Professor Maltseff pointed out in the afternoon the irony of the fact that it's a Russian
who will talk to you about why America must be saved and that it will be a German, that
is me, who will talk to you about the question how America can be saved. I do not know whether
I do not know whether it is justified to ask a German to answer this question given the fact that Germans in the 20th century have not proved to have too much in terms of strategic savvy having lost all wars, so to speak, but I will try my very best.
My speech has three parts. First, I want to present a diagnosis. What has happened in the 20th century and where are we?
My second part of the speech will be rather brief and will address what is our goal? Where do we want to go?
And the third part of the speech will concern the question of strategy. That is, how can we move from here, where we are, to there, that is, where we want to go.
Now, let me begin with the diagnosis. And for that, let's go back about 100 years and ask the question, what did the Western world look like then, 100 years ago?
And let me give you some quotes, first from a British historian, A.J.P. Taylor, who describes pre-World War I Europe in the following way.
A man could travel across the lengths and breadth of the continent without a passport until he reached the frontiers of Russia or the Ottoman Empire.
He could settle in a foreign country for work or leisure without legal formalities, except occasionally some health requirements.
Every currency was as good as gold. Nearly everywhere men could be sure of reasonably fair treatment in the courts of law.
No one was killed for religious reasons, no one was killed for political reasons, despite the somewhat synthetic bitterness often shown in political disputes.
Private property was everywhere secure.
Now, second, a quote from John Maynard Keynes, not exactly one of my more favorite economists,
but even those people sometimes once in a while say something correct. So, Keynes about
this same period of pre-World War I Europe. The inhabitant of London could order by telephone
Sipping his morning tea in bed, this applies more to Keynes than most other people, the
various products of the whole earth in such quantity as he might see fit and reasonably
expect their early delivery upon his doorsteps. He could at the same moment and by the same
means adventure his wealth in the natural resources and new enterprises of any quarter
of the World and share without exertion or even trouble in their prospective fruits and
advantages. Or he could decide to couple the security of his fortunes with the good face
of the townspeople of any substantial municipality in any continent that fancy or information
might recommend. He could secure forthwith, if he wished it, cheap and comfortable means
of Transit to any country or climate without passport or any other formality, could dispatch
his servant to the neighboring office of a bank for such supply of the precious metals
as might seem convenient, and could then proceed abroad to foreign quarters without knowledge
of their religion, language or customs, bearing coined wealth upon his person, and would consider
Robert Higgs, economic historian,
Mises Institute, regarding in particular the situation in the United States at this time.
He writes, the average American could go about his daily business hardly aware of the existence
of government, especially the Federal Government. As farmer, merchant or manufacturer, he could
decide what, how, when and where to produce and sell his goods, constrained by little
are all more than market forces. Just think, no farm subsidies, price supports or acreage controls, no Federal Trade Commission, no antitrust laws, no Interstate Commerce Commission.
As an employer, employee, consumer, investor, lender, borrower, student or teacher, he could proceed largely according to his own lights.
Think. No National Labor Relations Board, no Federal Consumer Protection Laws, no Securities
and Exchange Commission, no Equal Employment Opportunity Commission, no Department of Health
and Human Services. Lacking a central bank to issue national paper currency, people commonly
used gold coins to make purchases. There were no general sales taxes, no social security
Taxes, No Income Taxes. Though governmental officials were as corrupt then as now, maybe
even more so, they had vastly less to be corrupt with. Private citizens spent about 15 times
more than all governments combined. Now after these quotes, let me also add a few illustrative
I want to add a few illustrative statistics to round out the picture regarding the late 19th century.
Government expenditure on all levels of government was typically less than 10% of gross national product.
Government employment was around 2% of the total labor force.
rates then were below 2.5 percent. The purchasing power of money gradually increased from year
to year. Families were strong and large given that they constituted the basic unit of social
life, responsible for personal welfare and security. And wars, with the exception of
were limited and not ideologically but territorially motivated and comparatively civil in that a clear-cut distinction between combatants and non-combatants was respected and civil life including international travel and commerce went on almost uninterruptedly during the course of the war.
