The great problem that has occupied political philosophers for several millennia and economists
for centuries has been finding a rationale for the state and its managers that will assure
the state's longevity and stability. On the face of it, that might seem to be a strange
thing to be concerned about. One might think that curbing despotism would be a greater
Mises laid out the ideal in 1929 when he wrote,
The citizen must not be so narrowly circumscribed in his activities,
that if he thinks differently from those in power, his only choice is either to perish or to destroy the machinery of state.
Sadly, however, there are no governments that are liberal by nature.
All have a tendency to grow and become menaces to society.
Also, by definition, the state enjoys a territorial monopoly on the legal use of aggressive force in society, and therefore does not face a problem of compliance most of the time.
Given this, one might think that the last problem that would occupy anyone is how to assure the state's stability and longevity.
It is akin to medical research that is trying to figure out how to make diseases as long-lasting, painful, and deadly as possible.
By comparison, far less energy has been applied to addressing a greater problem, how and when to throw the bums out.
If we look at a sweep of history, especially modern history, we can see that the state as an institution is responsible for the largest and gravest of all social, economic, cultural, and economic.
Cultural and Humanitarian Disasters
The problem isn't so much assuring that states survive, but in limiting the power of states and getting rid of them when they go too far.
The Encyclopedia of Revolutions and Revolutionaries chronicles more than a thousand cases of internally driven regime change from the ancient world to the present.
Some were peaceful, with regimes dissolving without a trace. Others were not peaceful.
Many ended in greater liberty, some ended in terrible tyranny.
The difference in case after case is the intellectual climate that surrounded the great event.
In the sweep of history, however, this much is clear.
Far too few states have been overthrown.
Liberty is the exception, tyranny the norm.
Why are states not stopped before they attack private property, wreck economies,
to stabilize families and engage in mass murder.
As Thomas Jefferson wrote, all experience hath shown that mankind are more disposed
to suffer while evils are sufferable than to right themselves by abolishing the forms
to which they are accustomed.
There is an additional factor.
It is rather difficult to stop states and probably impossible to limit the state to
a certain set of functions.
The tendency is always and everywhere for it to grow and become overweening.
Stopping any voluntary institution in society is comparatively easy.
All enterprises in a market economy can be brought to their knees by the simple act of
refraining from buying.
Families too are broken up by the simple act of walking away.
Churches collapse when people lose interest in faith.
Private schools go belly up when the students stop showing up, but states always and everywhere
extract their revenue by force. People have no choice but to comply, or rather they face
the choice of complying or suffering physical punishment. Of course, states prefer to elicit
compliance through other means, by eliciting patriotic fervor or devotion to the prince.
What are the conditions under which a state fails? What are the moral and practical justifications
for giving it a push? What is the best method for assisting in the overthrow of a regime
and bringing about new social and political systems? These are questions that have been
addressed by a relatively few thinkers in history. In fact, we can single out the groups
of intellectuals who have addressed the topic in any depth. The moral thinkers of the high
The classical liberal tradition spoke to the issue because it was the first to see that social order and prosperity were not sustained by the state, but rather existed despite the state.
In that tradition, the founding generation of the U.S. that overthrew British rule drew on the writings of John Locke and others.
The Marxists, too, have been variously consumed by this topic. They, like the classical liberals, view the state as something of an artifice masking a deeper structure of political dynamic. To this extent, they are correct.
The issue is directly relevant for our own times. We just witnessed the amazing spectacle of a recall election in California.
The citizenry concluded that the regime in charge had failed to do what it said it would do.
With the legitimacy of the regime lost, the California system, premised on some small measure on the idea that government should reflect the people's will, permits citizens to petition for throwing the bum out.
They elected a new manager in this place.
Now there are many obvious problems with the system. There's no real justice for the bum. He's not punished for his transgressions.
He loses nothing out of his personal assets for his mismanagement. He only loses the right to rule.
