Of the many exposés that I have read recently, two stand out so clearly that I would like to call particular attention to them. The first relates to our economic meltdown; the second to public education. These two economic sectors, money and childhood education, are among our several American experiments with socialism. The pieces linked below demonstrate in painful detail how the the aggression of the state makes suckers of us all. The biggest suckers, perhaps, are those "liberals" and conservatives who retain endless faith in the efficacy of force and aggression by the state.

The second link is to a lengthy free online book that I have only sampled so far. But I have been impressed by the author's outrage, dedication and documentation.

Wall Street's Bailout Hustle

The Deliberate Dumbing Down of America

FInally, I would like to thank Eric Sundwall of the NYLP for suggesting the book Against the State by Crispin Sartwell. It stands out among anti-state polemics for its reader-friendly writing style and clarity. It is carried by Amazon, and in an ebook edition by Barnes and Noble.

Normally, we can adjust our thinking at the winter solstice to peaceful thoughts and a kind acceptance of our fellow man. But the U.S. Senate has made it difficult for us this year.

The Senate has proposed a medical care bill dripping with taxes and penalties, touting it as a valuable gift. Young people stand to be big losers if this bill becomes law. They, at the beginning of their careers, are required to carry a substantial share of the costs so that their more well-to-do elders may enjoy subsidized hypochondria. The senate and house bills do nothing to reshape public medicine towards nutrition, wellness, education, personal responsibility, or finding the actual causes of chronic illness. The bills blindly endorse whatever unhealthy practices the medical establishment has acquired over the forty years since medicare and medicaid funds began to pour into the system. With only a few days left until Christmas, the controversy continues. The message of Christmas is rarely heard this year.

Even non-Christians may appreciate that there was something new in the Christian message. It had roots in various philosophies of the time, but whatever the source, it differed from prior moral teaching. To give one prime example, consider the notion of turning the other cheek. That is, the idea that force need not always be met by equal or greater counter-force. It is hard to see how civilization as we know it could have flourished without this idea. Anyone who has raised children knows that patience and understanding are needed in large quantities; force rarely.

Much the same is true in economics. Most of the time we make and follow contracts, or deals. We try to understand our vendor or our customer. Rarely, when contracts are broken, we need to ask some third party to act. One of those bound by the contract may be constrained to compensate the other.

The voluntary basis of economics is vital to its success. As Ludwig von Mises noted in his critique of socialism, a price is determined by the uncontrained preferences of buyer and seller. To the extent that these preferences are not freely expressed but are subsidized, constrained or prohibited, prices become meaningless. They no longer lead to an allocation of goods and services that is optimal. Prices, the foundation of economics, are swept away. We are left to tyranny, poverty and death.

Voluntary choice is equally the foundation of our leisure culture. So long as each person is free to do those things that interest him most, or at which he excels, culture flourishes. When the state intervenes, we are forced to do or support things that we do not value, even things that we regard as detrimental. Life becomes bleak and meaningless.

Thus peace, the absence of war or force, is the foundation of civilization. Libertarianism, properly understood, advocates peace with at most a minimal use of force. We approve force only to resist a prior use of force or fraud. So as libertarians we endorse the sentiments of the Christmas season.

We may, however, use the civilized substitute for force to further our message. It takes money to keep the flame alive. The organizations listed on our link page can make good use of your support.

Currently I am listening to some CD's of Dr. Mary Ruwart: Secrets of Transforming Liberals, Greens, Christians and New Agers into Libertarians. She explains how to peacefully engage others in a discussion that might change their minds, without turning them off in the process. Surely this is a skill that we could all use, if we are to become effective advocates for liberty. Perhaps the peaceful approach toward life and liberty must begin with our everyday individual behavior.

Recently I attended a lecture of CATO's David Boaz at FEE: The Rebirth of Liberty in which he compared the present with the 1930's under FDR. He is another optimistic speaker, unfazed by our current apparent rush to tyranny.

The major treat of my Fall season was to attend a conference of the Mises Institute in Salamanca Spain in October. The idea was to expose the roots of some of the ideas behind modern economics. It seems that a number of key ideas were formulated by Spanish scholastic monks, centuries before Adam Smith. Indeed, they got some things right that Adam Smith botched. One of these was the modern theory of value: the just price, echoed by Mises in his critique of socialism and mentioned above.

These people and organizations are there to bring a little Christmas cheer to us libertarians. The public appreciation of liberty may be at a low ebb, but the flame is very much alive. Happy Holidays!

Links:
Senate Health Bill
House Health Bill

Harry Reid Turns Insurance Into a Public Utility
Why the Personal Mandate to Buy Health Insurance Is Unprecedented and Unconstitutional

Several cases of selective blindness in news reporting have struck me of late. Many commentators pile onto the bond rating agencies for rating what turned out to be junk bonds with AAA ratings. Often this is given as the root cause of the financial crisis. How could the agencies have been so stupid, or corrupt?

Put yourself in the place of these bond raters prior to the crisis. They saw bonds that had been issued by Sallie Mae or Freddie Mac, quasi-governmental organizations established by congress. Surely such bonds would enjoy the full faith and credit of the U.S. Government. Is it really so hard to see how the rating agencies could rate them AAA? After the crisis struck, the government did in fact step in to infuse trillions of dollars in cash and credit to cover the losses. So the AAA rating, villified by the commentators, was vindicated, at least in part.

What is going on here? I see a triple blindness at work. To blame the rating agencies in the first instance, commentators had to overlook the involvement of the government itself in setting up Sallie Mae and Freddie Mac and instructing them, and all other banks, to make very risky loans to would-be home owners. By implication, the rating agencies were expected to pass judgement on government policy, accurately assess its consequences, and lower the ratings accordingly. In fact, the rating agencies did exhibit blindness in this regard. But it turns out that their rosy judgement was far from entirely wrong, a fact that also escaped much notice. Banks were bailed out at unprecedented cost.

Stockholm Syndrome can explain these instances of selective blindness. Once government policy is established, we fail to see beyond its boundaries. We stop arguing the merits of the policy. It suddenly becomes difficult even to imagine a world in which the policy does not hold. Our minds have become imprisoned, fenced in by statutes raised to the status of holy writ. In the end, we come to love our captors, as did the prisoners in the famous experiment.

Another case: it was recently announced that GM was ending the production of the Saturn. This, while it continues the production of massive four-door pick-up trucks, advertised on cable. On the one hand, the government funds a cash-for-clunkers program to get people to drive smaller cars. Yet its own car company stops production of its only really small car, and continues to advertise the sort of car liberals have been deploring for decades. Did anyone notice? Not too many.

Or again. Sixty Minutes had a segment last night on illiteracy in America, in which it was claimed that one seventh of our population is functionally illiterate. During this interesting segment one question was never raised: in a nation with universal compulsory education, how can it happen that one-seventh of our population can't read? I am not amazed that some illiteracy exists, but I do find it amazing that no question concerning the educational experience of those interviewed was asked. My take: since education is a government function, it lies outside the walls of our mental prison. We simply don't see the problem.

