Last few months have been tough for neocoms

[Hugo]

What I really don't like were his policies with respect to the military ie. cutting it by 2/3's and not having a strong resolve in fighting terrorism and being weak in places like Somalia.

Here's the funny thing. Remember all those people executed by terrorists in Iraq? All their families begged the US to withdraw and save their lives. It's easy to be "brave" when you're sitting in Washington DC sending people to a desert thousands of miles away to get shot at and (hopefully) shoot the enemy. People like Douglas Haig perfected this art. My point is that I will believe George W. Bush is "strong on terror" when I see him with the infantry at Fallujah carrying a rifle.

You can also say that Clinton was strong in Somalia, because he made a difficult decision that would make him appear "weak" to many in order to save the lives of his soldiers. It's also worth noting that Somalia is a good deal more peaceful and quiet since the UN and US forces withdrew.

With respect to his social policies I like his attitude on gun control and more socialized (I hate that word) medicine.

How does that gel with Reaganomics, exactly?

With respect to Bush, I think he's dead on with respect to foreign economic policy, taxation and defence.

Foreign economic policy? Foreign markets are starting to lose faith in the dollar. There's growing doubts that the US will ever be able to repay its foreign debt, which spells near-certain doom for the US economy, built as it is on foreign capital. What is so great about his tax policy? Slight tax cuts combined with rising expenditures translates into whopping tax increases in the future. I wouldn't be looking forward to that. Luckily for Bush, he won't be in power when it happens - this may have been part of his plan. As regarding his defence policy, money allocated for defence is like any government spending, wasteful and economically destructive, with the caveat that with defence a lot of the resources allocated are actually destroyed and won't reappear in anybody's economy, ever. Jefferson and his school also realised that a standing army creates the temptation to use it, and war is the worst thing that can happen to any people. It's the end of security, prosperity and often life itself.

I think he has grown the government a lot, but I see it as nessesary considering the war on terror.

The war on terror has become necessary because terrorists overseas are disgusted and threatened by the burgeoning power and influence of the US government. Growing the government in response to that is like leaving loads of food lying around at night because you have a rodent problem.

And although you put a negative spin on Bush and Clinton, I'm glad you recognize the similarties in policies between Clinton and Bush. The radical left *cough* blackdog *cough* hold these two men to completely different standards.

I don't think that's fair to Blackdog. I've heard him argue that Democrats are just as bad as Republicans many times. Just today he agreed with me that the differences between the two were very slight. I also find it odd that you'd label him "radical left", I'm "radical right" and we agree far more often than we disagree these days. I think left-right labels are confusing and silly. It's far better to describe oneself in terms that aren't relative to other people. I'm a radical libertarian, for instance.

Actually I should change that Chinese analogy with Clinton considering he basically sold out US military secrets to China.

That's not the big problem with China. The greatest threat from China is an increasingly liberal economy (already more free market than the USA) combined with a people possessed of great economic acumen and commercial instincts. It's likely that in the next 50 years, China will become the world superpower. The current US situation is unsustainable. The size of government cannot be maintained without a Soviet economy, and we all know what happened to the USSR.

[I miss Reagan]

Here's the funny thing. Remember all those people executed by terrorists in Iraq? All their families begged the US to withdraw and save their lives. It's easy to be "brave" when you're sitting in Washington DC sending people to a desert thousands of miles away to get shot at and (hopefully) shoot the enemy. People like Douglas Haig perfected this art. My point is that I will believe George W. Bush is "strong on terror" when I see him with the infantry at Fallujah carrying a rifle.

There's no doubt this is true, but I think you need to be realistic. George Bush nor any other nation's leader will ever personally fight in a war. He was elected to make these difficult decisions. The people weighed his decisions and agreed they were correct.

You can also say that Clinton was strong in Somalia, because he made a difficult decision that would make him appear "weak" to many in order to save the lives of his soldiers. It's also worth noting that Somalia is a good deal more peaceful and quiet since the UN and US forces withdrew.

I will give Clinton credit for going to a non-strategic country purely to help out starving people. However, pulling out with out finishing the job gave terrorists a victory and platform to build on. And of course it's quiet now. The people are oppressed by warlords and criminals. There's no one there to protect them.

How does that gel with Reaganomics, exactly?

Ya ya you got me there But reaganomics do not necessitate leaving poor people bleeding in the streets.

Foreign economic policy?

This is my opinion. From my view I see an economy that has consistantly recovering. I see a leader in favor of free trade and opposed to restrictions in trade. I see tax cuts as a huge impotus to this resurgence. And in this day and age of terrorism, I have to respectfully disagree with Mr. Jefferson.

I don't think that's fair to Blackdog. I've heard him argue that Democrats are just as bad as Republicans many times.

Perhaps it's just his contrarian nature, but we've had a few passionate debates where he adamantly defended the Dems against the GOP.

I also find it odd that you'd label him "radical left", I'm "radical right" and we agree far more often than we disagree these days. I think left-right labels are confusing and silly. It's far better to describe oneself in terms that aren't relative to other people. I'm a radical libertarian, for instance.

Well like I've pointed out before, the political spectrum is circular rather than linear. This just proves my point.

[Hugo]

There's no doubt this is true, but I think you need to be realistic. George Bush nor any other nation's leader will ever personally fight in a war. He was elected to make these difficult decisions. The people weighed his decisions and agreed they were correct.

