Friday, January 25, 2013

"Deficit Hawk Down," Financial Delusion Up

Yes, readers, I do agree with Paul Krugman when he says that the federal budget deficit is not the central fiscal issue that the U.S. Government and the U.S. economy face today. However (and you KNEW there would be a "however" coming), we disagree for opposing reasons.

In his latest column, Krugman attacks what he calls the "deficit hawks" (thus, the clever title for the column) who he says have always been wrong on the real effects of federal budget deficits:
Mr. Obama’s clearly deliberate neglect of Washington’s favorite obsession was just the latest sign that the self-styled deficit hawks — better described as deficit scolds — are losing their hold over political discourse. And that’s a very good thing. Why have the deficit scolds lost their grip? I’d suggest four interrelated reasons.
His reasons are as follows:
  • A true Greece-style meltdown has not happened; therefore, it cannot happen here;
  • Deficit spending as a share of GDP supposedly has started to decline, and the "deficit hawks" had predicted a reverse secular trend, i.e. recent deficits have become slightly smaller than previous years;
  • Advocates of government "austerity" are wrong because "austerity" did not immediately bring about full economic recovery where it was practiced;
  • The anti-deficit agenda really was a not-so-secret attempt by Evil Republicans to impose an unrelated evil political agenda.
 There is what I would call a "fifth reason" that Krugman says is a reason why the deficit hawks should not worry: the deficit is a good thing, not bad:
...it was, in fact, a good thing that the deficit was allowed to rise as the economy slumped. With private spending plunging as the housing bubble popped and cash-strapped families cut back, the willingness of the government to keep spending was one of the main reasons we didn’t experience a full replay of the Great Depression.

Whether or not one believes that the government's bank bailouts and subsequent "stimulus" spending prevented a return to 1933 is not answerable because one would have to prove a negative. What we are supposed to believe, however, is that "trickle-down" economics works when the government is in charge.

What happens? The government gives money or financial credits to politically-connected financial institutions and everyone pretends that the market values of the assets of those institutions are higher than what everyone understands is the case. (If you try to do this in private, the government will charge you with "fraud." However, if it is done by the government, it is called "saving the economy.")

Under outright stimulus, the government directly issues funds to politically-favored groups and the individuals then spend the money with the idea being that the good effects will "trickle down" to the rest of us who do not have the same political connections. Somehow, after we spend what money is left over, the effects will be such that the economy will magically have "traction" and it will move forth on its own.

Moreover, as Krugman argues, since the Fed has managed to push interest rates for U.S. securities to near-zero, then there is almost no opportunity cost for borrowing (and more borrowing). As he declared in a blog post a while back, it is "free money." Because the Fed and the Social Security Administration own the largest single blocs of U.S. debt, we "owe it to ourselves" which apparently means that there are no problems associated with the high debt of the U.S. Government.

What puts the USA in the "catbird's seat" (as opposed to other countries like Greece) is that this country has its own currency, which means that the government essentially can pay its bills with printed money, and since the U.S. Dollar effectively has been the "world currency" for a long time, we can get away with it, while countries like Zimbabwe could not. Unlike Greece, which is on the euro, we can print and devalue forever, and the rest of the world simply has to take it.

The federal deficit is not the problem in and of itself; instead, it is a symptom of a much larger fiscal problem, and that is that the U.S. Government is spending at rates that impose huge burdens on everyone else. In Krugman's Wonderland, government spending always is a net plus, especially when the economy is down.

(Yes, I know that Krugman calls for "austerity" during a boom, but in reality, politicians spend even more if they think the funds are available. Furthermore, I don't recall hearing Krugman call for massive cuts in government spending during the last few years of the Clinton Stock Bubble or during the Bush Housing Bubble.)

Furthermore, in Wonderland, those who are productive are the real "takers," entrepreneurs are irrelevant to a growing economy, the most desired industries are those that receive massive subsidies, and it is the people receiving direct government benefits that are most likely to take the entrepreneurial risks that our economy needs to grow. (Face it, that was the gist of Barack Obama's "Progressive" inauguration speech, and Krugman himself declared that there was "a lot for progressives to like" in that speech.