The big news of the day is the proposed "overhaul" to our medical care "system". The bills are offered in two versions, a plain language version and a statutory language official version. It seems that no one can understand the official versions, not even the congressmen involved, most of whom are lawyers. Our own DownsizeDC website has long pushed for a Read The Bills Act, requiring congressmen to read bills before approving them. It seems that even this may not solve anything if they can't understand what they read. What appears as blindness in the reader can instead be deliberately cryptic legislative drafting.

Our financial situation remains in doubt. Here it is October again and no investor knows what to expect. Will inflation strike? Will interest rates rise? Will gold remain legal? Will the markets fall? Nothing seems certain as our trusty government remains ready to do whatever it takes to......preserve itself. Uncertainty as to what the government will do produces a blindness concerning the future that poisons the markets.

Liberty has many aspects. Perhaps the mental aspect has been neglected. How can we escape from prison if we fail to see the walls?

Recent reading:

Fed-Acorn Criminality
The Money Monopoly
Learning for Liberty
A Fresh Voice: Star Parker

Often the facts that are least observed are the ones in plain view. The President's health plan is one of the biggest stories this year. Yet, if you go to the White House website and look up his health plan under "issues", you will find a video of his speech before a joint session of congress, a transcript of that speech, a summary of its announced benefits, and a one-page printable pdf file excepted from the summary. For greater detail you would have to go to one or another bill that has been introduced in congress, none of which has the President's endorsement.

This weekend the President provided a media blitz, appearing on every Sunday morning talk show. He seems urgently to seek public endorsement of his "plan". But what plan? He wants the endorsement of the public without presenting congress with a bill to consider, and without having to argue for that bill.

"Let the jury consider their verdict," the King said, for about the twentieth time that day.
"No, no!" said the Queen. "Sentence first-- verdict afterwards."
"Stuff and nonsense!" said Alice loudly. "The idea of having the sentence first!"
"Hold your tongue!" said the Queen, turning purple.
"I won't!" said Alice.
"Off with her head" the Queen shouted at the top of her voice. Nobody moved.
"Who cares for you?" said Alice (she had grown to her full size by this time). "You're nothing but a pack of cards!"

The President's approach, leaving the dirty work to Congress, is but an extension of the approach congress itself uses: off-loading the unpleasant details of rule-making to bureaucrats. Bills are often passed that are simply statements of good intentions, very often conflicting with one another. The agencies charged with enforcing the law are also charged with writing the regulations to be enforced. This relieves congressmen of direct responsibility for what they have done. They can always say that whatever regulation and enforcement resulted was not what they intended, and that (what else) reform is needed.

For example, consider a typical thousand-page bill robbing various Peters to pay various Pauls. It may not be clear from the bill itself just who will be Peter and who will be Paul. Best leave such details for later, after the bill becomes law. Beforehand, everyone is encouraged to think of himself as Paul.

Consider the plight of the poor congressman. His job description is to write laws to restrict people's freedom. He must do this in a nation that views itself as a bastion of freedom. Surely it would be easier to sell refrigerators in Alaska. How can shackles be made to seem desirable? It is an intellectual challenge, but there are always court intellectuals who rise to the occasion; that is a subject for another day.

In the case of health care, as so often happens, some of the biggest losers appear to be the young. The healthy young will be forced by law to buy insurance that they very likely do not need. They must do this while working for the lowest wages of their lives. They already help to pay for the retirement and medical care of their elders through social security and medicare. They have been forced to spend the first twelve years of their education in generally poor-to-mediocre public schools. They risk being drafted into the armed forces. They may be denied employment at low starting wages by minimum wage laws and union shops. If they take government student loans, they will find no escape through bankruptcy. All this while they are engaged in some of the socially most important activities of their lives: education and raising families. If any group should find the status quo wanting, it is our young.

Another group of losers is the medically ignorant. Ours is a culture of specialists. We are encouraged to rely on professionals and experts in most things, particularly in medicine. Yet even today's medical procedures cover a broad spectrum in terms of effectiveness. Now, as ever, surgery can often save one's life. Yet many expensive procedures do little or nothing to reduce mortality, that is, to delay the expected time of death. A recent study found that for those suffering a first heart attack, aerobic exercise produces better outcomes than angioplasty. Another study found that the use of x-rays in cancer detection produces about as much additional cancer as would have occurred without it. In the opinion of some doctors, the use of drugs to treat chronic diseases that are not well understood does more harm than good. A colonoscopy can find cancer, but it can also result in a punctured colon. There are nearly as many deaths from the latter as there are cancerous tumors discovered by the former. Surveys have found that though oncologists make most of their income by administering chemotherapy, most of them would not use it if they themselves developed cancer.

The point is that most medical interventions are a double-edged sword. There is no time in life when the phrase caveat emptor (buyer beware) is more urgent than when you are making medical decisions. Making medical care free at the time of use causes people to use it far more often than is good for them. The result is higher insurance costs and poorer health outcomes.

Hayek justified freedom by observing that information and knowledge are local and broadly distributed. No central authority can know enough, or attain sufficient certainty, to justify making local decisions by force of law. The history of the Soviet Union, Castro's Cuba or Mao's China should make the point. If not, look at the history of urban renewal or public housing in this country.

The only unique product that a government has to offer is force. Small government thus means a minimum use of force. Rather than looking for new roles for government, it would be better to strip government of any roles that do not absolutely require the use of force. Like commerce, banking, education, pensions, medicine....

If voters can ever get their act together, they will find that government is no more fearsome than a pack of cards.

Near the end of The Wizard of Oz, the reader learns that the wizard is really an ordinary man behind a curtain. He describes himself as a good man but a bad wizard.

In a few refreshingly candid moments in the President's speech last night, we caught a glimpse of the admittedly well-meaning man behind the curtain, as he revealed a few of the secrets behind his magic.

How will medical coverage become universal? To quote:

...under my plan, individuals will be required to carry basic health insurance – just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers.

So free health care really means mandatory medical premiums. Behold the master illusionist at work.

Also, we learn that

Under this plan, it will be against the law for insurance companies to deny you coverage because of a pre-existing condition. As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies – because there's no reason we shouldn't be catching diseases like breast cancer and colon cancer before they get worse.

Sounds good, but wouldn't the insurance companies have to respond to this change by raising their rates, or even leaving the business altogether? Not to worry:

I will not sign a plan that adds one dime to our deficits – either now or in the future. Period. And to prove that I'm serious, there will be a provision in this plan that requires us to come forward with more spending cuts if the savings we promised don't materialize.

As for insurance companies leaving the business:

But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. Let me be clear – it would only be an option for those who don't have insurance. No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5% of Americans would sign up.

But the biggest proposed rabbit in the hat is cost savings:

Second, we've estimated that most of this plan can be paid for by finding savings within the existing health care system – a system that is currently full of waste and abuse. Right now, too much of the hard-earned savings and tax dollars we spend on health care doesn't make us healthier. That's not my judgment – it's the judgment of medical professionals across this country. And this is also true when it comes to Medicare and Medicaid.

