2488). So not only does Melville suggest that some people are good and some evil; he also suggests that the evil ones are aberrations, and that among these are men like Claggart and Burke.

Even today, Edmund Burke is among the most respected English legal scholars ever, and before writing Reflections, he had earned a reputation as a friend of liberty. Melville explains that Captain Vere was very well-read in political non-fiction. In the cases of both Burke and Vere, there is mystery as to why such educated and liberal-minded men as they were would favor law over right. Many of Burke’s critics believed that he was ambitiously hoping to win a sizable pension from the king when he wrote Reflections, and George III expressed his admiration for the book. In Billy Budd, when Vere dies, we learn also of his secret ambition. Melville writes of Vere, “Unhappily he was cut off too early for the Nile and Trafalgar. The spirit that ‘spite its philosophic austerity may yet have indulged in the most secret of all passions, ambition, never attained to the fullness of fame” (2521).

I actually see Melville’s Billy Budd as a fictional continuation of Paine’s arguments in The Rights of Man. To illustrate this, I will present a series of quotes within the two works in which Melville seems to echo Paine’s words:

On war contractors:

Paine: “That there are men in all nations who get their living by war, and by keeping up the quarrels of nations, is as shocking as it is true.”

Melville: “war contractors (whose gains, honest or otherwise, are in every land an anticipated portion of the harvest of death)” (2515).
On God and injustice:

Paine: “The name of the Creator ought not to be introduced to witness the degradation of his creation.”

Melville: “It was noted at the time [of Budd’s execution], and remarked upon afterwards, that in this final scene the good man [chaplain] evinced little or nothing perfunctory. Brief speech indeed he had with the condemned one, but the genuine Gospel was less on his tongue than in his aspect and manner towards him.”
On first principles:

Paine: “It is unnatural that a pure stream should flow from a foul fountain.”

Melville: “The Mutiny Act, War’s child, takes after the father.” (1511).
On monarchy:

Paine: “We must shut our eyes against reason, we must basely degrade our understanding, not to see the folly of what is called monarchy.”

Melville: “How can we adjudge to summary and shameful death a fellow creature innocent before God, and whom we feel to be so?—Does that state it aright? You sign sad assent. Well, I too feel that, the full force of that. It is Nature. But do these buttons that we wear attest that our allegiance is to Nature? No, to the King” (2509).

Billy Budd, as a whole, may be viewed as a story against war. If not for war, Billy would never have left his peaceful trading ship, and the awful series of events that make up the drama of the story would never have occurred. Melville’s antiwar message echoes the sentiments of Paine, who writes, “Man is not the enemy of man, but through the medium of a false system of government.” This follows from Paine’s belief that men are virtuous absent of law. Burke would never agree to such a statement, for it is his belief that man is naturally the enemy of man, but that his warring nature is restricted by the rule of law.

Another similarity is the way in which contemporary society remembered Billy Budd and Thomas Paine. Both were heroes who the newspapers called villains. Both were publicly ridiculed and lied about. Paine’s contemporaries called him—though he professed his belief in God—a blasphemer and an atheist, and a seditious agitator. Melville presented newspaper stories that incorrectly portrayed Billy Budd as a mutinous criminal. Paine died in impoverished obscurity—hated by the very multitudes who once shared his revolutionary spirit—despite his magnanimous contributions to society. On a smaller scale, Billy perished in much the same way.

Melville closes by writing, “The above, appearing in a publication now long ago superannuated and forgotten, is all that hitherto has stood in human record to attest what manner of men respectively were John Claggart and Billy Budd” (2522). One cannot help but wonder if he is not also talking about the manner of men that were Edmund Burke and Thomas Paine.

The conservative views of following the law to the letter and believing in intrinsic evil are supposed to seem unjust in Billy Budd, because Melville favors the liberal view. Whether or not the debates between Burke and Paine inspired this story, only Melville knows for sure, but the similarities are compelling.

Works referenced:

Burke, Edmund. Reflections on the Revolution in France. New York: Oxford University
Press. 1993

Paine, Thomas. The Rights of Man. Rights of Man and Common Sense. New York: Alfred A. Knopf (Everyman’s Library), 1994.

All page numbers cited from the following work:

Reidhead, Julia, Ed. The Norton Anthology of American Literature. Melville, Herman. Billy Budd. Seventh Edition. Volume B. 1820 – 1865. New York: W.W. Norton & Company, 2007.

