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NOTE Left, Right, and the Prospects for Liberty

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LEFT, RIGHT, AND THE PROSPECTS FOR LIBERTY by Murray N. Rothbard

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The conservative has long been marked, whether he knows it or not, by long-run pessimism,

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by the belief that the long-run trend, and therefore time itself, is against him.

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Hence the inevitable trend runs toward left-wing statism at home and communism abroad.

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It is this long-run despair that accounts for the conservative's rather bizarre short-run

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optimism.

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For since the long run is given up as hopeless, the conservative feels that his only hope

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of success rests in the current moment.

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In foreign affairs, this point of view leads the conservative to call for desperate showdowns

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with communism, for he feels that the longer he waits, the worse things will ineluctably

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become.

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At home, it leads him to total concentration on the very next election, where he is always

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hoping for victory and never achieving it.

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The quintessence of the practical man, and beset by long-run despair, the conservative

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refuses to think or plan beyond the election of the day.

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Pessimism, however, both short-run and long-run, is precisely what the prognosis of conservatism

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deserves.

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For conservatism is a dying remnant of the Ancien Régime of the pre-industrial era,

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and as such, it has no future.

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In its contemporary American form, the recent conservative revival embodied the death throes

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of an ineluctably moribund, fundamentalist, rural, small-town, white Anglo-Saxon America.

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But however of the prospects for liberty?

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For too many libertarians mistakenly link the prognosis for liberty with that of the

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seemingly stronger and supposedly allied conservative movement.

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This linkage makes the characteristic long-run pessimism of the modern libertarian easy to

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understand.

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But this paper contends that while the short-run prospects for liberty at home and abroad may

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may seem dim, the proper attitude for the libertarian to take is that of unquenchable long-run optimism.

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The case for this assertion rests on a certain view of history, which holds first that before

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the 18th century in Western Europe there existed, and still continues to exist outside the West,

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an identifiable old order.

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After the old order took the form of feudalism or oriental despotism, it was marked by tyranny,

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exploitation, stagnation, fixed caste, and hopelessness and starvation for the bulk of

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the population.

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In some, life was nasty, brutish and short.

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Here was Maine's society of status and Spencer's military society.

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The old order was and still remains the great and mighty enemy of liberty, and it was particularly

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mighty in the past because there was then no inevitability about its overthrow.

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When we consider that basically the old order had existed since the dawn of history, in

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all civilizations, we can appreciate even more the glory and the magnitude of the triumph

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of the liberal revolution of and around the 18th century.

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Part of the dimensions of this struggle has been obscured by a great myth of the history

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of Western Europe, implanted by anti-liberal German historians of the late 19th century.

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The myth held that the growth of absolute monarchies and of mercantilism in the early

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modern era was necessary for the development of capitalism, since these served to liberate

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the merchants and the people from local feudal restrictions.

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In actuality, this was not at all the case.

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The King and his nation-states served rather as a super feudal overlord, re-imposing and

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re-enforcing feudalism just as it was being dissolved by the peaceful growth of the market

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economy.

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The King superimposed his own restrictions and monopoly privileges onto those of the

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feudal regime.

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The absolute monarchs were the old order writ large and made even more despotic than before.

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Capitalism indeed flourished earliest and most actively precisely in those areas where

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the central state was weak or non-existent, the Italian cities, the Hanseatic League,

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the confederation of 17th century Holland.

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Originally the old order was overthrown or severely shaken in its grip in two ways.

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One was by industry and the market expanding through the interstices of the feudal order,

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for example, industry in England developing in the countryside beyond the grip of feudal,

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state and guild restrictions.

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More important was a series of cataclysmic revolutions that blasted loose the old order

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and the Old Ruling Classes, the English Revolutions of the 17th Century, the American Revolution

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and the French Revolution, all of which were necessary for the ushering in of the Industrial

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Revolution and of at least partial victories for individual liberty, laissez-faire, separation

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of church and state, and international peace.

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The society of status gave way, at least partially, to the society of contract.

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The military society gave way partially to the industrial society.

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The mass of the population now achieved a mobility of labor and place, and accelerating

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expansion of their living standards for which they had scarcely dared to hope.

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Some had indeed brought to the Western world not only liberty, the prospect of peace, and

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the rising living standards of an industrial society, but above all, perhaps, it brought

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hope, a hope in ever greater progress that lifted the mass of mankind out of its age-old

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sinkhole of stagnation and despair.

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In their developed in Western Europe two great political ideologies centered around this

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new revolutionary phenomenon.

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One was liberalism, the party of hope, of radicalism, of liberty, of the industrial

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revolution, of progress, of humanity.

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The other was conservatism, the party of reaction, the party that longed to restore the hierarchy,

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liberalism, theocracy, serfdom and class exploitation of the old order.

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Since liberalism admittedly had reason on its side, the conservatives darkened the ideological

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atmosphere with obscurantist calls for romanticism, tradition, theocracy and irrationalism.

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Political ideologies were polarized, with liberalism on the extreme left and conservatism on the

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and the extreme right of the ideological spectrum.

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That genuine liberalism was essentially radical and revolutionary, was brilliantly perceived

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in the twilight of its impact by the great Lord Acton, one of the few figures in the

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history of thought who, charmingly, grew more radical as he grew older.

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Acton wrote that liberalism wishes for what ought to be, irrespective of what is.

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In working out this view, incidentally, it was Acton, not Trotsky, who first arrived

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at the concept of the permanent revolution.

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As Gertrude Himmelfarb wrote in her excellent study of Acton, his philosophy developed to

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the point where the future was seen as the avowed enemy of the past, and where the past

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was allowed no authority except as it happened to conform to morality.

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To take seriously this liberal theory of history, to give precedence to what ought to be over

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what is, was, he admitted, virtually to install a revolution in permanence.

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The revolution in permanence, as Acton hinted in the inaugural lecture and admitted frankly

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in his notes, was the culmination of his philosophy of history and theory of politics.

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This idea of conscience, that men carry about with them the knowledge of good and evil,

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is the very root of revolution, for it destroys the sanctity of the past.

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Liberalism is essentially revolutionary, Acton observed, facts must yield to ideas, peaceably

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The Liberal, wrote Acton, far surpassed the Whig.

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The Whig governed by compromise.

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The Liberal begins the reign of ideas.

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One is practical, gradual, ready for compromise.

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The other works out a principle philosophically.

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One is a policy aiming at a philosophy.

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The other is a philosophy seeking a policy.

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What happened to liberalism?

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Why then did it decline during the 19th century?

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This question has been pondered many times, but perhaps the basic reason was an inner

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rot within the vitals of liberalism itself.

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For with the partial success of the liberal revolution in the West, the liberals increasingly

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abandon their radical fervor, and therefore their liberal goals, to rest content with

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a mere defense of the uninspiring and defective status quo.

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Two philosophical roots of this decay may be discerned.

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First is the abandonment of natural rights and higher law theory for utilitarianism,

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where only forms of natural or higher law theory can provide a radical base outside

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the existing system from which to challenge the status quo.

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And only such theory furnishes a sense of necessary immediacy to the libertarian struggle

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by focusing on the necessity of bringing existing criminal rulers to the bar of justice.

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Utilitarians, on the other hand, in abandoning justice for expediency, also abandon immediacy for quiet stagnation, and inevitably end up as objective apologists for the existing order.

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The second great philosophical influence on the decline of liberalism was evolutionism or social darwinism, which put the finishing touches to liberalism as a radical force in society.

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For the social darwinist erroneously saw history and society through the peaceful rose-colored glasses of infinitely slow, infinitely gradual social evolution,

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Ignoring the prime fact that no ruling caste in history has ever voluntarily surrendered

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its power, and that therefore liberalism had to break through by means of a series of revolutions,

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the social Darwinists looked forward peacefully and cheerfully to thousands of years of infinitely

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gradual evolution to the next supposedly inevitable stage of individualism.

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An interesting illustration of a thinker who embodies within himself the decline of liberalism

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in the 19th century is Herbert Spencer.

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Spencer began as a magnificently radical liberal, indeed virtually a pure libertarian.

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But as the virus of sociology and social Darwinism took over in his soul, Spencer abandoned libertarianism

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Liberalism as a dynamic historical movement, although at first without abandoning it in

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pure theory.

