For a New Liberty: The Libertarian Manifesto
Why Liberty Will Win
Having set forth the libertarian creed and how it applies to vital current problems, and having sketched which groups in society that creed can be expected to attract and at what times, we must now assess the future prospects for liberty. In particular, we must examine the firm and growing conviction of the present author not only that libertarianism will triumph eventually and in the long run, but also that it will emerge victorious in a remarkably short period of time. For I am convinced that the dark night of tyranny is ending, and that a new dawn of liberty is now at hand.
Many libertarians are highly pessimistic about the prospects for liberty. And if we focus on the growth of statism in the twentieth century, and on the decline of classical liberalism that we adumbrated in the introductory chapter, it is easy to fall prey to a pessimistic prognosis. This pessimism may deepen further if we survey the history of man and see the black record of despotism, tyranny, and exploitation in civilization after civilization. We could be pardoned for thinking that the classical liberal upsurge of the seventeenth through the nineteenth centuries in the West would prove to be an atypical burst of glory in the grim annals of past and future history. But this would be succumbing [p. 314] to the fallacy of what the Marxists call “impressionism”: a superficial focus on the historical events themselves without a deeper analysis of the causal laws and trends at work.
The case for libertarian optimism can be made in a series of what might be called concentric circles, beginning with the broadest and longest-run considerations and moving to the sharpest focus on short-run trends. In the broadest and longest-run sense, libertarianism will win eventually because it and only it is compatible with the nature of man and of the world. Only liberty can achieve man’s prosperity, fulfillment, and happiness. In short, libertarianism will win because it is true, because it is the correct policy for mankind, and truth will eventually out.
But such long-run considerations may be very long indeed, and waiting many centuries for truth to prevail may be small consolation for those of us living at any particular moment in history. Fortunately, there is a shorter-run reason for hope, particularly one that allows us to dismiss the grim record of pre-eighteenth-century history as no longer relevant to the future prospects of liberty.
Our contention here is that history made a great leap, a sea-change, when the classical liberal revolutions propelled us into the Industrial Revolution of the eighteenth and nineteenth centuries.6 For in the preindustrial world, the world of the Old Order and the peasant economy, there was no reason why the reign of despotism could not continue indefinitely, for many centuries. The peasants grew the food, and the kings, nobles, and feudal landlords extracted all of the peasants’ surplus above what was necessary to keep them all alive and working. As brutish, exploitative, and dismal as agrarian despotism was, it could survive, for two main reasons: (i) the economy could readily be maintained, even though at subsistence level; and (2) because the masses knew no better, had never experienced a better system, and hence could be induced to keep serving as beasts of burden for their lords.
But the Industrial Revolution was a great leap in history, because it created conditions and expectations which were irreversible. For the first time in the history of the world, the Industrial Revolution created a society where the standard of living of the masses leapt up from subsistence and rose to previously unheard of heights. The population of the West, previously stagnant, now proliferated to take advantage of the greatly increased opportunities for jobs and the good life.
The clock cannot be turned back to a preindustrial age. Not only [p. 315] would the masses not permit such a drastic reversal of their expectations for a rising standard of living, but return to an agrarian world would mean the starvation and death of the great bulk of the current population. We are stuck with the industrial age, whether we like it or not.
But if that is true, then the cause of liberty is secured. For economic science has shown, as we have partially demonstrated in this book, that only freedom and a free market can run an industrial economy. In short, while a free economy and a free society would be desirable and just in a preindustrial world, in an industrial world it is also a vital necessity. For, as Ludwig von Mises and other economists have shown, in an industrial economy statism simply does not work. Hence, given a universal commitment to an industrial world, it will eventually — and a much sooner “eventually” than the simple emergence of truth — become clear that the world will have to adopt freedom and the free market as the requisite for industry to survive and flourish. It was this insight that Herbert Spencer and other nineteenth-century libertarians were perceiving in their distinction between the “military” and the “industrial” society, between a society of “status” and a society of “contract.” In the twentieth century, Mises demonstrated (a) that all statist intervention distorts and cripples the market and leads, if not reversed, to socialism; and (b) that socialism is a disaster because it cannot plan an industrial economy for lack of profit-and-loss incentives, and for lack of a genuine price system or property rights in capital, land, and other means of production. In short, as Mises predicted, neither socialism nor the various intermediary forms of statism and interventionism can work. Hence, given a general commitment to an industrial economy, these forms of statism would have to be discarded, and be replaced by freedom and free markets.
Now this was a much shorter run than simply waiting for the truth, but to the classical liberals at the turn of the twentieth century — the Sumners, Spencers, and Paretos — it seemed like an unbearably long run indeed. And they cannot be blamed, for they were witnessing the decline of classical liberalism and the birth of the new despotic forms which they opposed so strongly and steadfastly.They were, alas! present at the creation. The world would have to wait, if not centuries then at least decades, for socialism and corporate statism to be shown up as utter failures.