But the biggest problem is that Californians were only permitted to vote on who should manage the government apparatus,
not on the legitimacy of the government apparatus itself.
Even so, the very existence of a recall election taps into the unquot sense we all have
that there is nothing sacred about government managers. They can be replaced, deposed, overthrown.
The government is not permanent. It can fall if the people will it, provided the system permits such a thing to happen.
The system that makes this impossible is in some sense unjust, because it makes power alone the measure of all things.
If we believe that power must be justified in some way, there ought to be a mechanism to check power by the prospect of overthrowing it.
It is crucial for heads of state to understand that their rule is contingent. This serves
a crucial role in keeping power in check. Even when putting together the U.S. Constitution,
the right of the Congresses, the people's representatives, to impeach the President
and convict him was firmly established. The founders expected that this threat would
In the modern world, however, governments have worked to make themselves unimpeachable,
so to speak.
It was once only dictators who referred to themselves as permanent fixtures, unalterable
facts of history.
The U.S. started doing the same thing in the 1990s when it became the world's only superpower.
Madeleine Albright declared that the U.S. is the world's only indispensable government.
She said indispensable nation, but we know what she meant.
In our own time, as President Bush has not only declared the U.S. government to be permanent
and eternal, he has set up the U.S. as the sole judge of all other governments in the
world which are somehow deemed dispensable.
Other regimes can be changed, even decapitated, but only one, the most powerful of all, is
regarded as sacrosanct.
Why is the U.S. the world's only permanent government?
Is it something written into the fabric of the natural law?
We know the reason.
It has the most guns by far, and therefore no one is in a position to object.
The impeachment power all but gone, the right of secession declared null and void, the impossibility
of Recalling Presidents and the rise of the permanent bureaucratic class, does this mean
that there are no mechanisms remaining to us to check the power of the state? Is there
nothing we can do to dislodge these people from their seats of power and prestige?
There still is another force at work, the propensity of governments to overreach in
so many areas that their exercise of power itself can lead to their own undoing. The
The overreach can take many forms, financial, economic, social, military. In this way, with
enough passion for liberty burning in the hearts of the citizenry, governments can be
responsible for their own undoing. It comes about as a result of overestimating the capacity
of power and underestimating its limits. I believe this is happening in our time.
It may not be obvious when taking a broad view, but when you look at the status of a huge range of government programs and institutions, what we see is a government that is once enormously rich and powerful, but also fragile and teetering on the brink of bankruptcy.
Events of the last year indicate just how far the government has slipped in its ability to manage the economy, society, culture and world order.
Despite the exalted status of the State today, the vast and sprawling empire called the U.S. Government may in fact be less healthy than it has ever been.
The other day we had a special speaker come to Auburn, probably the most famous man who has visited us since the country and western singer Alan Jackson anyway.
He was Mikhail Gorbachev, a very interesting figure in the history of nations.
He came to power with the reputation of a reformer and institute of many reforms that were designed not to give the people more liberty, but to stop the unraveling of an empire before it was too late.
But it was too late, and all his talk of perestroika and glasnost couldn't fool the people, who had become convinced that the Soviet machine was something of a hoax.
The empire unraveled not because of him, but despite his efforts to save it. When it came
time to make the crucial decision of whether to try to hold the empire together by much
more force, history had already made the choice for him, and the empire dissolved in the blink
of an eye. Not too many months later he was out of a job, not because he was recalled
Ron Paul has said for some years that the U.S. may be in a similar position to that
of the last years of the Soviet Union, an empire that everyone believes will last forever
but which has decayed at its very foundations, financially and militarily overextended to
the breaking point.
I agree with him on this.
Let's gain some insight into how governments travel the trajectory from high prestige to
to Humiliation by looking at the well-known tale of The Emperor's New Clothes by Hans-Christian
Anderson. It is much to teach us about the nature of the state and its stability in good
and bad times. In the story, the emperor has the ambition to be well dressed. He'll have
nothing more than showing off his clothes in procession so that people might be ever
more convinced of his glory. Now, we might think of this as a metaphor for the ideological
The Philosophers tell us that all societies need a coercive head to ensure justice and fairness.