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In short, while looking forward to an eventual ideal of pure liberty, Spencer began to see

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its victory as inevitable, but only after millennia of gradual evolution, and thus,

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in actual fact, Spencer abandoned liberalism as a fighting, radical creed, and confined

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and his liberalism in practice to a weary rear-guard action against the growing collectivism of

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the late 19th century.

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Interestingly enough, Spencer's tired shift rightward in strategy soon became a shift rightward

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in theory as well, so that Spencer abandoned pure liberty even in theory, for example in

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and repudiating his famous chapter in social statics, The Right to Ignore the State.

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In England, the classical liberals began their shift from radicalism to quasi-conservatism

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in the early 19th century.

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A touchstone of this shift was the general British liberal attitude toward the national

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liberation struggle in Ireland.

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This struggle was two-fold, against British political imperialism and against feudal landlordism,

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which had been imposed by that imperialism.

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By their Tory blindness toward the Irish drive for national independence and especially for

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peasant property against feudal oppression, the British liberals, including Spencer,

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symbolize their effective abandonment of genuine liberalism, which had been virtually born

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in a struggle against the feudal land system.

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Only in the United States, the great home of radical liberalism, where feudalism had

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never been able to take root outside the South, did natural rights and higher law theory and

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consequent radical liberal movements continue in prominence until the mid-19th century.

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In their different ways, the Jacksonian and abolitionist movements were the last powerful

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radical libertarian movements in American life.

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Thus, with liberalism abandoned from within, there was no longer a party of hope in the

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Western world, no longer a left movement to lead a struggle against the state and against

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the unbreached remainder of the old order.

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Into this gap, into this void created by the drying up of radical liberalism, there stepped

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a new movement, socialism.

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Libertarians of the present day are accustomed to think of socialism as the polar opposite

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of the libertarian creed, but this is a grave mistake, responsible for a severe ideological

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disorientation of libertarians in the present world.

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As we have seen, conservatism was the polar opposite of liberty, and socialism, while to

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the left of conservatism, was essentially a confused middle-of-the-road movement.

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It was, and still is, middle-of-the-road because it tries to achieve liberal ends by the use

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of conservative means.

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In short, Russell Kirk, who claims that socialism was the heir of classical liberalism, and

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Ronald Hamowy, who sees socialism as the heir of conservatism, are both right.

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For the question is on what aspect of this confused centrist movement we happen to be

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focusing.

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Socialism, like liberalism and against conservatism, accepted the industrial system, and the liberal

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All goals of freedom, reason, mobility, progress, higher living standards for the masses, and

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an end to theocracy and war.

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But it tried to achieve these ends by the use of incompatible, conservative means, statism,

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central planning, communitarianism, etc.

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Or rather, to be more precise, there were from the beginning two different strands within

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and Socialism.

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One was the right-wing authoritarian strand, from Saint-Simon down, which glorified statism,

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hierarchy and collectivism, and which was thus a projection of conservatism trying to

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accept and dominate the new industrial civilization.

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The other was the left-wing relatively libertarian strand, exemplified in their different ways

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by Marx and Bakunin, revolutionary and far more interested in achieving the libertarian

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goals of liberalism and socialism, but especially the smashing of the state apparatus to achieve

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the withering away of the state and the end of the exploitation of man by man.

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Interestingly enough, the very Marxian phrase, the replacement of the government by men by

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by the Administration of Things can be traced by a circuitous route from the great French

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radical laissez-faire liberals of the early 19th century, Charles Comte, no relation to

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Auguste Comte, and Charles Du Noyer.

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And so too may the concept of the class struggle, except that for Du Noyer and Comte, the inherently

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The antithetical classes were not businessmen versus workers, but the producers in society,

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including free businessmen, workers, peasants, etc., versus the exploiting classes, constituting

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and privileged by the state apparatus.

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Saint-Simon, at one time in his confused and chaotic life, was close to Comte and Du

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in the process, characteristically getting the whole thing balled up and converting businessmen

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on the market as well as feudal landlords and others of the state privileged into exploiters.

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Marx and Bakunin picked this up from the Sansemonians, and the result gravely misled the whole left

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Socialist Movement.

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For then, in addition to smashing the repressive state, it became supposedly necessary to smash

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private capitalist ownership of the means of production.

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Rejecting private property, especially of capital, the left socialists were then trapped

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in a crucial inner contradiction.

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If the state is to disappear after the revolution, immediately for Bakunin, gradually withering

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for Marx, then how is the collective to run its property without becoming an enormous

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state itself in fact, even if not in name?

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This was a contradiction which neither the Marxists nor the Bakuninists were ever able

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to resolve.

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Having replaced radical liberalism as the party of the left, socialism, by the turn

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of the 20th century, fell prey to this inner contradiction.

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Most socialists, Fabians, Lasallians, even Marxists, turned sharply rightward, completely

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abandoned the old libertarian goals and ideals of revolution and the withering away of the

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and became cozy conservatives permanently reconciled to the state, the status quo and

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the whole apparatus of neo-mercantilism, state monopoly capitalism, imperialism and war that

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was rapidly being established and riveted on European society at the turn of the 20th

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century.

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For conservatism too had reformed and regrouped to try to cope with a modern industrial system

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System and had become a refurbished mercantilism, a regime of statism marked by state monopoly

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privilege in direct and indirect forms to favored capitalists and to quasi-feudal landlords.

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The affinity between right socialism and the new conservatism became very close, the former

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advocating similar policies but with a demagogic populist veneer.

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Thus the other side of the coin of imperialism was social imperialism, which Joseph Schumpeter

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trenchantly defined as an imperialism in which the entrepreneurs and other elements woo the

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workers by means of social welfare concessions, which appear to depend on the success of export

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monopolism.

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Schumpeter, incidentally, realized that far from being an inherent stage of capitalism, modern imperialism was a throwback to the pre-capitalist imperialism of earlier ages, but with a minority of privileged capitalists now joined to the feudal and military castes in promoting imperialist aggression.

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Historians have long recognized the affinity and the welding together of right-wing socialism with conservatism in Italy and Germany,

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where the fusion was embodied first in Bismarckism and then in fascism and national socialism,

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the latter fulfilling the conservative program of nationalism, imperialism, militarism, theocracy,

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and a right-wing collectivism that retained and even cemented the rule of the old privileged

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classes.

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But only recently have historians begun to realize that a similar pattern occurred in

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England and the United States.

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Thus Bernard Semmel, in his brilliant history of the social imperialist movement in England

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at the turn of the 20th century, shows how the Fabian society welcomed the rise of the

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When in the mid-1890s the Liberal Party in England split into the radicals on the left

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and the liberal imperialists on the right, Beatrice Webb, co-leader of the Fabians, denounced

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the radicals as laissez-faire and anti-imperialists, while hailing the latter as collectivists and

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imperialists.

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An official Fabian Manifesto, Fabianism and the Empire, 1900, drawn up by George Bernard

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Shaw, who was later, with perfect consistency, to praise the domestic policies of Stalin

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and Mussolini and Sir Oswald Mosley, lauded imperialism and attacked the radicals who

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who still cling to the fixed frontier ideals of individualist republicanism and non-interference.

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In contrast, a great power must govern a world empire in the interests of civilization as

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a whole.

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After this, the Fabians collaborated closely with Tories and liberal imperialists.

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Indeed, in late 1902, Sidney and Beatrice Webb established a small secret group of brain-trusters called The Coefficients.

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As one of the leading members of this club, the Tory imperialist, Leopold S. Amery, revealingly wrote,

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Sydney and Beatrice Webb were much more concerned with getting their ideas of the welfare state put into practice by anyone who might be prepared to help, even on the most modest scale, than with the early triumph of an avowedly socialist party.

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There was, after all, nothing so very unnatural as Joseph Chamberlain's own career had shown

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in a combination of imperialism in external affairs with municipal socialism or semi-socialism

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at home.

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Other members of the coefficients, who, as Amory wrote, were to function as brain trusts

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or general staff for the movement were the liberal imperialist Richard B. Haldane, the

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geo-politician Halford J. McIntyre, the imperialist and germanophobe Leopold Maxey, publisher

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of the National Review, the Tory socialist and imperialist Viscount Milner, the naval

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imperialist Carleon Bel-Aires, the famous journalist J. L. Garvin, Bernard Shaw, Sir

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Sir Clinton Dawkins, partner of the Morgan Bank, and Sir Edward Gray, who, at a meeting

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of the club, first adumbrated the policy of Entente with France and Russia that was to

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eventuate in World War I.

