The New Deal: Savior from the Great Depression or Creator of the Welfare State?

Looking back over the history of not only the United States, but the history of most of the now modern world, the Great Depression was a defining moment in many people’s lives.  This was a time when the world economy came to a grinding halt for some, or slowed down so significantly that the people were desperate for any means possible to get out of their economic depression.  The evils of capitalism would not and could not allow for the economies of the world to rebound as fast as the people wanted or needed and thus drastic measures were required.  At least that is how the political figures in-charge defined their arguments for such “New Deal” policy and legislation. 

Scare Science: Fear in Sheep’s Clothing

Today I received an email providing me with a link to a website from a broadcasting company in Australia known as ABC.  I clicked on the link and to my surprise I was not sent to the website to learn about the news or to read a story that would be pertinent to my life or enrich my experience as a human being but to a website about “my CO2 influence on global warming.”  Now, first off, I want you to understand that I was surprised that something like this existed.  Secondly, I was shocked that they were portraying this as some kind of “scientific” measure of my contribution to global warming.  The debate over what causes global warming is still raging, whether people choose to believe this or not.  So why do these websites exist in the first place?  What is their true purpose, and why do people take them as “intelligent pieces of equipment” capable of giving us a true indicator of what is really going on in the world.

Policy vs. Politics: The Unknown Battle in Government

In our ever changing world, the idea of policy and politics tends to have a powerful and often times contentious meaning.  People see politics as a necessary evil in their day to day lives and for the most part completely forget the policy behind the politics.  In some cases, and more than most of us would like to think, we combine the world of politics and policy and blur the lines of what they truly are and represent.

visible and invisible hands

Douglas Den Uyl of Liberty Fund Inc. and Douglas Rasmussen, Professor at St. John’s University in New York ask the question:

what exactly is the connection between the visible hand of ethics and the invisible hand of the market?

If we assume, as most people do, that markets coordinate people based simply on mutual interest and consent, then the visible hand of ethics does not seem to have a place. They continue:

we know that in any social order we cannot allow people to do whatever may interest them. We shouldn’t be allowed to set up Murder Inc. So it seems we need some kind of rules even within a market system. This suggests right off the bat that ethics has a role to play in setting those rules. But then, why not let ethics set up everything?

This question concerning “where to draw the line” in relation to ethics, delineates libertarians from Liberals, conservatives, etc. While it is an important question, few people, even the most politically convicted, cannot answer it. They continue:

We could say that we stop doing ethics when the market approach of using interests rather than commands starts to work better than the visible hand of ethics. This response, unfortunately, brings us pretty much to a standstill in terms of how to proceed. On the one hand … there could be those who are less interested in what works and more interested in being sure that people do the right thing. On the other hand, there are those interested in what works, but who might have different opinions about what works better than what. Finally, besides those few who don’t think markets really work at all, there are those who might say that markets are okay in very limited spheres, but that ethics should really be the dominant way in which to organize people. All these qualifications seem to stand in the way of a robust defense of the liberty offered by the market. And if we went the other way and gave in to a largely market system, we would seem to be encouraging a culture of interest rather than one of ethical responsibility …

Their solution:

We, however, believe that this apparent “ignoring” of ethical concerns is not only justified but is actually a kind of celebration of ethics. In a certain sort of way, less is more. A lot less concern about adherence to commands and directives at the public level may mean a good deal more respect for ethics generally. We’re not saying that the liberty of the market will make people more ethical … we’re saying that this way of organizing society — giving people some simple rules and allowing them to interact with each other based on their mutual interests, agreements, plans, or projects — is an approach that gives ethics utmost importance in society.

How does this work?

Either society is structured around some ethical principle or set of principles such that the purpose of the society is to live according to them, or society takes some ethical principles to be central to it while leaving others for people to follow their own … we’ve got to be both general and specific at the same time with whatever basic governing principles of society we adopt. It still seems like we’re at an impasse. What kind of rule or principles could possibly both speak to everyone at the same time, allow for plural forms of living well, and not at the same time bias things in favor of one form of living well over others?

Their answer is the principle of self-direction. This means that within a social order, the first principle must be the protecion of the possibility of self-direction. The definition of self-direction is simple: the ability to make and exercise choices as an acting agent.

In protecting the possibility of self-directedness, it should be clear that we’re not trying to make people good or even increase their effectiveness in being self-directed. What we’re really trying to do by protecting the possibility of self-directed behavior is to give eithcs a chance.

