Von Mises Economics lesson: Capitalism works; Socialism fails

Dinner Topics for Thursday

If we were to regard the Soviet regime as an experiment, we would have to say that the experiment has clearly demonstrated the superiority of capitalism and the inferiority of socialism.~Ludwig von Mises

 

From Wikipedia

Ludwig Heinrich Edler von Mises; 29 September 1881 – 10 October 1973) was a philosopher, Austrian School economist, sociologist, and classical liberal. He became a prominent figure in the Austrian School of economic thought and is best known for his work on praxeology. Fearing a Nazi takeover of Switzerland, where he was living at the time, Mises emigrated to the United States in 1940. Mises had a significant influence on the libertarian movement in the United States in the mid-20th century.

Work in the United States

In 1940 Mises and his wife fled the German advance in Europe and emigrated to New York City.^[2]:xi There he became a visiting professor at New York University. He held this position from 1945 until his retirement in 1969, though he was not salaried by the university.^[6] Businessman and libertarian commentator Lawrence Fertig, a member of the NYU Board of Trustees, funded Mises and his work.^[12][13] For part of this period, Mises studied currency issues for the Pan-Europa movement, which was led by a fellow NYU faculty member and Austrian exile, Richard Coudenhove-Kalergi.^[14] In 1947, Mises became one of the founding members of the Mont Pelerin Society. Mises had an indirect role in the economic reconstruction of Europe after World War II through his professional relationships with Ludwig Erhard, Charles de Gaulle and Luigi Einaudi.^[15] In 1962, von Mises received the Austrian Decoration for Science and Art for political economy^[16] at the Austrian Embassy in Washington, D.C.^[2]:1034

Mises’s work influenced various Americans, including Benjamin Anderson, Leonard Read, Henry Hazlitt, Max Eastman, legal scholar Sylvester J. Petro, and novelist Ayn Rand. His American students included Israel Kirzner, Hans Sennholz, Ralph Raico, Leonard Liggio, George Reisman and Murray Rothbard.^[17]

Mises received students at his home in New York.^[18] He retired from teaching at the age of 87.^[19] Mises died at the age of 92 in New York. He is buried at Ferncliff Cemetery, in Hartsdale, New York. Grove City College houses the 20,000 page archive of Mises papers and unpublished works.^[20]

Mises wrote and lectured extensively on behalf of classical liberalism.^[22] In his treatise Human Action, Mises adopted [praxeology]] as a general conceptual foundation of the social sciences and set forth his methodological approach to economics.^{[citation needed]}

Mises criticized socialism in his 1922 work Socialism: An Economic and Sociological Analysis:

The only certain fact about Russian affairs under the Soviet regime with regard to which all people agree is: that the standard of living of the Russian masses is much lower than that of the masses in the country which is universally considered as the paragon of capitalism, the United States of America. If we were to regard the Soviet regime as an experiment, we would have to say that the experiment has clearly demonstrated the superiority of capitalism and the inferiority of socialism.^[23]

Read more about Ludwig von Mises

 

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YouTube Video: Milton Friedman, Capitalism and Freedom

Dinner Topics for Wednesday

YouTube Video: Milton Freedman, Capitalism and Freedom

From Rush Limbaugh Radio

One sound bite is two minutes of Milton Friedman schooling Phil Donahue and his audience in greed and capitalism and virtue.

RUSH:  [Obama] was quoting Reverend Wright, and he said that’s for me, man, I love that.  White folks’ greed runs a world in need.  So let’s go to 1979, ancient times for many of you.  We may as well be going back to the Roman Coliseum for this.  Nineteen seventy nine, I was 28.  Ancient times for many of you.  Phil Donahue interviewing Milton Friedman, and they had this exchange.  And Donahue starts off wanting to know about greed and capitalism.  Here it is.  And listen to this.

DONAHUE:  When you see around the globe the maldistribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few haves and so many have-nots, when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism and whether greed’s a good idea to run on?

Greed Definition

FRIEDMAN:  Well, first of all, tell me, is there some society you know that doesn’t run on greed?  You think Russia doesn’t run on greed?  You think China doesn’t run on greed?  What is greed?  Of course none of us are greedy. It’s only the other fellow who’s greedy.

The world runs on individuals pursuing their separate interests.  The great achievements of civilization have not come from government bureaus.  Einstein didn’t construct his theory under order from a bureaucrat.  Henry Ford didn’t revolutionize the automobile industry that way.  In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history are where they have had capitalism and largely free trade.  If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that.

So that the record of history is absolutely crystal clear that there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

DONAHUE:  But it seems to reward not virtue as much as ability to manipulate the system.

Virtue Definition

FRIEDMAN:  And what does reward virtue?  Do you think the communist commissar rewards virtue?  Do you think Hitler rewards virtue?  Do you think American presidents reward virtue?  Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout?  Is it really true that political self-interest is nobler somehow than economic self-interest?  You know, I think you’re taking a lot of things for granted.  Just tell me where in the world you find these angels who are going to organize society for us.