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The point, of course, is not that these men were products of some Fabian conspiracy, but

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on the contrary, that Fabianism, by the turn of the century, was socialism so conservatized

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as to be closely aligned with the other dominant neoconservative trends in British political

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life.

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The famous betrayal during World War I of the old ideals of revolutionary pacifism by

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the European socialists and even by the Marxists should have come as no surprise that each

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socialist party supported its own national government in the war with the honorable exception

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of Eugene Victor Deb's Socialist Party in the United States, was the final embodiment

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of the collapse of the classic socialist left.

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From then on, socialists and quasi-socialists joined conservatives in a basic amalgam, accepting

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the state and the mixed economy equals neo-mercantilism equals the welfare state equals interventionism

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equals state monopoly capitalism, merely synonyms for the same essential reality.

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It was in reaction to this collapse that Lenin broke out of the Second International to reestablish

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classic revolutionary Marxism in a revival of left socialism.

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In fact, Lenin, almost without knowing it, accomplished more than this.

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It is common knowledge that purifying movements, eager to return to a classic purity shorn

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of recent corruptions, generally purify further than what had held true among the original

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classic sources.

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There were, indeed, marked conservative strains in the writings of Marx and Engels themselves,

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which often justified the state, western imperialism and aggressive nationalism.

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It was these motifs, in the ambivalent views of the masters on this subject, that provided

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the fodder for the later shift of the majority Marxists into the social-imperialist camp.

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Lenin's camp turned more left than had Marx and Engels themselves.

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Lenin had a decidedly more revolutionary stance towards the State, and consistently defended

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and Supported Movements of National Liberation Against Imperialism.

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The Leninist shift was more leftist in other important senses as well.

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For while Marx had centered his attack on market capitalism per se, the major focus

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of Lenin's concerns was on what he conceived to be the highest stages of capitalism, imperialism

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and monopoly.

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Hence Lennon's focus, centering as it did in practice on state monopoly and imperialism rather than on laissez-faire capitalism, was in that way far more congenial to the libertarian than that of Karl Marx.

290
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Fascism and Nazism were the local culmination in domestic affairs of the modern drift toward right-wing collectivism.

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It has become customary among libertarians, as indeed among the establishment of the West, to regard fascism and communism as fundamentally identical.

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But while both systems were indubitably collectivist, they differed greatly in their socio-economic content.

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Communism was a genuine revolutionary movement that ruthlessly displaced and overthrew the old ruling elites,

294
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Science, while fascism, on the contrary, cemented into power the old ruling classes.

295
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Hence, fascism was a counter-revolutionary movement that froze a set of monopoly privileges

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upon society.

297
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In short, fascism was the apotheosis of modern state monopoly capitalism.

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Here was the reason that fascism proved so attractive, which communism, of course, never

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00:31:11.980 --> 00:31:19.340
did, to big business interests in the West, openly and unabashedly so in the 1920s and

300
00:31:19.340 --> 00:31:22.060
early 1930s.

301
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Of the fascist economy, Gaetano Salvimini perceptively wrote, In actual fact, it is

302
00:31:29.380 --> 00:31:36.540
the State, that is, the taxpayer, who has become responsible to private enterprise.

303
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In fascist Italy, the state pays for the blunders of private enterprise. Profit is private and

304
00:31:44.060 --> 00:31:50.260
individual. Loss is public and social.

305
00:31:50.260 --> 00:31:56.300
We are now in a position to apply our analysis to the American scene. Here we encounter a

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contrasting myth about recent American history which has been propagated by current conservatives

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00:32:03.100 --> 00:32:07.100
and adopted by most American libertarians.

308
00:32:07.100 --> 00:32:10.900
The myth goes approximately as follows.

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America was, more or less, a haven of laissez-faire until the New Deal.

310
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Then Roosevelt, influenced by Felix Frankfurter, the intercollegiate socialist society, and

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00:32:22.700 --> 00:32:29.580
other Fabian and communist conspirators, engineered a revolution which set America on the path

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00:32:29.580 --> 00:32:35.460
to Socialism, and further on, beyond the horizon, to Communism.

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The present-day libertarian who adopts this or a similar view of the American experience

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00:32:41.700 --> 00:32:48.660
tends to think of himself as an extreme right-winger, slightly to the left of him, then, stands

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00:32:48.660 --> 00:32:54.820
the conservative, to the left of that, the middle of the road, and then leftward to Socialism

316
00:32:54.820 --> 00:32:57.020
and Communism.

317
00:32:57.020 --> 00:33:04.140
Hence the enormous temptation for some libertarians to red-bait, for since they see America as

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00:33:04.140 --> 00:33:11.100
drifting inexorably leftward to socialism and therefore to communism, the great temptation

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00:33:11.100 --> 00:33:18.140
is for them to overlook the intermediary stages and tar all of their opposition with the hated

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00:33:18.140 --> 00:33:20.820
red brush.

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One would think that the right-wing libertarian would quickly be able to see some drastic flaws

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00:33:26.900 --> 00:33:29.000
in this conception.

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For one thing, the income tax amendment, which he deplores as the beginning of socialism

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in America, was put through Congress in 1909 by an overwhelming majority of both parties.

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00:33:43.640 --> 00:33:49.260
To look at this event as a sharp leftward move toward socialism would require treating

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President William Howard Taft, who put through the 16th amendment, as a leftist, and surely

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The New Deal was not a revolution in any sense.

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Its entire collectivist program was anticipated, proximately by Herbert Hoover during the Depression

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00:34:10.900 --> 00:34:16.580
and beyond that by the war collectivism and central planning that governed America during

330
00:34:16.580 --> 00:34:19.060
World War I.

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00:34:19.060 --> 00:34:24.840
Every element in the New Deal program, central planning, creation of a network of compulsory

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00:34:24.840 --> 00:34:31.060
industry cartels for industry and agriculture, inflation and credit expansion, artificial

333
00:34:31.060 --> 00:34:37.540
raising of wage rates and promotion of unions within the overall monopoly structure, government

334
00:34:37.540 --> 00:34:43.820
regulation and ownership, all this had been anticipated and adumbrated during the previous

335
00:34:43.820 --> 00:34:45.700
two decades.

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And this program, with its privileging of various big business interests at the top

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The kinship of the collectivist heap was in no sense reminiscent of socialism or leftism.

338
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There was nothing smacking of the egalitarian or the proletarian here.

339
00:35:01.860 --> 00:35:09.100
No, the kinship of this burgeoning collectivism was not at all with socialism-communism, but

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00:35:09.100 --> 00:35:15.820
with fascism or socialism of the right, a kinship which many big businessmen of the

341
00:35:15.820 --> 00:35:22.260
The 20s expressed openly in their yearning for abandonment of a quasi laissez-faire system

342
00:35:22.260 --> 00:35:26.400
for a collectivism which they could control.

343
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And surely William Howard Taft, Woodrow Wilson and Herbert Clark Hoover make far more recognizable

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figures as proto-fascists than they do as crypto-communists.

345
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The essence of the New Deal was seen far more clearly than in the conservative mythology

346
00:35:45.260 --> 00:35:52.860
by the Leninist movement in the early 1930s, that is, until the mid-30s, when the exigencies

347
00:35:52.860 --> 00:35:59.260
of Soviet foreign relations caused a sharp shift of the world communist line to popular

348
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front approval of the New Deal.

349
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Thus, in 1934, the British Leninist theoretician R. Palm Dutt published a brief but scathing

350
00:36:10.540 --> 00:36:35.340
The Roosevelt policy, wrote Dutt, was to move to a form of dictatorship of a war type.

351
00:36:35.340 --> 00:36:42.760
The essential policies were to impose a state monopoly capitalism through the NRA, to subsidize

352
00:36:42.760 --> 00:36:48.580
business, banking and agriculture through inflation and the partial expropriation of

353
00:36:48.580 --> 00:36:55.500
the mass of the people through lower real wage rates, and to the regulation and exploitation

354
00:36:55.500 --> 00:37:02.340
of labor by means of government-fixed wages and compulsory arbitration.

355
00:37:02.340 --> 00:37:09.100
In the New Deal, wrote Dutt, is stripped of its social reformist progressive camouflage,

356
00:37:09.100 --> 00:37:15.740
the reality of the new fascist type of system of concentrated state capitalism and industrial

357
00:37:15.740 --> 00:37:21.900
servitude remains, including an implicit advance to war.