Agreed. But what does this do for the fears of seniors who a;ready have medicare? It re-stokes the fears that rose to the surface earlier with the phrase "death panels". The wizard addresses this head-on:

That is why not a dollar of the Medicare trust fund will be used to pay for this plan.

Oh. And if that is not reassuring enough:

Some of people's concerns have grown out of bogus claims spread by those whose only agenda is to kill reform at any cost. The best example is the claim, made not just by radio and cable talk show hosts, but prominent politicians, that we plan to set up panels of bureaucrats with the power to kill off senior citizens. Such a charge would be laughable if it weren't so cynical and irresponsible. It is a lie, plain and simple.

Oh good. I was worried there for a minute. I guess they will save money by using divining rods to find waste and abuse. The President must simply have forgotten to explain this fully.

One more question nags at me. Just suppose that the new restrictions on insurance companies cause some of them to leave the business, leaving people uninsured. Wouldn't the public agency have to pick up those people?

[Insurance companies] argue that [they] can't fairly compete with the government. And they'd be right if taxpayers were subsidizing this public insurance option. But they won't be. I have insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects.

Yes, Mr. President, your intentions are impeccable. I applaud you for conceding that the critics would be right if taxpayers were subsidizing the public option. But free goods are invariably over-used, This excess of demand over supply has caused rapid inflation in health care prices since the inception of medicare. So wouldn't congress in the future face political pressure to fund this public option, just as it funds virtually every other program it has ever set up?

Where would that leave us? Socialized medicine? Well, imagine that. Who could have predicted it?

Generations have come and gone since "socialized medicine" was a damning phrase. What, after all is so wrong with the idea?

When government enacts a policy in law, it is protected from lawsuits by sovereign immunity. As it must use force in some form, it cannot let itself be held liable if someone disagrees with a policy that seems to cause harm. Thus, taxpayers and patients cannot expect redress through the courts.

However, there are cases when some statute allows damages to be paid. But with a public provider they are paid by the taxpayer rather than by whoever caused the harm. No one goes out of business, so there is less chance that the general quality of care will improve as a result; there is less incentive even to fire bad doctors.

We depend on civil courts to redress damages in the private sector. A secondary effect is to improve the general quality of services by financially punishing bad providers. Neither effect can be expected to occur when the supplier is in the public sector.

The free market provides an immense spectrum of approaches to health care. This allows the consumer to select the approach he or she is most comfortable with. Inevitably, a public provider will offer a much narrower range of options.

Once such a social program starts there will be no going back for a very long time; witness Medicare. You will not be able simply to cancel and take your business elsewhere. Socialized medicine must ultimately contribute to both of life's certainties: death and taxes.

Socialism is tyranny, whether it affects the whole economy or only some selected portions thereof. It is incompatible with liberty, that is to say, with life.

Further Reading:
Greeks Falling Out of Their Trojan Horse

I was one of some 300 tax activists from around the country attending the recent taxpayer conference held in Washington last weekend June 11-13, 2009. The program was excellent, the speakers outstanding. The Libertarian Party was one of about a dozen exhibitors.

Fittingly, one speaker presented the depths of despair, another gave hope. Former U.S. Comptroller General David Walker, now CEO of the Peterson Foundation, lamented a Federal deficit of $1.8 trillion and, longer-term, unfunded obligations for Medicare and Social Security of $56.4 trillion. At the state level, 42 of the 50 have “major fiscal challenges.” Because political reform will be needed to tackle the Federal structural imbalances, he urges reforms in the areas of redistricting, campaign finance reform, and term limits. Then, “we’ve got to renegotiate the social contract.”

The optimist was writer John Fund, opinionjournal.com (whose message, however, conflated responsible government with Republican rule, a debatable point). He said the GOP was even more ‘minority’ at times during the Carter and Clinton presidencies, yet their failures led to huge rebounds for the Republicans. If Obama’s program does not prove successful, the GOP can make big gains in 2010, so don’t despair.

The most helpful sessions for me, however, were the practical ones, including:
- Building effective e-mail lists
- New media resources
- Building an effective grassroots organization
All three were run by the Leadership Institute, whose mission is to train leaders for conservative causes (www.leadershipinstitute.org).

Key points: Your group’s web site should use lots of forms (to involve readers); also polls and petitions. Add value to your e-mails, e.g. a link to a late-breaking news item. Use the many new social networking tools: Facebook, MySpace, Twitter, UTube, Flickr, Blogger, WordPress. Local blogs can easily become sources to search engines. It’s no longer just the written word; everything is going to video. And by 2012, everything will be on mobile.

An excellent session on fundraising for political causes and campaigns was led by three experienced consultants. To raise money, start with your Christmas card list (if your grandmother can’t be persuaded to contribute, how will anyone else?). Especially important: research your prospects before you approach them, and always ask for a specific donation. Two books recommended were “Forces for Good,” and (I love this title) “Dig Your Well Before You’re Thirsty: The Only Networking Book You’ll Ever Need.”

There were four general sessions and nine breakout sessions on Friday and one general and nine breakouts on Saturday morning. An awesome program for the $129 registration fee. This annual conference is run by the National Taxpayers Union (NTU), www.ntu.org.

The Federal Government has appropriated funds to develop carbon sequestration as a solution to global warming. Not to be outdone, the Supreme Court has held that carbon dioxide is a pollutant within the meaning of environmental law. The vision is that at vast public expense we may avoid the specter of global warming by burying the harmful global warming gas carbon dioxide (geological sequestration).

Remember carbon dioxide? Usually called CO₂, this is the gas we exhale after inhaling oxygen, O₂. Diagrams in my public school books showed the carbon cycle: nearly all plants and animals use respiration, converting oxygen to carbon dioxide. Green plants of all kinds in the presence of sunlight convert carbon dioxide to oxygen using photosynthesis. Chlorophyll is the substance that makes this possible, and which lends its green color to the environmental movement. Is there anyone out there who has failed to have heard about this?

One proposal then, already well underway, is to bury carbon dioxide. With each carbon atom buried, we also bury two oxygen atoms. These atoms will not be available for future generations of humanity to inhale. The carbon will not be available for future green plants to convert. Amazingly, this proposal comes from the green movement that uses the word "sustainable" as a mantra.

Let's trace the verbal magic that made this irrationality possible. (1) There is global warming. (2) Global warming is bad. (3) CO₂ increases global warming. (4) Hence CO₂ is bad. (5) We must destroy CO₂ any way we can.

This is not the first time that our government has demonized some essential life process. Certain nutrients have been so severely restricted by the FDA that great harm has been done. Limits on folic acid caused spina bifida in infants. Limits on iodine have increased the incidence of thyroid malfunction. More recently the drumbeat against salt and fats threatens at least four more of the forty-odd essential nutrients.

There is a recurring pattern here. In the early 20th century, alcoholic beverages were demonized under prohibition. A few years later, falling tax revenues persuaded the new Roosevelt administration to end prohibition. School children will forever see two amendments to our constitution that negate each other.