Correction: some of the people weighed his decisions and agreed they were correct. Almost half of the electorate thought they weren't. Isn't it immoral to be making decisions that are going to affect so great a number of people in so profound a way without their consent? For example, let's say that Ford was the most popular car in Canada. Does that mean you should be forced to drive a Ford? Let's now imagine that Ford was the most popular car, but that it would explode in 1 of 50 collisions, no matter how trivial, killing all the occupants. Would it be fair and just to force you to drive a Ford in that situation?

I think there are quite a few things where the size of the mandate absolutely does not matter. As far as I am concerned, you can have the approval of everyone on the planet except one and it still would not justify murdering the one.

I will give Clinton credit for going to a non-strategic country purely to help out starving people. However, pulling out with out finishing the job gave terrorists a victory and platform to build on.

That platform is now defunct. Somalia is actually rebuilding pretty fast and there aren't any terrorists of note operating there. If there were, the Somalis would turn them over in a heartbeat and collect the bounty.

The people are oppressed by warlords and criminals. There's no one there to protect them.

"Warlords" is a popular term in Western journalism used to describe militia leaders. These people don't actually have any power except to lead the militia when it is mobilised due to aggression. They aren't universal throughout the country, many areas don't have a militia at all and thus no militia leaders. The way it works is that in a crisis in Somalia, elders of the community will appoint a temporary militia leader, who will appoint henchmen and organise the community for defence. Not dissimilar systems are used in Switzerland and Israel, but you don't call them "warlords" there, you call them "officers". The term is deliberately insulting. Somali "warlords" gather no taxes, hear no cases and pass no laws.

For instance, the movie "Black Hawk Down" distorted real events, creating a showcase "bad guy" in Mohammad Farah Aidid who was pure evil and organised troops to attack US soldiers on peacekeeping missions. The truth is that Somalis are used to defending their homes, and in that incident (and others) US troops were actually fighting militia from several clans and several warlords who had banded together to try and repel what they perceived as a US-led invasion of Somalia, no doubt to try and restore a central government. Understandably, after Siad Barre, they're not interested in that anymore.

But reaganomics do not necessitate leaving poor people bleeding in the streets.

I thought the whole idea behind Reaganomics was the trickle-down theory of wealth, so that it would improve the welfare of the poor? If that's the case, your ideas on socialised medicine definitely don't fit in.

From my view I see an economy that has consistantly recovering.

It's "recovering" because of Greenspan's inflatory policy. This means that there'll be a recession further down the road. It's as inevitable as night following day. All Bush is doing with his economic policies is putting off a recession, and the longer you delay one, the harder it is. Some future President is going to have to deal with 20% unemployment at the rate things are going.

I see a leader in favor of free trade and opposed to restrictions in trade.

How? He still maintains notions of "preferred trader status" and so forth. All the US tarriffs are still in place. Mercantilism is alive and well. His policy on Cuba is particularly dimwitted and anti-free-trade.

And in this day and age of terrorism, I have to respectfully disagree with Mr. Jefferson.

If we had listened to Jefferson there wouldn't be any terrorism. The Middle Eastern terrorists don't oppose America because it exists, they oppose America because of its military presence abroad. If, as Jefferson advised, they didn't have one, the terrorists wouldn't be bothered.

[Montgomery Burns]

Hey you Pravdian Pinheads, aka Nowt, Moulderx1, and Mission. Whatcha got to say now?

Bwahahaha.

[Sir Chauncy]

Hey Pigboy, how yall doing????

This Pravdan says, blow boy.LOL

Sir Chauncy

[TokyoTakarazuka]

If we had listened to Jefferson there wouldn't be any terrorism. The Middle Eastern terrorists don't oppose America because it exists, they oppose America because of its military presence abroad. If, as Jefferson advised, they didn't have one, the terrorists wouldn't be bothered.

Actually, Jefferson himself had to deal with Middle Eastern terrorism, and his response was to a direct a skillful complement of economic sanctions, military action, covert operations, and forceful diplomacy against those countries funding and supporting the terrorists – and it was a strategy that, in the end, worked. The ‘terrorists’ were actually pirates who worked for or were being harbored by the Arab monarchies and military dictatorships that ruled the north coast of Africa. American commercial ships trading in the Mediterranean Sea were often attacked and captured by these corsairs. ‘Tribute’ was extracted from their ships, and often the sailors themselves were kidnapped and later ransomed. Under captivity in North Africa, American sailors were made to do hard labor and frequently tortured. Obviously, this Arab terrorism was not caused by an expansive American state, because the American government was quite limited at the time; nor was it caused by an American military presence in the Middle East, since there was none. However, Thomas Jefferson realized that, “nothing will stop the eternal increase of demands from these pirates but the presence of an armed force”. The United States, which at the time did not even have a standing navy, was seen as a weak government that would tolerate these attacks rather than risk a war. As Thomas Jefferson recognized, the only effective recourse to deal with Muslim piracy was “to effect a peace through the medium of war”. Therefore, the United States built its first naval force since the end of the Revolutionary War. Fearing a peacetime navy as a threat to liberty, post-war presidents never bothered to rebuild their fleet. However, the threat of North African piracy caused Jefferson to realize that a navy would be necessary to preserve the liberty of those American merchants peacefully trading in the Mediterranean. In 1801 Jefferson instructed the fleet to blockade Tripoli, the most belligerent of these rogue states, and impose an economic embargo. Despite this, Yusuf Karmanli, the military dictator of Tripoli, was intransigent towards American intimidation, refusing to pay back any of the damages Tripolian pirates had inflicted on US shipping. Although Jefferson eventually authorized more forcible methods, such as naval raids and bombardments, arson attacks, the landing of marine commandos, and even blowing up explosive-laden ships near enemy fortifications, even these aggressive tactics would not force Tripoli's hand. Therefore, Jefferson decided in 1804 to attempt a regime change against the ruling military junta. With only a small army available for action overseas, he instead secretly sent a dozen marines to Egypt and Tunis to covertly organize a force of Tripolian expatriates and mercenaries. This proxy army of 650 marched on Tripoli at America’s behest, but after successfully capturing several fortifications Karamanli indicated to Jefferson that he would be willing to negotiate after all. Tripoli served as an example to the other rogue states of North Africa, most of which were convinced through coercive diplomacy to halt their depredations. Nonetheless, sporadic incidents continued and North African piracy would not halt entirely until President James Madison, also a great lover of liberty, organized another military operation in 1815.