War. Now, all of this is not to say that things were perfect then. There were plenty of reasons
to be worried, especially if one was a classical liberal. In the course of the last third of
the 19th century, some ominous events and developments had taken place. Political centralization
had sharply increased with the unification by way of military aggression and war of Italy
and Germany in Europe and in the United States with the so-called civil war. And all across
Europe as well as in the United States, especially after the civil war, the franchise had been
successively expanded from almost no one can vote except the very wealthiest property owners
As a consequence, the strengths of socialist-egalitarian parties and movements increased, while the influence of liberal parties and proponents of classical liberalism continually declined, and liberalism itself was increasingly transformed into a social liberal system.
and liberalism. Moreover, by the end of the nineteenth century, and that was a reflection
of the combined ideological forces of nationalism and social egalitarianism, at the end of the
nineteenth century, almost all governments had begun, however limited and restricted
this was initially, to introduce some forms of social security legislation, that is, compulsory
Social Insurances Against Old Age, Accidents, Illness and Unemployment for instance. Governments
then already possessed and in some cases for as long as centuries monopolistic control
over public education, that is essentially elementary schools for all and universities
universities for very few, that is typically less than 2% of an age group.
Now with the onset of social security policies
beginning in Germany
in the 1880s
government power had been expanded
from the control over children and students
to that of all family and household members.
Yet as the quotes from
Taylor
Keynes and Higgs rightly point out, up until 1914 and the outbreak of World War I, enough
of the great past achievements of liberalism were still in effect, and the egalitarian
socialist policies were still so much in their infancy that a liberal could still entertain
the hope that the 20th century would bring even further progress on the road toward freedom
and Prosperity. All such hopes were shattered by the events and the results of the war however.
World War I was to become one of the great watershed marks in modern history, in many
ways similar to that of the French Revolution. Rather than the century of the final triumph
of Liberalism in the European sense, the 20th century became the century of Socialism.
And World War I came to separate the old world of monarchies and liberal republicanism from
the new age of popular sovereignty, egalitarianism and mass democracy, whether in its parliamentary
form or that of popular dictatorships. World War I began as a new era of socialism.
This is the monarchical war and it ended from 1917 onward after the failed peace initiatives during the last months of 1916, most notably by the Austrian Emperor Charles I and the abdication of the Russian Tsar Nicholas II in March 1917 and the declaration of war on Germany by the United States in April 1917.
The war ended then as a prototypical democratic war. That is, at the outset, the war was an old-fashioned military conflict, even though it was somewhat atypical because of the higher degree of political centralization within Europe and, accordingly, the larger sizes of European armies, but it was nonetheless a traditional war in the sense that it was motivated by traditional territorial
and Strategic Objectives. Through the early involvement and the final entrance into the
war of the United States, however, where the expansionist centralist and the democratic
egalitarian spirit had only recently triumphed as a result of the violent defeat of the Confederacy
by the Union, and where this new spirit had found its personification in then President
Woodrow Wilson. The intra-European war then became at last an ideological mission and
hence a total war. It became the war to make the world safe for democracy and free of all
dynastic rulers. As a result of World War I, 20 million people were killed, most of them
World, most of them non-combatants, starved or diseased to death. The monarchies, most
notably in Russia, Germany and Austria, were disbanded and replaced by democratic republics.
Likewise, the newly created successor states, such as Poland and Czechoslovakia, were generally
are already given democratic republican governments and even where monarchies remain nominally in existence, such as in England and the Scandinavian countries, monarchs exercise in fact no longer any governmental powers, but all power was vested in public parliaments and officials. Germany and Austria were humiliated and the Austrian Empire almost completely dismembered. As a reflection of the
The war experience, that is the experience of mass participation and the disappearance
of all distinctions between combatants or soldiers and non-combatants or civilians,
almost everywhere, including also the United States, universal adult, female and male suffrage
was introduced, and this institution of universal suffrage and the additional strength that
The War had lent to the already popular sentiment of egalitarianism. This led then to a dramatic
upsurge in support of all sorts of socialist parties, movements and programs. In Russia,
Lenin and the Bolsheviks rose to power, followed by mass expropriation, mass murder and mass
emigration. Hungary experienced a brief communist experiment under Béla Kuhn. In Germany,
In Germany, at several places such as Munich, communist takeovers occurred, until government
power fell into the hands of the moderate Menshevik wing of the socialists, or as they
call themselves, social democrats. Likewise, Austria stood on the verge of a communist
takeover after World War I, and incidentally, it was only due to Mises and his personal
was influenced on Otto Bauer, the leader of the Austrian Socialist Party, that Austria
followed instead the somewhat more moderate socialist path of Germany instead of turning
Bolshevist. Italy was faced with communist revolts, land seizures and factory strikes,
until Mussolini was a former socialist turned a law and order nationalist socialist, seized
seized power and, in 1922, established his fascist government.