358
00:37:21.900 --> 00:37:26.820
Dutt effectively concluded with a quote from an editor of the highly respected Current

359
00:37:26.820 --> 00:37:29.500
History Magazine.

360
00:37:29.500 --> 00:37:36.420
The New America, the editor had written in mid-1933, will not be capitalist in the old

361
00:37:36.420 --> 00:37:39.380
sense, nor will it be socialist.

362
00:37:39.380 --> 00:37:45.780
If at the moment the trend is towards fascism, it will be an American fascism, embodying

363
00:37:45.780 --> 00:37:51.940
the experience, the traditions, and the hopes of a great middle-class nation.

364
00:37:51.940 --> 00:37:58.660
Thus, the New Deal was not a qualitative break from the American past.

365
00:37:58.660 --> 00:38:04.580
On the contrary, it was merely a quantitative extension of the web of state privilege that

366
00:38:04.580 --> 00:38:11.180
had been proposed and acted upon before, in Hoover's administration, in the war collectivism

367
00:38:11.180 --> 00:38:15.420
of World War I, and in the progressive era.

368
00:38:15.420 --> 00:38:21.500
The most thorough exposition of the origins of state monopoly capitalism, or what he calls

369
00:38:21.500 --> 00:38:27.020
Political Capitalism in the United States is found in the brilliant work of Dr. Gabriel

370
00:38:27.020 --> 00:38:28.780
Kolko.

371
00:38:28.780 --> 00:38:35.200
In The Triumph of Conservatism, Kolko traces the origins of political capitalism in the

372
00:38:35.200 --> 00:38:38.700
reforms of the progressive era.

373
00:38:38.700 --> 00:38:46.060
Orthodox historians have always treated the progressive period, roughly 1900 to 1916,

374
00:38:46.060 --> 00:38:52.620
As a time when free-market capitalism was becoming increasingly monopolistic, in reaction

375
00:38:52.620 --> 00:38:59.220
to this reign of monopoly and big business, so the story runs, altruistic intellectuals

376
00:38:59.220 --> 00:39:05.940
and far-seeing politicians turned to intervention by the government to reform and to regulate

377
00:39:05.940 --> 00:39:08.300
these evils.

378
00:39:08.300 --> 00:39:13.460
Kolko's great work demonstrates that the reality was almost precisely the opposite

379
00:39:13.460 --> 00:39:15.720
of this myth.

380
00:39:15.720 --> 00:39:21.480
Despite the wave of mergers and trusts formed around the turn of the century, Colco reveals,

381
00:39:21.480 --> 00:39:28.240
the forces of competition on the free market rapidly vitiated and dissolved these attempts

382
00:39:28.240 --> 00:39:34.880
at stabilizing and perpetuating the economic power of big business interests.

383
00:39:34.880 --> 00:39:41.320
It was precisely in reaction to their impending defeat at the hands of the competitive storms

384
00:39:41.320 --> 00:39:48.400
of the Market, that big business turned increasingly after the 1900s to the Federal Government

385
00:39:48.400 --> 00:39:51.220
for aid and protection.

386
00:39:51.220 --> 00:39:57.180
In short, the intervention by the Federal Government was designed not to curb big business

387
00:39:57.180 --> 00:40:03.480
monopoly for the sake of the public wheel, but to create monopolies that big business

388
00:40:03.480 --> 00:40:10.160
as well as trade associations of smaller business had not been able to establish amidst the

389
00:40:10.160 --> 00:40:17.160
and the competitive gales of the free market. Both left and right have been persistently

390
00:40:17.160 --> 00:40:26.160
misled by the notion that intervention by the government is ipso facto leftish and anti-business.

391
00:40:26.160 --> 00:40:33.260
Hence the mythology of the new fair deal as read that is endemic on the right. Both the

392
00:40:33.260 --> 00:40:39.500
The big businessmen led by the Morgan interests and Professor Kolko, almost uniquely in the

393
00:40:39.500 --> 00:40:46.700
academic world, have realized that monopoly privilege can only be created by the state

394
00:40:46.700 --> 00:40:51.660
and not as a result of free market operations.

395
00:40:51.660 --> 00:40:57.460
Thus Kolko shows that beginning with Theodore Roosevelt's new nationalism and culminating

396
00:40:57.460 --> 00:41:04.700
in Wilson's New Freedom, in industry after industry, for example, insurance, banking,

397
00:41:04.700 --> 00:41:13.220
meat, exports and business generally, regulations that present-day rightists think of as socialistic

398
00:41:13.220 --> 00:41:20.840
were not only uniformly hailed but conceived and brought about by big businessmen.

399
00:41:20.840 --> 00:41:27.640
This was a conscious effort to fasten upon the economy a cement of subsidy, stabilization

400
00:41:27.640 --> 00:41:30.120
and monopoly privilege.

401
00:41:30.120 --> 00:41:35.760
A typical view was that of Andrew Carnegie, deeply concerned about competition in the

402
00:41:35.760 --> 00:41:41.960
steel industry, which neither the formation of U.S. Steel nor the famous Gary Dinners

403
00:41:41.960 --> 00:41:45.720
sponsored by that Morgan Company could dampen.

404
00:41:45.720 --> 00:41:52.980
Carnegie declared in 1908 that it always comes back to me that government control and that

405
00:41:52.980 --> 00:41:56.360
alone will properly solve the problem.

406
00:41:56.360 --> 00:42:03.060
There is nothing alarming about government regulation per se, announced Carnegie.

407
00:42:03.060 --> 00:42:08.300
Capital is perfectly safe in the gas company, although it is under court control.

408
00:42:08.300 --> 00:42:13.660
So will all capital be, although under government control.

409
00:42:13.660 --> 00:42:21.080
The Progressive Party, Kolko shows, was basically a Morgan-created party to re-elect Roosevelt

410
00:42:21.080 --> 00:42:28.100
and punish President Taft, who had been overzealous in prosecuting Morgan enterprises.

411
00:42:28.100 --> 00:42:34.440
The leftish social workers often unwittingly provided a demagogic veneer for a conservative

412
00:42:34.440 --> 00:42:36.380
statist movement.

413
00:42:36.380 --> 00:42:42.020
Wilson's new freedom, culminating in the creation of the Federal Trade Commission,

414
00:42:42.020 --> 00:42:48.700
far from being considered dangerously socialistic by big business was welcomed enthusiastically

415
00:42:48.700 --> 00:42:55.100
as putting their long-cherished program of support, privilege and regulation of competition

416
00:42:55.100 --> 00:42:57.040
into effect.

417
00:42:57.040 --> 00:43:01.980
And Wilson's war collectivism was welcomed even more exuberantly.

418
00:43:01.980 --> 00:43:06.900
Edward N. Hurley, chairman of the Federal Trade Commission and formerly president of

419
00:43:06.900 --> 00:43:13.880
The Illinois Manufacturers Association happily announced in late 1915 that the Federal Trade

420
00:43:13.880 --> 00:43:20.620
Commission was designed to do for general business what the ICC had been eagerly doing

421
00:43:20.620 --> 00:43:26.860
for the railroads and shippers, what the Federal Reserve was doing for the nation's bankers,

422
00:43:26.860 --> 00:43:31.540
and what the Department of Agriculture was accomplishing for the farmers.

423
00:43:31.540 --> 00:43:37.340
As would happen more dramatically in European fascism, each economic interest group was

424
00:43:37.340 --> 00:43:44.380
being cartelized and monopolized and fitted into its privileged niche in a hierarchically

425
00:43:44.380 --> 00:43:48.580
ordered socio-economic structure.

426
00:43:48.580 --> 00:43:53.660
Particularly influential were the views of Arthur Jerome Eddy, an eminent corporation

427
00:43:53.660 --> 00:43:59.820
lawyer who specialized in forming trade associations and who helped to father the Federal Trade

428
00:43:59.820 --> 00:44:01.460
Commission.

429
00:44:01.460 --> 00:44:07.440
In his magnum opus, fiercely denouncing competition in business and calling for governmentally

430
00:44:07.440 --> 00:44:15.240
controlled and protected industrial cooperation, Eddie trumpeted that competition is war and

431
00:44:15.240 --> 00:44:17.840
war is hell.