So, if the government spends enough money, if enough people can receive new benefits that they will spend quickly, if the spending "trickles down" to those not receiving the direct benefits, if the government continues to massively subsidize politically-favored "green energy" firms and "green" research, if the Fed continues to keep interest rates low, if the government continues to print money, if the "Inflation Fairy" does its magic, and if everyone just believes in the Greatness of Barack Obama, we someday will have real prosperity. That is the financial delusion that apparently rules in "elite" academic and political economics these days.

57 comments:

Tom E. Snyder said...

When Krugman says it can't happen here I'm reminded of this story from the Bible:

Luke 16-19 Then he told them this story: "The farm of a certain rich man produced a terrific crop. He talked to himself: 'What can I do? My barn isn't big enough for this harvest.' Then he said, 'Here's what I'll do: I'll tear down my barns and build bigger ones. Then I'll gather in all my grain and goods, and I'll say to myself, Self, you've done well! You've got it made and can now retire. Take it easy and have the time of your life!'

20 "Just then God showed up and said, 'Fool! Tonight you die. And your barnful of goods—who gets it?'
..." (The Message)

Anonymous said...

Poster re-cast Krugman's arguments into something that sounds similar but can be refuted. Krugman was making an overall point, consistent with his argument over years, that government spending acts as a 'flywheel' to keep the economy going when private capital is not available (due to the hurt ones being unable and the hurters being unwilling). And of course, goverment SHOULD restrain spending to keep the economy from being overheated in more active cashflow times. The Republican controlled governments of the first two admins post 2000 got this exactly wrong, trying to finance two wars on borrowed money and trying to tighten the fiscal belt on those who negligibly effected the economy but were incapable of defending themselves.
The biblical reference that is apt for the purpose is Joseph in Egypt, the Pharoah's dream of 7 fat cows and 7 lean years leading Joseph to predict that lean years would follow rich years and the government needed to set aside storehouses and then open those storehouses. It works when you do this at the appropriate times. Timing is everything. This is what Krugman is saying.

Pulverized Concepts said...

"... goverment SHOULD restrain spending to keep the economy from being overheated in more active cashflow times....Timing is everything."

Since the abstraction that is "government" is composed of individual humans, no two of whom are alike, who's the human that restrains the spending with the right timing? Why should anyone believe that this secular priest actually knows what he's doing? Is it possible for that superman to make a mistake? Isn't it ethically better for each of us to make the decisions that affect our lives rather than have them made for us by supposed experts? If it's correct for an elite to make decisions about our medium of exchange, why not also let them decide whom we should marry, what's on our dinner menu, where we should live and even how long we should live?

Anonymous said...

The problem with "we owe it to ourselves" is that "we" is not the same group of individual as "ourselves"...

Anonymous said...

"Under outright stimulus, the government directly issues funds to politically-favored groups and the individuals then spend the money with the idea being that the good effects will "trickle down" to the rest of us who do not have the same political connections. Somehow, after we spend what money is left over, the effects will be such that the economy will magically have "traction" and it will move forth on its own."

It's stuff like this that makes me wonder why ASE is still on the periphery.

JG said...

I love how when the topic of subsidies to "politically connected" companies comes up the point of reference is always green energy companies. Nobody ever mentions that for every dollar in subsidies to renewable energy firms the oil & gas industry gets $14 of subsidies in the form of tax credits and other give-aways like exemptions from environmetal laws for gas drillers.

JG said...

Anderson,

I realize that right-wingers like you like to whip people up by spreading the idea that progressive/keynesian/socialist/democrats like Obama are spending America into the poor house but I do feel the need to inject some facts into the discussion to bring you back to reality.

Using CBO data of federal government spending growth for each year between 1982 and 2012 here is how the numbers shake out by presidential term:

Spending Growth by year
1982-1985.....8.7%
1986-1989.....4.9%
1990-1993.....5.4%
1994-1997.....3.2%
1998-2001.....3.9%
2002-2005.....7.3%
2006-2009.....8.1%
2010-2012.....1.4%

So you tell me, is Obama and his posse of Keynesian thugs the ones who were spending money like drunk sailors on shore leave? Or maybe the other guys who came before him, especially the ones who fancied themselves fiscal conservatives.

Source: http://articles.marketwatch.com/2012-05-22/commentary/31802270_1_spending-federal-budget-drunken-sailor

Bob Roddis said...