The Political Philosophers say that the people demand a head of state to represent their interests.
The Economists tell us that the state is essential to the provision of public goods.
The Historians tell us that the state is indispensable for making war, which is said to provide the hinge of history.
The justifications multiply and change as often as the Emperor's clothes in the story.
Some tailors of pre-established reputation are employed to make him the finest set of
clothes that have ever been worn.
But these are very shrewd tailors.
They come up with the idea of positing the existence of a fabric that can only be seen
by the smart and can't be seen by the stupid.
The Emperor is thus unwilling to admit that he can't see the cloth.
He's driven by vanity to praise the tailors as brilliant.
He is surrounded by sycophants who are similarly unwilling to tell what is true.
He first sends a minister who thinks, oh dear, can I be really this stupid?
I should never have thought it and yet it must be so.
Can it mean that I'm unfit for my office?
No, no, so I can't have that, so I must say that I can see the cloth.
What a beautiful pattern, he says, what brilliant colors.
I should tell the emperor that I like the cloth very much.
Next comes the so-called honest courtier, whom I think of as the bureaucrat. He's shown
the cloth and thinks, I'm not stupid. Therefore, it must be my good appointment that I'm not
fit for. Very strange, but I must not let anyone know it. He praised the cloth, expressed
his joy at the beautiful colors and the fine pattern.
Finally, the emperor himself. What is this, thought the emperor? I don't see anything
at all. That's terrible. Am I stupid? Am I unfit to be emperor? That would be the most
A dreadful thing. Really, he said to the weavers, your cloth has our most gracious approval.
Not uncontentedly, he looked at the loom, empty. All his attendants who were with him
looked and looked, and of course they couldn't see anything either. But like the emperor,
they said, it's very beautiful.
Onward goes the agenda of wearing the unseen clothes at a major procession. And sure enough,
the population participates in the allusion. In the most dramatic and hilarious scene in
In the story, the emperor walks in the procession, as all the people yell, the emperor's new
suit, it's incomparable, what a long train he has, how well it fits him. Everyone knows
how the story ends. A young child, too naive to understand the exalted status of the state,
and thus to know what can and cannot be thought or said, notes, but he has nothing on at all.
Another man says, good heavens, listen to the voice of an innocent child. The spell
is broken and all the people lose their fear and creativity, he's got nothing on, he's
Significant that the voice that shattered the illusion was not that of an intellectual, a bureaucrat, a politician, or even a clergyman.
It's also significant that the voice did not come from the masses of the people who had gathered to observe the state in all its glory.
These people were all too willing to suppress what they knew in order to retain their position or not depart from received opinion.
He said it was the voice of a child who told what was true, someone too unschooled to know
the merit of repeating propaganda and too young to be afraid to speak plainly. He did
not observe something others did not observe. What was different was his willingness to
speak about it, and he caused enormous humiliation to the state. But he did not pull a gun or
a knife. He did something far more powerful. He said what was true. That a young person
One said what was true when no one else seemed willing to speak is itself significant. Murray
Rothbard was fond of quoting Randolph Bourne on the virtues of youth. Youth puts the remorseless
questions to everything that is old and established. Why? What is this thing good for? Youth is
the leaven that keeps all those questioning, testing attitudes, fermenting in the world.
If it were not for this troublesome activity of youth, with its hatred of sophisms and
Youth is pessimistic towards the present, gloriously hopeful for the future, and it is this hope, said Born, which is the lever of progress, one might say, the only lever of progress.
Once exposed by this young person as the crowd joins him in observing the absurd reality, does the Emperor run and hide?
In short, the emperor knows that in some sense he has always lived a lie. He is no more glorious
and exalted than anyone else, and he may well be less so. But he has done well so far by
pretending otherwise, pretending to be above the common folk and especially fit to rule
Why should he change his posture now?
