Monty Pelerin's World

Economics, Finance and Politics Through The Prism of Classical Liberalism

Why Liberty Fails

Why Liberty Fails

Liberty as an Ephemeral Event

“If men are good, you don’t need government; if men are evil or ambivalent, you don’t dare have one.”  Robert LeFevre

Introduction

It is natural for oppressed men to yearn for liberty. Once attained, it is taken for granted and assumed to continue forever. History, however, shows that liberty is both rare and ephemeral. Liberty is not the norm; it is the exception. The world is generally replete with oppression.

Our Founders understood the nature and benefits of liberty and set out to create a nation that could preserve freedom.  The Jefferson and Franklin quotes below reflected their doubts regarding permanency:

“Our country is now taking so steady a course as to show by what road it will pass to destruction, to wit: by consolidation of power first, and then corruption, its necessary consequence.” Thomas Jefferson

“… I think a general Government necessary for us, and there is no form of Government but what may be a blessing to the people if well administered, and believe farther that this is likely to be well administered for a course of years, and can only end in Despotism, as other forms have done before it …” Benjamin Franklin

These giants of history were prescient and knew the dangers.  Their fears are now being realized by the people of our country. Are our current problems merely a part of the (inevitable?) process foreseen by these Founders?  Franklin declared that we “can only end in Despotism.” Jefferson predicted that we “will pass to destruction.”

Is that our fate?

The Fatal Flaw of Government

In 1776, Adam Smith’s Wealth of Nations explored the wealth of nations and concluded that liberty was essential to societal success. He described how imperfect men were compatible with a peaceful, orderly and prosperous society. Using the concept of the “invisible hand,” Smith showed how men pursuing their own self interest benefitted society. The process worked with proper institutional requisites, most notably competition, absence of power and a proper legal framework.

Smith’s work was a milestone in understanding the harmonious society, but it also was a caution for government. Two of Smith’s requisites, competition and absence of power, were inconsistent with the notion of government. By necessity, government possesses monopoly power.

James Madison in Federalist No. 51 described the essence of the problem:

what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.

James Madison

Robert LeFevre expressed Madison’s description more bluntly:  “If men are good, you don’t need government; if men are evil or ambivalent, you don’t dare have one.”  Government to function properly as a servant of the people needed the power that allows it to become the master.  That is the fatal flaw in government.

Our Constitution

Wisdom based on thousands of years of history and philosophy guided our Founders. Theirs was not an idealistic undertaking based on normative judgment. They had no utopian visions. These learned and practical men wanted a realistic solution for a new country. They focused on what man is rather than what he should or could be.

The Founders provided a framework designed to constrain imperfect men who would necessarily be governing. They understood “Power corrupts; absolute power corrupts absolutely,” long before the birth of Lord Acton. They produced The Constitution which designed a government with limited powers and checks and balances.

The Founders understood that rights were a priori to government, inalienable and provided by the Creator. The Constitution protected those rights by delimiting government. As expressed by Joseph Sobran, the Constitution was intended to be “an anti-trust act for government.”

Understanding the problem and producing the greatest document in support of freedom was not sufficient.  The problem of providing power while restricting it to uses intended is likely intractable. The quotes from Jefferson and Franklin suggested they knew their work was a holding action and not a permanent solution.

The Immediate Result

Grover Cleveland

Where freedom thrives, so does society. Nowhere was that more dramatically demonstrated than in early America. Starting as a backwater colony, populated primarily by rejects from around the world, America quickly rose from humble beginnings to a world power. Unleashing liberty and freedom produced innovation, creativity and initiative never before seen.

Sometime around World War II, America surpassed Britain as the leading economic power in the world. In the space of only a century and a half, America rose from colony status to the most powerful, richest, freest and admired country in the

world. It was viewed as “the land of opportunity” where “the streets were paved with gold.”  The Constitution was responsible for this success.

What Happened

Slowly, almost imperceptibly at first, the Constitution was weakened from incessant attempts to expand the role of government. Long agp, our government attained size and responsibilities that would have horrified our Founders. Similarly, most present Americans are incapable of understanding, what our government was supposed to be and why the country attained greatness.

An example to illustrate the change in our country is that of President Grover Cleveland in February 1887. He was confronted with requests for federal aid of $10,000 to aid drought-stricken Texas farmers. Cleveland, still operating on principle and within the law, stated:

I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit… The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune…

Today, Cleveland’s stand would be considered political suicide and outrageous. Too many people believe that the primary purpose of government is to improve their lives and take care of them. That is quite the opposite of the original intent of the Constitution.

Bastiat

Why Does It Happen

It is in man’s nature to improve his position. That does not change when a man enters political office. Laws or Constitutions constrain politicians, but only for a while. Initially, violations are minor and justified. Over time, political morality deteriorates and laws are de facto ignored.

This cycle is not unique to America. It plagued the Romans and all other great civilizations. More and more “bread and circuses” are offered to appease the populace. Soon the populace demands more than governments can provide.

In the 1840s Frederic Bastiat, famed French legislator and essayist, reflected on government deterioration and coined this universal truth of democracies:  “The State is the great fiction by which everyone seeks to live at the expense of everyone else.”

Bastiat’s observation reflects our Santa Claus model of government – gifts and promises for all. Politicians continue to strain the system by promising more than they (we) can afford. Prime examples are the unfunded entitlement programs of Social Security and Medicare. Consistent spending in excess of tax revenues is another.

Just as children outgrow Santa, so do societies. Irresponsible behavior cannot go on forever. Entitlements eventually require more than society can support and solvency becomes the issue.  Margaret Thatcher warned:  “The trouble with Socialism is, sooner or later you run out of other people’s money.” We have reached that point.

That is how civilizations decline.