Good and bad, right and wrong. This division into just two alternatives is often called Manicheanism. We see it in the great religions. It fits perfectly into the political process, where the principle tool is prohibition. The idea is quite simply to prohibit evil. Conservatives are accused of trying to legislate morality. Liberals are accused of adopting statism as a secular religion. In any case, the result is a growing mountain of law and regulation, and an ever-growing prison population.

Do we need all of these laws? Children in Sunday school learn the ten commandments. Ten seems a manageable number. George Carlin once helpfully reduced the number to two . See also the Ten Thousand Commandments.

No one, including legislators, reads or understands proposed legislation. Most people are too busy to care; law is left to lawyers. Yet congress acts as if we could achieve perfection if only we had enough laws. So the gap between what is prohibited and what is mandated narrows. Crushed within that gap lies liberty.

It need not be so. Manicheanism may be ancient, but so too is trade. Economics teaches us to consider costs and benefits. Every choice involves a trade-off between something gained and something lost. This leads to a more complex world-view. This view is often portrayed as gray or dismal; I think not. It replaces the notions of good and evil with the notion of quality. Where good vs. evil has only two values, quality can vary continuously and in multiple directions. In judging quality we are asked to distinguish better vs. worse rather than good vs. bad. Just as important, it is not required or even desirable that your notion of quality coincide with mine. Differences in subjective preferences permit exchanges in which each party benefits in his own eyes. Without such differences neither party to an exchange would have an incentive to make the trade.

Thus, the ideal in the Manichean view is that everyone should share the same values. Economics teaches that progress and prosperity result when they do not.

Our two major parties each contain an ever-shifting coalition of strange bedfellows. However, a fairly constant theme during the last century has been that the political right places more importance on the market mechanism, while the left values political solutions more (the 19th century was notably different). It amounts to economics vs. Manicheanism. If the right is to regain credibility, it should try to rid itself of its own Manichean tendencies. If the left is to refrain from marching us off a cliff, it should take economics more seriously.

Perhaps our brain power can be put to better use, providing new or improved economic and political systems. Until then, we can at least try to understand the merits and weaknesses of the systems that we have, speading the word as best we can.

When banking executives appeared before congress this winter, we all got a rare view into the conscious deception that underlies our representative democracy. The executives just could not seem to play their parts according to script. First the financial executives forgot that they were supposed to be in dire financial peril and disgrace, having taken their various enterprises to ruin. They pocketed handsome bonuses, well earned as a result of their successful negotiation of a massive bailout by the federal government. But they forgot that they were supposed to have hats in hand, begging for the bailout. The Feds were supposed to grant them their wish only because we ordinary citizens would face financial calamity if they did not get it. The damage to the government's cover story was such that in order to repair the damage it was necessary to consider confiscating the bonuses through legislation. The Nevada hotel industry also had to be sacrificed in order to defend the pristine reputation of the government. We were not to forget that they were doing it all for us, the little people.

Then the auto executives arrived in separate private jets. Sacre bleu! What theater school did these clowns attend? Take it again from the top. Okay. I seem to recall that the next time they all arrived in the same VW bug, but that can't be right. No matter. One of the lead actors had to be fired from the cast.

The scripts for these theatrical masterpieces were written some time ago. The banking story is variously told, but usually involves Jekyll Island. There some of the leading bankers of the day plotted the formation of a central bank that would become the Federal Reserve. This was all done in great secrecy, because the bankers did not want it to be known that they sought to be regulated. The cover story, which was already becoming familiar, was that regulation was needed to limit their own excesses. The truth was slightly different. They wanted access to unlimited reserves of funds to forestall failure. They would be considered too big to fail. They got their wish, and the Federal Reserve delivered big time this past winter. Pay no attention to the man behind the curtain, or to the fact that congressmen have received generous campaign contributions from the banking sector over the years.

How does this pattern explain the GM bailout? Probably the main campaign constituency to be hurt by a GM failure is organized labor. The loss of so many jobs, particularly unionized jobs, would be a great embarrassment to a Democratic administration. Poor Lehman Brothers. Too few friends in high places.

Don't look now, but each federal agency serves an organized constituency. There is no cabinet secretary for the unorganized little guy or gal. Homework: figure out how each organized constituency screws the little guy. For example, Social Security (representing those with gray hair) screws the young worker with a family, who must pay over 15 percent of his gross pay, from the first dollar earned, to support old codgers like yours truly who have had a lifetime to try to provide for themselves.

Since we oldies had to do the same thing, and have expected the support at retirement, we neglect to feel guilty.

But perhaps guilt is not the appropriate emotion anyway. Chagrin, embarrassment, mortification: these fit the situation better. We have been accepting cover stories from The Important Ones without question. Our birthright of liberty has been exchanged for baubles and trinkets. Nearly all of us belong to some constituency granted favors by the government, so we feel co-opted, beholden. We dutifully return our congressman to office every two years.

In return for the favors (baubles) granted to us, we have entrusted the value of our money to a printing press. We have entrusted our health to drug companies-- peddlers of poisons. Our property is not ours to use unless we have permission from faceless committees, some of them in Washington. We have entrusted the education of our children to the same people who write the cover stories, yet often school taxes are too expensive to bear. In other words, the exchange of value has not been a particularly good deal.

Perhaps the medical reforms now in congress will save us from our mortification. "Mortification syndrome" may be added to the medical lexicon, and low-cost lobotomies (co-payment only) prescribed so that we can enjoy all of the latest cover stories in peace.

It is not news that the papers are in serious trouble. Free information from the web is replacing the purchased kind. The old sales model is failing. New ways to profit from intellectual property seem needed.

Rather than try to invent something, let's look around for other models already in use. I am a member of a computer association that provides free access to two sources of online books. Certain books from the catalogs of several publishers are offered for viewing. I have found this service very useful, in fact, it helps me to justify my continued membership. I currently also have a subscription to a music service with a large selection of material. What keeps newspapers from trying something similar?

Specifically, rather than charging a subscription fee to one newspaper, why not offer, for a fee of similar size, on-line access to a wide selection of newspapers? This could both preserve the subscriber base that exists and greatly expand the value of each subscription to the public. This could save the newspapers as businesses and as an asset to the voting electorate.

Actually, there is a reason why this might not work. It is called antitrust. According to Wikipedia, the Sherman Act begins as follows:

"Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine....

Section 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine...."

This language, in the words of Mark Twain, serves to concentrate the mind. It might well dissuade a business from trying to save itself and its competitors by combining with them in any way.

Are we well served by these antitrust laws? Searching Mises.org for "antitrust" provides many articles that dispute this on economic grounds. The consensus among Austrian economists seems to be that a true monopoly can exist only when government prohibits competition in some area. The proposed newspaper combination would be voluntary in that no one would be forced to buy a subscription and no newspaper would be forced to join the group.

If our newspapers fail, let some of the blame fall on the burden of needless and harmful laws that we labor under.