The truth about him has always been there for those who could see it, but somehow the system worked.
Now that everyone could see what was true, what could he do but continue the racket in hopes that the system would continue to work for him?
Now the story ends there just to the most interesting part where one wonders about the affairs of state the next day.
Was the emperor more or less tyrannical?
Was he more or less successful in taxing the people? Was his rule more or less secure?
We cannot know the whole outcome with certainty, but we can know that his status had been seriously
diminished. And if we had to think of this as an allegory for the role that ideological
garb plays in covering the affairs of state, we know that a major myth has been shattered
and thus the grip of the state over the people weakened, even to the point at which the emperor
I submit to you that this procession of folly takes place every day in modern times. It's
spread all over the newspapers, it's on television, it appears on websites. The masses of people
may not be willing to admit what they see, or they may even see whatever it is they want
to see. But once you have in your mind a model for understanding the state and begin to see
Finally, the linkages between its failures and area after area of life. You begin to
stand out from the rest. You think and talk differently from the courtiers and the masses
of people who watch the same procession but are unwilling to say what is true.
Let's look at the U.S. budget, which only a few years ago seemed to be approaching the
point of being balanced. Of course, it was an illusion created by a massive infusion
of revenue due to an artificial economic boom. You might expect governments around the country
The Federal Reserve took the new revenue and ran with it, creating a vast apparatus of new programs only to find that when the recession hit, the money ran dry.
Deficits exploded at all levels of government. Localities and states had to find new revenue sources or cut the budget.
As for the Federal Government, once you wipe away the phony statistics, the real budget deficit surpasses $600 billion, which is a record.
What's the effect of deficits? Because the federal government enjoys the legal power to counterfeit with impunity. Deficits do little to restrain spending. But the financial effects are real indeed. Unless the debt is inflated away, the US puts itself in hawk to foreigners and citizens willing to fund the deficit, the effect of which is to crowd out private investment and frankly waste hundreds of billions funding big government rather than productive private enterprise. Now the system of finance can work
This cannot go on forever. If China's economy, for example, were to fall into recession and savings be depleted, they might stop holding U.S. debt and then the U.S. faces a very serious problem.
There are other things that could make interest rates rise and dramatically raise the cost of funding the debt, creating ever more debt, putting pressure on the Fed to monetize.
The scenarios for financial collapse are unlimited.
The point is that in economics there are limits to how far the state can go.
Yes, it will use every trick in the book to keep the game going for as long as possible, but even it bumps up against reality at some point.
In any case, financial collapse of the state is the oldest and most common scenario in world history by which states are brought to their knees.
And of all the governments in the world today, the U.S. may be the most prone.
The tragedy, of course, is this will happen at the expense of the people.
Their personal finance is demolished by the reckless ways of the state.
Such a scenario is not an inevitability. The Federal Government could get its financial house in order.
It could stop the reckless spending. It could cut back on the welfare and the warfare.
It could shut down the central bank and institute a gold standard to provide fiscal discipline.
Instead of performing inflationary tricks, it could attempt to tax the people to pay for every dime that it spends.
Of all scenarios, I would think this is probably the least likely to take place.
In the meantime, as the government spends more and more on less and less, its services continue to deteriorate relative to what the private enterprise provides.
Consider the area of communications technology. It was revealed earlier this year that employees of the CIA are not permitted to have access to the web or Google.
That tidbit of information is a window into a great reality. The government is remarkably blind as regards information access.
Consider Mises.org. As Jeff Tucker pointed out earlier, with our new news feeder, we can immediately provide free market news and views in addition to scholarly work, as we post them instantaneously to millions of news sources around the world, in real time.
We used to say that Misesian opinion was available to the world with a click of a mouse, but now that's not even necessary.
News sites around the world stream Mises.org content the same as they stream the BBC, Reuters or the New York Times.