Racist, sexist President Obama appoints racist, sexist judge Sotomayor

Surprise, surprise. Brief thoughts on the bigoted choice:

President Obama considered only females for the open Supreme Court seat; that’s sexism epitomized.  His choice was, by his own admission, largely influenced by race as well.  If Wal-Mart considered only men when choosing a new board member, and then announced they were proud of their choice because he is not only male but white, they would face a lawsuit.  Objectively, that is exactly what Obama did (only with a Hispanic woman), to the cheers of “liberal” bigots everywhere.  The absurdity and injustice of the process was disgustingly bigoted.  As is our wont, government sponsors injustice, the government-educated majority loves it, and everyone capable of objective, critical thought has to accept it, because democracy, in all its tyrannical splendor, is the new god.

DeGraw solid, honeyhoney sweet

Apologies to my readers for leaving the political realm for this post, but this is my blog and I will write whatever the hell I want to on it.  Today I want to write about a concert.

I went to see Gavin DeGraw at the Square Room last night.  I actually got to meet him a few hours before his show, which was a bonus.  He was walking around Market Square in Knoxville.  He seemed to be shopping, but he was kind enough to stop and talk with me for a minute.

DeGraw, musically, was about what I expected him to be.    He sounds a lot like his albums.  He surprised me once; while playing “Mountain to Move”, which is a quiet song, DeGraw turned to his lead guitarist and said, “hold on.”  The music stopped.  DeGraw was annoyed.  He said, “I can’t play over all this talking.”  He then respectfully told the audience to either shut up or leave, and started the song from the top.  The crowd submitted; the room fell completely silent for the entire song.  It was unexpected and stellar.

But the best surprise was the opener I had never heard of, honeyhoney.  There were only two members, a guy named Ben and a gal named Suzanne.  They were uber-talented.  Ben played guitar (and drums, sort of, if you can imagine what that might be like simultaneously), and Suzanne played violin, banjo, and sang (beautifully, but not all at once).  I was so impressed that I bought their disc, First Rodeo.  That’s right, I paid for music.  I listened to it in the car on the way home.  Enjoyable.  Where the hell did this band come from?  I wondered.

Upon arriving home, I wanted to see what sort of youtube presence they had.  I searched “honey honey,” and though there were a ton of hits, I was disappointed to find they were all Mamma Mia and ABBA videos–not that there’s anything wrong with Mamma Mia or ABBA.

Google hooked me up with their website, and as it turns out, I am the one out of the loop, not them.  Unknown to me, Suzanne Santo and Ben Jaffe have apparently gained relative fame as honeyhoney.  For instance, Kiefer freaking Sutherland is in their video for “Little Toy Gun”.  When I heard Suzanne sing that song live, I mentioned that she sounded almost exactly like Amy Winehouse (she did, but not as much on the record).

Fortunately, Suzanne does not look like Amy Winehouse.  She is an adorable, down-to-earth redhead (for now) with an edgy sense of humor and a welcoming smile.  From what I gathered, Ben is no slouch either.  I’m no judge of masculine sexiness, but when honeyhoney first came onstage, someone nearby asked if Ben was Gavin DeGraw.  The girl next to me noted that he was, “way too good-looking to be Gavin DeGraw.”  I’m not sure if that’s a knock on Gavin or a compliment to Ben.

If you don’t know Gavin DeGraw’s music, climb out of your hole and give it a listen.

I encourage all to visit honeyhoney’s website and listen to them as well.   Feed these relatively famous starving artists by purchasing their music and/or groupie gear (they have cool t-shirts with crows on them).

My interview with The Pakistani Spectator

I would like to inform my readers of an up and coming Pakistani website called The Pakistani Spectator.  Its webmaster, Ghazala Khan (who may or may not be a descendant of Genghis), is committed to the free flow of ideas throughout the world.   It is people like Khan who–more than the overpaid CEO’s of biased, failing media conglomerates–are laying the foundation for lasting global understanding, friendship, and peace.  Websites like The Pakistani Spectator are creating a global forum in which the humble average citizen of one country may speak openly with the humble average citizen of another, and these two would-be-strangers may find a common interest in peace that their governments and corporate media would have hidden from them.

If Americans wish to truly know a foreign people, they should look not to the solitary voice of that foreign government, but to the myriad voices of its real people.  This is a luxury only the blogosphere can provide, and it is the luxury that people like Ghazala Khan help provide to the world.  The greatest tool for peace that humans have is direct communication, and never before has that tool been available to so many.