These are the spending figures for 2008-2013:

2982.54

3517.68

3456.21

3603.06

3795.55

3803.36

Such increases are always geometric if stated as a percentage measured against the prior year. What makes JG think that libertarians and Austrians defend spendthrift Republicans? Or that they are unaware that Republicans are phony spendthrifts?

http://www.lewrockwell.com/rothbard/rothbard60.html

Anonymous said...

Next time certain people want to call Obama a "socialist" or a "Marxist," please see this link.

http://www.frontporchrepublic.com/2013/01/barack-obama-socialist/

Thanks!

William L. Anderson said...

When have I defended the Republicans or have claimed they were fiscally responsible people, JG? I would challenge you to look at everything I have written, and you won't find anything like what you described.

As for "subsidies" for oil and gas, does anyone believe that in a free market, oil and gas still are much more efficient than windmills and ethanol? If you want to defend these two turkeys, go ahead.

LK said...

"Under outright stimulus, the government directly issues funds to politically-favored groups and the individuals then spend the money with the idea being that the good effects will "trickle down" to the rest of us who do not have the same political connections. ..."

Oh, so something like a tax cut which virtually all people and even businesses get is just "funds to politically-favored groups", is it? Despite the fact that it is DIRECTLY putting money into most people hands.

This has nothing to with "trickle down" theory - a phrase that originally referred to supply side economics under Reagan.

As for stimulus spending, yes, the multiplier works, and if it did not, ALL private bank loans and spending would never work either to increase economic activity.

You might as well say this:

"Under private sector "stimulus", the non-government sector like banks and businesses issues funds to favored groups and the individuals, who then spend the money with the idea being that the good effects will "trickle down" to the rest of us who do not have the same connections to business and the banks! ..."

So therefore the private sector must NEVER increase economic activity!

William L. Anderson said...

First, LK, the term "trickle-down" was in circulation long before Ronald Reagan became president. You need to better learn your economic history.

Second, your screed assumes that the State owns everything, and lowering a tax rate is the same as the government "giving" someone money. Perhaps you consider everything in your current possess, including your own life, as a product of State ownership and control, but some of us don't think that way.

Your "multiplier" effect assumes homogeneous capital, homogeneous factors, and homogeneous preferences. It also assumes that there are no malinvestments.

JG said...

Anderson,

Frequently harping on Democrats, particularly Obama, as spendthifts while never uttering a word against the far greater spending profligacy of the Republicans is tantamount to having a pro-Republican bias. The lack of a formal endorsement from you is hardly evidence of the lack of bias.

Bob Roddis said...

[N]ever uttering a word against the far greater spending profligacy of the Republicans is tantamount to having a pro-Republican bias

I'm speechless. For my 40 years as a libertarian and Austrian, we have constantly pounded home the fact that both parties are Keynesian welfare/warfare statist parties. See Rothbard's analysis of Reagan above. Or this:

http://antiwar.com/blog/2013/01/03/three-ways-obama-carried-bushs-tyrannical-torch-in-just-one-week/

It is obvious that JG is not serious.

JG said...

"As for subsidies for oil and gas, does anyone believe that in a free market, oil and gas still are much more efficient than windmills and ethanol?"

In a real free market oil and gas would be far more expensive then they are currently and possibly more so than renewables. Take away the tax credits, the below market royalty payments for drilling on federal land, the naval protection for oil shipping lanes, and all the other direct and indirect federal assistance that the oil/gas industry enjoys and renewables start to look a lot more competitive.

JG said...

Roddis,

When I'm pointing out a right-leaning bias am I talking about every Libertarian everywhere? Or am I talking about the host of this blog? Get your story straight.

Anonymous said...

If anyone wants a more left leaning perspective on libertarian issues, then check out the Bleeding Heart Libertarians website. Steve Horwitz and Roderick Long both write for the website.

Anthony Lima said...

Can you explain what a multiplier is? How it works to increase wealth? How it actually works in financial institutions like banks?
The reason I ask is because I think it's an incorrect view of how wealth is "generated" and leads to erroneous policy. For example; an economy need only have an abundance of "cash" to borrow in order to create wealth. The unfortunate thing is that government may be good at making funds available, they just aren't good at figuring out how to make people utilize those funds the best way possible. I don't even think it even helps to make those loans more possible for banks to offer in the first place.

William L. Anderson said...