But the long run is now here. We do not have to prophesy the ruinous effects of statism; they are here at every hand. Lord Keynes once scoffed at criticisms by free-market economists that his inflationist policies would be ruinous in the long run; in his famous reply, he chortled [p. 316] that “in the long run we are all dead.” But now Keynes is dead and we are alive, living in his long run. The statist chickens have come home to roost.
At the turn of the twentieth century, and for decades thereafter, things were not nearly that clear. Statist intervention, in its various forms, tried to preserve and even extend an industrial economy while scuttling the very requirements of freedom and the free market which in the long run are necessary for its survival. For half a century, statist intervention could wreak its depredations through planning, controls, high and crippling taxation, and paper money inflation without causing clear and evident crises and dislocations. For the free-market industrialization of the nineteenth century had created a vast cushion of “fat” in the economy against such depredations. The government could impose taxes, restrictions, and inflation upon the system and not reap rapid and evidently bad effects.
But now statism has advanced so far and been in power so long that the cushion is worn thin; as Mises pointed out as long ago as the 1940s, the “reserve fund” created by laissez-faire has been “exhausted.” So that now, whatever the government does brings about an instant negative feedback — ill effects that are evident to all, even to many of the most ardent apologists for statism.
In the Communist countries of Eastern Europe, and now China, the Communists themselves have increasingly perceived that socialist central planning simply does not work for an industrial economy. Hence the rapid retreat, in recent years, away from central planning and toward free markets, especially in Yugoslavia. In the Western world, too, State capitalism is everywhere in crisis as it becomes clear that, in the most profound way, the government has run out of money: increasing taxes will cripple industry and incentives beyond repair, while increased creation of new money will lead to a disastrous runaway inflation. And so we hear more and more about the “necessity of lowered expectations from government” from among the State’s once most ardent champions. In West Germany, the Social Democratic party has long since abandoned the call for socialism. In Great Britain, suffering from a tax-crippled economy and aggravated inflation — what even the British are calling the “English disease” — the Tory party, for years in the hands of dedicated statists, has now been taken over by a free-market-oriented faction, while even the Labor party has been drawing back from the planned chaos of galloping statism.
But it is in the United States that we can be particularly optimistic, for here we can narrow the circle of optimism to a short-run dimension. [p. 317] Indeed, we can confidently say that the United States has now entered a permanent crisis situation, and we can even pinpoint the years of origin of that crisis: 1973-1975. Happily for the cause of liberty, not only has a crisis of statism arrived in the United States, but it has fortuitously struck across the board of society, in many different spheres of life at about the same time. Hence, these breakdowns of statism have had a synergistic effect, reinforcing each other in their cumulative impact. And not only have they been crises of statism, but they are perceived by everyone to be caused by statism, and not by the free market, public greed, or whatever. And finally, these crises can only be alleviated by getting the government out of the picture. All we need are libertarians to point the way.
Let us quickly run down these areas of systemic crisis and see how many of them dovetailed in 1973-1975 and in the years since. From the fall of 1973 through 1975 the United States experienced an inflationary depression, after forty years of alleged Keynesian fine-tuning which was supposed to eliminate both problems for all time. It was also in this period that inflation reached frightening, double-digit proportions.
It was, furthermore, in 1975 that New York City experienced its first great debt crisis, a crisis that resulted in partial default. The dread name “default” was avoided, to be sure; the virtual act of bankruptcy was instead called a “stretchout” (forcing short-term creditors to accept long-term New York City bonds). This crisis is only the first of many state and local bond defaults across the country. For state and local governments will be increasingly forced into unpleasant “crisis” choices: between radical cuts in expenditure, higher taxes that will drive businesses and middle-class citizens out of the area, and defaulting on debt.
Since the early 1970s, too, it has become increasingly clear that high taxes on income, savings, and investment have been crippling business activity and productivity. Accountants are only now beginning to realize that these taxes, combined especially with inflationary distortions of business calculation, have led to an increasing scarcity of capital, and to an imminent danger of consuming America’s vital stock of capital without even realizing it.
Tax rebellions are sweeping the country, reacting against high property, income, and sales taxes. And it is safe to say that any further increases in taxes would be politically suicidal for politicians at every level of government.
The Social Security system, once so sacred in American opinion that it was literally above criticism, is now seen to be as fully in disrepair as libertarian and free-market writers have long warned. Even the Establishment [p. 318] now recognizes that the Social Security system is bankrupt, that it is in no sense a genuine “insurance” scheme.
Regulation of industry is increasingly seen to be such a failure that even such statists as Senator Edward Kennedy have been calling for deregulation of the airlines; there has even been considerable talk about abolition of the ICC and CAB.