A longtime favorite libertarian think tank of mine is the Cato Institute. I was happy to be able to attend Cato’s 2009 Public Policy conference, held at the Waldorf Astoria Hotel, New York City on April 30.   About 300 attended.   Let me share this summary.

Keynote speaker was civil libertarian author Nat Hentoff , who argued that proposed ‘hate crimes' legislation is a dangerous violation of our First Amendment.  He also billed himself as a ‘pro-life atheist’ and spent several minutes explaining that position. Next, Patrick Michaels, a climatologist who has published several books criticizing the errors of the global warming crowd, exposed a few more errors, explaining that Greenland as recently as the 1950s had higher temperatures than today, and that the recently hyped ‘warming island’ 'revealed’ to be an island due to a melted ice bridge is nothing new - it was known to be an island early this century.  

Investment manager and author Peter Schiff criticized the government bailout as the wrong solution, one that involves printing so much money it will likely cause an inflationary depression.   The luncheon address was given by Princeton scholar Freeman Dyson, who urged us to make faster progress in dismantling nuclear weapons because the dangers of even keeping them in storage exceed the dangers of doing without them.  Dyson also took questions on global warming; he's recently become a prominent skeptic, and both he and Michaels have insisted that long-range climate models are unreliable (and got a laugh by comparing them to the computer models Wall Street used to price derivatives).   All four speakers were outstanding. 

Cato publishes a huge number of policy papers from its headquarters in Washington, DC. Its website is www.cato.org, where you can sign up to receive a free weekly dispatch.

Cast of characters

The China Shop: The U.S. economy
The Bull: The Federal Government

Let's face it. We who have thought about economics from the Austrian or even from the business perspective must suffer more than most as we live through the official folly of the present administration. Democrats think they are reversing the policies of the Bush administration as they outspend that previous crowd of big spenders.

Two of President Obama's heros are FDR and Lincoln. FDR presided over the worst and longest depression in our history, followed by World War II. Lincoln ended slavery at the cost of 600,000 soldiers' lives. He also set in motion the expansion of federal power that threatens to enslave us all, black and white, rich and poor.(1) Federal law increasingly restricts every decision we make, while taking away our incentive to work hard and our ability to save.

Judging by the actions of the Federal Reserve and the Treasury, the ghost of John Maynard Keynes has risen from the dead. He was well laid to rest by the stagflation of the 1970's, an event incompatible with his theory. Evidently, many of us did not notice this, or later forgot. So we see those in power trying to spend their way out of trouble.

I am old enough to remember the Kennedy-Johnson years, when academics from Harvard had great influence in government. They were wrong a great deal of the time, but people at that time were ready to admit that there were those who knew more about certain things than they. Today I am struck by the absence of professors on the talk shows. Two explanations come to mind: (1) professors have discredited themselves in the public mind; and (2) democracy has so permeated the public consciousness that we now believe that truth is determined by power, or by majority vote. This is unfortunate, as there are now many learned professors on the side of liberty.

Rahm Emanuel and Hillary Clinton have been quoted as saying that a crisis is too good to waste. In other words, a crisis is the occasion for government to advance its own agenda at the expense of the public. That agenda is most rapidly advanced by war. Hence, we have not only two foreign wars, but wars on drugs, terror, pollution, and climate change (formerly "global warming"). In earlier years we had Johnson's War on Poverty and Nixon's War on Cancer. The crusaders of the day inform us that in wartime, dissent is intolerable. This drives us inexorably towards fascism. It is a frontal attack on self-government.

Why does the federal government need excuses to expand its agenda? Mainly because our constitution gave it so little to do. It was formed to carry out foreign diplomacy and to wage wars. Our "great" presidents have all invented new goals, often named by catch phrases such as "war on poverty". Kennedy resolved to put a man on the moon, and incredibly it was done. But this was so long ago that some young people doubt that it ever happened. Now the plan is to do it again, as if reviving Camelot on Broadway.

In the late 19th century, Germany discovered another handy role for government: providing insurance. As Woodrow Wilson was told on a visit, if you give the people free medical care you (the government) can do whatever you want. Wilson liked the idea, of course. Now our federal government insures as many things as possible, at incredible risk. The government is not only the bull in the china shop, but the insurer of the china shop. Unfortunately for us, when the bill for the broken china comes due, as now, it is we and our children who must pay, through taxes and inflation.

For the buyer, insurance has both benefits and risks. The purchaser of insurance is faced with moral hazard. He may come to feel that the event insured against need no longer concern him, whether it is his own health or death, fire in his house, or traffic accidents. There is no doubt that having insurance can affect one's behavior negatively, most of all when the insurance is free. A free good is certain to be overused.

A seller of insurance typically uses statistics and probability to set rates. This works fairly well for some types of insurance like life insurance, but badly or not at all for others such as fire insurance. This insight was given to me by an uncle who was a consulting actuary. The mathematics of probability can help one to understand this. A probability model assumes some sort of symmetry in the world, like a fair coin or cubical dice. In order to justify the use of probability then, one should be able to discern some such symmetry in the situation to be insured. In practice, nothing of the sort may occur. Statistics and its formulas are often blindly used without understanding the assumptions on which their validity rests. For example, what possible symmetry could aid the FDIC in setting the premiums for deposit insurance?

When an insurance company fails due to excessive claims, its stockholders and customers are affected. When a government fails, everyone is affected. The net affect of government intervention is to magnify failure. The Soviet five-year plans or Mao's Great Leap Forward provide dramatic examples.

One form of symmetry that might help provide more consistent insurance results would be a stable set of laws. Unfortunately, congress works full time at changing our laws and regulations. This is always called "reform". Right now, at a time of greatest uncertainty, the rules are changing faster than at any time since the Great Depression.

Not content with being a referee in the economic game, the federal government is by far the largest single player. It is also the only player able to change the rules of the game arbitrarily and at will. In view of this, it is indeed odd that the government is rarely blamed for anything that goes wrong, at least by members of the party in power. Party loyalty trumps candor. Sadly, this is just as true among those who consider themselves to be intellectuals. To the extent that their biases trump their judgement, they are not in fact intellectuals.

All of the above relates to excesses of the legislative and executive branches of government. If government is to be reduced, these branches are the prime candidates for reduction. The most essential function of government is to resolve disputes. It may be that some government is needed to oversee the judicial function, to guide the selection of arbiters when the parties to a dispute cannot agree, and to provide guiding principles for arbiters to consider.

Our present system of representative government copies the earlier royal/aristocratic model, differing only in that the members of the privileged classes are elected to fixed terms. This is not, perhaps, as great an improvement over the earlier system as we are taught to believe.

Self-government might instead rely on the ability of each individual to choose the jurisdiction that he or she wishes to live under, each with its own package of freedoms and responsibilities. In the past, people voting with their feet have shown this country to be one of the world's most desirable residences. Overlapping jurisdictions would extend such geographical voting further, to a selection from among the offerings of a free market. This notion has been called panarchy.

There is no need to tolerate a bull in our shop.

(1) The Real Lincoln by Thomas J. DiLorenzo, Three Rivers Press, 2003

"If you can keep your head when all about you

Are losing theirs and blaming it on you; ..."