432
00:44:17.840 --> 00:44:23.440
What of the intellectuals of the progressive period, damned by the present day right as

433
00:44:23.440 --> 00:44:26.080
socialistic?

434
00:44:26.080 --> 00:44:30.600
Socialistic in a sense they were, but what kind of socialism?

435
00:44:30.600 --> 00:44:36.920
The conservative state socialism of Bismarck's Germany, the prototype for so much of modern

436
00:44:36.920 --> 00:44:43.400
European and American political forms, and under which the bulk of American intellectuals

437
00:44:43.400 --> 00:44:48.400
of the late 19th century received their higher education.

438
00:44:48.400 --> 00:44:54.540
As Kolko puts it, the conservatism of the contemporary intellectuals, the idealization

439
00:44:54.540 --> 00:45:01.180
Idealization of the State by Lester Ward, Richard T. Eli or Simon N. Patton was also

440
00:45:01.180 --> 00:45:07.540
the result of the peculiar training of many of the American academics of this period.

441
00:45:07.540 --> 00:45:13.060
At the end of the 19th century, the primary influence in American academic, social and

442
00:45:13.060 --> 00:45:17.300
economic theory was exerted by the universities.

443
00:45:17.300 --> 00:45:22.920
The Bismarckian idealization of the state with its centralized welfare functions was

444
00:45:22.920 --> 00:45:29.080
was suitably revised by the thousands of key academics who studied in German universities

445
00:45:29.080 --> 00:45:33.440
in the 1880s and 1890s.

446
00:45:33.440 --> 00:45:39.000
The ideal of the leading ultra-conservative German professors, moreover, who were also

447
00:45:39.000 --> 00:45:46.340
called socialists of the chair, was consciously to form themselves into the intellectual bodyguard

448
00:45:46.340 --> 00:45:51.800
of the House of Hohenzollern, and that they surely were.

449
00:45:51.800 --> 00:45:58.000
As an exemplar of the progressive intellectual, Colco aptly cites Herbert Crowley, editor

450
00:45:58.000 --> 00:46:01.880
of the Morgan-financed New Republic.

451
00:46:01.880 --> 00:46:08.480
Systematizing Theodore Roosevelt's new nationalism, Crowley hailed this new Hamiltonianism as

452
00:46:08.480 --> 00:46:15.240
a system for collectivist federal control and integration of society into a hierarchical

453
00:46:15.240 --> 00:46:17.040
structure.

454
00:46:17.040 --> 00:46:21.600
Looking forward from the progressive era, Gabriel Kolko concludes that

455
00:46:21.600 --> 00:46:28.760
A synthesis of business and politics on the federal level was created during the war in

456
00:46:28.760 --> 00:46:35.520
various administrative and emergency agencies that continued throughout the following decade.

457
00:46:35.520 --> 00:46:43.080
Indeed, the war period represents the triumph of business in the most emphatic manner possible.

458
00:46:43.080 --> 00:46:49.960
Big business gained total support from the various regulatory agencies and the executive.

459
00:46:49.960 --> 00:46:55.960
It was during the war that effective working oligopoly and price and market agreements

460
00:46:55.960 --> 00:47:01.320
became operational in the dominant sectors of the American economy.

461
00:47:01.320 --> 00:47:08.960
The rapid diffusion of power in the economy and relatively easy entry virtually ceased.

462
00:47:08.960 --> 00:47:14.720
Despite the cessation of important new legislative enactments, the unity of business and the

463
00:47:14.720 --> 00:47:21.040
Federal Government continued throughout the 1920s and thereafter, using the foundations

464
00:47:21.040 --> 00:47:28.880
laid in the Progressive Era to stabilize and consolidate conditions within various industries.

465
00:47:28.880 --> 00:47:34.640
The principle of utilizing the Federal Government to stabilize the economy, established in the

466
00:47:34.640 --> 00:47:44.640
The context of modern industrialism during the progressive era became the basis of political capitalism in its many later ramifications.

467
00:47:44.640 --> 00:47:54.640
In this sense, progressivism did not die in the 1920s, but became a part of the basic fabric of American society.

468
00:47:54.640 --> 00:47:57.640
Thus, the New Deal.

469
00:47:57.640 --> 00:48:04.200
After a bit of leftish wavering in the middle of the late 30s, the Roosevelt administration

470
00:48:04.200 --> 00:48:10.720
re-cemented its alliance with big business in the national defense and war contract economy

471
00:48:10.720 --> 00:48:13.740
that began in 1940.

472
00:48:13.740 --> 00:48:19.840
This is an economy and a polity that has been ruling America ever since, embodied in the

473
00:48:19.840 --> 00:48:26.960
permanent war economy, the full-fledged state monopoly capitalism and neo-mercantilism,

474
00:48:26.960 --> 00:48:31.760
The Military-Industrial Complex of the Present Era.

475
00:48:31.760 --> 00:48:37.360
The essential features of American society have not changed since it was thoroughly militarized

476
00:48:37.360 --> 00:48:44.760
and politicized in World War II, except that the trends intensify and even in everyday

477
00:48:44.760 --> 00:48:52.040
life men have been increasingly molded into conforming organization men serving the State

478
00:48:52.040 --> 00:48:55.680
and its Military-Industrial Complex.

479
00:48:55.680 --> 00:49:01.940
William H. White Jr. in his justly famous book, The Organization Man, made clear that

480
00:49:01.940 --> 00:49:08.880
this molding took place amidst the adoption by business of the collectivist views of enlightened

481
00:49:08.880 --> 00:49:13.120
sociologists and other social engineers.

482
00:49:13.120 --> 00:49:19.040
It is also clear that this harmony of views is not simply the result of naivete by big

483
00:49:19.040 --> 00:49:25.960
Businessmen, not when such naivete coincides with the requirements of compressing the worker

484
00:49:25.960 --> 00:49:33.000
and manager into the mold of willing servitor in the great bureaucracy of the military industrial

485
00:49:33.000 --> 00:49:34.800
machine.

486
00:49:34.800 --> 00:49:40.840
And under the guise of democracy, education has become mere mass drilling in the techniques

487
00:49:40.840 --> 00:49:47.320
of adjustment to the task of becoming a cog in the vast bureaucratic machine.

488
00:49:47.320 --> 00:49:58.920
Meanwhile, the Republicans and Democrats remain as bipartisan in forming and supporting this establishment as they were in the first two decades of the 20th century.

489
00:49:58.920 --> 00:50:11.520
Me tooism, bipartisan support of the status quo that underlies the superficial differences between the parties, did not begin in 1940.

490
00:50:11.520 --> 00:50:19.520
How did the corporal's guard of remaining libertarians react to these shifts of the ideological spectrum in America?

491
00:50:19.520 --> 00:50:28.520
An instructive answer may be found by looking at the career of one of the great libertarians of 20th century America, Albert J. Nock.

492
00:50:28.520 --> 00:50:34.520
In the 1920s, when Nock had formulated his radical libertarian philosophy,

493
00:50:34.520 --> 00:50:40.480
philosophy, he was universally regarded as a member of the extreme left, and he so regarded

494
00:50:40.480 --> 00:50:42.880
himself as well.

495
00:50:42.880 --> 00:50:48.880
It is always the tendency in ideological and political life to center one's attention on

496
00:50:48.880 --> 00:50:55.080
the main enemy of the day, and the main enemy of that day was the conservative statism of

497
00:50:55.080 --> 00:50:58.020
the Coolidge-Hoover administration.

498
00:50:58.020 --> 00:51:04.000
It was natural, therefore, for Nock, his friend and fellow libertarian H. L. Mencken and other

499
00:51:04.000 --> 00:51:10.600
radicals to join quasi-socialists in battle against the common foe.

500
00:51:10.600 --> 00:51:15.600
When the New Deal succeeded Hoover, on the other hand, the milk and water socialists

501
00:51:15.600 --> 00:51:21.120
and vaguely leftish interventionists hopped on the New Deal bandwagon.

502
00:51:21.120 --> 00:51:27.320
On the left, only the libertarians, such as Nock and Macon, and the Leninists, before

503
00:51:27.320 --> 00:51:33.320
the popular front period, realized that Roosevelt was only a continuation of Hoover in other

504
00:51:33.320 --> 00:51:50.320
It was perfectly natural for the radicals to form a united front against Roosevelt with the older Hoover and Al Smith conservatives, who either believed Roosevelt had gone too far or disliked his flamboyant populistic rhetoric.