This is true not only of our site but millions of individual blogs around the world.
The result is a world connected as never before.
Along with this has developed a vast international economy that is as once anarchistic and orderly.
Everyone knows how eBay and the power of reputation creates this global marketplace without police.
But fewer know about such sites as ExpertsExchange.com, where millions of technology developers pay $100 per year
that access to the insights and help from millions of other experts.
Those who solve problems are rewarded with cash bonuses out of the fund.
All the entrepreneurs behind this site do is create the infrastructure.
The rest is the product of the remarkable power of commerce combined with the creativity of human ingenuity.
It's a wonder to behold.
In thousands of years of trying, governments have created nothing of similar productive power.
This reality is not lost on the younger generation, whose world is shaped not by the products of the state, but rather by private markets.
It is this younger generation, as with the story, that can see the stark reality that
the government is wearing no clothes.
The times are creating remarkable idealists, but they need systematic education.
The child who spoke about the emperor's clothes had courage, but he also needed as he grew
up to read in the Austrian tradition so that he could systematize his views and develop
a consistent perspective on economics and politics.
That's one role the Mises Institute plays. We take the young generation in college that
is very sophisticated about technology and holds the government already in a sort of
tacit disdain and give them the reading materials to make sense of the bits of information that
come their way. Those students who are involved in politics right now are attended to issues
of military security and war and can't but be astounded at events that have taken place
The notion of liberation in Afghanistan lasted only several weeks before those who were still paying attention realized it had been a myth cooked up by the war planners.
Today the country is rife with violence, poverty, criminal gangs and the Taliban, forming again to stop the enormous rise of drug production that began only weeks after the Taliban was thrown out of the capital.
As for Iraq, with bombings, killings, human suffering all around and nothing in sight but the bad choices of continued military dictatorship or fundamentalist Islamic rule, everyone but the war planners now regards Iraq as a disaster.
The war planners believed that their will alone was enough to make and remake a country, whether Iraq or Afghanistan, and indeed the entire world because they operated the levers of state power.
State power sees people as pliable, all events as controllable, and all outcomes as the inevitable workings out of a well-constructed plan.
Being the top dogs of the world's only superpower, they never doubted their ability to dictate the terms, and so they had no plan for what to do when things went wrong.
What went wrong? Well, they forgot several essential components of the structure of reality.
People's free will is often backed by the willingness to undertake enormous sacrifices.
Most especially, it overlooks certain underlying laws that limit what is possible in human affairs.
In the scheme of how the world works, even the largest state is only a bit player.
Yes, it is capable of creating enormous chaos, transferring huge amounts of wealth, but not of controlling events themselves.
That is why government action generates oftentimes the exact opposite of the policy that it is constructed to create.
Donald Rumsfeld's now famous memo gives the game away.
He admits he does not know whether the US is winning or losing, but he's suspicious it's losing.
He admits that he lacks any means to discover whether the government is winning or losing.
He admits that private armies are doing better with millions than government armies with billions.
He goes so far as to contemplate whether the government is capable of beating its enemies or whether some new organization is needed.
If these comments don't strip away the facade of the warfare state, I don't know what would.
Indeed, the entire apparatus of the warfare state is defeated by this fact.
Human beings don't respond well to being treated like prisoners in someone else's central plan.
If the desire to wholly manage the future, the mega planner is always a mega failure.
If not in the short term, then certainly in the long term.
The Bush administration seems to have had bigger dreams than even FDR or Wilson.
But the group that began believing they could reshape the entire world is now merely responding to events.
Now, wherever it all was put into how the conquering heroes would manage the economy,
of the Economy. It is as if they completely forgot about people's needs for electricity,
clean running water, food, communications. The one principle that has guided the occupiers
in their economic affairs in Iraq has been that whatever happens, the U.S. government
must be in charge. This error has led them to kick out private entrepreneurs who attempted
to start cell phone companies and airlines. Even now, the U.S. is putting street vendors
out of business, establishing monopoly providers and throwing around U.S. tax dollars to well-connected
Corporations in the name of rebuilding the country it first destroyed.