DONAHUE:  Well —

FRIEDMAN:  I don’t even trust you to do that.

RUSH:  Milton Friedman back in 1979 schooling Phil Donahue, and everybody else who heard that on the notions of virtue and greed and just basically upsetting Phil’s applecart.  Phil wasn’t smart enough to know it was happening. He’s still running around lamenting the accident of birth. If he’d been 30 miles south he would have grown up in poverty.  Anyway, we wanted to play that for you and recognize Milton Friedman.

Milton Friedman:  “If you put the federal government in charge of the Sahara Desert, in five years there will be a shortage of sand.” 

 Milton Friedman:  “Underlying most arguments against the free market is a lack of belief in freedom itself.” 

Another Milton Friedman quote:  “Most of the energy of political work is devoted to correcting the effects of mismanagement of government.”  

Boy, isn’t that true? Pass another law.  Government comes along and creates a program.  The program is an absolute disaster.  Government says, “That’s gotta get fixed.”  Government says, “Okay, we’ll fix it.”  And it compounds itself, one error atop another. (Rush)

Another Milton Friedman quote:  “Nothing is so permanent as a temporary government program.”  

I’ll tell you, the guy was great.  He was a genius.  He lived into his late eighties.  He would have been a hundred years old this week. (Rush)

Dinner Talk

1. Who does Mr. Friedman say is greedy?

2. Do you think political self-interest is better than economic self-interest? Why or why not?

3. According to Mr. Friedman, which system fosters a stronger economy— management by government bureaucracies (socialism), or free enterprise? Why?

Critical Thinking Skills: Parable shows Unseen Realities of Bad Economic Policy

Dinner Topics

Moral Character Education

Critical Thinking Skills:

Parable shows Unseen Realities of Bad Economic Policy

Frederic Bastiat and Legalized Plunder, or Socialism Failure

Frederic Bastiat: The Law

Note: I found the Parable of the Broken Window when I clicked on just one more link. Parents, teach your children to pursue topics they are interested in. Your young people will excel in their education when they educate themselves, and they acquire a thirst for learning. You will not find any teachings of Frederic Bastiat in typical public schools. And look what they are missing!

The Law, by Frederic Bastiat. This is a short little book written in the nineteenth century. It really nails the notion of governments who think they can plunder the citizenry, just because they are the government and “above the law.” This is classic literature that you will want in your library, and which teens and young adults will find thought-provoking. It is well known by reliable historians, and should be easily available to purchase online. I highly recommend this little book to read aloud and discuss together. It will give you a clear understanding of how economics should be. ~C.A. Davidson

 

The Parable of the Broken Window

Bastiat’s original parable or story of the broken window from Ce qu’on voit et ce qu’on ne voit pas (1850):

Have you ever witnessed the anger of the good shopkeeper, James Goodfellow, when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation-“It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.^[1][2]

Bastiat’s argument

Austrian theorists, and Bastiat himself, apply the parable of the broken window in a different way. Suppose it was discovered that the little boy was actually hired by the glazier, and paid a franc for every window he broke. Suddenly the same act would be regarded as theft: the glazier was breaking windows in order to force people to hire his services. Yet the facts observed by the onlookers remain true: the glazier benefits from the business at the expense of the baker, the tailor, and so on.

Bastiat argues that people actually do endorse activities which are morally equivalent to the glazier hiring a boy to break windows for him:

Whence we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed;” and we must assent to a maxim which will make the hair of protectionists stand on end—To  break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.”

What will you say, Moniteur Industriel^[3]-what will you say, disciples of good M. F. Chamans, who has calculated with so much precision how much trade would gain by the burning of Paris, from the number of houses it would be necessary to rebuild?^[1][2]

Bastiat is not addressing production – he is addressing the stock of wealth. In other words, Bastiat does not merely look at the immediate but at the longer effects of breaking the window. Moreover, Bastiat does not only take into account the consequences of breaking the window for one group but for all groups, for society as a whole.^[4]

Complete article from Wikipedia

Biography

Bastiat was born in Bayonne, Aquitaine, a port town in the south of France on the Bay of Biscay, on 29 June 1801. His father, Pierre Bastiat, was a prominent businessman in the town. His mother died in 1808 when Frédéric was seven years old.^[2] His father moved inland to the town of Mugron with Frédéric following soon after. The Bastiat estate in Mugron had been acquired during the French Revolution and had previously belonged to the Marquis of Poyanne. Pierre Bastiat died in 1810, leaving Frédéric an orphan. He was taken in by his paternal grandfather and his maiden aunt, Justine Bastiat.^[2] He attended a school in Bayonne, but his aunt thought poorly of it and so enrolled him in Saint-Sever. At 17, he left school at Sorèze to work for his uncle in his family’s export business. It was the same firm where his father had been a partner. Economist Thomas DiLorenzo suggests that this experience was crucial to Bastiat’s later work since it allowed young Frédéric to acquire first-hand knowledge of how regulation can affect markets.^[3] Sheldon Richman notes that “he came of age during the Napoleonic wars, with their extensive government intervention in economic affairs.”^[4]