-- Rudyard Kipling, "If"

The socialists have taken charge, blaming our financial troubles on "market failure". The wartime extravagance of the Bush years is over. Barack Obama promised change, but all we can see so far is more extravagance: the purpose of a stimulus is spending, he says. The stock market has not begun to recover, and even government spokesmen decline to predict when a recovery might begin.

The challenges could not be more personal. Unemployment is increasing at an accelerating rate. Mortgage foreclosures are through the roof. Retirement account value is way down. Investors face unhappy choices: stock values can disappear; bond returns are far below the rate of monetary growth and so of anticipated inflation; gold is reliable but volatile.

In the meantime, the willingness of the Federal Government to bail out losers has encouraged everyone to rush to Washington to demand a handout.

Libertarians have been abandoned by the Republican Party, while the Democrats tar us with the same brush they apply to the Republicans. Is it time for us to give up in defeat?

Certainly not. Lives are lived one by one. We can still choose to live with dignity, as individuals, trying to make our lives as productive and interesting as we can.

There are plenty of past heroes to inspire us in this. In "The Myth of the Robber Barrons", Burton Fulsom compares Robert Fulton with Cornelius Vanderbilt: Fulton depended on heavy government subsidy for his steamboats. Vanderbilt operated without subsidy, and ultimately provided free transpotation between New York City and Albany, making his income by charging for the food. Fulton failed, while Vanderbilt created a fortune. Similarly, most of the early railroads were heavily subsidized and failed. James Hill built and operated the Great Northern Railroad without subsidy and prospered. The book gives several other examples.

The lesson is that easy money does not build lasting value. Those who take the long view will choose to live by unshakable personal ethics and moral principle. Homework: try to name an important or classic book on the subject of "socialist ethics". Can't find one? Enough said.

Does this mean that a starving person should refuse a handout? No. But the guilt and humiliation that was once felt by those reduced to such necessity was a sign of the underlying moral health of the society. Contrast that with the lack of guilt felt by powerful corporations, such as the drug companies, protected by the monopoly privilege of patents, in lobbying congress for ever-greater control over medical care. Equally, the lack of guilt felt by senators and congressmen who accept campaign contributions from those favored by their legislation. They accept money from some while enslaving the rest of us. Contrary to Senator Schumer's view, this exchange of value is not comparable to the invisible hand of the market; political corruption harms nearly all while helping only a favored few.

So for us as individuals, not that much has changed. More people around us are losing their heads. Our lives have become more difficult. To compensate, we may have to learn more, work harder, and be satisfied with more modest comforts until society regains its sanity. Our survival as a society depends on our survival as individuals. Individual survival depends on the same virtues as in the past, such as hard work, learning, and good cheer. A healthy skepticism is probably also essential.

I have been encouraged so far to see that the libertarian and market commentators are not silent. They refuse to go silently into that good night. May it continue to be so.

Eric Sundwall, the NYLP chair, has announced that he is running for the now vacant seat of the 20th U.S. Congressional District. He plans to campaign on the four principles that enabled Ron Paul to issue a joint statement last year with Chuck Baldwin, Cynthia McKinney and Ralph Nader. The whirwind campaign for the special election will take place during the next few weeks. Financial and volunteer support is needed. The HVLP unanimously endorsed Eric's candidacy at its February 4 meeting.

See Sundwall's campaign website.

Ron Paul's Campaign for Liberty is alive and well locally. A meeting is planned for the Bugaboo Creek Steak House in Poughkeepsie at 7:30 PM on Febrauary 17.

On the Republican side (remember them?) the Republican Liberty Caucus is active locally. Carl Svensson has organized a meetup group and Yahoo group: RLCNY-HV@yahoogroups.com. Carl seeks support for common concerns from those in other parties, such as ours.

Justin Raimondo of AntiWar.com has written a piece on the remarkable advice to the west from Vladmir Putin, delivered at the European Economic Summit Don't miss this one!

Now the outrages....

In health news, two of my favorite maverick doctors printed news on the same day concerning vaccines. Dr. Mercola explains how mercury in vaccines was replaced by aluminum, another neurotoxin. See also the pdf. Surely this will keep alive the debate about the huge rise in the incidence of autism in children.

Then in an email Dr. WC Douglass reports that New Jersey has mandated flu vaccine for preschoolers before they can be admitted to private schools. Perhaps New Jersey wishes to become known as the Autism State. Or maybe the teacher's unions have found a secret weapon to eliminate private schools.

Dr. Mercola also recently reported on the increasing practice to site cell phone towers in schools and churches, where children congregate.

Nat Hentoff, recently dropped (alas) from the staff of the Village Voice, recently reported on the strip-search room in a New York City school.

In an earlier post I described in general terms how Hayek's prescription for a basket of goods to back our money supply could work. Since the devil is in the details, let me spell this out more fully. It requires a smidgen of math, but after all, we are redesigning money itself. This is a goal that is worth a little effort. In the process it will become clear how our Federal Government ought to be spending its bailout money.

To start with a simple scenario, recall the history of the use of silver and gold to back our currency. The government once decreed that both metals would be used, and that they could be exchanged in the ratio of sixteen ounces of silver for one ounce of gold. The prices may have been $2 for an ounce of silver, $32 for an ounce of gold, say. This worked only so long as the market prices of gold and silver were also in the ratio of sixteen to one. Whenever the market prices shifted from this exact ratio, there would be a run on the dearer metal, and it would tend to disappear from circulation. This sort of thing is predicted by Gresham's Law, that bad money chases out the good.

Now for our thought experiment. Suppose that instead of fixing the ratio at sixteen to one, the government had decreed that a dollar could be redeemed as a share of a basket of gold and silver. A basket worth $16 would consist of x ounces of silver and y ounces of gold where the geometric mean of x and y is one.

Time out. What is a geometric mean? It is the square root of the product of the two numbers.

If a basket were defined in this way, one would not know exactly what combination of silver and gold one might receive when redeeming currency. But notice that if one received less gold than expected, one would receive more silver, or vice versa. So for example, a basket worth $32 might originally have consisted of 1/2 ounce of gold and eight ounces of silver, for a product of four and a mean of two. Over time, gold might have become much more expensive relative to silver. Your $32 might instead be redeemed as 1/4 ounce of gold and sixteen ounces of silver. Same product of four, same geometric mean of two. If this happened, you could hardly complain. At the original prices of $2 and $32 for silver and gold, this new basket would be worth $40. You would actually have benefited from this change in relative prices, at least in terms of the exchange rate in effect at the earlier time.

That is not all. The new price of silver is evidently $1 per ounce and the new price of gold is $64. Your redeemed basket is worth $32 at the new prices, the same as before. The terms of the original contract have been met and you have lost nothing in dollar value, nor in value as measured by the current prices of gold and silver.

But, you may say: If I had kept the 1/2 ounce of gold and eight ounces of silver, I could sell them now for $40. Yes, that is so. But in doing so you would have behaved like an investor, not a holder of cash. The point here is that this system will in some sense preserve wealth, that is, prevent significant inflation of prices, provided only that some simple rules are followed.

