Ladies and gentlemen, the Leviathan state, that monster devouring civilization in this
century, is in the throes of death. This is not a wish, it's not a prediction, but a conclusion
drawn from a broad look at the trends of the last decade and a half, which, if we take
the right steps, can be continued into the next century. The direction of history can
can be obscure in times like these. We've become accustomed to a fast pace of change,
to the growth of skepticism towards government, as if these were normal features of life.
So it's useful to take a step back, the better to see the overall picture. That's been the
perspective of this conference, and in my few minutes I want to compare our present
situation to 50 years ago and to 50 years in the future.
In 1947, Keynesian economic theory was just coming into its own after the most costly war in human history.
It had been a decade since the height of the New Deal, which was the central plan managing our country for years and making a terrible mess of it.
Why should the Russians have all the fun of remaking a world? asked New Dealer Stuart Chase in 1932.
And by 1947, everyone important seemed to agree.
After the war, there were murmurings of political dissent, but they were quickly crushed by a new national project, namely winning the Cold War,
an enterprise that cost trillions of dollars and four decades of public attention.
Fifty years ago, the political establishment, consisting of northeastern elites and led by the self-named wise men, was at its height.
Every important intellectual knew that the central planning was our future.
Most aspired to run the central plan.
The creation of the full-blown entitlement state was still two decades away,
but even this early it was seen as an inevitability.
Social scientists were designing the order of the future.
The age of the managerial class of scientific and public-spirited bureaucrats had been born.
We had fought a war against militarism, imperialism and national regimentation only to fasten these same ideas ever more tightly on America.
Internationally, the foundational apparatus for a world state was being constructed by all the top minds in Britain and the U.S.
World resources would be apportioned according to need on the model of the Marshall Plan.
There would be a World Central Bank issuing a world currency.
Agency. There would be a global trade agency managing the flow of goods and services. Everybody
important was behind Bretton Woods, a new deal for the Western world. The United Nations
would manage large issues like war and peace and smaller issues like labor relations. As
for the media, they were kept and cartelized, reporting just what they were told to report.
The media had dutifully handed down press releases from the War Department and the White
House for many years. They won Nobel prizes for covering up the crimes of totalitarian
murderers. By 1947, the media had become accustomed to their role as the fourth branch of government
and thought this constituted journalistic integrity. As for public opinion, people resented
the intrusions of government as they always have, but they considered the larger framework.
In a year, we would be locked in a life and death struggle with the USSR, which only yesterday
They had been our gallant ally. In the post-war world, you never knew who your friends were
or your enemies unless the government told you. This much we were clear. This much was
clear we were told. If the good guys were going to win, it could only be through the
power of government. And so we pitted one totalitarian bureaucracy against another and
put the longing for freedom on hold. Meanwhile, the domestic state grew even larger. By the
In the mid-50s, our ideological choices had been made for us. You could be a liberal like
John Kenneth Galbraith and believe in the welfare-warfare state. Or you could be a conservative
like William F. Buckley and believe in the welfare-warfare state. Or you could join Arthur
Schlesinger Jr. in the vital center between these two extremes.
The rest of us, of course, had plenty to be outraged about, but who were we to complain?
We had seen the awesome power of government at work in the war and its mass destruction.
Besides, in peacetime, government was the motive force behind spectacular accomplishments
like federal highways. In the academy, the old order had been overthrown and the government
was in charge, thanks to the GI Bill. The intellectuals who still believed in classical
liberalism and like Mises and Hayek had been relegated to the ghettos of academic life.
If people knew who they were or cared what they said it was only to display them as Neanderthals.
In time we would have wars within wars.
The Cold War required that we win Korea, Lebanon, Haiti, Cuba, the Dominican Republic, Congo,
Vietnam and a series of other skirmishers whose drama was somewhat enhanced by the prospect
of global nuclear annihilation.
We had to win the race to space and at taxpayer expense.
We had to win the war on poverty, the war on illiteracy, the war on discrimination,
the war on drugs, the war on voter apathy, all waged at taxpayer expense and all to the
benefit of government and the detriment of our freedoms.
These days we tend to look back affectionately at the 1950s, but in truth it was an age of
allegiance to power.
The civil religion invented to unify the federal states for the invasion of the South and developed
to unify the nation for the invasion of Europe in World War I had come to dominate real religion.