Bastiat began to develop an intellectual interest. He no longer wished to work with his uncle and dreamed of going to Paris for formal studies. This dream never came true as his grandfather was in poor health and wished to go to the Mugron estate. Bastiat accompanied him and took care of him. The next year, when Bastiat was 24, his grandfather died, leaving the young man the family estate, thereby providing him with the means to further his theoretical inquiries.^[2] Bastiat developed intellectual interests in several areas including “philosophy, history, politics, religion, travel, poetry, political economy and biography.”^[3] “After the middle-class Revolution of 1830, Bastiat became politically active and was elected justice of the peace of Mugron in 1831 and to the Council General (county-level assembly) of Landes in 1832. He was elected to the national legislative assembly after the French Revolution of 1848.”^[1]

His public career as an economist began only in 1844 when his first article was published in the Journal des economistes in October of that year. It was cut short by his untimely death in 1850. Bastiat had contracted tuberculosis, probably during his tours throughout France to promote his ideas, and that illness eventually prevented him from making further speeches (particularly at the legislative assembly to which he was elected in 1848 and 1849) and took his life. In the fall of 1850, he was sent to Italy by his doctors. He first traveled Pisa, then onto Rome. On 24 December 1850, Bastiat called those with him to approach his bed. He murmured twice the words “The truth” then passed away.^[2]

Bastiat’s most famous work, however, is undoubtedly The Law, originally published as a pamphlet in 1850. It defines, through development, a just system of laws and then demonstrates how such law facilitates a free society.

 

Bastiat asserted that the sole purpose of government is to defend and protect the right of an individual to life, liberty, and property. From this definition, Bastiat concluded that the law cannot defend life, liberty, and property if it promotes socialist policies, which are inherently opposed to these very things. In this way, he says, the law is perverted and turned against the only things (life, liberty, and property) it is supposed to defend.^[12]

He was also a strong supporter of free trade. He “was inspired by and routinely corresponded with Richard Cobden and the English Anti-Corn Law League and worked with free-trade associations in France.”^[1]

In The Law, Bastiat explains that, if the privileged classes use the government for “legalized plunder”, this will encourage the lower classes to revolt or use socialist “legalized plunder” and that the correct response to both the socialists and the corporatists [crony capitalism and corporate socialism are the same] is to cease all “legalized plunder”. Bastiat also explains why his position is that the law cannot defend life, liberty, and property if it promotes socialist policies. When used to obtain “legalized plunder” for any group, he says, the law is perverted and turned against the thing it is supposed to defend.^[12]

 

Dinner Talk

1. What do you learn from the Parable of the Broken Window? Why do Progressives and Socialists use the broken economy to make people dependent on them? (Hint: They get more power and votes.)

2. Bastiat writes of “legalized plunder.” In ancient American history, there was a group called Gadiantons who took over the free government and engaged in plunder. How is this a type of what governments do today? What recent examples can you give of our government engaging in “legalized plunder?”

Hayek Quotes: Liberty, Socialism, and Economy

Dinner Topics for Wednesday

Quotes by Friedrich Hayek

If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion. ~Friedrich August von Hayek

Even the striving for equality by means of a directed economy can result only in an officially enforced inequality – an authoritarian determination of the status of each individual in the new hierarchical order. ~Friedrich August von Hayek

We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice. ~Friedrich August von Hayek

 

The mirage of social justice

F. A. Hayek made many valuable contributions to the field of economics as well as to the disciplines of philosophy and politics. This volume represents the second of Hayek’s comprehensive three-part study of the relations between law and liberty. … Google Books

 

 

 

The Fatal Conceit

Book by Friedrich Hayek

The Fatal Conceit: The Errors of Socialism is a non-fiction book written by the economist and political philosopher Friedrich Hayek and edited by William Warren Bartley. Wikipedia

Published: 1988Author: Friedrich Hayek

 

Friedrich Hayek

Friedrich August Hayek ( 8 May 1899 – 23 March 1992), born in Austria-Hungary as Friedrich August von Hayek and frequently known as F. A. Hayek, was an Austrian, later turned British,^[1] economist and philosopher best known for his defense of classical liberalism. In 1974, Hayek shared the Nobel Memorial Prize in Economic Sciences (with Gunnar Myrdal) for his “pioneering work in the theory of money and economic fluctuations and … penetrating analysis of the interdependence of economic, social and institutional phenomena”.^[2]

Hayek is an economist^[3] and major political thinker of the twentieth century.^[4] Hayek’s account of how changing prices communicate information which enables individuals to coordinate their plans is widely regarded as an important achievement in economics.^[5] He also contributed to the fields of systems thinking, jurisprudence, neuroscience, and the history of ideas.^[6]

Hayek served in World War I and said that his experience in the war and his desire to help avoid the mistakes that had led to the war led him to his career. Hayek lived in Austria, Great Britain, the United States and Germany, and became a British subject in 1938. He spent most of his academic life at the London School of Economics (LSE), the University of Chicago, and the University of Freiburg.