The War Party has never understood what freedom means.
They believe it is something granted by government or the military as a proxy for government.
They believe that freedom is something that exists because of the people running the government
or the laws that manage society.
In fact, freedom means the absence of despotism of all sorts.
It can never be granted by the state.
It can only be taken away by the state.
If a government manager desires freedom for a society, his only path is to get out of the way.
The level of arrogance has also had an effect on how the administration believed it could fund this war.
It's increasingly clear that the total cost of the Iraq War will run into the hundreds of billions of dollars.
And yet they proceed as if there are no worries about paying for it.
Of course, the administration benefits by the presence of that great marble palace down the street
that promises to print unlimited quality and quantities of dollars to pay for whatever the administration wants to do.
The war policy of this administration may have failed in every way to achieve its stated aims, but it has succeeded in the one way war does succeed.
It has transferred huge amounts of money and power from the private sector to the public sector.
And believing that war is good for the ruling regime and its cronies really have so few been right about so much.
If the government cannot be trusted to run wars or provide the national defense that
so completely failed on September 11th, it surely cannot be trusted with managing such
crucially important institutions as education. Yet the Bush administration has succeeded
in making unprecedented inroads into local schools with its no child left behind policy.
Just the name alone is worthy of the age of despots who purported to be the father and
and Educator of Every Child.
Yes, I know it is supposed to represent a humanitarian spirit, but we need to ask ourselves
whether having the government as the imparter of values at taxpayer expense is really such
a good idea.
Evidently, many people think it is a bad idea.
As public school enrollments fall in both rural and urban schools in most places around
the country, homeschooling is taking off and creating a cottage industry of textbooks and
materials that parents themselves use to educate their children.
The effect of this is fantastic, not just for the children who are the main beneficiaries,
but also for the parents. A major problem of the public schools is that they socialize
the parents into believing that they do not need to take responsibility for the education
of their children. But homeschooling is bringing back an old value, that parents bear primary
responsibility for their children's education and for their training generally. Homeschooling
is still small by comparison to public education, but the trend line is enormously encouraging.
Nor do I intend to slight private schools which are also growing in size and diversifying
in shape. They are rising up to meet the needs of parents whose values are even more diverse.
And this fact raises an interesting point. The growing multiculturalism of the American
public is often treated as a problematic issue for national unification. But this presumes
there is some political value to homogeneity. Believers in freedom might question this assumption.
It could be that the rise of multiculturalism will indeed make the country ever less governable
at some level. It will reduce the extent to which the population is attached to the central
state as an expression of their values. A multicultural people will be ever less attached
to the symbols of national unification. This could end up as one means by which the central
state, heavily premised on the idea of a unified population, could unravel.
Like all empires in human history, especially ones with growing populations and rising prosperity,
this country is far too big and diverse and complex to be managed by a central state.
It is essentially an unviable project and is destined to fail just as it has failed.
It's true that the population is becoming ever more diverse in its values if it is true,
as the political left constantly tells us.
It makes no sense that there should be a single state that would presume overarching political jurisdiction over the entire entity.
It's heresy to say it, but I think it's long past time we called into question the words of the pledge, one nation, indivisible.
Crucially important in the process will be the growing problem of Social Security and the whole welfare state.
For all the attention given to the income tax, it is increasingly less significant as a factor in looting the average American.
For three-quarters of U.S. taxpayers, the bite that the payroll tax takes out of their paycheck, if we admit that both the employee and the employer tax comes directly out of the workers' wages, as they do.
And what does the worker get in exchange? A bankrupt system that dulls out of pittance should you happen to reach the officially defined age of retirement.
For the generations after World War II, this might have seemed generous, but for those who will retire in 20 years, it's nothing short of pathetic.
Then there is the absurdity of retirement itself as promoted by the Roosevelt administration.