Thomas Paine wrote, “Man will not be brought up with the savage idea of considering his species as his enemy, because the accident of birth gave the individuals existence in countries distinguished by different names.” If, after more than two centuries of lying inefficaciously upon our bookshelves, and lying ceaselessly to the hopeful minds of multitudes, those words are to finally become truth, humankind may owe less gratitude to Paine’s enlightenment than to the free exchange of ideas across the worldwide web.

I agreed to an interview with The Pakistani Spectator, which may be found here.  I encourage all to bookmark the website and watch it grow and develop into a large and peaceful online community.

Debunking the “beauty of the two-party system” myth

“Government is a beast” – Thomas Paine

I copy the following from a conversation I had with a Democratic friend, because I think his is one of the most common arguments in favor of the status quo, and I think it is faulty.   My friend said,

“The compromise of Democracy or Republicanism or whatever you want to call it (I think you’re splitting hairs – nobody is advocating mob rule) is what makes our country great… the constant push-pull of left and right that always eventually ends up in the middle.”

My response was this:

“Is it great to bomb Pakistan?  Is it great to invade Iraq?   Is it great to detain people without evidence?  Is it great to start wars and support the pre-emptive first strike doctrine?  Is it great that the government can listen to your phone calls, read your emails, etc.?  Is it great to condone torture?  Is it great to imprison non-violent drug users?  Is it great to reward failed business practices?  Is it great to call dissenters terrorists?  Is it great that both parties support all of these measures?  When policies like these have become your cherished middle ground, is the push-pull of left and right really so great?  I think justice is great.  Many have died willingly for it, and i think they were all great.  Supporting moderation in the pursuit of justice is the mark of a person who is not great.”

There is nothing beautiful about two parties whose petty quarrells never fail to bring more government, more police, more imperialism, and less freedom.

The Second Amendment’s wisdom

Weapons, in the hands of a free people, are a general danger to none but tyrants and criminals. The leader who would ban private ownership of arms considers the citizens enemies, and himself above the law. To attempt such a measure without properly amending the sacred contract upon which our government is founded, is a gross denial of justice. It is to assert that there are no laws, but only rulers.

AIG spells nationalization of entire insurance industry

The Wall Street Journal reports that since receiving government aid, insurance giant AIG has begun greatly underbidding its competitors in the insurance industry.  Fed Chair Ben Bernanke acknowledges this practice, and believes it is necessary for AIG to do this, in order to gain enough marketshare to become profitable.

With billions of government handouts, AIG is able to offer peerless premiums.  In a free market, offering such low premiums would be corporate suicide.  But AIG is not a free market participant.  It has government backing.  Bernanke and Treasury Secretary Timothy Geithner have, on numerous occasions, voiced their intent to do whatever is necessary to keep AIG from folding. In this context, risks that would normally bankrupt the company do not restrict its behavior, because its liquidity flows from a seemingly bottomless barrel, the purse of the citizenry.  Losses from these risks will continue to be subsidized, and those subsidies will encourage more risks, and bring on more losses.

Other insurance companies cannot compete with a company that has unlimited liquidity.  This leaves their executives with a dilemma: they can keep their premiums high and non-competitive, and lose all of their customers; or they can lower their rates to meet AIG’s, keep their marketshare, and become illiquid when they are forced to pay out to misfortunate customers.  Both of these options will end in bankruptcy.

When AIG’s competitors are nearing bankruptcy, one of a few results may play out:  they may fail outright, leaving their marketshare available to AIG; they may be bailed out by the government, which starts them on AIG’s path of neverending losses; or, they may be purchased by AIG.  In each of these results, a government-funded monopoly over the insurance industry is established.  This monopoly, like all monopolies, will suffer unnecessary costs and miss opportunities to innovate.

The added costs of a non-competitive insurance industry will be great, even in the unlikely circumstance that it is fully funded by premiums.  It is likely, however, that the monopoly would evolve into a nationalized insurance company, or a government service, rather than revert back to a private insurance corporation.

If AIG’s insurance role becomes a government service, it appears that the costs of that service will be borne by everyone who uses dollars, as the Treasury has started printing large amounts of currency to pay its bills.  This inflation is perhaps the most regressive form of taxation, because it hurts those who are not wealthy enough to protect themselves properly from its effects.