In 1984, he was appointed as a member of the Order of the Companions of Honour by Queen Elizabeth II on the advice of Prime Minister Margaret Thatcher for his “services to the study of economics”.^[7] He was the first recipient of the Hanns Martin Schleyer Prize in 1984.^[8] He also received the US Presidential Medal of Freedom in 1991 from president George H. W. Bush.^[9] In 2011, his article The Use of Knowledge in Society was selected as one of the top 20 articles published in the American Economic Review during its first 100 years.^[10]

 

More about Hayek from Wikipedia

The Hayek Center

 

US Constitution Series 14: Property is Key to Liberty

Dinner Topics for Wednesday

Life and Liberty are Secure Only so Long as the Right to Property is Secure

Under English common law, a most unique significance was attached to the unalienable right of possessing, developing, and disposing of property. Land and the products of the earth were considered a gift of God which were to be cultivated, beautified, and brought under dominion.

From The 5,000 Year Leap—A Miracle that Changed the World

By W. Cleon Skousen

US Constitution Series 14: Property is Key to Liberty

Development of the Earth Mostly by Private Endeavor

Without private “rights” in developed or improved property, it would be perfectly lawful for a lazy, covetous neighbor to move in as soon as the improvements were completed and take possession of the fruits of his industrious neighbor. And even the covetous neighbor would not be secure, because someone stronger than he could take it away from him. (Skousen, 170)

Without Property Rights, Four Things Would Occur

1. One experience like the above would tend to completely destroy the incentive of an industrious person to develop and improve any more property.
2. The industrious individual would also be deprived of the fruits of his labor.
3. Marauding bands would even be tempted to go about the country confiscating by force and violence the good things which others had frugally and painstakingly provided.
4. Mankind would be impelled to remain on a bare-subsistence level of hand-to-mouth survival because the accumulation of anything would invite attack. (Skousen, 171)

John Locke: A Person’s Property Is a Projection of Life Itself

The “labor” of his body and the “work” of his hands, we may say, are properly his.

He that is nourished by the acorns he picked up under an oak, or the apples he gathered from the trees in the wood, has certainly appropriated them to himself. Nobody can deny but the nourishment is his. And it is plain, if the [work of] first gathering made them not his, nothing else could. (Locke, Second Essay Concerning Civil Government, pp.30-31)

Property Rights Sacred?

It is important to recognize that the common law does not make property sacred, but only the right which someone has acquired in that property.

It is not the right of property which is protected, but the right to property. Property, per se, has no rights; but the individual—the man—has three great rights, equally sacred from arbitrary interference: the right to his LIFE, the right to his LIBERTY, the right to his PROPERTY. . . .The three rights are so bound together as to be essentially one right. To give him all that makes his life worth living. To give him his liberty but take from him the property which is the fruit and badge of his liberty, is to still leave him a slave. ~ Justice George Sutherland of the U.S. Supreme Court, January 21, 1921)

Abraham Lincoln:

Property is the fruit of labor. Property is desirable, is a positive good in the world. That some should be rich shows that others may become rich and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another, but let him work diligently to build one for himself, thus by example assuring that his own shall be safe from violence. . . .I take it that it is best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in a law to prevent a man from getting rich; it would do more harm than good.

Primary Purpose of Government Is to Protect Property

The early American colonists had much to say about property and property rights because it was a critical issue leading to the Revolutionary War. The effort of the Crown to take their property through various kinds of taxation without their consent (either individually or through their representatives) was denounced as a violation of the English constitution and English common law. (Skousen, 174)

Property Rights Essential to Liberty

John Adams

The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. PROPERTY MUST BE SECURED OR LIBERTY CANNOT EXIST. (emphasis added)

Should Government Take from the “Haves” and Give to the “Have Nots”?

As we have pointed out earlier, one of the worst sins of government, according to the Founders, was the exercise of its coercive taxing powers to take property from one group and give it to another. In our own day, when the government has imposed a [multi-trillion]dollar budget on the American people with about one half being “transfer payments” from the tax-paying public to the wards of the government, (Skousen, 174-5) James Madison has this to say:

Government is instituted to protect property of every sort. . . .This being the end of government, that alone is not a just government, … nor is property secure under it, where the property which a man has in his personal safety and personal liberty is violated by arbitrary seizures of one class of citizens for the service of the rest.