For those of you who claim that I support the Republican Party, here is a link to a post I had on KIW:

http://krugman-in-wonderland.blogspot.com/2010/02/is-gop-really-party-of-small-government.html

It is true that I harp on the Democrats more, but that is because this site deals with the economics and commentary of Paul Krugman, who is a hardcore partisan Democrat. Nonetheless, I do repeat again that the Republican rule between 2001 and 2009 was disastrous, and I have pulled no punches in my criticisms.

And if anyone really thinks that windmills are more efficient and can produce electricity at a lower opportunity cost, I have a bunch of them where I live that I can sell. These things are a sick joke. And it always is fun to watch someone try to defend the ethanol program. Enough said.

William L. Anderson said...

By the way, LK, you failed to answer my point that "social democracy" types like you hold that every human being is a possession of the State, and that there really is no individual ownership of anything. Thus, if government lowers one of our tax rates, government is "giving" us something.

In my reading of modern Progressives and "social democracy" people, I find that they believe that all of us are mere putty to be bent to the will of those who control the State. How far are you willing to go in your contention that the State is our master and our savior? Should the State determine the theology of our religions? Should the State officials be free to invade our own homes at any time?

Are there any limits at all to State power? I think this is at the heart of the arguments you present. If the State can tell us what "money" should be and its worth, then it pretty much can and should dictate everything else.

So, do you agree with my assessment, or will you claim any exceptions? If so, upon what do you base those exceptions?

Andrew Jackson said...

Bob Roddis, forty years is quite a long time to be worshiping someone like Rothbard. Your pal Major_Freedom isn't that much better when it comes to promoting a Somalia like paradise. You call anyone you don't like a statist, even a reasonable man like Daniel Kuehn, who has had civil conversations with Austrian economists. That is the kind of rhetoric I've seen from religious organizations who call anyone that deviates away from their doctrine a "heretic." Face it, man. The chances of Ancapistan and your little anti-statist society forming are far less than you ever winning the lottery. Get real dude.

Bob Roddis said...

Proposing a rigorous and meticulous recognition and enforcement of the same English common law concepts of property and contract that are understood and employed by everyone in the USA is the equivalent of “Somalia”?

Such brilliant remark, both as to substance and rhetorical style.

William L. Anderson said...

Exactly, Bob. And if I recall, the General Theory was written almost 80 years ago, so if the Keynesian gang is going to say Rothbard is wrong because he wrote 40 years ago, then by their own standards Keynes is doubly wrong!

I always like the reference to Somalia. Besides the obvious point Bob made, what do any of you know about Somalia except what the newsies (who never have been there) tell you? For that matter, what I find with these people is that they start on a narrative and then never let it go. If the facts get in the way, then go back to the narrative.

Bob Roddis said...

Maybe "progressives" compare us to Somalia because they are racists and hate black people. So comparing us to black Africans is the worst possible insult pursuant to the "progressive" viewpoint.

http://factsandotherstubbornthings.blogspot.com/2012/09/brad-delong-on-austrian-economics.html?showComment=1348083510346#c5393909482052509363

Andrew Jackson said...

I was attacking the idea of anarchism in general, not English common law, Mr. Roddis. I have been watching YouTube videos from various types of anarchists and most of them have something in common. They are trapped in an idealistic bubble that they are just using because they are trying to cope with personal problems. Why would you assume that I was a Keynesian in the first place just because I think Daniel Kuehn is a civil man who engages in civil conversations with a man like Bob Murphy, another man I respect deeply and doesn't resort to childish name calling to prove his points?

If you want more people to believe in the inane idea of anarcho-capitalism, something that I'm sure David Friedman would acknowledge would possibly not lead to desirable results, why do you constantly resort to calling the 99.8% of the people that you debate with statists? I also acknowledge that Somalia was under a strict communist regime prior to the outbreak of the civil war back in the early 90s.

Is Gene Callahan a statist too because he doesn't agree with anarchist ideas? Keep dreaming. I also believe that there is no one size fits all type of government for every country on Earth. Somalia has recently instated its own Parliament.

http://allafrica.com/stories/201208220474.html

Bob Roddis said...

I thought that DK and I have had somewhat pleasant exchanges:

http://factsandotherstubbornthings.blogspot.com/2013/01/poor-kid-was-just-couple-years-too.html?showComment=1358998365568#c2813953362544372035

http://factsandotherstubbornthings.blogspot.com/2012/07/bob-roddis-makes-bad-argument.html

Further, the hateful, venomous rhetoric always starts with the anti-Austrians. I see no reason to not respond to ignorant bullies.