Keynes and the “intellectuals” v. America

I wrote an email about John Maynard Keynes a couple of weeks ago that I want to share with you.  It was to my mother.  As a university instructor, she receives emails from intellectual colleagues of all fields, who often know little or nothing of economics, but strongly support Keynesian theories.  Such professors, living comfortably on the fringes of capitalistic prosperity, compare their salaries with the earnings of industrious geniuses around them, and blame free markets for their conditions, because they are too proud to blame themselves.  Mention to them that throughout history, where free markets are absent, famine and misery abound–that government noninterference produced the only society to ever avoid starvation for more than a century–and these intellectuals will not listen, for they are teachers and not learners, and in a planned society they imagine themselves to be the planners, and not the laborers.  But before they can plan, they must destroy the system that feeds everyone but makes them irrelevant: capitalism.  Their destruction is nearing completion, and they hope to take advantage of the ensuing collapse, become planners, and rule over the creative, industrious, and inventive energies within our society.

So backward are these educators’ attitudes, that they confused my educated mother (M.B.A. and J.D.) into thinking Keynes could be right.  I had to set her straight, but I could not blame her for being confused.  Even I thought Keynes was right until I started studying macroeconomics.  In my first college economics class, I answered one of my professor’s questions about recessions by accurately explaining Keynes’ theory of aggregate demand.  His response was, “they’ve got you brainwashed, don’t they?”  His firm criticism encouraged me to begin reading economic theory.  There was a time (in the 1960s and 70s) when almost every economist was Keynesian, but today Keynes’ theories are rarely taught without a healthy dose of skepticism.  This is because much of what happened in the economy of the 1970s and 80s appeared to prove Keynes wrong.  The longer I studied, the more I realized that, in America today, almost every economic barrier an individual encounters has been erected by government.  I realized that while private entities sometimes invest poorly, which hurts the economy, government often invests poorly, negligently, and with impunity, which hurts and may cripple the economy.

For any argument about suitable means to be valuable, parties must agree on suitable ends.  My end is the maximization of individual liberty.  I see this also as the maximization of justice.  I believe that every individual has rights to political and economic liberties, “life, liberty,” etc.  I believe the primary purpose of government is to protect those rights.  If that end cannot be agreed upon, then you will find my argument worthless, but knowing you to possess a liberal mind, I suspect you will gain something from my opinion.  The best economic means toward protecting individual liberty are, in my opinion, minimal taxation, fiscal responsibility, sound money, and government noninterference (peace would also help).  If his goal was to protect our rights (and I strongly suspect it was not), Keynes theory was wrong.  If his goal was to improve stability, Keynes was wrong.  If his goal was to improve justice, Keynes was wrong.  If his goal was to increase the control of the state over the everyday lives of individuals, Keynes was wrong, but successful.

Here is the email I wrote my mom:

“If in the first attempt to create a world of free men we have failed, we must try again.  The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century.” – F.A. Hayek, The Road to Serfdom

After reading The Road to Serfdom, F.A. Hayek’s criticism of J.M. Keynes’ General Theory, Keynes admitted, “morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.”  Keynes was praising a book, morally and philosophically, that championed laissez-faire over his own theory.  It warned that Keynes’ theory would lead to the enslavement of all mankind (save a small governing elite), and Keynes agreed with “virtually the whole of it,” morally and philosophically.

Keynes was a unique figure, brilliant enough to recognize his own wrongs, and proud enough to refuse to set them right.  A supporter of eugenics, he was an arrogant man who always thought himself the most clever person in the room, and on this one point, it is likely that he was always correct.  His mind, however, was poisoned by the Old World belief that there must always be two classes of people, the rulers and the ruled, but Americans believe that these classes are neither natural nor necessary, and that every man is his own ruler.  Keynes knew his theory would be, on a free people, an immoral imposition, and even admitted its ability to increase economic instability (which it has done), but like a contemptible, soul-selling politician, he dismissed an economic system of justice, honesty, and freedom for “light and transient causes,” to become a ruler, gathering fortune and fame while providing the most efficient immediate remedy to those most in need; and while all this rottenness may be crafty politics, it is bad economics.