Redistribution of the Wealth Unconstitutional

No man would become a member of a community in which he could not enjoy the fruits of his honest labor and industry. The legislature, therefore, had no authority to make an act divesting one citizen of his freehold, and vesting it in another, without a just compensation. It [such action] is contrary to the principles of social alliance in every free government; and … It is contrary to the letter and spirit of the Constitution. ~The Supreme Court

Property Rights: the Foundation of All Civilizations

If history could prove and teach us anything, it would be the private ownership of the means of production as a necessary requisite of civilization and material well-being. All civilizations have up to now been based on private property. Only nations committed to the principle of private property have risen above penury and produced science, art, and literature. There is no experience to show that any other social system could provide mankind with any of the achievements of civilization. ~Ludwig von Mises

Caring for the Poor without Violating Property Rights

After 1936 (the Butler case), the Supreme Court began arbitrarily permit the distribution of federal bounties as a demonstration of “concern” for the poor and the needy. (Skousen, 175)

[T]he nagging question still remains. If it corrupts a society for the government to take care of the poor by violating the principle of property rights, who will take care of the poor? The answer of those who built America seems to be: “Anybody but the federal government.”

Americans have never tolerated the suffering and starvation which have plagued the rest of the world, but until the present generation help was given almost exclusively by the private sector or on the community or state level. (Skousen, 176-177)

The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. ~Grover Cleveland

This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the Government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood. ~Grover Cleveland

NEXT:

US Constitution Series 15: The Highest Level of Prosperity Occurs when there is a Free-market Economy and a Minimum of Government Regulations

 

US Constitution Series 13: American Safety from Human Corruption

 

 

Political Cartoons: State of the Union at Stake

Political Cartoons:

State of the Union at Stake

Union At Stake

At times it seems as if Trump has his finger in the dam against the recent wave of socialist agenda politics and the destructiveness it brings. Political cartoon by A.F. Branco ©2019.

More A.F. Branco cartoons at FlagAnd Cross.com here.

White Wing Extremist

Democrat women, When you wear White it shows everything, like revenge politics, infanticide, socialism, national election fraud etc.

More A.F. Branco Cartoons at The Daily Torch.

US Constitution Series 12: Democracy Attacks American Republic

US Constitution Series 12: The United States of America shall be a Republic

There are many reasons why the Founders wanted a republican form of government rather than a democracy.

IMPORTANT: See Republic and Democracy Defined—Read this First

The Founders’ Basic Principles: 28 Great Ideas that changed the world

The practical application of this book review of Skousen’s educated wisdom is to leverage “We, The People’s” knowledge to easily expose ignorance, anarchy and tyranny, and hold the government accountable.

 

From The 5,000 Year Leap—A Miracle that Changed the World

By W. Cleon Skousen

How the American Constitutional Republic became known as a Democracy

Modern Emphasis on “Democracy”

In spite of efforts to clarify the difference between a democracy and a republic, the United States began to be consistently identified in both the press and the school books as a “democracy.”This transformation of our Constitutional republic into a “Democracy” began with the Progressives in the early 20^th century. President Wilson, a leader in the Progressive movement, helped contribute to this confusion when he identified World War I as the effort to “make the world safe for democracy.” ~Skousen, 158

 

Socialists use a Front Group to mask their true purpose

Definition: (A Front Group is an organization that uses a false name to deceive people about their true purpose)

Two leftists, Harry Laidler and Norman Thomas, set up an organization called the Intercollegiate Socialist Society. (ISS)They spoke at campuses from coast to coast, calling America a democracy. The ISS adopted a snappy (socialist)slogan for the times: “Production for use, not for profit.”

By 1921, with the violence and brutality associated with the Communist revolution, “socialism” became repugnant to people. So ISS changed their name to “The League for Industrial DEMOCRACY.”

 

“Democracy” Loses Its Identification with Socialism

Following World War II, an interesting semantic transition began to take place in the American mind with reference to the use of the word “democracy.”

To begin with, the Communists, the National Socialists of Germany, and the Democratic Socialists throughout the rest of Europe had all misused the word “democracy” to the point where it had become virtually meaningless as a descriptive term. As a euphemism for socialism, the word had become totally innocuous.

The word “democracy” used to cover up the abject worldwide failure of “socialism”

Furthermore, socialism, whether spelled with a capital or small “s”, had lost its luster. All over the world, socialist nations—both democratic and communistic—were drifting into deep trouble. All of them were verging on economic collapse in spite of tens of billions of dollars provided by the United States to prop them up. Some had acquired a notorious and abhorrent reputation because of the violence, torture, starvation, and concentration-camp tactics they had used against their own civilian population. All over the world, socialism had begun to emerge as an abject failure formula. To the extent it was tried in America (without ever being called “socialism”), it had created colossal problems which the Founding Fathers’ formula would have avoided. (Skousen, 160)

 

The Attack on the Constitution

With the preceding historical picture in mind, it will be readily appreciated that the introduction of the word “democracy (to describe the United States) was actually designed as an attack on the Constitutional structure of government and the basic rights it was designed to protect.

