The Free Market 25, no. 7 (July/August 2007)
The world went bonkers for about ten years way back when. The stock market crashed in 1929, and with it fell the last remnants of the old liberal ideology that government should leave society and economy alone to flourish. After the Great Depression hit, there was a general air in the United States and Europe that freedom hadn’t worked well. What we needed were strong leaders to manage and plan economies and societies.
And how they were worshiped—disgustingly so! There were Stalin and Hitler and Mussolini, but in the United States we weren’t in very good shape either. Here we had FDR, who imagined himself capable of astonishing feats of price settings and economy boosting. Of course he used old-fashioned tricks: printing money and threatening people with guns. It was nothing but the old despotism brought back in pseudoscientific guise. Things didn’t really return to normal until after the war.
It’s strange to go back and read opinion pieces from the times. It’s as if everyone just assumed that we had to have either fascism or socialism, and that the one option that was ruled out was laissez-faire. People like Mises and Hayek had to fight tooth and nail to get a hearing. The Americans had some journalists who seemed to understand but they were few and far between.
So what was the excuse for such a shabby period in ideological history? Why did the world go crazy? It was the Great Depression, or so says the usual explanation. People were suffering and looking for answers. They turned to a Strongman to bail them out. There was a fashion for scientific planning, and the suffering economy (all caused by the government, by the way) seemed to bolster the rationale.
All of which brings me to a strange observation: when it comes to politics, we aren’t that much better off today. It’s true that we don’t have people running for office in ridiculous military garb. They don’t scream at us or give sappy fireside chats or purport to be the embodiment of the social mind.
But have you listened carefully to what the Democrats are proposing in the lead-up to the presidential election? It’s just about as disgusting as anything heard in the 1930s: endless government programs to solve all human ills. It’s as if they can’t think any other way, as if their whole worldview would collapse if they took notice of the fact that government can’t do anything right.
But it also seems as though they are living on another planet. The stock market has a long way to fall before it reaches anything we could call low. Mortgage interest rates are creeping along at the lowest possible rates. Unemployment is close to 4 percent, which is lower than even Keynesians of old could imagine in their wildest dreams.
The private sector is creating a miracle a day, even as the stuff that government attempts is failing left and right. The bureaucracies are as wasteful and useless as they’ve ever been, spending is already insanely high, debt is skyrocketing, and there’s no way that any American believes himself to be under-taxed.
The Democrats, meanwhile, go about their merry business as if the public schools were a model for all services in society. Oh, and let us not forget their brilliant idea of shutting down the industrial economy in order that government can plan the weather 100 years from now. We can only hope that there are enough serious people left to put a stop to this harebrained idea.
But before we get carried away talking about the Democrats, let’s say a few words about the blood-thirsty Republicans, who think of war as not something to regret but rather the very moral life of the nation. For them, justice equals Guantanamo Bay, and public policy means a new war every month. Sure, they pay lip service to free enterprise, but it’s just a slogan to them, unleashed whenever they fear that they are losing support among the bourgeois merchant class.
So there we have it. Our times are good, and yet we face a choice between two forms of central planning. They are varieties of socialism and fascism, but not overtly: they disguise their ideological convictions so that we won’t recognize that they and their ilk have certain predecessors in the history of political economy.
You see, the American economy may look good on the surface, but underneath the foundation is cracking. The debt is unsustainable. Savings are nearly nonexistent. Money supply creation is getting scary. The paper money economy can’t last and last. One senses that the slightest change could bring about massive wreckage.
What would happen to us should the bottom fall out? Scary thought. We need ever more public spokesmen for our cause. In many ways, the Mises Institute bears a heavy burden as the world’s leading voice for economic liberty. But we are working in every way possible to do what we can to make sure that the flame of liberty is not extinguished, even in the face of legions of charlatans and power-mongers. Even though the politics of our times are as dark as ever, there are many bright lights on the horizon.