A good economist considers not only a strategy’s short-term effects on interested groups, but its short- and long-term effects on all groups.  To joke that “in the long run we’re all dead,” as Keynes did, is an assault on posterity, and indicates his intent to rob their liberties and fortunes for the sake of temporary splurging.  We know individuals that live beyond their means are destined to live beneath them, and this is no less true of nations.  Until now, U.S. production and national wealth have increased in spite of government, because capitalism is still operating to some extent, and because by luck, a slow waitress is handling the bill for all this “aggregate demand”.  I don’t expect the Department of Treasury will leave her a tip.

There is a lot of bad economics abroad, being taught in universities, being preached in the halls of Washington, and being recorded for wiser generations to lampoon.  As Louis XIV had his divine right, Paul Krugman has his Nobel Prize.  Bad economics tells us that the government must make us better off (limit our choices), inflate the currency (steal our savings), save the X industry (kill the Y industry, and harm everyone not closely related to the X industry), increase the minimum wage (increase prices), protect our industry with tariffs (limit choices and increase prices) increase credit (increase debt), increase public works (increase taxes), create more jobs (impossible), stop technology from stealing jobs (lose opportunity for increased standard of living), achieve “full employment” (instead of full production), bail out unions (tax all others), stop foreclosures (undermine the price mechanism that guarantees short recessions), increase the velocity of money (tempt hyperinflation), and give away “free” pensions, healthcare, houses, food, and money (remove all incentives for production).  But one thing we must never, ever do, under any circumstances (according to this “economics”), is save.  There is no rhyme to bad economics.  It cherishes credit, and although savings is the only true source of credit, savings is, in their muddled minds, the bane of all good society; the only use of savings is as actual wealth that, in the absence of a gold standard, the government can steal through inflation.

The economic ideas I prefer are what Barack Obama calls “the stale political arguments which have consumed us for so long,” which “no longer apply.”  By the context of this quote in his inaugural speech, it appears Obama is attacking arguments in favor of individualism, the philosophy of John Locke, upon which the United States was founded and became prosperous.  John Locke died over three hundred years ago, so–though collectivism is much older–individualism may now be called a “stale” argument, but this is totally irrelevant.  It matters not whether an idea is new or old, but whether it is right or wrong.  I believe that collectivism is wrong and individualism is right, and as it is better to repair a wrong than persist in it, I will halt discussion of contemporary leaders to return to the informative purpose of my writing you.

Bad economics insults reason, starving and torturing the mind, and causing anxiety; but good economics informs reason, satisfying the mind’s natural appetite.  I may feed that appetite with my own words, but others have prepared portions so tasteful as to make my own attempts bland.  Morsels to follow:

• “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.” – Adam Smith
• ““Dying industries absorb labor and capital that should be released for the growing industries.  It is only the much vilified price system that solves the enormously complicated problem of deciding precisely how much of tens of thousands of different commodities and services should be produced in relation to each other.  These otherwise bewildering equations are solved quasi-automatically by the system of prices, profits and costs.  They are solved by this system incomparably better than any group of bureaucrats could solve them.  For they are solved by a system under which each consumer makes his own demand and casts a fresh vote, or a dozen fresh votes, every day; whereas bureaucrats would try to solve it by having made for the consumers not what the consumers themselves wanted, but what the bureaucrats decided was good for them.  Yet, though the bureaucrats do not understand the quasi-automatic system of the market, they are always disturbed by it.  They are always trying to improve it or correct it, usually in the interests of some wailing pressure group.” – Henry Hazlitt
• “It may be that he who bestows the largest amount of time and money on the needy is doing the most by his mode of life to produce that misery which he strives in vain to relieve.” – Henry David Thoreau
• “The evil is inflation.  Its weapon of defense is an invisible vapor, the effect of which is to cause people to become economic alcoholics, afflicted with the delusion that they can get rich by destroying the value of money.” – Garet Garrett
• “A government that has arrived at the ultimate goal of total power may dispense with inflation.  The power to command obedience enables it to achieve directly what formerly it could only achieve indirectly by inflation.  The consuming delusion is that because of what Americans were, this may not or cannot happen.” – Garrett
  