Although Jefferson and Madison were successful in using military force to squash Mediterranean piracy, as America’s trade links were expanded throughout the world it was discovered that piracy was a global phenomenon. Thus, the American war on piracy resolved to fulfill a global scope as well. In the 1820’s, five elite naval squadrons were created, each with a mandate to police one part of the world. This being before the days when America had much ‘international obligation’ to respect the sovereignty of other nations, American marines were free to pursue pirates into countries such as Greece, Indonesia, and several Spanish colonies of the Caribbean, where their strongholds were raided and destroyed. It was not until the 1850’s, however, that attacks on American merchants in both the Atlantic and Pacific had been rendered insubstantial. The once ubiquitous threat of piracy is today just a memory outside a few pockets in Southeast Asia and Africa. The liberty we have to ship goods overseas without fear of attack is today taken for granted, but it wouldn’t exist without the efforts of several European and American nations, especially Great Britain, the United States, and France, that courageously resolved to beat back piracy by force. Thus, the standing military, so often berated by classical liberals of old, proved itself to be an institution in service not for the destruction, but for the preservation of liberty.

[TokyoTakarazuka]

The greatest threat from China is an increasingly liberal economy (already more free market than the USA)

You’re incorrect about this. The Fraser Institute’s 2004 study of Economic Freedom In The World rates China as only the 90th most liberalized economy of 123 surveyed. By comparison the United States was 3rd. The Heritage Foundation’s 2005 Index of Economic Freedom, although using a considerably less professional rating system, generally concurs with the Fraser Institute’s judgments. The United States is ranked the 13th freest economy of 161 surveyed, whereas China was 112th. The reasons for China’s low score, however, lie not in its government expenditure to GDP ratio, but its, among others things, high average tariffs, extensive corporate subsidies, widespread price controls, hefty regulation of foreign investment, and high levels of political corruption. Despite operating within a free market framework, China’s economic growth is, unlike America’s, still distinctly state-led.

Both parties were/are pro war (no party in the United States can afford not to be, given the tremendous power and influence of the Pentagon/military apparatus).

John Kerry stated that he believes the Iraq war to have been a “mistake” and said on several occasions that he would attempt to begin troop withdrawal from Iraq within six months. Therefore, it would be accurate to say that the Democrats were the anti-war party. The Republicans are widely viewed as the more militant party due to recent politics; Reagan and Bush’s military spending increases are a sharp contrast to the steady decline that occurred under most of the Carter and all of the Clinton administration. Whereas Reagan eventually increased defense expenditures by nearly 1.5% of the GDP, under Clinton they declined by nearly 1.5%.

All the US tarriffs are still in place. Mercantilism is alive and well. His policy on Cuba is particularly dimwitted and anti-free-trade.

Although it's true that American free trade policy lags slightly behind the European Union, outside the EU the United States' trade liberalization is matched by, according to the Fraser Institute, only eight other nations. Obviously the United States is not a leader in this particular field, but with an average tariff rate of only 2.6 %, neither are they mercantilist. Like every other first world nation, the United States is obedient to binding WTO decisions which outlaw many blatantly mercantilist foreign economic policies. The policy on Cuba is, of course, not Bush's, but one that has been set since 1961 to protest Fidel Castro's hostility towards the United States. Keep in mind that even Thomas Jefferson did not object to imposing economic sanctions to weaken enemy governments, such as the embargos he imposed on Great Britain, France, and, as I mentioned previously, several countries in North Africa. Bush’s major free trade initiatives include the US-Australia Free Trade Agreement of 2004, undoubtedly the most important free trade deal the United States has signed since NAFTA, two bilateral trade accords with Chile and Singapore in 2003, and his not-yet-ratified proposal for a Central America Free Trade Agreement. Through his continuous effort and vocal support for expanding America's global trade links, Bush is proving himself more than worthy to follow in the footsteps of Ronald Reagan and Bill Clinton in defying the protectionist consensus that characterized antebellum America. I think that American supporters of free trade would have been more likely to vote for Bush than Kerry, in part because of Bush’s already strong record in support of free trade, but also due to the strongly anti-globalization stance of Kerry’s running mate John Edwards, who The Economist magazine described as a “rank protectionist”.

Bush's measures to "privatize" social security are about as free-market as the worst of FDR's crackpot schemes. The actual results of this scheme are - surprise, surprise - increased government spending and intervention in the free market!