In France, the Republican Socialist Left divided into numerous competing parties, consistently
garnered a majority of the votes, and from the mid-twenties onward managed repeatedly
to form coalition governments. And in Great Britain, the traditional haven of classical
European Liberalism, the Liberal Party was reduced to insignificance and displaced by
an increasingly powerful Labour Party instead, which gained government control even if only
briefly for the very first time in 1924. Moreover, as a result of the war itself and the expansion
As a result of the war itself and the expansion of egalitarian socialist policies immediately following the war, most of Europe was ridden by inflation, and the loser nations in particular, Russia, Germany and Austria, were actually devastated by hyperinflations.
In Austria and even more so in Germany an entire generation of savers was financially ruined, causing an enormous wealth transfer from typically small savers and creditors to typically big investors and debtors, and escalating tensions and animosities directed against war profiteers and speculators, many of whom happened to be Jewish.
In addition, rather than returning to the classical gold standard that the warring governments had abandoned during the war,
the western world, after 1922, adopted instead an inherently inflationary pseudo-gold standard, that is the so-called gold exchange standard.
In the Soviet Union, the noble experiment of full-blown socialism, that was the term that most contemporary intellectuals used to refer to these events, this noble experiment quickly led to economic disaster and political terror on a scale unheard of.
and in the West, the somewhat more moderate egalitarian socialist policies brought on creeping capital consumption.
To finance the steadily increasing welfare expenditures, governments resorted to monetary inflation and credit expansion,
resulting finally in the great stock market crash of 1929 and the following world economic depression.
As a result of this depression, once again the specter of a Bolshevist takeover returned to Western Europe, in particular to Germany.
And in reaction to this ever-increasing Bolshevist threat then, as some far-sighted individuals such as Mises had predicted years before it actually happened,
The political rivalry between the various political parties in Western Europe turned increasingly hostile.
And the internationalist socialists, that is, the Marxist-inspired communist and socialist parties,
were ultimately crushed and violently defeated by the competing anti-Bolshevist national socialist forces.
That is the earlier Italian example. The rise of Mussolini and the fascists in reaction to the communist threat in Italy became, for a while, the wave of the future.
In Germany and somewhat later in Austria, Hitler and the National Socialist German Workers Party came to power.
Salazar rose to power in Portugal, Franco in Spain and in more than a dozen other European countries anti-Bolshevist dictatorships were installed, in Poland for instance, in Hungary, in Turkey, in Greece and also in Romania and in the United States the Mussolini rising to power was of course named Federal Delano Roosevelt, FDR.
Now, in the wake of the Great Depression, the European countries as well as the United States once again went off the pseudo gold standard and international economic cooperation came to a virtual standstill.
Hostile trade and currency blocks were formed. Protectionism and aggressive nationalism replaced whatever free trade had still existed in the 1920s.
World War II, then, was largely the consequence of these ever-sharper monetary and economic conflicts, and was further stimulated by the outrageous injustices done to Germany and Austria after World War I.
World War II and we are still about to learn the full truth of World War II, which is only coming out now slowly.
For instance that Stalin had actually prepared an attack on Western Europe and was only to his own surprise
by the German invasion of Russia, which preceded his own planned attack on Western Europe by just a few weeks.
Now, World War II, about which there is still plenty of things to learn and ended,
due to the close collaboration of Roosevelt and his administration with Stalin
with the spreading of Bolshevism all across Eastern Europe
and indeed all the way into the very heart of Central Europe.
The war itself had cost about 40 million casualties, mostly against civilians.
As a result of the communist takeover of Eastern Europe
In Eastern Europe, millions more were killed immediately afterwards. Mass expropriation and mass expulsions and emigrations followed.
And all of Eastern Europe, until the final collapse of the evil empire in the late 1980s, suffered unspeakable economic destruction and devastation.
Once civilized countries became huge prisoners camps with living standards of or even below those of third world countries, all the while western intellectuals of course had nothing else to do but praise the beauty and justice of socialism.
In Western Europe, in West Germany, Austria, Italy and France in particular, Western Europe once again stood on the verge of a communist takeover as well.
Not the least due to some lucky circumstances, however, that is, a few great men at the right time and at the right place,
These countries, as well as the United States, ultimately turn toward moderate socialism, that is, toward social democracy as the most enduring form of socialism, which is with us to this very day.
In Western Europe and the United States, the governments did not resort to terror or engage in an outright expropriation of the owners of private property, to be sure.
Instead, they engaged in creeping socialism, in creeping expropriation and in creeping destruction of civilization.
After a few decades of a restored gold exchange standard, since the early 1970s, the western world went on a pure paper money standard,
handing government almost complete counterfeiting autonomy
and leading to incessant
and unheard of rates of inflation on a worldwide scale.
Social democracy led to ever-increasing taxes, such that today
government expenditures make up everywhere between 40 and 60 percent
of gross national product.
Government debt and unfunded liabilities have reached astronomical heights.