One way to keep both the cash and the investment options open would be for money to be issued by private brokerages. Each account holder could decide whether or when to shift assets from one asset class to another; whether to hold, to re-balance, or to convert some assets to one class. Brokerages using the same portfolio specifications would have currencies so nearly identical as to be freely interchangeable. This seems to be an argument in favor of using private brokerages to issue money.

Time out again. What is portfolio re-balancing? In the above examples, we have assumed that the goal is to have holdings of gold and of silver that are equal in current market value. As the prices of gold and silver fluctuate, the value of one metal's inventory may exceed the other's. To re-balance means to sell some of the metal with the higher inventory value and purchase some of the other metal so as to bring the two inventory values together. It can be shown that this will always increase the total holdings as measured by the geometric mean.(1) The increment constitutes a profit. However, too frequent re-balancing is counterproductive. It reduces returns and incurs needless fees.

It may be objected that it would be inconvenient to have to accept both gold and silver when redeeming a bank note, or to have to supply both when exchanging coins for paper currency. This objection was raised by Prof. Hoppe in a talk from 1992 , and the objection is well taken. But in this new setting there is a simple solution. We can define new transactions to buy or sell a single metal from the inventory. To sell a metal, subtract the value of the total inventory after the sale from the value of the total inventory before the sale. Both of these valuations are to be done using the geometric mean definition of value. The sale is advantageous to the bank if the value sold (plus transaction costs) is below the price paid by the customer. A purchase is advantageous to the bank if the value purchased (minus transaction costs) is above the price paid to the customer.Using this idea, transactions in a single metal may be carried out in conformity with the established rules.

In order for the prices above to be close to the market prices the bank would have to re-balance actively and often. This would prevent the bank from making any significant profit from the re-balancing. So the bank or government would have to charge for its services. This will be discussed below.

This system applied to the earlier examples will tend to keep the basket ounce price fixed at $16. The government or bank would insure this by selling inventory when the market price is above $16, impounding the cash received or destroying account money, and by buying inventory with new or previously impounded cash or with newly created account money when the price falls below $16. The law of supply and demand will do the rest.

Supply and demand will tend to guide the total commodity inventory to a stable value, neither growing without limit nor vanishing towards zero. To see this, standard market arguments suffice. The proposed rules tend to keep the price of a basket unit quite constant. But the prices of all non-basket goods, including labor, are subject to to the inflation or deflation of the total supply of money. If mining companies set out to sell as much metal as possible to the banks, they would find the price of labor and every other factor of production rising, making their operations less and less profitable, until they had to stop. In fact, these effects are subtle and immediate and would never continue long before marginal mining operators stopped producing.

On the other hand, if money became tight then non-basket prices would fall. This would encourage the production of the very commodities that make up the currency basket. Producers would sell their product to the government or bank and the money supply would be restored.

This basket money scheme may be generalized in several ways:

(1) More than two commodities may be used. In fact, the more the merrier. With more distinct commodities, the influence of any one on the value of money is greatly reduced. Also, new money introduced to the economy is more widely distributed in the first round, diluting the advantage.

Note: the geometric mean of n numbers is the n-th root of their product. All of the claims made for the case of two metals carry over to this more general case.

(2)The inventory's values of the different metals need not be equal; unequal weight factors may be used. Some commodities may be used in much larger quantities than others. Some may have higher or lower price volatility than others. For such reasons, it might be desirable to allow some commodities to constitute a larger share of total inventory value than others. The notion of geometric mean generalizes to this case as well. Let w1, w2, ... ,wn be the share of the total that each of n commodities will supply. Then w1 + w2 + ... + wn = 1. If q1, q2, ..., qn are the quantites of the various commodities in the inventory, their geometric mean is the sum of the numbers qk to the wk power, where k = 1, ... ,n. Again all of the facts claimed before carry over to this more general case.

(3) Commodities other than metals may be used; fuels and food grains, for example. The important property of a commodity here is that it should remain valuable and salable over time. Perishable commodities such as grains would pose special problems, but those problems are well addressed in the marketplace already and need not concern us here.

Disadvantages and Lessons

As mentioned above, this system in common with a 100% gold standard would incur significant costs. Stockpiles must be preserved and protected. This costs money and someone must pay.

Paper money backed by commodity stockpiles would also incur costs. Why is it so uncommon to see, anywhere in the world or in history, paper money backed 100% by gold or other commodity? Simple economics. The storage of commodities costs money. Someone must be charged for this service. When paper money is freely circulating, there is no traceable connection between a particular note and the holder of the note; there is no one to be charged for the service that the note holder of such currency enjoys. A benevolent government might choose to subsidize this service, but in general governments are not noted for their benevolence. They prefer arrangements that provide them with advantages.

In our new system paper money might incur a rental charge. A small fee might be charged when it is issued, and an expiration date printed on the bill. Anyone redeeming the note after the expiration date would have to pay a late fee. As the expiration date approached, people would begin to refuse to accept the note at par.

Such paper money, in effect, would be losing value over time. It would resemble nothing so much as our current paper money in this respect.

In short, this system is not a way to preserve value over time without charge. Metal coins might seem to be such a way, but for them there is always the risk of theft. Insurance against this risk would also be a fee.

Perhaps the lesson here is that if one is fortunate enough to be in a position to want to preserve wealth, then there is no escape: one must become an investor. Get over it!

Another lesson is that one should not keep all of one's assets in cash. Even well-designed cash loses value over time, one way or another.

Summary

The government should be spending its bailout money to purchase inventories of commodities to back its currency: cash, demand deposits, and savings deposit reserves. This would allow us to stabilize our currency once and for all. It would pour the money into the economy in a way that would cause it to be spent, without any problem about "pushing a string". Importantly too, it would end the tyranny of interest rate manipulation by the Federal Reserve, with its disastrous effects on the markets.

Even better, the government should repeal the legal tender laws and permit private banks and brokerages to issue their own money, preferably along the lines outlined here. Capital gains tax laws would, at a minimum, be modified to allow a taxpayer to choose which currency he wishes to use in measuring his capital gains.

Notes

(1) The proof for the case of two commodities requires only simple algebra, and relies on the inequality between the arithmetic and the geometric means. The proof of the latter inequality in the general case may be found in "A Course in Pure Mathematics" by G. H. Hardy, Tenth Edition, Cambridge University Press, 1958, in appendix I.

The financial crisis and the election of Barack Obama have led to the greatest rush toward socialism in living memory. It would be easy to despair for freedom, to feel that there is little to celebrate this holiday season. Actually, there is a great deal to celebrate. Here, in no particular order, are some of those things:

(1) Personal corporations. Corporations provide a way for individuals to engage in business while minimizing taxes. By minimizing one's taxes one maximizes one's own well being while putting the state on hardship rations. Organizing your life around your business is a way to live productively in relative liberty. It forces you to learn things that you need to know, to become the sort of person you want to be. It also tends to influence one's politics toward liberty.