In its current form, social security in the United States is simply welfare for the retired. Social security payments are collected from taxpayers the same year that they are distributed to its recipients. Under Bush's social security plan each person would have the option of putting a portion of their income in a personal account, the money from which would be invested in the economy for profit. This will result in less government intervention in the economy, not more, for two reasons. Firstly, the money which each individual will enjoy in retirement will not consist entirely of tax dollars as it does currently, but rather, it will consist largely or entirely of the profit generated on their private account. In terms of cost to the taxpayer, this system will undoubtedly result in less spending in the long-term. Although the government will need to pay the expensive cost of transferring the social security apparatus to private accounts, no one disputes that Bush’s project will save money in the long run. The question raised by critics is simply how long it will be before those savings materialize, which will obviously depend on just how much the social security ‘transition costs’ turn out to be, a figure that is highly disputed. Nonetheless, your characterization of social security privatization as a proposal for big government is exactly opposite to the goal of the plan. The second way in which social security privatization will reduce government intervention is by transferring greater responsibility to the individual for the management of his or her account. Under the current system, each retiree passively receives money collected by the government from younger taxpayers. However, under the new proposal each individual will deal largely with the money they personally invested in their account, and they will have considerable liberty to choose which stocks and bond they want to invest their money in.

The initial impetus for Bush's social security privatization program was a similar proposition devised by preeminent free market economist Milton Friedman, and the most vocal advocate of the plan at present is the Cato Institute, a libertarian think-tank. The reason for their support is because, as Chicago School economist Gary Becker said, what Bush proposal boils down to is “eliminating government management of the retirement industry”.

The awarding of government contracts and so forth under Bush is profoundly anticapitalist, and smacks of statist mercantilism and nepotism.

There’s nothing mercantilist about contracting government business to private corporations. If you’re referring to Halliburton then you’re mistaken. Halliburton was already supplying the US military’s logistic needs prior to the Iraq War, including during both the Afghan War and much of Clinton’s war in Bosnia, after winning competitive bids. However, often during times of war a lengthy bidding process must be skipped or delayed in order to meet immediate needs. Those few no-bid contracts that Halliburton was given by Bush (and Clinton, incidentally), were found to be legal by the General Accounting Office.

It's pretty easy to make the claim that George W. is a socialist, but a biiiiiig stretch to say that he pays anything more than lip-service to capitalism and libertarianism.

Considering the level of economic freedom enjoyed by Americans, this is a statement that only a radical libertarian could make in good faith. American federal expenditures as a percentage of the GDP are, at about 35%, quite low by the standards of the industrialized world. The only First World countries with a lower figure are the recently-industrialized Asian Tigers. Few people, perhaps save radical libertarians, would consider Canada, Spain, or the United Kingdom to be socialist countries, yet each of those nations accumulate annual expenditures of about 45% of their GDP. Most of the rest of Western Europe, including France, Italy, Denmark and Germany, spend the equivalent of 50 to 60 percent of their GDP annually, and in many cases are driving up budget deficits that, once compared with their GDP, far exceed those of the United States. Despite this, few would consider France or Italy, both of which are currently governed by rightist parties, to be bastions of socialism. However, I believe that you are misusing the term. In economic discourse, as opposed to philosophical, socialism generally refers to a system in which a nation’s economic production is guided by the state, usually through government regulation or state-owned corporations. Price controls and state subsidies, which are rare in the United States but are still significant but fading policies in a few European countries, would be typical examples of socialist policy. Even though most socialist countries are characterized by high taxation and government spending, those policies do not in themselves indicate a socialist economy. In ‘Capitalism: A Treatise on Economics’, a 1,050-page libertarian bible, Austrian economist George Reisman writes this: “Socialism means an economic system based on government ownership of the means of production. On the basis of this definition, not only must Nazi Germany, a country usually not recognized as socialist, be categorized as socialist, but other countries, usually thought of as being socialist, must not be categorized as socialist - for example, Great Britain, Sweden, and Israel when they were under the rule of so-called labor governments.” Therefore, the socialist label (or in your case, pejorative) should not be thrown around too liberally.

[TokyoTakarazuka]

The Democrats were originally conceived as a bastion of small-government, Jeffersonian ideals which its founders felt were increasingly threatened. Their great flaw was their endorsement of slavery, necessitated by their power base in the South. Ultimately, it would become a big part of their undoing in the War Between the States, when Lincoln, the first Republican president and a man with a seeming penchant for statism and destructive war, all but destroyed them. The final blow for the Democratic tradition came with FDR, who decided that the best way to oust the Republican Hoover was to copy his policies completely and blow them up to an unimaginable size. Since that time both parties have been indistinguishable.

In American democracy, each party campaigns on whatever platform will satisfy their supporters and simultaneously convince as many moderate and undecided voters as possible to back them; no party that consistently adheres to a rigid ideology will survive long when trying to maintain the loyalty of a fickle public. Thus, the progressive or conservative philosophy of leading American political parties has existed only so long as politically convenient. Historically, neither the Republicans nor the Democrats have stuck to their principles all the time, and Franklin Roosevelt was no more or less opportunist than any of them.