Bob Roddis said...

Callahan is ALWAYS rude to me, probably because I have smacked him down so many times.

http://consultingbyrpm.com/blog/2012/11/the-system-is-rigged-the-futility-of-politics.html#comment-48700

Andrew Jackson said...

I don't know, Bob. His credentials are impressive. He has a PhD from the London School of Economics. I think he's far more open minded than you are if he's willing to admit that NGDP targeting can be used until the misallocations of a bubble possibly caused by a fall in aggregate demand and Austrian type malinvestments are settled out. Austrian economics needs to be reinvented completely, especially with all the technology that's out there. Praxeology has been abused to the point where it's become an excuse not to avoid being empirical.

There are libertarians who have expressed why anarchism wouldn't work and how it's neither capitalism or communism, as you can see here.

http://www.youtube.com/watch?v=4geQplQO32E

http://www.youtube.com/watch?v=Dcv7YVXcsls

Are you familiar with the Somali gangs in America by any chance?

Bob Roddis said...

At the moment, I'm not particularly concerned with Ancap. When we reach the mini-state, I'll start to worry about it. At the moment, there are Keynesians, "progressives" and NeoCons to worry about.

And, of course, my degrees are from Michigan State, Detroit College of Law and Wayne State School of Law, so that makes me a moron.

Andrew Jackson said...

I wasn't implying that your credentials made you a moron per se, but I was saying that Gene appears to be well read in his economics. I'm assuming you have completely self studied economics text on your own and maybe attended a few events at the LVMI. My point is that I am concerned with how people are trying to turn economists into infallible people that can't be criticized, which is doing a great disservice to them as well. I also wanted to know why Major_Freedom won't admit that he was the same troll on Reddit, as you can see here. It's fairly obvious it's him and that he's lied about what he does for a living.

http://www.reddit.com/r/TrollAlert/comments/cexi6/captain_freedom_aka_sage_advice_private_freedom/

By the way, I am not a neoconservative or a progressive either, but at the same time, I also can't call myself a libertarian.

William L. Anderson said...

What does technology have to do with the Law of Opportunity Cost and the Law of Scarcity, not to mention Marginal Utility? Technology does not and cannot change economic theory despite what Keynesians might claim.

As for anarchism, you seem to mean that it is defined as a state of affairs in which there is no social cooperation, no exchange, no gains from trade, and no human institutions. What I hear you saying is that only the State through coercion and violence can bring about any kind of social cooperation at all.

In the end, it is the deep-seeded belief by Keynesians and others that violence imposed by the "correct-thinking" people upon everyone else will create paradise.

Andrew Jackson said...

Technology as in means of collecting economic data, Professor Anderson. Nothing wrong with praxeology as long as it's not the whole of economic science.

So the State is engaging in coercion and violence when it uses taxpayer dollars to fund universities and STEM fields? I don't see it that way, especially in a developed country like the United States. Sure, the state has done bad things but one can argue that with the presence of a state that there has been less problems and crime, therefore leading to greater economic utility. How would immigration be handled without a state structure?

LK said...

William L. Anderson@January 26, 2013 at 11:52 AM and @January 26, 2013 at 9:25 AM

(1) Post Keynesian theory does not require homogenous capital, and has acknowledged the heterogeneous nature of capital from the beginning; in fact, that was one of its early critiques of neoclassical theory.

Nor does it require homogeneous preferences.

The idea that Keynesian theory (of any type) assumes "no malinvestments" is ludicrous in the extreme, for obviously with uncertainty, shifting utilities and preferences business people can never accurately predict what consumers want.

(2) "By the way, LK, you failed to answer my point that "social democracy" types like you hold that every human being is a possession of the State, and that there really is no individual ownership of anything. etc, etc."

That is a ridiculous straw man rant of course, but I should not be surprised given your quite clear inability to engage in anything like honest debate.

The social democratic/progressive liberal tradition holds the state as a human institution which exists to serve its citizens and their rights, whose freedom is indeed an important aim. Merely because people do not have absolute freedom over property, it does not mean that "every human being is a possession of the State".

That you would equate Keynesian economics (say, a tax cut) with the notion that "every human being is a possession of the State" demonstrates what a sick and laughable hack you really are.