Real interest rates have risen to about five percent
from less than two and a half percent one hundred years ago
and are
with five percent as high as they were almost five hundred years ago
at a time
when the western world was actually infinitely poor than it is nowadays.
Savings rates are stagnating now or even falling
instead of rising
with rising incomes.
Government employment has increased from about 2% in the 19th century to more than 20% of
the total labor force. Real incomes since the 1970s are stagnating or even falling and
the cost of social security systems has brought on the prospect of an imminent economic meltdown.
Even the most fundamental private law provisions, that is the principles of freedom of contract
and Association and also Disassociation have been perverted by an unabating flood of legislation
and regulation. As a result of an ever-expanding range of compulsory social insurances, the
institutions of marriage and families have been increasingly weakened and the birth rate
has fallen to about half of what it was 100 years ago. At the same time, the rates of
The rates of divorce, illegitimacy, single parenthood, singledom and abortion have steadily increased.
Structural unemployment has been constantly increasing.
In Western Europe, the average unemployment rate is presently about 15%,
that is as high or higher than during the 1930s, during the world economic depression.
The quality of public education has steadily deteriorated, all the while it has received more and more lavish funding, to the point where schools and universities produce illiterate brutes and beasts instead of civilized human beings.
Individual responsibility has been continuously undermined or even ridiculed and replaced by so-called social responsibility.
crime rates have gone up and up and welfare dependency, parasitism, negligence, recklessness, uncivility, psychopathy and hedonism have become the mark of the day
Nineteenth-century free trade has given way to managed trade and intergovernmental trade
arrangements such as the European Community and NAFTA, the North American Free Trade Agreement,
the so-called North American Free Trade Agreement, which have upwardly harmonized the tax and
regulation structure in Europe and in North America and have thus helped to reduce international
International Competition and actually strengthened the mutual dependency of big business and
multinational corporations and big government, all of course at the expense of weakening
or even destroying small government unconnected businesses.
All the while the crusade begun with World War I of making the world safe for democracy
goes on and on and on, and the more arrogantly so, the more futile and disastrous its results are.
Now, this then is where we are today, at the end of the 20th century.
After this diagnosis, I want to turn to the second question I want to raise. It is, where do we want to go?
What are our goals? This question can be answered relatively quickly. What we, that is, the Mises Institute and those associated with it, what we want has been explained by Mises, the Institute's patron saint, and by Murray Rothbard, Mises' most important student and intellectual heir and successor.
What we want is a society that is based on the recognition of a few very fundamental rules.
These rules are, every person owns his own physical body as well as all nature-given goods which he has put to use with the help of his body before anyone else does.
This ownership implies his right to employ these resources however one sees fit, that is to consume them or use them to produce other goods with their help, as long as one does not thereby uninvitedly change the physical integrity of another person's property,
or as long as one does not delimit another person's control over his property without having his consent.
In particular, once a good has been first appropriated or homesteaded by someone
or has been produced by someone in combining his labor and some homesteaded goods,
Then ownership in such a good can only be acquired by means of a voluntary or contractual transfer of its property title from a previous to a later owner.
These rights of a person are absolute. Any person's infringement on them is subject to lawful prosecution by the victim of this infringement or by his agent,
and is then actionable in accordance with the principles of strict liability and the proportionality of punishment.
In other words, we want a society based on the recognition of private property, of freedom of contract and association,
as well as, of course, the freedom not to contract and not to associate if we so desire,
and, of course, of strict personal responsibility for one's own actions and of punishment of irresponsible behavior.
Accordingly, we reject all compulsory wealth and income redistribution, that is, robbing Peter to give to Paul.
We oppose all forms of compulsory social insurances as undermining individual responsibility,
Utility. Taking care of the unfortunate or helpless is the task of families and of voluntary
charity such as churches, both of which will be destroyed by any form of compulsory insurance.
We oppose all public, that is tax-funded education. We oppose all business regulations apart
Actions apart from insisting that no business is permitted to physically damage anyone else's
property in the course of its operations. We oppose all restrictions on free trade, while
of course upholding everyone's right to boycott whoever he wants to boycott. We reject all
forms of anti-discrimination laws or so-called civil rights legislation. Instead, every owner
Every owner has the right to discriminate against and exclude whoever he wants for whatever
reason he so chooses. We reject the notion of social or collective responsibility and
of the rights of criminals. Violators of property rights, that is criminals, have no rights
We oppose a central bank and fiat money and object to all counterfeiting, whether it is private or governmental. Instead, we demand a gold standard and 100% reserve deposit banking. And we object to all foreign wars and interferences in external affairs. If a government has any taboos, then we are under forced obligation to compensate their victims. If a government has any taboos, then we are under forced obligation to compensate their victims. If a government has any taboos, then we are under forced obligation to compensate their victims.