For instance, the Democrat Grover Cleveland (President from 1885 to 1889 and 1893 to 1897), was widely perceived to support a more limited role for the government in the economy, and rightly so considering his support for lowering tariff walls and reducing federal relief aid. However, he also advocated and signed the Interstate Commerce Act, proposed by congressional Democrats in 1887, which forced all private railways to submit to tight federal administration. This resulted in the creation of America's first federal regulatory agency and signaled the beginning of the regulatory state. Despite the party’s confidence in the capitalist system, the Democrats did not seek to oppose the public will on this issue, which was greatly influenced not by Republican ideals, but by the social and political reforms advocated by the ‘progressive movement’. Cleveland similarly was vigorous in using the Sherman Antitrust Act to break up large firms when the country was behind him. One expression of the new progressivism was the Populist Party, which earned a surprising 9% of the popular vote in the 1892 election by running on a platform of opposition to the gold standard and greater social equality. Recognizing a chance to increase their voter base, the ever opportunist Democrats ran in 1896 on a platform that emphasized the same proposals. Because the Democrats were willing to accommodate Populist and Progressive ideas in their own policies, the Populists disappeared. However, they left a mark on the Democrats which still exists today. The Democratic Party’s support for such left-wing policies as a strongly progressive income tax and increased trade union power do not date back to FDR, but are rather ideas absorbed from the Populists and other contemporary progressive thinkers. Woodrow Wilson, America's Democratic president between 1913 and 1921, similarly supported whichever policies would secure him the most votes and best improve America's standing in the world, regardless of whether they complied with a free market philosophy. Wilson raised a new income tax shortly after coming to power, set up federal banks that would give low-interest rate loans to farmers, established America's first system of workmen's compensation, and created the Federal Reserve central banking system. During World War I he passed the Alien and Sedition Acts, which almost certainly represent the greatest legislative abridgement of American civil liberties in the nation's history. The Sedition Act threatened with arrest or deportation all who would, “willfully utter, print, write or publish any disloyal, profane, scurrilous, or abusive language about the form of government of the United States or the Constitution of the United States, or the military or naval forces of the United States, or the flag of the United States.” At the time congress was dominated by fellow Democrats, although the acts were repealed shortly after the Republicans regained control of the House in 1919.

Thus, politics has always been politics, and politicians will always pursue whatever set of policies will maximize the number of people willing to vote for them, rather than maintaining a fixed ideology, which brings me to the second point I want to make. You lament that since the 1940’s the Republican and Democratic policy platforms have been, by your criteria, indistinguishable, but placing the blame for that on Roosevelt and the Democrats in incorrect. FDR merely realized that it would be necessary destroy the ‘Democratic tradition’ in order to save the Democrats. His decision wasn’t exactly radical either, because, as I noted previously, no uniform Democratic tradition of protecting civil and economic liberties had ever truly existed. Thanks to FDR, the Democrats secured the presidency for 20 years and Roosevelt himself won several landslide victories, something which certainly cannot be said of the old Democrats James Buchanan and Franklin Pierce. Even if you do mourn the rise of the new Democrats, so long as you support democracy you can't deny that FDR's policies were clearly the people's choice; whether they made the right choice or not is irrelevant. Thus, it wasn’t FDR who destroyed the Democratic tradition, it was the voters.

In order to demonstrate to you my theory of politics, I will give you a brief case study in twentieth-century British politics before moving back to the United States. Britain's equivalent of the old Democrats was the Liberal Party, which contested each election with the Conservative Party. Although the Liberals and Conservatives had, on most economic issues, to varying degrees almost always advocated self-reliance and laissez-faire, the British voters were increasingly demanding greater government regulation of economic production and improved public social services. Into this power void jumped Britain’s trade unions, which had formed the socialist Labour Party in 1900. This new upstart party began increasingly to undercut both Conservative and Liberal voter bases, culminating in the landslide election victory of 1945. The progressive, Keynesian reforms that the Labour Party implemented post-1945 became known as the ‘post-war consensus’, because they were, in economic respects, adopted by the rival Conservative Party as well. As for the Liberals, they never managed, despite determined attempts, to create a new and attractive platform that could appeal to the fickle voters of Great Britain; between 1945 and 1979 they never controlled more than 14 seats in parliament. The Liberals failed to adapt and therefore they died out. However, with time the British people once again became dissatisfied with the status quo. The Conservative Party, now under the influence of Hayekian ideologue Margaret Thatcher, promised to initiate a new economic program which would break several aspects of the post-war consensus that had become unpopular. If the Conservatives hadn’t been willing to transform into a mold that better fit popular sentiments, they would have eventually been replaced by some upstart third party willing to campaign on a platform of giving the voters what they wanted. However, Thatcher made the Conservatives palatable to the voters for seventeen years until a reenergized ‘new’ Labour Party was finally triumphant in the 1997 election. New Labour success was based not on a platform of threadbare socialism, but of a ‘third way’ between economic statism and liberalism; Labour was willing to compromise its ideology in order to retake the House of Commons. Does this mean that since Thatcher and Blair, there has been no difference between the Conservative and Labour parties? Not exactly, they still differ on many significant issues such as the size of the welfare state, controls on immigration, and tax reform, but it is true that a new consensus has been reached for the time being, and it may be a few decades before the British people deem another shakeup necessary.