Then in the late 1960s, a generation took upon itself the task of dismantling what was
left of the traditional structures of family and faith and private life.
Freedom of association and freedom of contract were declared dead.
Property rights were doled out by government.
In the end, all that seemed permanent was the ruling class.
There wasn't much hope for us, it was widely believed, but if there was any, who doubted
that it was the gift of almighty government?
These sentiments were confirmed as the state grew, as public faith in government grew,
and as the ideological forces behind statism found ever-new justifications for interference
in our lives.
But in the late 1980s, all this began to change, slowly and then at the lightning speed that
continues to this day. With the benefit of hindsight, we can see that the way had been
paved by crucial events in the 1970s, as Murray Rothbard was the first to point out at the
time. The great monetary order designed in the aftermath of the Second World War unraveled
exactly as Henry Hazlitt had said it would, leading to a debilitating and confiscatory
inflation. Government mismanaged the economy on a scale we had not seen since the Great
Depression. But the effects were contrary to everything Keynesian theory had predicted.
Political corruption, real and imagined, became a mainstay of presidential politics. The war
on poverty and most every other war the government embarked on failed to live up to its promises.
The backlash had begun, but not without a series of diversions. In retrospect, it's
easy to see that the three great leaders of the 1980s, Margaret Thatcher, Ronald Reagan
and Mikhail Gorbachev were transitional figures. They did as much to advance the reconfiguration
of our political loyalties as they did to forestall that reconfiguration. Indeed there's a close
analogy among these leaders and their place in the history of our century. They were the
last of the great statesmen astriding the world as living embodiments of the national
or even international soul. Their public legitimacy depended on their claims to be fighting the
and the corruptions of the past, while their power and status depended on the continuation of an inherently corrupt system.
Indeed, all three were products of the system they were presuming to reform.
They didn't succeed in battling the post-war establishment and indeed they worked towards shoring it up.
But they nonetheless increased the public desire for the very reforms they claimed to be bringing about.
Their long-run effect was in convincing the public of their rhetorical ideals,
And even deeper contradiction lay at the heart of all three regimes. Despite protest to the
contrary, they all believed in some variant of the central evil of the century, the welfare
warfare state, a fact which is easily demonstrated by even a casual reading of their speeches.
They could not imagine a world fundamentally different from the one that had dominated
the scene since 1947. A world of superpowers, diplomats, foreign policy strategists, centrally
managed industrial economies and big events on the world stage. In short, a world where
the National Socialist Principle prevailed. Nations were collectivized and embodied in
their heads of state. Thatcher, Reagan and Gorbachev were praised for their vision, but
their vision did not include a world that could somehow manage without important statesmen
such as themselves. They could not imagine nor did they desire social systems not organized
on the principles of leadership and centralization. They could not foresee the kinds of societies
now being created by default, depoliticized societies that no longer desire mega-leaders
on the Thatcher, Reagan, Gorbachev model. Societies where government and political leaders
indeed are widely seen as menaces to social peace and prosperity. Indeed Thatcher who
who ultimately fell from power for drastically raising taxes has more recently become the United Kingdom's fiercest critic of the decentralization of the British government.
In retrospect, we can see that the really important forces for social change in the last five decades were not politicians.
They were not mainstream intellectuals. They were not public servants working in the permanent bureaucracy.
The really important figures behind social change were a very small band of intellectuals
who were never taken in by the claims that central planning would last forever.
They continued to challenge the system of social and economic management at its very
root.
They are the most important thinkers of our century, the Austrian School economists, who
dared to repudiate and denounce the statism of their time and to reconstruct the social
theory of freedom for our time and all time.
But they paid a heavy price.
Ludwig von Mises, once Europe's most important monetary economist, was uprooted by the tragic
events of the 1930s and eventually relegated to an unpaid post at New York University where
he taught a small group of friends and admirers in a basement classroom.
If Hayek did better, he went to the University of Chicago, but was not allowed to teach in
the economics department, as if to say that no real economist could oppose central planning.
When Murray and Rothbard entered graduate school and eventually came upon Mises's Human Action,
he chose the pursuit of truth above the path to professional prominence.
The author of world-historic works on economics, he was rewarded with an ill-paid job at a
trade school in Brooklyn with a windowless office the size of a coat room for the first
twenty years of his academic life.
But it was a choice he made consciously and indeed joyously.
He chose the path of long-term change over short-term benefit.