As Samuel Adams pointed out, the Founders had tried to make socialism “unconstitutional.” Therefore, to adopt socialism, respect and support for traditional constitutionalism had to be eroded and then emasculated. In view of this fact, it should not surprise the student of history to discover that those who wanted to have “democracy” identified with the American system were also anxious to have Americans believe their traditional Constitution was outdated, perhaps totally obsolete. (Skousen, 160)

 

Next: Principle 13

A Constitution should be Structured to Permanently Protect the People from the Human Frailties of their Rulers.

US Constitution Series 11: Liberty of the People vs. Government Force

 

Henry Hazlitt: Economics in One Lesson

Economics in One Lesson—Choices and Consequences

This is the root of our economic problems today. People simply do not look at the long term consequences of their actions.

Henry Stuart Hazlitt (November 28, 1894 – July 9, 1993)

 

Economics is haunted by more fallacies than any other study known to man. This is no accident. It can be boiled down, Hazlitt says, to two basic fallacies—the first causes the other.

1. Selfish interests.
2. The fallacy of overlooking secondary consequences.

Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed.

The whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence.

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

THE LESSON APPLIED

Let us begin with the simplest illustration possible: let us, emulating Bastiat, choose a broken pane of glass.

A young hoodlum, say, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furious, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side. It will make business for some glazier.

As they begin to think of this they elaborate upon it. How much does a new plate glass window cost? Fifty dollars? That will be quite a sum. After all, if windows were never broken, what would happen to the glass business? Then, of course, the thing is endless. The glazier will have $50 more to spend with other merchants, and these in turn will have $50 more

Failure of the New Economics

to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.

Now let us take another look. The crowd is at least right in its first conclusion. This little act of vandalism will in the first instance mean more business for some glazier. The glazier will be no less unhappy to learn of the incident than an undertaker to learn of a death.

But the shopkeeper will be out $50 that he was planning to spend for a new suit. Because he has had to replace a window, he will have to go without the suit (or some equivalent need or luxury). Instead of having a window and $50 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit. If we think of him as a part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.

The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new “employment” has been added. The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier.

They had forgotten the potential third party involved, the tailor. They forgot him precisely because he will not now enter the scene.

They will see the new window in the next day or two. They will never see the extra suit, precisely because it will never be made. They see only what is immediately visible to the eye.

Hazlitt: Foundations of Morality

Here is Hazlitt’s major philosophical work, in which he grounds a policy of private property and free markets in an ethic of classical utilitarianism.

Related Posts:

The Fallacy of the Greek Bailout, an amusing analogy

 

History Facts: Real Story of Thanksgiving

Thanksgiving Stories the Teacher is not Teaching our Children

History Facts: Real Story of Thanksgiving

 “Here’s the part that’s been omitted…”  I’ll come back with the part that is omitted from modern day textbooks for young children in the schools. ~Rush Limbaugh

A group of separatists first fled to Holland and established a community. “After eleven years, about forty of them agreed to make a perilous journey to the New World, where they would certainly face hardships, but could live and worship God according to the dictates of their own consciences. On August 1, 1620, the Mayflower set sail. It carried a total of 102 passengers, including forty Pilgrims led by William Bradford. On the journey, Bradford set up an agreement, a contract, that established just and equal laws for all members of the new community, irrespective of their religious beliefs. Where did the revolutionary ideas expressed in the Mayflower Compact come from?

“From the Bible. The Pilgrims were a people completely steeped in the lessons of the Old and New Testaments. They looked to the ancient Israelites for their example. And, because of the biblical precedents set forth in Scripture, they never doubted that their experiment would work. But this was no pleasure cruise, friends. The journey to the New World was a long and arduous one. And when the Pilgrims landed in New England in November, they found, according to Bradford’s detailed journal, a cold, barren, desolate wilderness. There were no friends to greet them, he wrote.

“There were no houses to shelter them. There were no inns where they could refresh themselves. And the sacrifice they had made for freedom was just beginning. During the first winter, half the Pilgrims — including Bradford’s own wife — died of either starvation, sickness or exposure.” For a long time, many of them continued to live on the Mayflower. There was nowhere else to live. “When spring finally came, Indians taught the settlers how to plant corn, fish for cod and skin beavers for coats. Life improved for the Pilgrims, but they did not yet prosper!

“This is important to understand because this is where modern American history lessons often end. Thanksgiving is actually explained in some textbooks as a holiday for which the Pilgrims gave thanks to the Indians for saving their lives,” and teaching them to grow food and eat and all that, “rather than as a devout expression of gratitude grounded in the tradition of both the Old and New Testaments.” The Bible. Remember, these were religious people. They set out on a journey to a place that they had no idea of, and they just found barren wilderness.

The very idea that they survived — even before they began to prosper, the very idea that they just survived — was what gave them pause to thank God. That was the original Thanksgiving, and that’s not taught. The original Thanksgiving is taught as, “If it weren’t for the Indians, Pilgrims would have died. The Indians saved their bacon! The Indians saved them.” It’s an understandable effort here, but that’s not what happened, is the point. “Here’s the part that’s been omitted…”  I’ll come back with the part that is omitted from modern day textbooks for young children in the schools.