During the Dirty Thirties in the United States, Americans were showing their displeasure with mainstream parties by electing numerous third party candidates to the House of Representatives. By 1937 13 third party candidates were seated in the legislature. However, America was not protesting the economic interventionism and social activism utilized by the Republicans and Democrats to alleviate the Great Depression. On the contrary, all these new faces entering the House of Representatives ran on blatantly socialist platforms similar to that of the British Labour Party. If the Democrats had held staunchly and adamantly to a laissez-faire ideology and refused to change their platform to reflect the changing tastes of the voters, which as I noted previously they never had, perhaps the Democrats would have went the way of the Liberals and Americans would today be casting their ballots between the Republican Party and the Farm-Labor Party (or possibly the ‘new’ Farm-Labor Party). After all, the Farm-Labor platform won more seats in the House of Representatives in 1933 than the Labour Party of Britain did on its first electoral run. FDR and Truman cut racial discrimination from the Democratic Party’s policy platform when the demand for it still existed in the south, thus spawning a revolt among segregationist Democrats (‘Dixiecrats’). However, when FDR purged the Democratic Party of libertarianism, who filled the void? No one, because right-wing economics was simply not in favor with American voters. In terms of the total number of votes received, by far the best performance of the US Libertarian Party in a presidential election was in 1980, perhaps because the previous Republican and Democratic presidents, Nixon and Carter, were both in favor of and had sponsored legislation advocating such strongly left-wing policies as increased welfare spending, affirmative action, tougher environmental regulation, and the use of price controls to stop inflation. However, it was not to be the beginning of a meteoric rise for this nascent third party. The Libertarians have so far had a fate more similar to the Populists than the Labour Party. Ronald Reagan, although not the model libertarian, was right-wing enough to get most of their votes in time for the 1984 election. Reagan knew what the voters wanted just as well as the Libertarians, and unfortunately for them, he delivered what he promised. Reagan’s opposition to all the aforementioned policies shifted the Republican Party distinctly to the right on economic issues and earned him the loyalty of probably about 700,000 voters who had cast their ballots for Libertarian candidates only four years prior. Reagan attempted to forge a new economic synthesis in the United States, which is demonstrated well by these tables.

http://libertyunbound.com/archive/2004_10/...dman-reagan.pdf

So you see, the precise explanation for the longevity of the two-party system in the United States is the outstanding versatility which Democratic and Republican presidents and policymakers have demonstrated over the years. Since the 1860’s they have proven themselves to be responsive to change and ideologically flexible, continuously modifying, shifting, and moderating their political platforms in order to obtain the loyalty of the maximum number of voters. Which former presidents should Bush seek to emulate in order to win over America? As it stands, both the American public and scholarly community view old, pre-Lincoln Democrats like James Buchanan and Franklin Pierce to be among the worst presidents in American history. On the other hand, Abraham Lincoln, a man with a ‘penchant for statism and destructive war’ and FDR, a president full of ‘crackpot schemes’ rank with George Washington in a recent survey as the only three presidents in American history deemed worthy of the word ‘great’. In the opinion of most American voters, this praise is well deserved. Therefore, when a libertarian position will once again get the Democratic Party votes, only then will the Democrats become libertarian. Until then, if you don't like the party that the majority will vote for, don't blame the party, blame democracy. As congressman Morris Udall once said, “The voters have spoken… The bastards.”

As of right now, we can see the two parties as basically a referendum on the Iraq war. One is for, one is against, but as to all the other measures they are the same. Both parties believe that America needs a big, powerful government that will interefere in social and economic aspects of its citizens lives on a daily basis... I'm curious as to how Republicans on this forum can so heartily endorse one party and so vehemently denounce the other when they are so nearly identical in policy and ideology.

It all depends on what issues are personally important to you. Bush is in favor of the death penalty, while Kerry is staunchly opposed; Kerry wanted to renew the assault weapons ban, whereas Bush did not; Bush supports the Patriot Act, but Kerry would’ve allowed it to expire; Bush is against homosexual marriage and Kerry is for it; Bush would continue funding the National Missile Defense, while Kerry would not; Bush planned to legislate against partial-birth abortion, whereas Kerry said that he would maintain the status quo; Bush was determined to leave northeast Alaska open to oil exploration, and Kerry was opposed. These are all examples of issues passionately debated among Americans, and if you have strong beliefs on any of them, you will no doubt ‘heartily endorse one party’ over the other. However, the matter which is obviously of overriding importance to you, reducing the size of government, is unfortunately seldom discussed outside libertarian circles. Because of the paramountcy of limited government in your ideological philosophy, it may indeed seem that the Republicans and Democrats are indistinguishable, but in reality they differ on a substantial number of policies besides those I have already listed, they are just not necessarily the issues that are important to radical libertarians.

Despite your claim that both parties are dedicated to ‘big, powerful government’, by global standards it would be more accurate to say that neither are. Over the past 30 years the government expenditure to GDP ratio in the United States has grown from 32.4% to 34.6%, an annual rate of increase of .07%. The reason why Americans are unconcerned with the increasing size of their government must be either because they don’t view it as a large enough problem to deal with immediately, or because they don’t view it as a problem at all. Judging from the experiences of other first world countries, the latter is probably more likely than the former. For instance, Canada’s government size compared to GDP, while it has grown considerably less than much of Europe, has nonetheless increased more than five times faster than America’s (about .36% annually) over the same period of time. Despite this, limiting the size of government is not of much importance to most Canadians either. Similarly, although the German government has expanded eight times faster than the United States during the last 30 years, even there political debate during recent elections has not focused around breaking down big government (although that might change during this year’s election, if Angela Merkel proposes Thatcherite reforms to overcome the present economic malaise).