As the Keynesian model began to break down in the 1970s,
the writings of these men began to receive some attention.
But for the most part, they and their followers
remained outsiders and renegades,
condemned because they refused to believe
in a government-run society.
It was the unworkability of central planning and socialism
that led to their collapse.
It was the ideas of the Austrians
that allowed us to make sense of these developments
and Point the Way Towards the Future.
And what a future it is.
We are now living through a time
when people's traditional political allegiances
are being radically transformed.
Americans are learning to love the stateless,
trust the stateless, depend on the stateless.
They are turning to tangible relationships
and repudiating the lie that the state
is an appropriate substitute for the ties of family,
religion, commerce and community.
It is impossible to overestimate the impact of the end of the Cold War has had on the
public perception of government. No longer is government what stands between us and being
vaporized by a foreign foe. It is no longer seen as our defender or the key to our security.
The power elite no longer has a trump card, it can pull out to say, you might not like
the power we have, but look what we are protecting you from. The Cold War had become the bottom
Online Justification of the Federal Imperium, and though people debate about who should
get credit for ending it, in truth no member of the ruling class saw its end. The crumbling
of the old balance of power was a consequence of forces outside the control of the world
managers. It was the beginning of the end of the old order of geopolitical central planning.
Today we live in radically different times. The Gulf War was supposed to set a precedent
for the US to Become the Perpetual World Policeman, but it may in fact be the last large-scale
military operation in our lifetimes. Public resistance to foreign wars is higher now than
in any time since after World War I. And consider this, all Poles show that government jobs
carry with them extremely low social status. Today the most ambitious students do not aspire
These positions are no longer something to aspire to, but something people accept after foregoing the fast lane of corporate life or the risks of entrepreneurship.
It is hard to overestimate the significance of this trend. When the younger generation
sees government as a haven for dregs and losers, we have taken the first crucial step towards
changing the very structure of society. In my lifetime, there was no more watched event
than a presidential news conference. Now the president can't find a network willing to
carry one. In my lifetime, when Senator so-and-so visited the Rotary Club or held a town meeting,
It was a big deal and attended by one and all, and his remarks were always featured on the cover of the local press.
Nowadays, town meetings tend to be dominated by people who make demands Senator so-and-so hasn't been briefed on,
like why the justice environment isn't persecuting the Waco murderers
or investigating the claims that TWA Flight 800 was downed by friendly fire.
Old-time congressional aides who have flitted from office to office for three decades express astonishment and frustration.
Constituents are willing to believe government capable of any villainy, and they're unwilling to accept assurances to the contrary.
These days, senators look forward to the banquets and conferences of beltway think tanks so they can get a sympathetic hearing.
This turn of events is potentially lethal for the democratic socialist project, which requires our loyalty and confidence above all.
As Hume and Mises and Rothbard argued, no government, no matter how tyrannical, can survive if the people withdraw their consent.
And consent depends on trust. That's why the partisans of government power are so anxious to shore up that public trust.
Much of what goes on in Washington these days is designed to do exactly that.
This is the real impetus between the astounding tax abuse hearings on Capitol Hill.
Don't think for a minute that this was the leaders' first choice in what to do with their time.
Their internal polling shows that respect for Congress and the leadership is near zero
after both the 104th and 105th Congresses failed to achieve their stated goals
and indeed betrayed their own principles with a series of egregious tax and spending increases.
Midterm elections are just around the corner.
All political analysts predict lower turnouts than we've ever seen, perhaps the lowest in American history.
What happens if the government holds an election and nobody comes?
Rather than risk finding out, these hearings are designed to shore up interest and support on an issue that is extremely important to every taxpayer.
And make no mistake, there are consequences to hearings like this.
The tax collection agency is the teeth of Leviathan, just as the central bank is its lifeblood.
Undermine the authority of the official confiscators, and society is that much less governable.
Just as the largest and most powerful central governments in human history were not built up all at once,
they are being torn down bit by bit, frequently in ways that surprise.
But let's remember that the path towards dissolution is different in every political context.
In Romania, it happened in one sweep of mass emotion and the bullets that ripped through Nikolai Ceausescu's chest.
In the Soviet Union, the empire became financially unviable and politically unworkable, toppling like a house of cards.
In China, we see a rare case of a top-down reform instigated by an elite that has lost faith in the old rationale for its power.