If we want a genuinely revolting ideology that stands in opposition to human freedom, it is the most degraded forms of anarcho-capitalism (of Rothbard and Block), where, e.g.,

(1) the police from private protection agencies would be allowed “beat and torture” suspects “to find information,” and they would face no penalty or criminal charge for violence against such a suspect, as long as (wink, wink!) the suspect is found guilty.

http://socialdemocracy21stcentury.blogspot.com/2011/10/rothbard-on-torture.html

(2) According to Rothbard, parents have the legal right to not feed their children, and hence even kill their own children by starvation.

http://socialdemocracy21stcentury.blogspot.com/2012/06/horror-of-rothbardian-natural-rights.html

Wonderful thing, libertarian freedom, isn't it.

Andrew Jackson said...

That was basically the crux of my point about anarcho-capitalism that I was making earlier, Lord Keynes. Thank you for stopping by and illustrating what I was trying to say earlier. I appreciate the wide array of interesting content that you have presented on your blog. I wouldn't go that far and call Anderson a "hack," but to me, he just seems a bit too entrenched in the idea that anarchism would bring about more freedom when there's absolutely no guarantee that it would. It could easily result in an oppressive communist society depending on the visions of a specific kind of anarchist. That's not the kind of society I would want to live in.

Dikvoormekaar said...

AJ said: "So the State is engaging in coercion and violence when it uses taxpayer dollars to fund universities and STEM fields?"
I would suggest asking Wesley Snipes this question. He did not pay taxes and ended up in a cage.
The State forces me to participate in the "Social Security" Ponzi, health care schemes, drone attacks, illegal wars, and all sorts of wealth redistribution schemes, all because of the fact that I was born here. How's that not force and coercion? If these are all such good ideas, I'm sure the market would be able to provide better alternatives for them.

I was taught (in a government High School, so take it with a grain of salt) that Keynes essentially advocated governments to build reserves during "good times" which could then be spent during "bad times" in order to smooth out "business cycles" (No explanation about these cycles, they were just natural, I vaguely recall "animal spirits" was mentioned).
The Austrians at least provide a logical explanation for business cycles, which leads to common sense solutions on how to avoid them. And as professor Anderson says, you can only pretend that immutable laws like Opportunity, Scarcity and Marginal Utility don't exist for so long. If I jump off a building, I can pretend (for a few seconds at least) that gravity doesn't exist, but then the reality will become painfully clear.

Andrew Jackson said...

That's basically why political parties, freedom of the press and the system of checks and balances exists so that power from the government can be kept in check and that ordinary people and watchdog groups can point out any wrongdoing that politicians engage in so they will not be voted again by the people, even though the country is not a direct democracy. It's obviously not a perfect system but America has been able to last well over 200 years with the type of constitution and laws that are present. Despite a huge civil war, America was able to successfully overturn an institution of slavery that had been present throughout many societies over hundreds of years, though civil rights issues still remained a problem.

William L. Anderson said...

Every other country save Haiti and the USA got rid of slavery peacefully. Are you trying to say that unless the Civil War had been fought, we still would have slavery today? I've heard that argument before and wonder if you believe it.

I marvel at how people can believe that the only thing our government does is build roads and government schools. Apparently, there is no drug war, no militarized police, no SWAT home invasions because, after all, the State by definition cannot engage in violence.

Andrew Jackson said...

"Every other country save Haiti and the USA got rid of slavery peacefully. Are you trying to say that unless the Civil War had been fought, we still would have slavery today? I've heard that argument before and wonder if you believe it."

I did a Google search and found that as far back as 1588, the Polish-Lithuanian Commonwealth abolished slavery. Serfdom and partial slavery remained in other countries to a certain degree. I would like to know more about why it is that violence was involved when slavery was rid of in the United States. I can understand Haiti and its circumstances. I think it depends on the country, the region, the time period, and context. I said earlier that different types of governments suit various countries best.

I also never said that the State has never done anything wrong, but in the long run, stability and defense for a wide population has been maintained. How would an anarcho-capitalist society last as long as say the Roman Empire, the Byzantine Empire, Ancient Greece or Ancient Egypt?

Dikvoormekaar said...