• “Wealth brings with it its own checks and balances.  The basis of political economy is non-interference.  The only safe rule is found in the self-adjusting meter of demand and supply.  Do not legislate.  Meddle, and you snap the sinews with your sumptuary laws.  Give no bounties, make equal laws, secure life and property, and you need give no alms.  Open the doors of opportunity to talent and virtue and they will do themselves justice, and property will not be in bad hands.  In a free and just commonwealth, property rushes from the idle and imbecile to the industrious, brave and persevering.” – Ralph Waldo Emerson
• “Anyone who has observed how aspiring monopolists regularly seek and frequently obtain the assistance of the power of the state to make their control effective can have little doubt that there is nothing inevitable about this development.” – Hayek
• “The money rate can, indeed, be kept artificially low only by continuous new injections of currency or bank credit in place of real savings.  This can create the illusion of more capital just as the addition of water can create the illusion of more milk.  But it is a policy of continuous inflation.  It obviously is a process involving cumulative danger.  The money rate will rise and a crisis will develop if the inflation is reversed, or merely brought to a halt, or even continued at a diminished rate.” – Hazlitt
• “Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise.  They force the general taxpayer to subsidize the bad risks and to defray the losses.  They encourage people to ‘buy’ houses that they cannot afford.  They tend eventually to bring about an oversupply of houses as compared with other things.  They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion.  In brief, in the long run they do not increase overall national production but encourage malinvestment.” – Hazlitt (1946, if heeded, we may have avoided current recession)
• “There is no subtler, no surer means of overturning the existing basis of society than to debauch its currency.  By a continuing process of inflation, governments can confiscate secretly and unobserved an important part of the wealth of their citizens.  By this means they not only confiscate, but confiscate arbitrarily, and while the process impoverishes many it actually enriches some.” – Keynes
  
• “As to the assumed authority of any assembly in making paper money, or paper of any kind, a legal tender, or in other language, a compulsive payment, it is a most presumptuous attempt at arbitrary power.  There can be no such power in a republican government: the people have no freedom, and property no security where this practice can be acted: and the committee who shall bring in a report for this purpose, or the member who moves for it, and he who seconds it merits impeachment, and sooner or later may expect it.” – Thomas Paine
• “Deficit spending is simply a scheme for the confiscation of wealth.  Gold stands in the way of this insidious process.  It stands as a protector of property rights.  If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” – Alan Greenspan
• “What is called economic power, while it can be used as an instrument of coercion, is, in the hands of private individuals, never exclusive or complete power, never power over the whole life of a person. But centralized as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery.” – Hayek
• “You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less.  You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services he is capable of rendering.  In brief, for a low wage you substitute unemployment.  You do harm all around, with no comparable compensation.” – Hazlitt
• “The question is not whether we wish to see everybody as well off as as possible.  Among men of good will such an aim can be taken for granted.  The real question concerns the proper means of achieving it.  And in trying to answer this we must never lose sight of a few elementary truisms.  We cannot distribute more wealth than is created.  We cannot in the long run pay labor as a whole more than it produces.  The best way to raise wages, therefore, is to raise marginal labor productivity.  This can be done by many methods: by an increase in capital accumulation–i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training.  The more the individual worker produces, the more he increases the wealth of the whole community.  The more he produces, the more his services are worth to consumers, and hence to employers.  And the more he is worth to employers, the more he will be paid.  Real wages come out of production, not out of government decrees.  So government policy should be directed, not to imposing more burdensome requirements on employers, but to following policies that encourage profits, that encourage employers to expand, to invest in newer and better machines to increase the productivity of workers–in brief, to encourage capital accumulation, instead of discouraging it–and to increase both employment and wage rates.” – Hazlitt
• “‘Adequate’ relief will cause some men not to seek work at all, and will cause others to consider that they are in effect being asked to work not for the wage offered, but only for the difference between the wage and the relief payment.” – Hazlitt

“A malady… once known is half cured.” – Jefferson

Jefferson v. Hamilton, federal powers, and the Marshall Court

Alexander Hamilton and Thomas Jefferson were the most prominent representatives of two contrary interpretations of the U.S. Constitution. Two landmark Supreme Court cases, Marbury v. Madison (1803) and McCulloch v. Maryland (1819), show the relative influences of these two interpretations on American political thought.

Jefferson was a strict constructionist. He desired a limited government, and thought Congress should be restricted to the enumerated powers of the Constitution. In 1787, he wrote to James Madison from Paris, “I own I am not a friend to a very energetic government. It is always oppressive.”

Hamilton, on the other hand, believed in a strong and energetic central government. He thought Congress should have more legislative powers than those expressly stated in Section 8 of the first article of the Constitution. He also favored a strong executive power.