The only issues which divide the Republicans and Democrats are those which also divide the American people. If neither party will make a controversy into an electoral issue, then that issue probably isn’t contentious enough to matter to most Americans. However, because there is a radical fringe on both sides of the American political spectrum, so too is that radical fringe mirrored among American political parties. Currently, America’s most popular third parties are able to lock up the radical vote, but they advocate issues that alienate them from the vast majority of the American public. In the 2004 presidential election the Libertarian Party’s candidate Michael Badnarik ran on an anarcho-capitalist platform, advancing such blatantly extremist policies as privatization of the entire public education system, abolition of the central bank, and legalization all contraband drugs. Of course, mainstream parties wouldn’t have touched any of these proposals, which are obviously opposed by the vast majority of Americans. Ralph Nader represented the anti-globalization left, which turned out to be not nearly as extreme as the Libertarians but nonetheless put forward some rather radical proposals by American standards, such as a system of universal health care, vastly increased corporate taxation, the repeal of the Taft-Hartley Act, and a national ‘living wage’. Nor did he disguise such rhetoric as his frequent assertion that unrestrained capitalism generates fascism. I think that radicals are often far enough away on the political spectrum from Democrats and Republicans that they are also too far away to discern the differences between them. For instance, Republicans and Democrats are perfectly capable of passionately debating the advantages and disadvantages of semi-privatized ‘charter schools’ or the merits of using education vouchers to increase school choice, whereas I’m sure Badnarik would fail to see many differences between those two positions at all; his radical and adamant support for the privatization of all public education would not bother to nuance between a charter school and public school. Nader went so far as to say that the Republican and Democratic Parties failed to offer Americans a real choice. In the 2004 election, Americans repaid Nader’s efforts to give them a real choice by awarding him only .38% of the popular vote, easily the most dismal performance for a leading third party candidate since 1984. The fact that so many Americans will heartily support one candidate over another does not indicate any defect in American political thought, it rather simply means that the vast majority of Americans are satisfied with the choice already being given to them. However, if Nader and Badnarik do represent the only ‘real choices’ in American politics, then it’s a good thing Americans don’t favor radicals. Whereas the Republicans and Democrats are moderate first and foremost, Nader and Badnarik are militant; they want to make thoroughgoing changes to many things very quickly. Now imagine them alternating for the presidency; needless to say, it would be a disaster. Their ideas on most issues are so diametrically opposed that they would no doubt each have to spend their entire terms working to undue whatever socialist or libertarian reforms were just implemented by their predecessor. Nonetheless, both candidates presented offers to entice voters away from third parties. Kerry campaigned in favor of several social reforms which Bush opposed vocally, such as increasing the minimum wage and vastly expanding government-funded health insurance (Clinton ran a similar campaign in 1992, although his health care plan was eventually squashed in congress). Bush also embraced a few other policies that would appeal to moderate libertarians, such as partial privatization of social security, opposition to most affirmative action, and greater use of education vouchers to increase school choice.

The Republicans and Democrats may not always be consistent to their principles, and they may not know what’s right all the time, but the same could be said about the American people. However, because their survival depends on it, both parties are in service to the United States and they embody the same conservative and progressive sentiments and goals held by the Americans people who heartily endorse or denounce them. Thomas Sowell’s summation of the capitalist economy, often quoted by libertarians, is that: “It is the consumers who call the tune, and the capitalists who want to remain capitalists have to learn to dance to it.” However, replace ‘consumers’ with ‘voters’ and ‘capitalists’ with ‘politicians’, and you have described Western democracy.

[Hugo]

Actually, Jefferson himself had to deal with Middle Eastern terrorism, and his response was to a direct a skillful complement of economic sanctions, military action, covert operations, and forceful diplomacy against those countries funding and supporting the terrorists – and it was a strategy that, in the end, worked.

The Barbary corsair campaign is not analogous. Firstly, the Barbary "pirates" weren't pirates at all but privateers operating under the mantle of the ruling states of the area. Jefferson's military solution became necessary because, unlike other governments like Britain, he failed to negotiate a treaty with the Barbary rulers.

Basically, Jefferson mustered a navy and attacked the Barbary corsairs because he was not willing to recognise the right of the Barbary states to charge tribute for passage through their territorial waters. Put in this way, it looks more like imperialism than anything else, and perhaps Jefferson should have taken his own advice.

You’re incorrect about this. The Fraser Institute’s 2004 study of Economic Freedom In The World rates China as only the 90th most liberalized economy of 123 surveyed. By comparison the United States was 3rd.

Right. The trouble is that China is increasingly liberalising its economy, whereas the USA is steadily deliberalising. Soon enough, China going up will pass the USA going down, unless these trends reverse. However, as I pointed out, the Chinese leadership seems to be committed to a liberalising course, but both major American political parties have rejected liberalism.

Obviously the United States is not a leader in this particular field, but with an average tariff rate of only 2.6 %, neither are they mercantilist.

Any tarriff is, by definition, mercantilist. It is indicative of a mindset that free trade can be a bad thing and that there is a need for the State to manipulate foreign commerce for the good of the nation. If this mindset was not firmly entrenched in American government, there would be no tarriff, period. If you look at Great Britain during the 19th Century you will see a nation that had embraced free trade in a far more fundamental and effective way than the USA does today.

The policy on Cuba is, of course, not Bush's, but one that has been set since 1961 to protest Fidel Castro's hostility towards the United States.

It doesn't work. The embargo is probably the only thing keeping Castro in power right now, since it is his main excuse for the failure of socialism. Compare it to the example of China and Taiwan. The trade and openness of Taiwan to China has undoubtedly been a major influence in the liberalisation of China.