It is nothing else and nothing more than to protect private property and the rights of private property owners against internal and external assaults and aggressions, and to crack down on those who do not know how to behave, that is, the aggressors and the assaulters.
And in order to assure that this and only this is what governments actually do, we support the right of every smaller unit, of every state, every county, every city, every village, even every household, to secede from any larger political unit.
For the smaller a political unit is, and the more inter-regional competition exists between different political units, the less likely is it that any government will be able to abuse its power.
Now, lastly, after the question of where we are and where we want to go, lastly comes
the most difficult question. How to go from here to there? In the mid-19th century, a
program such as the one that I just outlined would have been considered a program of liberal
and radical reform. And Mises and Rothbard, for instance, would have been regarded as nothing more than radical reformers. Indeed, many, if not most of their demands would have found widespread acceptance and been regarded as a matter of course. Today, less than one and a half centuries later, the same program cannot but appear revolutionary and Mises and Rothbard and the Mises Institute
The Mises Institute that promotes their ideas are considered intellectual dinosaurs or dangerous
reactionaries or counter-revolutionaries wanting, so to speak, to repeal the entire 20th century
and then go on from there. Now, mustn't then what we, that is those associated with the
What does the Mises Institute want to accomplish be considered hopelessly unrealistic and futile
or even foolishly naïve? Isn't a revolution such as we want to bring it about impossible?
Let me explain why I am convinced that these questions must be answered in the negative.
That is why we have some reason to be optimistic.
First off, it should be noticed that what we see in front of our very own eyes, that
is social democracy and welfare warfare statism, is itself the result of a revolution. Someone
who around the mid-19th century would have advocated the policies, laws and institutions
and other institutions that our democratic republican rulers, the mass media, our so-called intellectual elites, and much of public opinion, what they nowadays regard as normal and self-evident, would then, 150 years ago, have been regarded as a dangerous revolutionary.
More precisely, he would have been considered a communist. Just take a look, for instance, at the Communist Manifesto of 1848 and the political planks that are contained in this manifesto.
Most of what was then considered to be the agenda of nuts has in the meantime become political reality.
And what would have been called then as three-quarter communism is nowadays called liberalism.
Now surely this change must be called a revolution.
And just as surely then, if a socialist revolution is possible, why not also a classical liberal-libertarian revolution?
Now indeed, as Murray Rothbard has shown in his historical writings, the original American revolution was to a large extent a classical liberal-libertarian revolution.
and such a thing then that has happened in the past can hardly be considered an impossibility.
Nor, given their own history, should Americans be in any way afraid of the label revolutionary.
Admittedly, however, things were different then, more than 200 years ago than they are now.
George III's rule could hardly be termed tyrannical, but the popular resentment against the excesses of government power could be directed against and fixed onto a real, tangible person, that is George III.
Today, government power is nothing but tyrannical, but its exercise is impersonal and clouded
in anonymity. For, after all, aren't we all ruling ourselves nowadays?
Thus then, in many respects, a revolution appears more difficult to bring about now
than it was then. On the other hand, we have also learned something in the meantime, not
at least from the socialists. For even if we don't agree with or indeed detest the goals
of the socialists, there is no way of denying that they must have been right in some respects,
that is, in matters concerning to strategy and tactic of ideological movements. Otherwise,
if they would not have been correct in that respect, how could they have succeeded and
Ride to Triumph and Leave the Once Powerful Liberal Movement in the Dust.
Now in any case then, what are the prospects of a liberal libertarian revolution or if
you prefer to put it this way, what are the prospects of a counter revolution? There are
two conditions for a revolution. Indeed for any revolution, whether good or bad. What
What we might call an objective condition and there is a subjective condition for revolution.
The objective condition which must be fulfilled is the existence of a generally perceived
crisis situation. That is a lost war, a hyperinflation or an economic depression for instance. But
also and this is particularly important for our present situation in the United States
as well as in Western Europe but also a widening gap between economic aspirations and economic reality, that is an increasing clash between expectations and a reality falling behind and disappointing and frustrating these expectations.
Now there can be little doubt that this condition is in fact fulfilled.
Not only have we seen the East European Socialism collapse like a house of cards before our
very eyes. Here, at home, after some 70 years of ever-expanding statism, even the dullest
of dullards have begun realizing that the present system is a failure. The reserve fund,
The capital stock that we inherited from the past is visibly exhausted and even the spectacular
advances in productivity can no longer compensate for the economic waste and destruction caused
by our system of democratic socialism.