505
00:51:50.320 --> 00:52:05.320
But the problem was that Nock and his fellow radicals, at first properly scornful of their newfound allies, soon began to accept them, and even don cheerfully the formerly despised label of conservative.

506
00:52:05.320 --> 00:52:18.320
With the rank-and-file radicals, this shift took place, as have so many transformations of ideology and history, unwittingly, and in default of proper ideological leadership.

507
00:52:18.320 --> 00:52:24.220
Partnership. For Nock, and to some extent for Mencken on the other hand, the problem

508
00:52:24.220 --> 00:52:31.080
cut far deeper. For there had always been one grave flaw in the brilliant and finely

509
00:52:31.080 --> 00:52:38.080
honed libertarian doctrine hammered out in their very different ways by Nock and Mencken.

510
00:52:38.080 --> 00:52:45.920
Both had long adopted the great error of pessimism. Both saw no hope for the human race ever adopting

511
00:52:45.920 --> 00:52:52.080
in the System of Liberty, despairing of the radical doctrine of liberty ever being applied

512
00:52:52.080 --> 00:52:58.560
in practice, each in his own personal way retreated from the responsibility of ideological

513
00:52:58.560 --> 00:53:06.360
leadership, making joyously and hedonically knock haughtily and secretively.

514
00:53:06.360 --> 00:53:11.580
Despite the massive contribution of both men to the cause of liberty, therefore, neither

515
00:53:11.580 --> 00:53:16.380
Neither could ever become the conscious leader of a libertarian movement.

516
00:53:16.380 --> 00:53:21.500
For neither could ever envision the party of liberty as the party of hope, the party

517
00:53:21.500 --> 00:53:28.060
of revolution, or, a fortiori, the party of secular messianism.

518
00:53:28.060 --> 00:53:35.080
The era of pessimism is the first step down the slippery slope that leads to conservatism,

519
00:53:35.080 --> 00:53:41.040
and hence it was all too easy for the pessimistic radical knock, even though still basically

520
00:53:41.040 --> 00:53:59.100
It is fascinating that Albert J. Nock thus followed the ideological path of his beloved

521
00:53:59.100 --> 00:54:02.900
spiritual ancestor, Herbert Spencer.

522
00:54:02.900 --> 00:54:06.740
Both began as pure radical libertarians.

523
00:54:06.740 --> 00:54:12.780
Both quickly abandoned radical or revolutionary tactics as embodied in the will to put their

524
00:54:12.780 --> 00:54:20.040
theories into practice through mass action, and both eventually glided from Tory tactics

525
00:54:20.040 --> 00:54:24.820
to at least a partial Toryism of content.

526
00:54:24.820 --> 00:54:30.740
And so the libertarians, especially in their sense of where they stood in the ideological

527
00:54:30.740 --> 00:54:56.500
World War II reinforced and cemented this alliance, for in contrast to all the previous

528
00:54:56.500 --> 00:55:03.580
Since American wars of the century, the pro-peace and isolationist forces were all identified

529
00:55:03.580 --> 00:55:09.420
by their enemies, and subsequently by themselves, as men of the right.

530
00:55:09.420 --> 00:55:15.020
By the end of World War II, it was second nature for libertarians to consider themselves

531
00:55:15.020 --> 00:55:22.020
at an extreme right-wing pole, with the conservatives immediately to the left of them, and hence

532
00:55:22.020 --> 00:55:27.020
The Great Error of the Spectrum that persists to this day.

533
00:55:27.020 --> 00:55:33.520
In particular, the modern libertarians forgot, or never realized, that opposition to war

534
00:55:33.520 --> 00:55:41.100
and militarism had always been a left-wing tradition that had included libertarians.

535
00:55:41.100 --> 00:55:46.540
And hence, when the historical aberration of the New Deal period corrected itself, and

536
00:55:46.540 --> 00:55:51.220
The right wing was once again the great partisan of total war.

537
00:55:51.220 --> 00:55:56.820
The libertarians were unprepared to understand what was happening, and tailed along in the

538
00:55:56.820 --> 00:56:01.120
wake of their supposed conservative allies.

539
00:56:01.120 --> 00:56:08.860
The liberals had completely lost their old ideological markings and guidelines.

540
00:56:08.860 --> 00:56:15.120
Given a proper reorientation of the ideological spectrum, what then would be the prospects

541
00:56:15.120 --> 00:56:16.980
for Liberty.

542
00:56:16.980 --> 00:56:23.760
It is no wonder that the contemporary libertarian, seeing the world going socialistic and communistic,

543
00:56:23.760 --> 00:56:30.720
and believing himself virtually isolated and cut off from any prospect of united mass action,

544
00:56:30.720 --> 00:56:34.400
tends to be steeped in long-run pessimism.

545
00:56:34.400 --> 00:56:40.280
But the scene immediately brightens when we realize that that indispensable requisite of

546
00:56:40.280 --> 00:56:47.600
of Modern Civilization, The Overthrow of the Old Order, was accomplished by mass libertarian

547
00:56:47.600 --> 00:56:54.880
action erupting in such great revolutions of the West as the French and American revolutions,

548
00:56:54.880 --> 00:57:01.280
and bringing about the glories of the Industrial Revolution and the advances of liberty, mobility

549
00:57:01.280 --> 00:57:06.560
and rising living standards that we still retain today.

550
00:57:06.560 --> 00:57:12.360
Despite the reactionary swings backward to statism, the modern world stands towering

551
00:57:12.360 --> 00:57:14.880
above the world of the past.

552
00:57:14.880 --> 00:57:21.680
When we consider also that in one form or another, the old order of despotism, feudalism,

553
00:57:21.680 --> 00:57:28.640
theocracy and militarism dominated every human civilization until the west of the eighteenth

554
00:57:28.640 --> 00:57:37.060
century, optimism over what man has and can achieve must mount still higher.

555
00:57:37.060 --> 00:57:43.400
It might be retorted, however, that this bleak historical record of despotism and stagnation

556
00:57:43.400 --> 00:57:50.160
only reinforces pessimism, for it shows the persistence and durability of the old order

557
00:57:50.160 --> 00:57:56.440
and the seeming frailty and evanescence of the new, especially in view of the retrogression

558
00:57:56.440 --> 00:57:58.760
of the Past Century.

559
00:57:58.760 --> 00:58:04.360
But such superficial analysis neglects the great change that occurred with the revolution

560
00:58:04.360 --> 00:58:09.720
of the new order, a change that is clearly irreversible.

561
00:58:09.720 --> 00:58:15.960
For the old order was able to persist in its slave system for centuries precisely because

562
00:58:15.960 --> 00:58:22.840
it awoke no expectations and no hopes in the minds of the submerged masses.

563
00:58:22.840 --> 00:58:30.480
Their lot was to live and eke out their brutish subsistence in slavery, while obeying unquestioningly

564
00:58:30.480 --> 00:58:34.640
the commands of their divinely appointed rulers.

565
00:58:34.640 --> 00:58:40.560
But the liberal revolution implanted indelibly in the minds of the masses, not only in the

566
00:58:40.560 --> 00:58:46.880
West, but in the still futilely dominated undeveloped world, the burning desire for

567
00:58:46.880 --> 00:58:53.400
of Liberty, for land to the peasantry, for peace between the nations, and, perhaps above

568
00:58:53.400 --> 00:58:59.260
all, for the mobility and rising standards of living that can only be brought to them

569
00:58:59.260 --> 00:59:02.400
by an industrial civilization.

570
00:59:02.400 --> 00:59:08.720
The masses will never again accept the mindless serfdom of the old order, and given these

571
00:59:08.720 --> 00:59:14.940
demands that have been awakened by liberalism and the industrial revolution, long-run victory

572
00:59:14.940 --> 00:59:18.620
Industry for Liberty is inevitable.

573
00:59:18.620 --> 00:59:26.300
For only liberty, only a free market can organize and maintain an industrial system, and the

574
00:59:26.300 --> 00:59:32.980
more that population expands and explodes, the more necessary is the unfettered working

575
00:59:32.980 --> 00:59:35.420
of such an industrial economy.

576
00:59:35.420 --> 00:59:42.620
Laissez-faire and the free market become more and more evidently necessary as an industrial

577
00:59:42.620 --> 00:59:50.160
System Develops, Radical Deviations Cause Breakdowns and Economic Crises.