In Chile, the reform was undertaken by a military dictator.
in Singapore by an undemocratic ruling family, in Hong Kong by colonial officials,
in New Zealand the reform has been led by labor governments, same is true in Britain where Tony Blair calls for a virtual dissolution of the old United Kingdom.
In our own country we see the fall of power in a different form, the dramatic decline of the presidency itself, which means the decline of the executive state and all its works.
We feel a tinge of embarrassment when we realize that the sitting president is better known for his peccadilloes than his policies.
Personally, I can't imagine a better situation.
We don't need to bring back the Fuhrer principle.
The logic of dissolution requires that we lose faith in political leaders before we can regain faith in our own ability to solve our own problems.
I pledge allegiance, begins the oath of fealty to government power.
But the American founders did not write this oath. Indeed, men like Jefferson or Mason or Randolph would have winced adhering school children made to recite the civic prayer of a socialist minister, by which we swear never to break up the consolidated central state established not by the framers, but by Lincoln.
True American patriotism is of a very different sort. It is rooted in love of freedom and in rebellion against those who would encroach on our natural right to freedom.
True American patriotism is rooted in the conviction that this is and must always be the sweet land of liberty.
A land whose freedom is rooted in law and whose law is rooted in the inalterable nature of man.
Our foundational loyalties must always be to the institutions our natural instincts tell us are important.
Not social workers, but families.
Not federal projects, but civic associations.
Not government bureaucracies, but commercial relationships.
Not NATO or the UN, but the land of the free.
Yet the ruling class declares this true patriotism to be traitorous,
and crowns as patriots the actual traitors to our heritage.
This is just one of the reasons they're being relegated to the margins of real history,
which is increasingly not the history of government officials,
but the actions of people willing to challenge their pretensions to power.
Let's fast forward 50 years and imagine the story that will be told about our own times.
Times. Will it be about the Weld-Helms dispute over who's going to be ambassador to Mexico?
Will it be about which party's plan for national education reform prevails? Far from it. The
policy elites of today will be named in the footnotes if they are named at all.
The truly significant people of our times do not exist within the government milieu.
They have names like Bill Gates and Mother Teresa, a capitalist and a humanitarian, seem
seem to be doing great work outside of politics and therefore untainted by its corruptions.
The ruling class is finding itself with fewer admirers without the proteges of old who aspired
to join its ranks.
What trends will the historians of the year 2047 say dominated our times?
First as Murray Rothbard noted, the nation state is decomposing into smaller units of
government.
The example of the Soviet Union comes to first to mind, but we also see the logic of devolution
applying itself in the most unlikely places. In Italy, in the United Kingdom and right
here at home, artificial unions are under strain and historic loyalties are reasserting
themselves much to the shock of world planners. In 1919, Ludwig von Mises said that the idea
of secession could make democracy pro-liberty. He proposed as a restraint on government that
no people, nor any part of a people, shall be held in a political association it does
does not want. Absurd, everyone said, but today we see more and more that the principle
of voluntary association is tenable and just. The second trend is this. The market economy
is overrunning the dictates of central planners. This has created a vast and complex international
structure of mutual benefit that operates largely outside government purview. It has
accomplished technological feats no one could have imagined 15 years ago and done so in
and the industries that are least regulated by government.
Innovation and entrepreneurship proceed at a pace that baffles the regulators.
Even the likes of Ira Magazina is forced to concede this,
as he did recently with regard to regulation of the Internet.
In the United States, if enterprise is to be called free anymore,
it's not because government lacks the will to strangle it.
It is due to the enormous ability of market forces to outwit government time and again.
The growth of high-tech industries in particular has made the subversive act of evading government far less costly and far less risky.
Thanks to increased speed of access, we no longer have to depend on official institutions for information.
The claims of government can be checked against other sources and by practically anyone.
The most promising sectors of the economy are those that, for all practical purposes, exist in a state of anarchy.
Consider the rise of all private communities, private courts and arbitration system, the homeschooling movement, and the large and growing microprocessor-related industries.
They are wrecking havoc on the political elites. They are causing us to rethink all our assumptions about government and the private sector.
This is precisely the opposite of what centuries of celebrated intellectuals had hoped and worked for.
They sought to abolish economic law and the market economy, to circumscribe private life, to scrap family and tradition, to overthrow the natural elites, to install a world state and to transform human nature at its core.