On the average, real incomes have been stagnating or even falling since the early 1970s.
The recognition has become ever more widespread that rather than each successive generation
being better off than their parents and viewing this almost as something like a law of nature,
people nowadays recognize that our children actually will be economically worse off than
we are or our parents were. And more than two thirds of all adults consider politicians
and the political elite as corrupt, untrustworthy and the cause rather than the solution to our problems.
Thus we can say the objective conditions for a revolution are given and they become better almost every day
because the welfare state will ultimately have to collapse just as socialism collapsed some years ago.
What then about the second requirement, that is the subjective conditions for revolution?
In this respect, matters do not or do not yet look quite as good or promising.
But tremendous progress has been made in recent years.
The subjective conditions can be broken down into two components.
First, there must be an intellectual elite in place, that is, a cadre of full-time professional
social thinkers, economists, philosophers and historians, who have dedicated their lives
to a common shared goal, in this case, a liberal-libertarian revolution. And this intellectual elite must
must have worked out and be able to supply the public not only with a coherent explanation
as to the why, the causes of the generally perceived crisis situation, but in particular
they must be able to inspire the population with a vision and a comprehensive explanation
of the viability and superiority of another alternative system as a solution to the perceived
crisis.
And even though in a crisis situation people are willing to listen to and to consider ideas
that they would never contemplate during normal times, in order to overcome their handicap
of being regarded as uncompromising radicals, this intellectual elite, this cadre must have
a track record of having predicted and warned against the crisis at hand. I will return
to this point in a second. Secondly, this intellectual elite, the ideological generals as we might
and I will keep using military analogies because after all what we are engaged in is an ideological war.
These ideological generals must also control under their command a small army of intellectual officers, foot soldiers and part-time volunteers
who help spread the ideological message, who simplify it, indeed sometimes even compromise it and make it understandable by and palatable to the so-called common man, so as to change public opinion.
It is not necessary that everyone will be persuaded of the cause of and the solution to the current crisis.
It is not even necessary that an overwhelming majority needs to be persuaded.
Nor is it necessary that the public at large becomes actively involved in the ongoing ideological struggle.
As soon as something approaching a majority of the adult population withdraws their current passive or resigned support of the government
and begins to regard our Democratic-Republican ruling elite as illegitimate and even if only passively and silently shifts support to the small group of liberal-libertarian activists instead.
A revolution then can no longer be stopped and the current social democratic tyranny will crumble and fall like a house of cards.
All of this may sound rather theoretical and abstract.
Let me then elaborate on both of these components of the subjective condition for a genuine social revolution
and indicate where we are and what is still needed and how to overcome our current deficiencies.
I will proceed in reverse order, beginning with the importance of public opinion for the maintenance or the breakdown of government power.
The insight that all government power, whether monarchical government, democratic government
or dictatorial government, that all government power rests on the recognition of its rule
by a majority of the population as legitimate and breaks down as soon as a majority stops
This insight was first discovered by Etienne de la Boitie in the 16th century, it was then rediscovered by David Hume in the 18th century, and it was restated in our century, in particular by Ludwig von Mises and Murray Rothbard.
Even the most ruthless dictators and despots must, in order to impose their will on their
hapless subjects, rely on the voluntary cooperation of countless persons.
And these cannot execute their activities, their deeds, without in turn relying on the
and the voluntary support given to their actions by an even larger number of family, friends, neighbors and bystanders.
As soon as the majority of the public considers the dictator's orders illegitimate,
truth of this fundamental insight and to also recognize the implied insight that revolutions do not necessarily require much or even any violence but can be completely peaceful revolutions, just consider such events as the fall of the Shah regime in Iran or more recently the breakdown of the power of the communist government in the Soviet Union.
Arm to the teeth, both governments fell from one day to the next. They gave orders to their soldiers to shoot and kill, but the soldiers simply did not execute these orders. They were afraid that they might get mistreated by their wives and girlfriends if they would come home.
Now, we are still far away from the point where the President and the Congress are considered as illegitimate usurpers of power.
But we have certainly reached the point where such a thing appears to be within reach.
Indeed, we may be closer than you might think. For, just consider this, there exists within the armed forces of the United States, in fact, within the special forces of the armed forces of the United States, that is, an elite group within our army, there exists within it a group called the resistors who, and now listen to this,
claim to have learned their lesson from Menger, Boehm-Bawerk, Mises and Rothbard and who regard
the government as unconstitutional and tyrannical. Hardly surprising, the government desperately
tries to find out who these people are and wants to root them out. And yet, given what
Given what the very same government has done to ruin the military through affirmative action
policies and the feminization of the military, can you have any doubt whatsoever that groups
such as these resistors will actually find more and more support?