578
00:59:50.160 --> 00:59:57.380
This crisis of statism becomes particularly dramatic and acute in a fully socialist society,

579
00:59:57.380 --> 01:00:03.420
and hence the inevitable breakdown of statism has first become strikingly apparent in the

580
01:00:03.420 --> 01:00:08.500
countries of the socialist, that is, communist camp.

581
01:00:08.500 --> 01:00:15.440
Where socialism confronts its inner contradiction most starkly, desperately it tries to fulfill

582
01:00:15.440 --> 01:00:21.640
its proclaimed goals of industrial growth, higher standards of living for the masses

583
01:00:21.640 --> 01:00:28.320
and eventual withering away of the state, and is increasingly unable to do so with its

584
01:00:28.320 --> 01:00:35.160
collectivist means, hence the inevitable breakdown of socialism.

585
01:00:35.160 --> 01:00:41.260
This progressive breakdown of socialist planning was at first partially obscured.

586
01:00:41.260 --> 01:00:47.720
For in every instance the Leninists took power not in a developed capitalist country as Marx

587
01:00:47.720 --> 01:00:53.800
had wrongly predicted, but in a country suffering from the oppression of feudalism.

588
01:00:53.800 --> 01:01:00.340
Second, the communists did not attempt to impose socialism upon the economy for many

589
01:01:00.340 --> 01:01:03.460
years after taking power.

590
01:01:03.460 --> 01:01:10.820
and Soviet Russia until Stalin's forced collectivization of the early 1930s reversed the wisdom of

591
01:01:10.820 --> 01:01:17.140
Lenin's new economic policy, which Lenin's favorite theoretician, Bukharin, would have

592
01:01:17.140 --> 01:01:21.100
extended onward towards a free market.

593
01:01:21.100 --> 01:01:26.840
Even the supposedly rabid communist leaders of China did not impose a socialist economy

594
01:01:26.840 --> 01:01:30.740
on that country until the late 1950s.

595
01:01:30.740 --> 01:01:37.260
In every case, growing industrialization has imposed a series of economic breakdowns so

596
01:01:37.260 --> 01:01:43.460
severe that the communist countries, against their ideological principles, have had to

597
01:01:43.460 --> 01:01:50.860
retreat step by step from central planning and return to various degrees and forms of

598
01:01:50.860 --> 01:01:52.560
a free market.

599
01:01:52.560 --> 01:01:57.980
The Lieberman Plan for the Soviet Union has gained a great deal of publicity, but the

600
01:01:57.980 --> 01:02:04.740
The inevitable process of desocialization has proceeded much further in Poland, Hungary

601
01:02:04.740 --> 01:02:07.220
and Czechoslovakia.

602
01:02:07.220 --> 01:02:13.320
Most advanced of all is Yugoslavia, which, freed from Stalinist rigidity earlier than

603
01:02:13.320 --> 01:02:21.700
its fellows, in only a dozen years has desocialized so fast and so far that its economy is now

604
01:02:21.700 --> 01:02:25.340
hardly more socialistic than that of France.

605
01:02:25.340 --> 01:02:31.620
The fact that people calling themselves communists are still governing the country is irrelevant

606
01:02:31.620 --> 01:02:35.520
to the basic social and economic facts.

607
01:02:35.520 --> 01:02:39.860
Central planning in Yugoslavia has virtually disappeared.

608
01:02:39.860 --> 01:02:46.120
The private sector not only predominates in agriculture but is even strong in industry,

609
01:02:46.120 --> 01:02:53.520
and the public sector itself has been so radically decentralized and placed under free pricing,

610
01:02:53.520 --> 01:03:00.620
and Loss tests and a cooperative worker ownership of each plant, that true socialism hardly

611
01:03:00.620 --> 01:03:03.400
exists any longer.

612
01:03:03.400 --> 01:03:10.280
Only the final step of converting workers' syndical control to individual shares of ownership

613
01:03:10.280 --> 01:03:15.160
remains on the path toward outright capitalism.

614
01:03:15.160 --> 01:03:20.880
Communist China and the able Marxist theoreticians of Monthly Review have clearly discerned

615
01:03:20.880 --> 01:03:28.280
the situation and have raised the alarm that Yugoslavia is no longer a socialist country.

616
01:03:28.280 --> 01:03:33.600
One would think that free market economists would hail the confirmation and increasing

617
01:03:33.600 --> 01:03:40.320
relevance of the notable insight of Professor Ludwig von Mises a half century ago, that

618
01:03:40.320 --> 01:03:47.440
socialist states, being necessarily devoid of a genuine price system, could not calculate

619
01:03:47.440 --> 01:03:54.000
economically, and therefore could not plan their economies with any success.

620
01:03:54.000 --> 01:04:00.520
Indeed, one follower of Mises, in effect, predicted this process of desocialization

621
01:04:00.520 --> 01:04:03.720
in a novel some years ago.

622
01:04:03.720 --> 01:04:09.640
Yet neither this author nor other free market economists have given the slightest indication

623
01:04:09.640 --> 01:04:16.200
of even recognizing, let alone saluting, this process in the communist countries.

624
01:04:16.200 --> 01:04:22.400
Perhaps because their almost hysterical view of the alleged threat of communism prevents

625
01:04:22.400 --> 01:04:29.000
them from acknowledging any dissolution in the supposed monolith of menace.

626
01:04:29.000 --> 01:04:37.160
The novel in question is by Henry Hazlitt, The Great Idea, 1951.

627
01:04:37.160 --> 01:04:43.920
Communist countries, therefore, are increasingly and ineradicably forced to desocialize and

628
01:04:43.920 --> 01:04:47.820
will therefore eventually reach the free market.

629
01:04:47.820 --> 01:04:54.160
The state of the undeveloped countries is also cause for sustained libertarian optimism.

630
01:04:54.160 --> 01:04:59.520
For all over the world the peoples of the undeveloped nations are engaged in revolution

631
01:04:59.520 --> 01:05:03.300
to throw off their feudal old order.

632
01:05:03.300 --> 01:05:09.280
It is true that the United States is doing its mightiest to suppress the very revolutionary

633
01:05:09.280 --> 01:05:32.120
We are left with the United States and the countries of Western Europe.

634
01:05:32.120 --> 01:05:38.000
Here the case for optimism is less clear, for the quasi-collectivist system does not

635
01:05:38.000 --> 01:05:43.520
present as stark a crisis of self-contradiction as does socialism.

636
01:05:43.520 --> 01:05:50.200
And yet, here too, economic crisis looms in the future and gnaws away at the complacency

637
01:05:50.200 --> 01:05:56.820
of the Keynesian economic managers, creeping inflation reflected in the aggravating balance

638
01:05:56.820 --> 01:06:02.960
of payments breakdown of the once almighty dollar, creeping secular unemployment brought

639
01:06:02.960 --> 01:06:09.920
about by minimum wage scales and the deeper and long-run accumulation of the uneconomic

640
01:06:09.920 --> 01:06:13.520
distortions of the permanent war economy.

641
01:06:13.520 --> 01:06:19.920
Moreover, potential crises in the United States are not merely economic.

642
01:06:19.920 --> 01:06:25.400
There is a burgeoning and inspiring moral ferment among the youth of America against

643
01:06:25.400 --> 01:06:32.240
the fetters of centralized bureaucracy, of mass education in uniformity, and of brutality

644
01:06:32.240 --> 01:06:36.880
and Oppression, exercised by the minions of the state.

645
01:06:36.880 --> 01:06:43.180
Furthermore, the maintenance of a substantial degree of free speech and democratic forms

646
01:06:43.180 --> 01:06:50.200
facilitates, at least in the short run, the possible growth of a libertarian movement.

647
01:06:50.200 --> 01:06:56.420
The United States is also fortunate in possessing, even if half forgotten beneath the statist

648
01:06:56.420 --> 01:07:26.060
What the Marxists would call the objective conditions for the triumph of liberty exist

649
01:07:26.060 --> 01:07:31.900
then everywhere in the world, and more so than in any past age.

650
01:07:31.900 --> 01:07:38.100
For everywhere the masses have opted for higher living standards and the promise of freedom,

651
01:07:38.100 --> 01:07:45.860
and everywhere the various regimes of statism and collectivism cannot fulfill these goals.