Jefferson and Hamilton became political rivals. In 1818, explaining the notes taken during his tenure as Secretary of State (Hamilton was Secretary of the Treasury at the time), Jefferson remembered, “Hamilton was not only a monarchist, but for a monarchy bottomed on corruption.”

The two politicians squared off when arguing about the constitutionality of a national bank before the legislature in 1791, and that instance best displayed their different interpretations of the Constitution. The argument centered around a part of the Constitution that has become famously known as the “necessary and proper” clause.

The last power of Article 1, Section 8 of the U.S. Constitution reads, “To make all laws which shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the government of the United States, or in any department or officer thereof.”

According to Jefferson, the establishment of a national bank was illegal under the Constitution. His argument before Congress was unsuccessful but legally sound and compelling. He said, “The second general phrase is, ‘to make all laws necessary and proper for carrying into execution the enumerated powers.’ But they can all be carried into execution without a bank. A bank therefore is not necessary, and consequently not authorized by this phrase. It has been urged that a bank will give great facility or convenience in the collection of taxes. Suppose this were true: yet the Constitution allows only the means which are ‘necessary,’ not those which are merely ‘convenient’ for effecting [sic] the enumerated powers.” In addition to this logical argument, Jefferson claims that the Constitutional convention specifically rejected the power to erect a bank, because it would cause the Constitution to be rejected by the states.

Alexander Hamilton’s response to Jefferson’s interpretation, which today brings to mind Bill Clinton’s “depends on what the meaning of the word is is” defense, was to alter the meaning of the word “necessary.” With tortured logic, Hamilton explained that “necessary often means no more than needful, requisite, incidental, useful, or conductive to.” He argued as if the Constitution was not a deliberate legal document, but a casually rendered text of hyperbole, a rubber instrument open to broad interpretations.

Government tends to expand its own powers to the furthest extent tolerated by a majority of citizens. As Hamilton’s program proceeded, so did this tendency in the United States; Marbury v. Madison and McCulloch v. Maryland help to commemorate this procession.

In Marbury v. Madison, Chief Justice John Marshall wrote the decision against Jefferson’s administration. Jefferson was upset by the decision, but he was not entirely opposed to its points. Reacting to the Constitution in 1787, Jefferson wrote in a letter to Madison, “I like the negative given to the Executive with a third of either house, though I should have liked it better had the Judiciary been associated for that purpose, or invested with a similar and separate power.” The Marbury v. Madison decision established Jefferson’s wish precisely, judicial review, which is the ability of the Supreme Court to declare a law unconstitutional and void.

As a strict constructionist, however, Jefferson believed that the Constitution meant what it said, and was alarmed by Marshall’s claim in Marbury v. Madison that “it is, emphatically, the province and duty of the judicial department, to say what the law is.” According to Jefferson, this dangerously opened the Constitution to liberal interpretations like Hamilton’s.

If in 1803 Marbury v. Madison lobbed Jefferson’s strict constructionist interpretation, McCulloch v. Maryland batted it to oblivion in 1819. The issue hotly debated by the political giants in Congress twenty-nine years earlier, the constitutionality of a national bank, again entered the national political arena, this time in the Supreme Court. Marshall wrote the decision. He affirmed Hamilton’s interpretation of the “necessary and proper” clause, instituting the implied powers of Congress.

These decisions effectively turned the Constitution into the glass-encased relic it is today, and made the United States government one of men, and not of laws. The judges of the Supreme Court, appointed for life by the President and confirmed by a majority of the Senate, granted themselves in Marbury v. Madison the power “to say what the law is” in 1803, after which any statute wished for by the President and a majority of Senators, however offensive to the Constitution, could be legally enacted, so long as there were sufficient vacancies in the Supreme Court to procure a majority of like-minded judges. Congress was granted implied powers by McCulloch v. Maryland in 1819. Despite John Marshall’s lip-service to the Constitution in McCulloch v. Maryland, “its limits are not to be transcended,” his decision legally ended constitutionally limited government in the United States. The Marshall Court assented to Hamilton’s interpretation, and killed Jefferson’s. Jefferson knew he was defeated, and called upon the democratic forces of the people to reinstitute a strict constructionist interpretation of the Constitution. That call remains unanswered.

Works Referenced

Hamilton, Alexander. “Opinion on the Constitutionality of a National Bank”. 1791.Dolbeare, Kenneth M. and Michael S. Cummings, Ed. American Political Thought. Fifth Edition. Washington, D.C.: CQ Press, 2004.