While many people claim that markets are amoral, even immoral, Rasmussen and Den Uyl refute this:

It may seem that market societies are indifferent or ambivalent about ethics, but if so it is because they and only they recognized that there’s a difference between ethical principles that make ethical actions possible in society and ethical principles that guide us in what we need to do to live well or fulfill our obligations to ourselves and others.

Finally,

While there is solid evidence to support the contention that liberal orders make people generally better off, what is perhaps less well noticed is that liberal orders allow something deeper and more profound. They allow people to be human– that is, they allow people to employ their peculariarly human capacities of reason, judgment, and social sympathy towards ends and purposes they themselves have chosen. The market order is not, then, a dehumanizing institution, but the most human, and ethical, of them all.

(all quotations from “Visible and Invisible Hands”, see link in first sentence to read the entire article)

inspiration for the cause

Jessica Wright 

An article by one of my professors, Douglas B. Rasmussen, features a poem called “My Creed”,

I do not choose to be a common man.
It is my right to be uncommon- if I can.
I seek opportunity- not security.
I do not wish to be a kept citizen,
Humbled and dulled by having the state look after me.
I want to take the calculated risk,
To dream and to build, to fail and to succeed.
I refuse to barter incentive for a dole.
I prefer the challenges of life to the guaranteed existence,
The thrill of fulfillment to the stale calm of utopia.
I will not trade freedom for beneficence
Or my dignity for a handout.
I will never cower before any master
nor bend to any threat.
It is my heritage to stand erect, proud,
And unafraid, to think and act for myself,
Enjoy the benefits of my creations
And to face the world boldly and say, this I have done.
All this is what it means to be an American.

 While this is what I would like “American-ness” to be as well, and this is what I mean when I say proudly that I am an American, I have to agree with Rasmussen’s analysis:

I seriously doubt that this moral and cultural attitude is prevalent in the United States today… but certainly I think it was prevalent at some time in the past in the United States … as I consider the decline of liberty in the United States and what appears to be its moral and economic deterioration as well, I like to remember that a man from Lithuania gave me the poem called “My Creed”.  This reminds me that the ideals expressed in this poem are not the property of some people who inhabit a particular location, but are ideal for any and every human being.

The overwhelming political and cultural trends that sweep across the United States and Europe no longer emphasize these principles.  Instead of promoting thriving businesses that create wealth and thus stability, people are encouraged to pay more to the state so the state can provide.  But, as well all know, and in the words of F.A. Hayek,

The aim for which the successful entrepreneur wants to use his profits may well be to provide a hospital or an art gallery in his home town.  But quite apart from the question of what he wants to do with his profits after he has earned them, he is led to benefit more people by aiming at the largest gain than he could if he concentrated on the satisfaction of the needs of known persons.  He is led by the invisible hand of the market to bring the succor of modern conveniences to the poorest homes he does not event know (Law, Legislation and Liberty, Vol.2).

Marijuana in vending machines

Oliver Tree 

This certainly is a day for liberty. Exactly as it says on the tin California has decided to sell marijuana in vending machines!

inverse conclusion

jessica wright

Steffen Hentrich wrote about “the dictatorship of the experts” in today’s post of the German language IUF blog, referring to this article by David Shearman. Shearman claims the following with regard to China’s ban on the use of plastic shopping bags, in the interest of reducing Greenhouse gas emissions:

All this suggests that the savvy Chinese rulers may be first out of the blocks to assuage greenhouse emissions and they will succeed by delivering orders. They will recognise that the alternative is famine and social disorder.

Shearman believes liberal democracy incapable of dealing with the supposed problem of Greenhouse gas emissions, and argues that governments must now take authoritative action for the good of all. He goes on to say,

Liberal democracy is sweet and addictive and indeed in the most extreme case, the USA, unbridled individual liberty overwhelms many of the collective needs of the citizens. The subject is almost sacrosanct and those who indulge in criticism are labeled as Marxists, socialists, fundamentalists and worse. These labels are used because alternatives to democracy cannot be perceived! Support for Western democracy is messianic as proselytised by a President leading a flawed democracy.

Shearman would like to create a counsel of scientists who would direct governments in making authoritarian policies, based on what many consider flawed scientific analysis. He concludes with an ominous warning, and seemingly inverted conclusion:

“if we do not act urgently we may find we have
chosen total liberty rather than life”

 

(all quotes taken from original article by Shearman)