The problem with nation states, and ours in particular, is that they are to big to manage effectively, and therefore slide into authoritarian and bureaucratic nightmare. It is not by coincidence that the most successful nation states are also the smallest. The world would be an infinitely better place if we had thousands of small nation states. Hoppe argued that they would have to become libertarian, else they would be abandonded: http://lewrockwell.com/hoppe/hoppe31.1.html
The US was originally conceived as a union of states, not a single a state with a bunch of provinces.
I agree that abolishing nation states, although preferable,is a pipe dream. But if we can at least have our voluntary union of states back, and a Federal government that upholds its oath to the constitution, that would be a worthy and achievable goal. Secession would be awesome, too...

Andrew Jackson said...

Basically you seem more like a reactionary in practice, but ideally, you'd want to go beyond that in terms of decentralization.

Zachriel said...

Andrew Jackson: I would like to know more about why it is that violence was involved when slavery was rid of in the United States.

Economics. The ruling elites in the South were getting rich on slavery.

However, the South was confronted with a demographic problem. The population and political power of the North was expanding dramatically. Southern leaders knew that eventually, as long as the Union persisted, slavery would one day be outlawed. Faced with this prospect, they chose secession and war.

Lincoln knew this too. He knew that preserving the Union was essential to preserving and extending Republicanism and freedom.

Andrew Jackson said...

Zachriel, that's what I thought. It's been a while since I last picked up an American history textbook, but that's exactly how I remember it taught. Thanks!

Dikvoormekaar said...

AJ: "Basically you seem more like a reactionary in practice, but ideally, you'd want to go beyond that in terms of decentralization."
Not hearing a cogent argument for centralization here, unless the Romans , Byzantines, Third Reich (You missed that one) are all splendid examples of centralization. As for me, I like the choices that limited and decentralized governance provides. I guess that makes me "a reactionary".

Dikvoormekaar said...

Zachriel said: "He knew that preserving the Union was essential to preserving and extending Republicanism and freedom."
Rubbish. preserving and extending absolute power and control, was more like it. Read "The Real Lincoln" by Tom DiLorenzo.

Zachriel said...

Dikvoormekaar: Rubbish. preserving and extending absolute power and control, was more like it.

Well, if you mean he supported the Union, well, sure.

For centuries, it was common knowledge that the people couldn't govern themselves, that only a monarch could sustain a nation. The question concerning the first reincarnation of the Republic was whether "that nation, or any nation so conceived and so dedicated, can long endure". Unionists believed that if the Union collapsed, then Republican government would collapse with it. You may disagree, but that was certainly what many believed.

On the other hand, the South made clear they were fighting for slavery and white supremacy.

Bala said...

LK

"Merely because people do not have absolute freedom over property, it does not mean that "every human being is a possession of the State"."

Hogwash as usual. If people do not have absolute freedom over property and the State can override them on matters relating to their property, it does indeed mean that "every human being is a possession of the State". And who's talking of strawmen??? The entire "The General blah blah blah" is a strawman argument.

Bala said...

"Faced with this prospect, they chose secession and war."

This seems wrong. The way I see it, the South chose secession and the North chose war to preserve the Union.

Zachriel said...
This comment has been removed by the author.
Zachriel said...

Bala: Hogwash as usual. If people do not have absolute freedom over property and the State can override them on matters relating to their property, it does indeed mean that "every human being is a possession of the State".

Death and taxes.

Zachriel said...

Bala: If people do not have absolute freedom over property and the State can override them on matters relating to their property, it does indeed mean that "every human being is a possession of the State".

That's the very point the South made when they seceded!

Zachriel said...

Bala: The way I see it, the South chose secession and the North chose war to preserve the Union.

Fort Sumter.

Pulverized Concepts said...

Before, during and after the War Between the States, the US military waged a war of extermination against the native inhabitants of the continent. People that love to kick around the political football that bounces on the head of the southern states seem incapable of grasping the fact that as soon as the North "freed the slaves" they turned their full fury on the western tribes. So much for integrity, honesty and humanity.

Zachriel said...

Pulverized Concepts: Before, during and after the War Between the States, the US military waged a war of extermination against the native inhabitants of the continent.

Yup.

Anthony Lima said...

Oh my, that last sentence is a zinger! I'm still reeling from it!

Anthony Lima said...

Just try not paying your taxes.
Rothbard also claims that the police could be prosecuted as well for the beating. Something unlikely to happen today.
What parent would willingly starve their own child? To what ends would this serve a parent?
The state doesn't prevent this from happening today.

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