RUSH: We are back with the original, the true story of Thanksgiving, as written by me See, I Told You So, Chapter 6: “Dead White Guys, What the History Books Never Told You, The True Story of Thanksgiving — “Here is the part that has been omitted: The original contract the Pilgrims had entered into with their merchant-sponsors…” in London called for everything they produced to go into a common store, and each member of the community,” all 40 of them, “was entitled to one common share. All of the land they cleared and the houses they built belong to the community as well. “

It was a commune. It was socialism! Because they wanted to be fair. “They were going to distribute it equally. All of the land they cleared and the houses they built belonged to the community as well. Nobody owned anything. They just had a share in it. It was a commune, folks. “It was the forerunner to the communes we saw in the ’60s and ’70s out in California — and it was complete with organic vegetables, by the way,” in case you’d like to know. “Bradford, who had become the new governor of the colony, recognized that this form of collectivism was as costly and destructive to the Pilgrims as that first harsh winter, which had taken so many lives,” and half the people weren’t carrying their weight, didn’t have to.

“He decided to take bold action. Bradford assigned a plot of land to each family to work and manage,” and they got to keep the bulk of what they produced, “thus turning loose the power of the marketplace. That’s right. Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism. And what happened? It didn’t work! … “What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else, unless they could utilize the power of personal motivation!

“But while most of the rest of the world has been experimenting with socialism for well over a hundred years … the Pilgrims decided early on to scrap it permanently. What Bradford wrote about this social experiment should be in every schoolchild’s history lesson. If it were, we might prevent much needless suffering in the future. ‘The experience that we had in this common course and condition, tried sundry years,'” meaning it was tough for a long time, “‘that by taking away property, and bringing community into a common wealth, would make them happy and flourishing — as if they were wiser than God,’ Bradford wrote.”

Meaning: We thought we knew, but we were wrong.

“‘For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense…that was thought injustice.'” So what happened was, the hard workers began to see a bunch of slackers. Even in the first Pilgrims, they had a bunch of slackers, and they said, “What the hell are we doing? If everybody’s getting an equal share here and half of these people aren’t working, to hell with this!” and they threw it out.

William Bradford wrote about it in the journal. “The Pilgrims found that people could not be expected to do their best work without incentive. So what did Bradford’s community try next? They unharnessed the power of good old free enterprise by invoking the undergirding capitalistic principle of private property. Every family was assigned its own plot of land to work,” and they were permitted to use it as they saw fit, “and permitted to market its own crops and products. And what was the result? ‘This had very good success,’ wrote Bradford, ‘for it made all hands industrious, so as much more corn was planted than otherwise would have been.'”

They had surpluses. You know what they did with the surpluses? They shared them with the Indians. Capitalism, as opposed to socialism, produced abundance, the likes of which they had never experienced. They remembered the help they got when they first landed from the Indians. They shared their abundance. That’s the first Thanksgiving: A thanks to God for their safety, a thanks to God for their discovery, and a thanks to the Indians by sharing the abundance that they themselves produced after first trying what could only be called today Obamaism or Clintonism or socialism.

That, my friends, is the real story of Thanksgiving.

It’s not taught. It is not explained anywhere. The original story of Thanksgiving stops where the Indians saw these newly arrived, struggling Europeans who did not know what to do, and showed them how to plant corn and all that. Meaning the first Thanksgiving is: “If it weren’t for Indians…” So that has led us to today where Obama says the Indians are the only ones that have any real right to be offended at immigration. I try to tell this story every year on the day before Thanksgiving on the EIB Network. I do. And as I say, we’ve written an entire book for children about this featuring time travel with Rush Revere and his talking horse, Liberty, that take children back to Holland.

They make the journey with the Pilgrims across the Atlantic Ocean.

They’re there and get to know Bradford and so forth.

It’s the way we decided to teach history, by actually taking these young readers to these events and making them part of them. Kathryn and I are abundantly thankful for all of you for making our lives and the lives of our families so rich and rewarding. The true story of Thanksgiving for us is how fortunate we all are to have people like you in our lives and compromising this audience. We hope you have a great Thanksgiving with your family. We hope that it’s everything that you want it to be, hope you’re able to get there if you intend to go. But regardless, if you’re able to make it or not, we hope that your Thanksgiving gives you time to pause and give thanks for the great fortune we all have to be Americans.

Socialism and the First Thanksgiving

 Dinner Topics for Monday

The Real Story of Thanksgiving

Rush Limbaugh

“Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism.” And they found that it didn’t work.

The true story of Thanksgiving is how socialism failed.  With all the great expectations and high hopes, it failed.  And self-reliance, rugged individualism, free enterprise, whatever you call it, resulted in prosperity that they never dreamed of.