Indeed that last point was the crucial link to all the rest. But human nature is not to be outdone.
One, it will always triumph and bury its undertakers, just as economic law continually reasserts
itself against the designs of those who would repeal it, just as core loyalties that stem
from human contact and contract will supersede the artificial allegiances manufactured by
that ultimate artifice, the omnipotent state. Leviathan is crumbling because its traditional
ideological infrastructure no longer compels public confidence. That is why on a daily
On a daily basis, we see ever more excuses being manufactured to bolster its credentials.
We can tick them off as easily as we can read the daily newspaper.
Global warming, killer hamburgers, kids without health care, the education crisis, the gap between rich and poor, discrimination, teen smoking, terrorism, the shortage of affordable housing, and on it goes ad infinitum ad ad nauseam.
Each of these pretenses for a power grab must be exposed and battled, even the ones that are so manifestly absurd as to deserve no comment whatsoever.
Many of them will be the basis for new laws, no doubt, and these new laws will create new victims to add to the multitudes of old victims of government.
These laws will also generate new and unexpected failures to add to the endless litany of government disaster that chronicles our century.
In turn, it is our job to point to these victims and failures and provide the rationale for explaining cause and effect.
If these visible signs of Leviathan's grip are everywhere, what will be the precise mechanism for loosening that grip?
It's impossible to know, but we can know what will bring it about.
The ideas that people hold about themselves and their relationship to the world around them.
There's no point in pretending that social change can occur without intellectuals.
It's a reality we cannot escape.
Keynes knew it, and so did Marx to the world's detriment.
Mises and Rothbard understood that if we surrender in the world of ideas, we've given up the entire battle.
In 15 years of running the Mises Institute, I hear the same critiques of our work again and again.
We're told that our heads are in the clouds and we toy the way only to have our ideas buried in library stacks.
But we must meet the enemy on its own ground, which means the upper reaches of the academy where ideas are born and shaped and reshaped.
Citizen organizations are great, but they are not enough.
Doing the hard work of liberty requires the defenders of free markets be able to assume what Murray Rothbard called the mantle of science.
For the same reason, the vast majority of Institute resources go towards students, though some think we should be spending that money on lobbying in the belt way.
But long-term change requires that good ideas influence every new generation of thinkers, not just the recent crop of politicos.
We make no apologies for investing in education as our first priority. Every great body of ideas is the history of student-teacher relationships.
In the Austrian School, as any other, if these bonds were ever severed for lack of institutional
support, the body of ideas would lose its life.
Paradoxically, we're also told that our work is too accessible, but we make no apology
for seeking to make economics interesting and understandable to people in all walks
of life.
Mises and Rothbard are our guides here as elsewhere.
They wrote great treatises on economics, published in tiny popular publications, and spoke in
in front of any group that was curious to hear what they had to say.
Economics in particular, Mises said, is the proper subject of study for every person.
So at the Mises Institute, we seek to create a seamless web between academia and popular culture
so as to influence the future in every way possible.
Another criticism I hear frequently, we take too radical a stance.
But we make no apology for our desire to bring about social change rather than to merely fit in.
If it were our desire to seek status as an end in itself, we would approach matters very differently.
And if your desire were merely to fit in, you wouldn't be here this weekend.
But you are because you share with us a vision.
A vision that's admittedly radical now, but mainstream tomorrow.
Namely to bring about a society where private life is held at a premium.
And where no autocrat or despot, democratically elected or not,
is allowed to run roughshod over the private pursuit of prosperity and security.
We seek, all of us, a society where politics means the enforcement of the rule of law,
where economic development is left to those who own and control real resources, and where
owners can use their property without violent interference by parasites who neither produce
nor create, but live off those who do without their consent.
We owe all of you, and all our supporters, everything for your backing for these endeavors.
For we are partners in a revolutionary intellectual movement, and in the price we all pay for
the stance that we take in these last days of the century of government power.
But we can be confident for ourselves, for our families, for our fellow Americans, and
for the future of our civilization, that what we are doing is right.
I believe we can win. I believe it's within our grasp. But even if not, even if not everything
goes the way we plan or expect, we must remember the line from Virgil that Mises adopted as
a boy and kept to throughout the darkest hours of this darkest of centuries.
Tude, cate malus sed contra adentior eto. Do not give in to evil, but proceed ever more
and more boldly against it, but as to make that our motto and stick to it no matter what the cost.