Now lastly and in conclusion, back to the first component of the subjective condition
and requirement for a genuine liberal-libertarian revolution. That is, the intellectual generals,
officers and foot soldiers who can and must bring about the necessary and still unaccomplished
total delegitimization of our tyrants and inspire the masses with the vision of a greater,
Better Free Society. Again, as I try to make clear in a moment, much needs to be done in
this respect too. But many basic requirements are already in place and, due to the Mises
Institute and Lew Rockwell's heroic intellectual entrepreneurship, one cannot but again be
highly optimistic about the prospects of a freedom revolution. First off, a few remarks
about the unique character of the Mises Institute and why it is that if and when we will have
a genuine social revolution, it can only be the Mises Institute which serves as its command
center and its heart and soul. Put briefly, the reason for this is the undeniable fact
that only the Mises Institute, dedicated to and building upon the work of the twentieth
In the last century, two greatest economists and social philosophers, Ludwig von Mises
and Murray Rothbard, that only the Mises Institute possesses a track record of fundamental, principled
and uncompromising opposition against the current system.
Only Mises and Rothbard and only their students associated with the Mises Institute have a
have a track record of having predicted from the very outset the inevitability of the collapse
of Soviet-style socialism as well as the current crisis and the impending collapse of Western-style
welfare statism and social democracy. And only Mises and Rothbard and the Mises Institute
and its fellows have a track record of uncorruptibility and can prevent that the revolution will not
will not be betrayed by unprincipled opportunists and compromisers.
Now let me emphasize here in parentheses the fundamental importance of the recognition
of the difference between strategy and tactic, between theory and politics and between principle
and practice.
It is of course true that one may not be able to accomplish one's goals completely, fully
and purely.
It may not be possible to roll back the state to zero and to root out each and every socialist
policy and institution. In real life one is at times forced to make compromises. But this
does not mean and never should be taken to mean that one must or should abandon or only
dilute the purity of one's theory and principles and one's ultimate goals. Quite to the contrary,
Only if one holds onto one's theory and principles no matter what, can it be assured that the necessary compromises that need to be made in real life will at least be consistent with the principles for which one fights, instead of compromising the principles itself.
Put somewhat differently, we may only be able to roll back state expenditures to, let's say, 5% of gross national product.
But we will only be able to do this if there is some voice out there that insists that they should be cut to zero.
or it is one thing to vote in favor of cutting taxes by 10% if there is not enough support to eliminate them altogether.
It is quite a different thing to advocate a 10% tax cut as one's ultimate goal.
Such a position to advocate a 10% tax cut as one's ultimate goal is not only theoretically inconsistent and incoherent
Because it implies that there is nothing wrong with robbing people of the fruits of their own labor as such.
Yet, if that is the case, how can one then convincingly argue that robbing 40% of someone's income is somehow bad, but taking only 30% is quite alright?
In practice, any such compromising on the level of principle and theory will almost inevitably lead to no improvement at all or even contribute to further decline.
Compromise and moderation elevated to principle is a sure recipe for disaster.
In fact, the current mess that we have in front of us is precisely the result of such misunderstood realism.
That is, classical liberalism made all sorts of compromises that ended up producing the current mess.
Just look, for instance, at such revolutionaries as Gingrich or Limbaugh.
They want to pacify us by reducing the rate of increased socialism and thus give the idea of a revolution, of course, a bad name.
Or take the whole alphabet soup of so-called free market think tanks in the United States, with the sole exception, of course, of the Mises Institute.
All of these so-called free market think tanks in the United States, all of them, without any exception,
In the name of free trade and free markets endorsed and supported NAFTA and GATT, both agreements that are through and through anti-free trade agreements and all of these institutions then actually helped to thoroughly discredit the entire idea of free trade.
They smeared a good idea by associating a bad institution with it.
Of course, all these institutions, all these free-market think tanks were handsomely paid off for this treachery with millions of dollars in government though, especially from the Mexican government.
Now, there is then no other institution in the United States, or in the entire western world for that matter, that can possibly ignite and carry on a true liberal-libertarian revolution, except the Mises Institute, precisely because it is as radical and uncompromising, or as our enemies would say, as unrealistic as it is.
But can we do it? Do we have the intellectual generals, officers and foot soldiers and do we have a strategy of how to package our basic message so as to bring about a radical transformation in public opinion?
Now as far as the last part of this question is concerned, the question do we have the right packaging for our message?
I believe that we can say that due to the works of Mises and Rothbard we are in almost perfect shape.