What is the story of Thanksgiving?  What I was taught, what most people my age were taught, maybe even many of you were taught, the Pilgrims got to the New World, they didn’t know what to do.  They didn’t know how to feed themselves. They were escaping tyranny, but they got here, and the Indians, who were eventually to be wiped out, taught them how to do everything, fed them and so forth.  They had this big feast where they sat down and thanked the Indians for saving their lives and apologized for taking their country and eventually stealing Manhattan from ’em.

But that’s not what really happened.

“The story of the Pilgrims begins in the early part of the seventeenth century … The Church of England under King James I was persecuting anyone and everyone who did not recognize its absolute civil and spiritual authority. Those who challenged ecclesiastical authority and those who believed strongly in freedom of worship were hunted down, imprisoned, and sometimes executed for their beliefs. A group of separatists first fled to Holland and established a community.  After eleven years, about forty of them agreed to make a perilous journey to the New World, where they would certainly face hardships, but could live and worship God according to the dictates of their own consciences.

“On August 1, 1620, the Mayflower set sail. It carried a total of 102 passengers, including forty Pilgrims led by William Bradford. On the journey, Bradford set up an agreement, a contract, that established just and equal laws for all members of the new community, irrespective of their religious beliefs. Where did the revolutionary ideas expressed in the Mayflower Compact come from? From the Bible. The Pilgrims were a people completely steeped in the lessons of the Old and New Testaments. They looked to the ancient Israelites for their example.

“And, because of the biblical precedents set forth in Scripture, they never doubted that their experiment would work. But this was no pleasure cruise, friends. The journey to the New World was a long and arduous one. And when the Pilgrims landed in New England in November, they found — according to Bradford’s detailed journal — a cold, barren, desolate wilderness. There were no friends to greet them, he wrote.  There were no houses to shelter them. There were no inns where they could refresh themselves. And the sacrifice they had made for freedom was just beginning. During the first winter, half the Pilgrims — including Bradford’s own wife — died of either starvation, sickness or exposure. When spring finally came, Indians taught the settlers how to plant corn, fish for cod and skin beavers for coats.

“Life improved for the Pilgrims, but they did not yet prosper! This is important to understand because this is where modern American history lessons often end. Thanksgiving is actually explained in some textbooks as a holiday for which the Pilgrims gave thanks to the Indians for saving their lives.”  That’s not what it was.

“Here is the part that has been omitted: The original contract the Pilgrims had entered into with their merchant-sponsors in London called for everything they produced to go into a common store, and each member of the community was entitled to one common share.” It was a commune.  It was socialism.  “All of the land they cleared and the houses they built belonged to the community as well,” not to the individuals who built them.

Socialism Didn’t Work Then, Either

“Bradford, who had become the new governor of the colony, recognized that this form of collectivism was as costly and destructive to the Pilgrims as that first harsh winter, which had taken so many lives. He decided to take bold action. Bradford assigned a plot of land to each family to work and manage.”  They could do with it whatever they wanted. He essentially turned loose the free market on ’em.  “Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism.” And they found that it didn’t work.

“What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else,” because everybody ended up with the same thing at the end of the day.  “But while most of the rest of the world has been experimenting with socialism for well over a hundred years — trying to refine it, perfect it, and re-invent it — the Pilgrims decided early on to scrap it permanently.

What Bradford wrote about this social experiment should be in every schoolchild’s history lesson. ‘The experience that we had in this common course and condition,’ Bradford wrote. ‘The experience that we had in this common course and condition tried sundry years… that by taking away property, and bringing community into a common wealth, would make them happy and flourishing — as if they were wiser than God. … For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children without any recompense.'”

What he was saying was, they found that people could not expect to do their best work without any incentive.  So what did they try next?  Free enterprise.  “Every family was assigned its own plot of land to work and permitted to market its own crops and products. And what was the result? ‘This had very good success,’ wrote Bradford, ‘for it made all hands industrious, so as much more corn was planted than otherwise would have been.'”
They had miraculous results.  In no time they found they had more food than they could eat themselves.  So they set up trading posts.  They exchanged goods with the Indians.  The profits allowed them to pay off the people that sponsored their trip in London.  The success and the prosperity of the Plymouth settlement attracted more Europeans, began what became known as the great Puritan migration.

And they shared their bounty with the Indians.  Actually, they sold some of it to ’em.  The true story of Thanksgiving is how socialism failed.  With all the great expectations and high hopes, it failed.  And self-reliance, rugged individualism, free enterprise, whatever you call it, resulted in prosperity that they never dreamed of. []

The Pilgrims left the Old World to find freedom of religion in the New World. Today, even in America, there is evidence of efforts to stifle the freedom of Christian worship. If we want to preserve our Judeo-Christian culture, we can only do so by teaching it in our homes. This collection of Christian Dinner Topics helps parents transmit Judeo-Christian traditions every day. Learn more