Books: "Lower Your Taxes-- Big Time" by Sandy Botkin.

(2) Investments. People with savings are faced with an inflation-prone currency and need to learn about investing. Any purchase of property that preserves its value over time is investing. By investing well one can keep one's cash holdings low and thus be protected against periods when the rate of inflation exceeds the interest rate, as occurred during the 1970's and arguably also in some recent years.

(3) Children and Education. We can celebrate home schooling, libertarian children's books, private schools, colleges with economists of the Austrian school on the faculty. "Capitalism for Kids" by Karl Hess is still in print. Richard Ebeling is currently teaching at Trinity College in Hartford, CT. George Mason University has a few of our guys on the faculty. There are summer programs for students at FEE and at IHS.

(4) The Bill of Rights, and the groups that defend it. In particular, the NRA and other groups that defend the second amendment. Currently, you can still buy a gun and ammunition. We have surrendered health care, law, and nearly every other service, including hair styling, to the licensed professionals. The result is that we tend to know little and have few skills outside our own line of work. The government receives taxes every time we buy any service from someone else; all the more when the provider is licensed. (Perhaps the Amish and Mennonites are exceptions to this rule.) Thanks to the second amendment, with diligence we just may be able to retain the right to do-it-yourself provision of personal security. If we do not, for most of us in times of crisis there will be no real security.

(5) Computers and the internet. Everyone, including children, now uses these tools to advantage. They empower the individual to learn more rapidly than ever before. They post new facts and expose false claims with astounding speed. Consider Wikipedia, Wikibooks, Google, Yahoo.

(6) Cash and the micro-economy. Cash is still legal. The unemployed can still earn money by selling their services directly to the public. Many people learn more about business during rough economic times than the rest of us learn while employed. It pays to learn who in your area can provide you with needed services at a reasonable cost. The underground economy flourishes on small transactions that often fly under the radar of government oversight and of most taxation.

On the internet, PayPal provides a way to make small money transfers. Ebay is a source of income for countless small entrepreneurs. Craig's List is an unprecedented repository for classified ads. These are but the tip of the iceberg.

(7) Private services supplementing or competing with government services. Toll roads; private light-houses. Private arbitration. Private schools. The existence of these things debunks claims that there are certain functions that cannot be performed by the marketplace. Such claims are made in order to extend the use of government force into more areas of life.

(8) Libertarian think tanks, intellectuals, and writers. Thomas Woods' list:. Our links The fact that most intellectuals shill for the state has been commented on by many of our writers. However, the tide turned in the last several decades, when certain market economists received Nobel prizes. Libertarian think tanks such as Cato, Mises, the Manhattan Institute and others supply a vital need. The supply of liberty-minded historians, novelists and philosophers is even more limited than the ranks of Austrian economists. For history we have Paul Johnson, Murray Rothbard and Thomas DiLorenzo; Ayn Rand is still our most popular novelist; Karl Popper, friend of Hayek, is my first choice for philosophy. All of these fields could be used to turn the tide of uncritical thinking by the public towards the defense of liberty, if only more of our best thinkers could be converted.

While the work of our intellectual thinkers and journalists leads the thinking of the public as a whole, I believe that their own thinking can be led to support our cause by the use of the tools that they themselves value most: mathematical proof, scientific demonstration, and critical analysis of all kinds. For this reason, liberty's own small band of intellectual lights have had, and may continue to have, an influence far beyond their numbers.

(9) Libertarian advocacy groups and lobbyists. Our link page contains a list of many organizations formed to fight injustices caused by government intervention in many areas of life. These organizations play the political game as it now exists: they use the direct financial support of the public to finance publicity and lobbying efforts to change the direction of government. We can contribute to these worthy causes.

(10) Muckrakers and whistleblowers. Not all courage occurs on the battlefield. It takes a different level of courage to risk one's job, the opinion of one's co-workers and much of the public to expose wrongdoing at home. It is rare to be rewarded for such efforts; big career penalties are more common. The reward is in preserving your dignity, your sense of self-respect and your mental health. May the moral and the truthful among us prosper.

(11) Libertarian science-fiction (and other) novelists. Fiction can ask "what if?". As readers of the novel, we follow an alternate universe, down a path different from the world we know. The "what if" question asks what would have happened if different decisions had been made at some point in history. We are forced to confront the fact that everyone has, and has always had, choices to make. This is called free will. Without it, the concept of liberty is meaningless.

A few such hypothetical novels hit the big time: Bring the Jubilee by Ward Moore; The Man in the High Castle by Philip K. Dick. These were not libertarian novels, but they illustrate the potential of the genre. Many of the top science fiction writers made veiled social and political commentary. Robert Heinlein's novels, for example. Arthur C. Clarke and Ray Bradbury also had a purpose well beyond science fiction.

One source of libertarian science fiction is Baen Books.

In contrast with writers who celebrate human freedom, Karl Marx believed in historical inevitability, a sort of predestination. Can you picture Marx playing poker, watching ball games, or predicting the weather?

(12) Libertarian comedians. Examples: P.J. O'Roarke, John Stossel, and the late George Carlin. Humor is the best medicine. The decline and fall of the Soviet Union was sprinkled with an endless supply of socialism jokes. Jay Leno's monologue has frequently skewered some absurdity of the political scene, as Bill Mayer and others have also done.

(13) Libertarian legislators, and the Libertarian Party. Ron Paul provides an example of a successful libertarian legislator. The role is not that difficult: vote no, and clearly explain just why you are doing so. I see more difficulty for a libertarian trying to carry out the duties of other political offices. A libertarian executive would inevitably be required to enforce many laws and regulations that he or she believed to be unwise or worse. This has even been a problem for Republican administrations, like the current one.

The LP is not the only political game in town. Other small parties share at least some of our goals. Those in the Republican Liberty Caucus believe in steering their major party in the direction of liberty. Our local RLC has begun an effort to see whether it may be worthwhile for members of different parties to work together towards achieving some of their aims.

(14) Health through nutrition and exercise. Beat the pharmaceutical giants that try to get you hooked on a medication for some chronic "disease" for the rest of your life. The causes of these diseases are always unknown, and no claim is ever made that the medication will cure them. But your medication will add greatly to the income of the pharmaceutical company until it fails you, as it ultimately must.

Take responsibility for your own health, just as gun owners take responsibility for their personal security. Nutritionists and certain maverick doctors specialize in taking approaches quite different from the mainstream. They have much to say that is important to consider: See

(15) Individualist and ethical organizations. Culture grows from the grassroots upwards, while tyranny grows from the top down. This country has always had a rich assortment of voluntary organizations contributing to our culture and well-being. They still provide us with hope for the future. Some of them will be at the forefront of public opposition to tyranny.

We can take heart from people and groups such as those named above. Our own numbers are considerable, and there are many others in all political parties who share many of our views. Let's be grateful for this. Rather than resign in defeat, we can instead increase the urgency of our efforts in behalf of liberty, using whatever talents and resources that each of us finds within himself.

Now it's time to celebrate.