We know the answer to practically all economic questions and we are able to make the case for the economic superiority,
indeed for the economic insurpassability of a pure private property society.
And if there were still a few shortcomings in Mises' views concerning our possibilities
of persuading the public of this truth, such shortcomings were repaired by Rothbard. Mises
himself was skeptical about the possibility of a rational ethic and accordingly he believed
that we have to rely exclusively on economic arguments in order to make the case for a
for a liberal capitalist order. Yet as Mises himself realized quite clearly, and as I based
on my own teaching experience can only confirm, economic arguments, even if they strike me
and you as perfectly obvious, are beyond the grasp of many of my students because they
lack even the most elementary ability of rigorous logical reasoning. And even if they see the
And to the point, they still remain entirely unaffected, because a welfare bum, for instance, or a politician, even if he grasps that in the long run his way of life must lower even his own standards of living, is not much impressed by this fact, because he prefers present gratification, present loot, and present power, and gives a damn about the future, that is, about the long run.
Very importantly then, Rothbard demonstrated the possibility of a rational ethic and thus
complemented the economic case for capitalism with a moral case for capitalism.
And he argued, convincingly as I believe, once again based on my own teaching experience,
that as important as economic arguments are in bringing about a change in public opinion,
Moral arguments are even more important.
Moral outrage and moral shame are a far more powerful motivator than intellectual outrage
and intellectual fault.
And the recognition that something or someone is evil has far greater behavioral implications
than the recognition that something or someone is merely plain stupid.
Now some things and some people are of course both evil and stupid, and that might be even better.
But in any case, due then to Rothbard's additions to the magnificent intellectual structure
that we inherited from Mises in combining ethical and economic arguments in support
for the very same goal, society based on private property and freedom of contract,
We hold in our hands a message that I believe is of utmost power and persuasiveness. We
are then in good but significantly less than perfect shape concerning intellectual generals,
officers and soldiers. We have suffered a devastating blow last year with the death
As of Murray Rothbard, our supreme commander, ten-star general, generalissimo, duche and
führer, but Murray has raised and trained quite a few, let's say four and three-star
generals who are capable and willing, indeed burning, to carry on. And in Lew Rockwell
We possess a strategic genius of the highest caliber.
Thanks to your help
the Mises Institute has also been able to produce numerous officers,
some of them
of the intellectual and motivational caliber of future generals
and you have seen
some of those
at this conference.
These officers have managed to slip through the cracks of an ever more pervasive political
correctness screening process in academia and who are now doing a magnificent, that is,
a magnificently subversive job in many universities and recruit steadily increasing numbers of
foot soldiers and hopefully down the road additional officers as well. In fact the first
The first Austrian Scholars Conference two weeks ago in Auburn with about 150 participants
from ten countries was a wonderful and heartwarming display of the gains in strengths that we
have achieved in the course of the last decade.
Only a few years ago a conference such as this would have been unimaginable.
In addition, through the Institute's annual summer universities and our other topical conferences,
we have reached and I am sure deeply affected thousands of individuals, many of whom are
and will be in the future participating in our ideological struggle of taking America
back. However, despite all of our efforts and all of our successes and despite your
For our heroic support, there still remains in my judgment one fundamental deficiency that
needs to be overcome in order to achieve a final breakthrough in our attempt to take
this country back from our socialist tyrants.
We need a permanent training center, a place where we can educate and instruct people throughout
throughout the entire year, year in and year out, where students, professionals, educated laymen, you, your children, friends and associates can come, just for a few days or weeks, but also for extended periods, an entire year or even longer, in order to receive a rigorous training in the foundations and fundamentals of free market economics and philosophy.
Society as well as the History of Western Civilization or where they can just come to take a brief
refresher course at any time they feel the desire to do so. Now in my judgment it is
impossible at least as long as the social revolution is not already well underway to
To take over a university or to take over even a single university department, we may slip through the cracks here or there, and we must of course try to continue doing so, but the universities and university professors in the United States as well as in Western Europe are in fact the greatest threat to freedom and prosperity.
In fact, they are the hothouses and breeding places for and the progenitors of everything
that is wrong and evil today.
And the academic establishment then regards us, and rightly so, as their deadly foes.
We are a threat to their very existence, and they will try to marginalize or destroy us
as long as they can still breeze. Thus, the necessary ideological center that I just described,
the permanent center of training and teaching, the permanent hothouse and breeding place
for our, that is, the liberal libertarian counterrevolution, can only be the Mises Institute itself. You,
You, all of you have already done great things on behalf of the Mises Institute to restore liberty and prosperity to this country. Help us to realize this next decisive step and we will repeal the entire 20th century and return America to a flowering civilization again.