On the social front, the once sacrosanct public school system has come under increasing fire. Public schools, necessarily making educational decisions for the entire community, have been generating intense social conflicts: over race, sex, religion, and the content of learning. Government practices on crime and incarceration are under increasing fire: the libertarian Dr. Thomas Szasz has almost single-handedly managed to free many citizens from involuntary commitment, while the government now concedes that its cherished policy of trying to “rehabilitate” criminals is an abject failure. There has been a total breakdown of enforcement of such drug laws as prohibition of marijuana and laws against various forms of sexual relations. Sentiment is rising across the nation for repeal of all victimless crime laws, that is, laws that designate crimes where there are no victims. It is increasingly seen that attempts at enforcement of these laws can only bring about hardship and a virtual police state. The time is fast approaching when prohibitionism in areas of personal morality will be seen to be as ineffective and unjust as it was in the case of alcohol.
Along with the disastrous consequences of statism on the economic and social fronts, there came the traumatic defeat in Vietnam, culminating in 1975. The utter failure of American intervention in Vietnam has led to a growing reexamination of the entire interventionist foreign policy that the United States has been pursuing since Woodrow Wilson and Franklin D. Roosevelt. The growing view that American power must be cut back, that the American government cannot successfully run the world, is the “neoisolationist” analogue of cutting back the interventions of Big Government at home. While America’s foreign policy is still aggressively globalist, this neoisolationist sentiment did succeed in limiting American intervention in Angola during 1976.
Perhaps the best sign of all, the most favorable indication of the breakdown of the mystique of the American State, of its moral groundwork, was the Watergate exposures of 1973-1974. It is Watergate that gives us the greatest single hope for the short-run victory of liberty in America. For Watergate, as politicians have been warning us ever since, destroyed the public’s “faith in government” — and it was high time, too. Watergate engendered a radical shift in the deep-seated attitudes of everyone — regardless [p. 319] of their explicit ideology — toward government itself. For, in the first place, Watergate awakened everyone to the invasions of personal liberty and private property by government — to its bugging, drugging, wiretapping, mail covering, agents provocateurs — even assassinations. Watergate at last desanctified our previously sacrosanct FBI and CIA and caused them to be looked at clearly and coolly. But more important, by bringing about the impeachment of the President, Watergate permanently desanctified an office that had come to be virtually considered as sovereign by the American public. No longer will the President be considered above the law; no longer will the President be able to do no wrong.
But most important of all, government itself has been largely desanctified in America. No one trusts politicians or government anymore; all government is viewed with abiding hostility, thus returning us to that state of healthy distrust of government that marked the American public and the American revolutionaries of the eighteenth century.
For a while, it looked as if Jimmy Carter might be able to accomplish his declared task of bringing back people’s faith and trust in government. But, thanks to the Bert Lance fiasco and to other peccadilloes, Carter has fortunately failed. The permanent crisis of government continues.
The conditions are therefore ripe, now and in the future in the United States, for the triumph of liberty. All that is needed is a growing and vibrant libertarian movement to explain this systemic crisis and to point out the libertarian path out of our government-created morass. But, as we have seen at the beginning of this work, that is precisely what we have been getting. And now we come, at last, to our promised answer to the question we posed in our introductory chapter: Why now? If America has a deep-seated heritage of libertarian values, why have they surfaced now, in the last four or five years?
Our answer is that the emergence and rapid growth of the libertarian movement is no accident, that it is a function of the crisis situation that struck America in 1973-1975 and has continued ever since. Crisis situations always stimulate interest and a search for solutions. And this crisis has inspired numbers of thinking Americans to realize that government has gotten us into this mess, and that only liberty — the rolling back of government — can get us out. We are growing because the conditions are ripe. In a sense, as on the free market, demand has created its own supply.
And so that is why the Libertarian party received 174,000 votes in its first try for national office in 1976. And that is why the authoritative newsletter on Washington politics, The Baron Report — a report that [p. 320] is in no sense libertarian-oriented — denied, in a recent issue, media claims of a current trend toward conservatism in the electorate. The report points out, to the contrary, that “if any trend in opinion is evident, it’s toward libertarianism — the philosophy that argues against government intervention and for personal rights.” The report adds that libertarianism has an appeal to both ends of the political spectrum: “Conservatives welcome that trend when it indicates public skepticism over federal programs; liberals welcome it when it shows growing acceptance of individual rights in such areas as drugs, sexual behavior, etc., and increasingly reticence of the public to support foreign intervention.”7
The strength of the current libertarian movement is demonstrated by the intensity of recent attacks upon it by defenders of statism left, right, and center. From mid-March through mid-June 1979, the liberal Catholic Commonweal, the leftist Nation, and the right-wing National Review, each attacked libertarianism after its own fashion, and each proclaimed the supremacy of the State over the individual. Commonweal’s editorial in its March 16 issue, entitled “In Defense of Government,” summed up all of their concerns by bewailing the fact that not for generations “have there been so many intelligent people bent upon proclaiming that the state is the enemy.”