Jefferson, Thomas. “Explanations of the 3. volumes bound in marbled paper”. February 4, 1818. Thomas Jefferson Writings: pp. 661-673. New York: Library of America. 1984.

Jefferson, Thomas. “Opinion on the Constitutionality of a National Bank”. February 15, 1791. Thomas Jefferson Writings: pp. 416-421. New York: Library of America. 1984.

Jefferson, Thomas. “To James Madison”. Paris, Dec. 20, 1787. Thomas Jefferson Writings: pp. 914-918. New York: Library of America. 1984.

Marshall, John. “Marbury v. Madison”. 1803. Dolbeare, Kenneth M. and Michael S. Cummings, Ed. American Political Thought. Fifth Edition. Washington, D.C.: CQ Press, 2004.

Marshall, John. “McCulloch v. Maryland”. 1819. Dolbeare, Kenneth M. and Michael S. Cummings, Ed. American Political Thought. Fifth Edition. Washington, D.C.: CQ Press, 2004.  I also referenced the full arguments and decision of this case available at: “http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=17&invol=316”

A letter concerning economic reality

As a response to this bloomberg.com article, which declares and celebrates the end of laissez-faire economic influence, I shared with my mother (who forwarded the article to me) thoughts so relevant to the economic discussion in America today, they are worth repeating here:

This article, besides unpardonably confounding economic liberty with imperial oppression and brutal dictatorhip, grossly neglects theoretical argument, so the ignorant reader is to accept its conclusion without understanding it.  This negligence of thought is a necessary means to an unreasoned end.  So far from being worthy of publication, this article would be expensive at any price, and is not worth the time spent reading it.  By equivocating much, it says nothing.

The idea that Barack Obama will “referee the laissez-faire versus free-market debate” is laughable; as referee in that non-existent contest (laissez-faire and free-market are inseparable allies), Obama would probably sabotage both competitors and declare an interventionist victory.

I will present a few points ignored by this article that, if attended to, would render a very different image.

First, it has been over a century since we have had a free market for goods and services and private control of production and consumption.  Therefore we have not had capitalism, and it is irrational to blame economic woes on a system that does not exist; it is as reasonable to blame Martians.

Secondly, and most importantly, government fostered the economic crisis.  Behold artificially low interest rates during the tech bust of 2001-02.  The only way to keep rates so low is by printing money out of thin air.  This government-created free money combined with implicit government guarantees of new loans via Fannie Mae and Freddie Mac generated a housing bubble and subsequent financial bubble large enough to threaten the existence of the global financial system.  Because that system is naturally undeserving of its legitimacy, its collapse may be a good thing, but only if governments practice humility in the aftermath.  Governments should understand that the maximization of individual freedom is their purpose, both politically and economically.  Governments should come to know that the evils of paper money cannot be overstated.  Governments should not allow interested monopolies to control monetary bases.  Governments should focus on destroying monopolies, not turning them into unavoidable institutions.  Inexplicably, we must now rest our hopes of economic salvation upon the imminent Representative Barney Frank and Senator Christopher Dodd, both of whom promoted bad loan practices and free money policies for years, and neither of whom saw the economic crisis coming.  This is a sure case of the inmates running the asylum.

On this point, note that at least one House Representative did accurately predict the events that led to the financial bust.  In a speech to the House in 2001, he said “despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.” That Representative was ignored by almost everyone, and probably laughed at by the interventionist economists that this article aggrandizes.  That Congressman was Dr. Ron Paul, who continues to be widely ignored by popular economists, his colleagues, and our media.

Thirdly, most true free-market economists follow the “Austrian” theories of Murray Rothbard, Ludwig von Mises, and Friedrich A. von Hayek.  Free marketeers typically place more value on each of these three than Milton Friedman because their work was much more thorough, more laissez-faire, and more conclusive.  Few if any contemporary proponents of laissez-faire economics hail from the University of Chicago.

Economic science and history inform us that there will eventually be a final and all-destructive economic downturn: the fiat currency bust, which in the United States will be the destruction of the dollar.  The nature of this destruction will likely be hyperinflationary, like Germany’s post-WWI Mark or the ancient Roman denari (severe dilution of silver content in coins was the ancient “paper” money, and is still practiced).  I hope this will be followed by a return to sound asset-backed currencies and the elimination of fraudulent banking institutions, whose theft brings so much hardship to the unaware, unoffending, humble human.