The very idea that people need to throw in the towel at age 65 is a gross anachronism.
Even more fundamentally absurd is the idea that Washington, D.C., which can't manage even the slightest improvement in our well-being,
can care for us in our old age, providing a steady stream of income to substitute for the care given by savings and family.
and Family. The very idea alone drives a wedge between the generation and pits young against
old. For young people these days, they know that they will be caring for their elders
and that they need to provide for themselves in old age. The government apparatus that
loots them day after day, which is under intense financial strain, is nothing short of a fabulous
failure.
If the welfare state in the U.S. is under strain, it has reached the breaking point in
in most parts of Europe, where nearly everyone recognizes that something must be done to dismantle the grave errors of the post-war planners who instituted such huge redistribution schemes.
The choice at this stage is between continuing decline and a revival of prosperity by sweeping away the old structures that are inhibiting free initiative and capital accumulation.
Equally anachronistic is the idea of centralized fiscal and monetary management.
Keynesian planners from the 1930s to the 1970s imagined themselves as masterminds operating a huge machine called the macro economy.
But they made a terrible mess of things exactly as we might expect.
They believed they were boosting aggregate demand when all they were doing was looting the private sector and ballooning the national debt.
They believed they were stimulating production by creating new money and credit, but all they did was generate inflation and the business cycle.
In their management of international trade, they believed they were harmonizing regulations across borders to create efficiency and protecting domestic industry from competition.
But all they did was loot American consumers, entrench inefficient industries and create conflicts among nations.
Even in this current recessionary cycle, the Bush administration has reached deep into the Keynesian grab bag and pulled out 50 year old gimmicks,
None of which have helped the economy, but instead only forced all recovery.
It's time the macroeconomic planners stopped pretending and gave up.
What is desperately needed are intellectuals who understand the utter futility of all kinds of central planning, including fiscal, monetary, regulatory and trade.
These are far rarer than you might think.
Even today, people who call themselves economic libertarians also counsel the Federal Reserve to provide more liquidity to the system and otherwise attempt every manner of gimmickry to stimulate the economy.
They haven't absorbed the central lesson of the liberal tradition. Society does not need central management by the state.
Why is that a difficult message to get across?
Those of us steeped in libertarian theory and the economics of the Austrian School are sometimes amazed that it takes others so long to come around.
But we must remember that it takes intellectual work to begin to see the logic of economics, and to apply it to our world.
The ignorance is vast and overwhelming, and we must do everything we can to combat it.
Sometimes people ask why it is that if liberty is so central to the Mises Institute's mission, we concentrate so heavily on economics.
Mises gave us the answer. The study of economics properly considered is the study of the rise and fall of civilization itself.
Aside from the beauty and elegance of economic theory, economics delivers a bracing message to the state. Your power is limited.
The structure of reality limits the possibilities for power to have its way in this world.
Socialism will fail, central planning will fail, protectionism will fail, regulations, taxation, welfare, all these programs will often produce the exact opposite of their stated aims.
Economics says to the state, society does not need you.
The cooperative work of billions of people exchanging and creating is the very source of the quality of life, the very core of peace and prosperity.
Economics sets the limits for the state, helps us understand our world, and leads us to make sense of the passing scene.
With economics, we would never have been deceived about the true nature of the emperor's suit.
That is not a message the state wants to hear, which is why we must be passionate, aggressive, entrepreneurial in delivering it.
We're fortunate that the message is capable of connecting very closely with ordinary people.
If we look at the way people conduct their affairs, in daily life we find that people are utterly and completely dependent on free enterprise and on the institutions upon which it rests, and less and less on the products of the state.
We are enormously fortunate to live in times when the wonders of free markets are constantly before our eyes.
We can observe the way the seeming anarchy of the market economy, which is global in scope, operates as an orderly, productive process that improves our standard of living in every way.
not only provides the goods and services we need to live,
it is daily creating alternatives to the status ways of doing things.
