Perhaps the two longest and most intractable trends in this country are the inexorable growth of the state and the receding of liberty since at least the days of the Lincoln administration. The centralization of power has been driven by at least five factors:
Most are ignorant of our heritage and the way a market economy functions. They equate a lack of planning on the part of government with chaos, or that some things simply won’t get done. For example, if the government doesn’t take care of the poor they’ll starve. They fall for the “fatal conceit” that planners possess enough knowledge to actually do their job. They don’t stop to think that three hundred million people acting voluntarily to cooperate, compete, and improve their lives possess far greater knowledge than the “Gang of 535” inside the Beltway ever could. Knowledge is decentralized. They have no clue how the price system enables economic calculation, i.e. allowing us all to make choices in a world of scarcity. They forget that centrally planned economies have been a disaster throughout history, including the early settlements in this country.
Most people fail to differentiate between the public and private sectors. The former is coercive in nature, the latter peaceful and voluntary. They focus instead on the supposed greed of the businessman. The real greed is the businessman who crosses the line and uses the state to gain special privileges. This is mercantilism (the very system we originally fought a Revolution to overturn), synonymous with "political capitalism" and "crony capitalism." It is not laissez faire capitalism. Yet the free market gets the blame whenever the economy goes haywire. The government response is always more intervention, which ultimately means even less economic freedom.
Any great centralizer of power knows people are most willing to surrender their liberties during periods of crisis. As John Adams observed, “Fear is the foundation of most governments.” Thomas Jefferson warned, “A nation that limits freedom in the name of security will have neither.” Perhaps H.L. Mencken summed it up best: “The one permanent emotion of the inferior man is fear--fear of the unknown, the complex, the inexplicable. What he wants above everything else is safety.”
Some statists are motivated by envy, resentment of achievement itself. According to FEE’s Sheldon Richman, envy can take a large share of the blame for our current welfare apparatus: “It is bad enough that the administrators of the welfare state are moved by a hatred of ability. The greater tragedy is that they poison the minds of the constituency they so desperately need. Instead of the poor learning to admire the productive and aspire to be like them, they are taught by the system that their poverty is caused by others’ affluence. They learn to resent achievement and to prefer seeing the achievers dragged down. That is all the welfare state can bring about.” He goes on to make that the poor need the "invisible hand" more than a handout: “The welfare statist will cry out that we have responsibility to those less fortunate. We do, but in a sense other than the egalitarian imagines. We have a responsibility to create and maintain a free society so that all may go as far as their abilities and determination will take them.”
And finally we have the dreamer, the ideologue, the Utopian. He naively imagines a world of harmony and abundance which, of course, someone must plan and run. The only inconvenience? His Utopia ultimately requires brute force. That such fantasy provides the basic foundation of the great atrocities of the 20th century - Stalin’s collectivist famine in the Ukraine, Hitler’s gas chambers, and the Khymer Rouge’s killing fields in Cambodia - always escapes the dreamer. Perhaps this is why Hollywood celebrities routinely meet with tyrants like Fidel Castro and Hugo Chavez, or why Western journalists were enamored of the mass murderer Joe Stalin during the 1920s and 1930s. To the Utopian, it is always the particular implementers at fault, never the system or the theory itself.
When will these trends of expanding government and contracting freedom end? Likely as most trends do - when they exhaust themselves. Trends tend to move through several phases: disbelief, gradualism, acceleration, blow off (with signs of hubris and rationalization), initial decline (with denial and acts of desperation to keep the trend going), and ultimately collapse (and a return to sanity). Perhaps the Iraq War was the blow off stage of the foreign policy driver of state centralization. And perhaps our recent credit bubble was the blow off phase of the monetary driver. If so, a major change in trend is upon us.
~ Kevin Duffy, Bearing Asset Management, November 10, 2007