652
01:07:45.860 --> 01:07:52.100
What is needed then is simply the subjective conditions for victory, that is, a growing

653
01:07:52.100 --> 01:08:22.100
liberty cannot be fully achieved unless libertarians exist in number to guide the peoples to the proper path, but perhaps the greatest stumbling block to the creation of such a movement is the despair and pessimism, typical of the people of the world, and not of the people of the world, but of the people of the world, and of the people of the world, and of the people of the world.

654
01:08:22.100 --> 01:08:25.800
of the libertarian in today's world.

655
01:08:25.800 --> 01:08:31.540
Much of that pessimism is due to his misreading of history and his thinking of himself and

656
01:08:31.540 --> 01:08:38.100
his handful of confrères as irredeemably isolated from the masses and therefore from

657
01:08:38.100 --> 01:08:40.460
the winds of history.

658
01:08:40.460 --> 01:08:46.160
Hence he becomes a lone critic of historical events rather than a person who considers

659
01:08:46.160 --> 01:08:59.160
The Modern Libertarian has forgotten that the liberal of the 17th and 18th centuries

660
01:08:59.160 --> 01:09:05.240
faced odds much more overwhelming than those which face the liberal of today.

661
01:09:05.240 --> 01:09:12.560
For in that era, before the Industrial Revolution, the victory of liberalism was far from inevitable.

662
01:09:12.560 --> 01:09:18.800
And yet, the liberalism of that day was not content to remain a gloomy little sect.

663
01:09:18.800 --> 01:09:23.720
Instead, it unified theory and action.

664
01:09:23.720 --> 01:09:30.040
Liberalism grew and developed as an ideology, and, leading and guiding the masses, made

665
01:09:30.040 --> 01:09:34.320
the revolution which changed the fate of the world.

666
01:09:34.320 --> 01:09:40.840
By its monumental breakthrough, this revolution of the 18th century transformed history from

667
01:09:40.840 --> 01:09:47.960
from a chronicle of stagnation and despotism to an ongoing movement advancing toward a veritable

668
01:09:47.960 --> 01:09:53.960
secular utopia of liberty and rationality and abundance.

669
01:09:53.960 --> 01:10:00.900
The old order is dead or moribund, and the reactionary attempts to run a modern society

670
01:10:00.900 --> 01:10:08.280
and economy by various throwbacks to the old order are doomed to total failure.

671
01:10:08.280 --> 01:10:14.640
The liberals of the past have left to modern libertarians a glorious heritage, not only

672
01:10:14.640 --> 01:10:20.320
of ideology but of victories against far more devastating odds.

673
01:10:20.320 --> 01:10:25.740
The liberals of the past have also left a heritage of the proper strategy and tactics

674
01:10:25.740 --> 01:10:33.440
for libertarians to follow, not only by leading, rather than remaining aloof from, the masses,

675
01:10:33.440 --> 01:10:38.120
but also by not falling prey to short-run optimism.

676
01:10:38.120 --> 01:10:45.000
For short-run optimism, being unrealistic, leads straight away to dissolution and then

677
01:10:45.000 --> 01:10:47.640
to long-run pessimism.

678
01:10:47.640 --> 01:10:54.240
Just as, on the other side of the coin, long-run pessimism leads to exclusive and self-defeating

679
01:10:54.240 --> 01:10:59.840
concentration on immediate and short-run issues.

680
01:10:59.840 --> 01:11:06.560
Short-run optimism stems, for one thing, from a naïve and simplistic view of strategy.

681
01:11:06.560 --> 01:11:13.320
And liberty will win merely by educating more intellectuals, who in turn will educate opinion

682
01:11:13.320 --> 01:11:19.760
molders, who in turn will convince the masses, after which the state will somehow fold its

683
01:11:19.760 --> 01:11:23.800
tent and silently steal away.

684
01:11:23.800 --> 01:11:25.800
Matters are not that easy.

685
01:11:25.800 --> 01:11:32.120
For libertarians face not only a problem of education, but also a problem of power.

686
01:11:32.120 --> 01:11:40.120
And it is a law of history that a ruling caste has never voluntarily given up its power.

687
01:11:40.120 --> 01:11:46.060
But the problem of power is, certainly in the United States, far in the future.

688
01:11:46.060 --> 01:11:51.800
For the libertarian, the main task of the present epoch is to cast off his needless

689
01:11:51.800 --> 01:11:58.560
and debilitating pessimism, to set his sights on long-run victory, and to set out on the

690
01:11:58.560 --> 01:12:01.200
road to its attainment.

691
01:12:01.200 --> 01:12:07.840
To do this, he must, perhaps first of all, drastically realign his mistaken view of the

692
01:12:07.840 --> 01:12:10.060
ideological spectrum.

693
01:12:10.060 --> 01:12:17.120
He must discover who his friends and natural allies are, and above all, perhaps, who his

694
01:12:17.120 --> 01:12:19.440
enemies are.

695
01:12:19.440 --> 01:12:25.360
Armed with this knowledge, let him proceed in the spirit of radical, long-run optimism

696
01:12:25.360 --> 01:12:31.360
that one of the great figures in the history of libertarian thought, Randolph Bourne, correctly

697
01:12:31.360 --> 01:12:35.320
identified as the spirit of youth.

698
01:12:35.320 --> 01:12:43.700
Let Bourne's stirring words serve also as the guidepost for the spirit of liberty.

699
01:12:43.700 --> 01:12:49.720
Youth is the incarnation of reason pitted against the rigidity of tradition.

700
01:12:49.720 --> 01:12:55.440
Roth puts the remorseless questions to everything that is old and established.

701
01:12:55.440 --> 01:12:56.520
Why?

702
01:12:56.520 --> 01:12:58.920
What is this thing good for?

703
01:12:58.920 --> 01:13:05.480
And when it gets the mumbled evasive answers of the defenders, it applies its own fresh,

704
01:13:05.480 --> 01:13:12.720
clean spirit of reason to institutions, customs and ideas, and finding them stupid, inane

705
01:13:12.720 --> 01:13:19.040
or poisonous, turns instinctively to overthrow them and build in their place the things with

706
01:13:19.040 --> 01:13:29.560
Youth is the leaven that keeps all these questioning, testing attitudes fermenting in the world.

707
01:13:29.560 --> 01:13:34.960
If it were not for this troublesome activity of youth, with its hatred of sophisms and

708
01:13:34.960 --> 01:13:43.000
glosses, its insistence on things as they are, society would die from sheer decay.

709
01:13:43.000 --> 01:13:48.400
It is the policy of the older generation, as it gets adjusted to the world, to hide

710
01:13:48.400 --> 01:13:54.800
read away the unpleasant things where it can, or preserve a conspiracy of silence and an

711
01:13:54.800 --> 01:13:58.640
elaborate pretense that they do not exist.

712
01:13:58.640 --> 01:14:03.720
But meanwhile the sores go on festering just the same.

713
01:14:03.720 --> 01:14:06.480
Youth is the drastic antiseptic.

714
01:14:06.480 --> 01:14:12.200
It drags skeletons from closets and insists that they be explained.

715
01:14:12.200 --> 01:14:17.280
No wonder the older generation fears and distrusts the younger.

716
01:14:17.280 --> 01:14:21.880
Youth is the avenging nemesis on its trail.

717
01:14:21.880 --> 01:14:27.120
Our elders are always optimistic in their views of the present, pessimistic in their

718
01:14:27.120 --> 01:14:29.480
views of the future.

719
01:14:29.480 --> 01:14:35.720
Youth is pessimistic toward the present and gloriously hopeful for the future.

720
01:14:35.720 --> 01:14:39.840
And it is this hope which is the lever of progress.

721
01:14:39.840 --> 01:14:44.520
One might say, the only lever of progress.

722
01:14:44.520 --> 01:14:51.320
The secret of life is then that this fine youthful spirit shall never be lost.

723
01:14:51.320 --> 01:14:58.520
Out of the turbulence of youth should come this fine precipitate, a sane, strong, aggressive

724
01:14:58.520 --> 01:15:01.720
spirit of daring and doing.

725
01:15:01.720 --> 01:15:08.660
It must be a flexible, growing spirit, with a hospitality to new ideas and a keen insight

726
01:15:08.660 --> 01:15:11.060
into experience.

727
01:15:11.060 --> 01:15:18.540
To keep one's reactions warm and true is to have found the secret of perpetual youth,

728
01:15:18.540 --> 01:15:21.900
and perpetual youth is salvation.