Whether we look at communications, education, security, managing disputes, or any other area of life,
the wonders of liberty and the failures of the state are all around us.
In a grand procession in which the Emperor marches onward in a humiliating pose,
and the rest of us wait for someone to break the silence and point out what is true.
Murray Rothbard argued that there are two conditions that must be met in order to bring
about a revolution, objective and subjective. The objective conditions are in place. Most
everywhere in the world people have embraced the promise and prosperity of freedom and
rejected the poverty of despotism. The institutions we love, commerce, creativity, enterprise,
property, trade, voluntary association are on the march while the state is languishing
with its creaking agent institutions of coercion, compulsion, war and welfare.
What's left undone is for people like those of us in this room to work towards achieving
the subjective conditions essential for revolution.
We must make the intellectual case and teach the world to see the benefits of consistently
embracing liberty in theory and practice.
Our odds of victory are no better and no worse than they were in the 18th century when the
and the founding generation threw up the rule of a foreign king and they were better and
no worse than they were in the Soviet Union in the late 1980s when the people dismantled
an imperial system of despotism.
I'm optimistic about the prospects for liberty because our side has enough energy and enthusiasm
to match and exceed anything coming from the partisans of stagnation and state power.
The application of this energy in the area of political and intellectual activism has
is a cumulative effect over time. As you know, in the workplace, the employee who is just
slightly more productive than the average can end up as a champion in a year or two.
It's the same in the intellectual arena. Long ago, we had become accustomed to thinking
of ourselves as a tiny remnant of true believers who had to write for anyone willing to read,
but seriously hindered in our ability to get the message out. After 1996, that all changed
A key question to ask of any body of ideas is whether it's living or dying. Looking at the body of ideas of the Austro-libertarian tradition and where we stand today as compared with 10 or 20 years ago, there can be no doubt as to our status. We are living and growing at compounded rates, and this is paying off in so many ways.
Many years ago there were only a handful of Austrians teaching in economics departments
around the world. Today there are many hundreds and they no longer have to hide their views.
On the contrary, they're hired precisely for their Austrian connections. It's easy to see
where this is headed. Not too many years from now it will become the rule rather than the
exception for every economics department at a vibrant institution to have at least one
faculty member who embraces the Misesian tradition.
The history of the Mises Institute proves this much. A little work done day by day adds up
over time. Multiply that work by millions and we have a revolution on our hands. What
should that work be? It depends on circumstances of time and place. We must first work to improve
our own cultural circumstances and this is something we can control. We must free ourselves
We must be good examples. An outstanding entrepreneur is the living embodiment of the power of free enterprise. A great teacher is a living example of idealism in practice. A great father or mother, of which we have many here, is living proof that the family is not the den of pathology that the left proclaims. A wonderful statesman like Ron Paul is proof that not all politicians need to care about self-interest only.
No revolution in history has gone precisely according to plan.
Every case is different, and the timing and nature of social change surprises the most brilliant intellectual architects.
But know this, every time you learn something new about liberty, share a book, an article, an idea, contribute to a good cause,
write a letter to the editor, or give another hero of liberty moral support,
For your support, you are taking a sledgehammer to the foundation of despotism in our time.
We don't know when it will finally crack, but we do know that it is the intellectual work above all that will bring it down.
In its place, we must seek to plant a garden of liberty that will have to be constantly cultivated from its inception until the end of time.
All states everywhere enjoy power only because people are willing to continue to obey and not challenge the powers that be.
This means that power is ultimately based on the elusive notion called legitimacy.
But legitimacy can vanish in an instant, exposed as a facade that covers up the massive looting machine that is government.
It is the role of all of us gathered here tonight to break the silence.
It is the role of the Mises Institute to teach so that young people can state the truth in ways that others find compelling.
The Emperor may continue his march, but never do it again with the confidence that he can fool all of the people all of the time.
Let us work towards a time when he fools no one. Thank you.