Through his continuous effort and vocal support for expanding America's global trade links, Bush is proving himself more than worthy to follow in the footsteps of Ronald Reagan and Bill Clinton in defying the protectionist consensus that characterized antebellum America.

Not really. There has been a veritable flurry of Bushite protectionist programs. There's the Vietnam catfish fiasco, the textile industry, the South Korean computer chips affair, drug reimportation, and so forth.

Note that the protectionist measures in all these cases were all undertaken by the Bush administration. It was not that they were in place and he hasn't gotten around to dismantling them yet, no, it's that he actually created them.

Under Bush's social security plan each person would have the option of putting a portion of their income in a personal account, the money from which would be invested in the economy for profit. This will result in less government intervention in the economy, not more

This is all wrong. Basically, the plan just moves a budget deficit around. State borrowing remains unaffected. Effectively, the government puts more money back into the free market with the left hand and borrows it all again with the right. The increased supply of loanable funds is exactly offset by the increased demands of the government for loans and government intervention in the economy is exactly unchanged.

Although the government will need to pay the expensive cost of transferring the social security apparatus to private accounts, no one disputes that Bush’s project will save money in the long run.

No, actually, a lot of people dispute this. Go to the Mises Institute and do a search on social security to find an awful lot of economists spending a lot of time exploding Bush's plan.

Nonetheless, your characterization of social security privatization as a proposal for big government is exactly opposite to the goal of the plan.

But the plan doesn't work. Currently, social security funds subsidize other areas of government. Remove that subsidy and the government has to borrow more money from elsewhere, i.e. it exactly offsets the new loanable funds available. The only way to reduce government intervention is the old-fashioned way: cut government spending. But that isn't even on the table.

However, under the new proposal each individual will deal largely with the money they personally invested in their account, and they will have considerable liberty to choose which stocks and bond they want to invest their money in.

No, what you've described is a private investment account like a mutual fund or savings account. That's not what this is.

[Hugo]

The initial impetus for Bush's social security privatization program was a similar proposition devised by preeminent free market economist Milton Friedman

Austrian economists generally describe Milton Friedman as leftist.

the most vocal advocate of the plan at present is the Cato Institute, a libertarian think-tank.

The Cato Institute hasn't been the same since Murray Rothbard died. Try the Mises Institute, another libertarian organization that is staunchly opposed to this social security reform (of course, they aren't in favour of the existing system either). The Mises Institute is headed by Lew Rockwell, a radical libertarian in the Rothbardian mould and thus not plagued by the inconsistencies and self-contradictions of halfway-house classical liberals such as Ayn Rand or the Cato people (and, ironically, Ludwig von Mises himself).

There’s nothing mercantilist about contracting government business to private corporations.

Yes, there is. Government obtains money through coercion and awards it to various businesses. It identifies strongly with the mercantilist ideas of economic operation in the national interest and strongly against the idea of the free market, in which trades should never be coerced. Every contract the government makes is coerced.

Considering the level of economic freedom enjoyed by Americans, this is a statement that only a radical libertarian could make in good faith.

That's me.

American federal expenditures as a percentage of the GDP are, at about 35%, quite low by the standards of the industrialized world.

Yes, and quite low by the standards of the USSR, too. Well done! Of course, it's a very ugly picture when put next to the USA of 1790, when federal expenditures were more like 2%. Of course, if you compare Bush to Stalin, he doesn't look that socialist. Compare him to Andrew Jackson, however, and he's left of Jack Layton.

In economic discourse, as opposed to philosophical, socialism generally refers to a system in which a nation’s economic production is guided by the state, usually through government regulation or state-owned corporations.

Well, as described by Marx, socialism is the state between capitalism and communism. The USA began with a classical liberal government spending about 2% of GDP and, since then, has ramped up spending and interventionism to about 35% at a steady rate, and still climbing. In the Marxist definition, the USA is now definitely in the intermediate socialist stage, and heading for communism.

Socialism means an economic system based on government ownership of the means of production.

Ownership is the right to control. The US government has pretensions to the right to control a large part, if not most or even all, of the means of production on US soil by setting controls, laws, rules, tarriffs, etc. They can dissolve businesses and industries, reward others, persecute certain businesspeople, and more. Therefore, the US government de facto owns the means of production at least in large part. At best, one could say that the US government is part-owner of the means of production along with the ostensible business owners. The owners get to decide what to do with the permission of Uncle Sam, which makes the government a non-shareholding but decidedly non-silent partner of every business in America. This is especially true when the Constitution and law evidently do not set any kind of limit on the economic intervention that the State may take. Legally, they are entitled to seize the means of production, so what we have now can also be seen as a system whereby the American government merely leases out the means of production to private individuals for as long as it suits them to do so.

Thomas Sowell’s summation of the capitalist economy, often quoted by libertarians, is that: “It is the consumers who call the tune, and the capitalists who want to remain capitalists have to learn to dance to it.” However, replace ‘consumers’ with ‘voters’ and ‘capitalists’ with ‘politicians’, and you have described Western democracy.

No. The difference is that consumers must place a stake in the process to affect the outcome. Voters don't have to. Democracy can be viewed as a vast market failure because the price of entry to the market has been lowered to 0 and, effectively, the cost of individual failure reduced to 0. Voting is the biggest public goods problem of all.

[Hugo]

On your points on the political parties, I will read more in-depth later but for now I will say this: In a State, good law is a public goods problem. David Friedman identified that where a coercice State exists, it is in people's best interests to vote for laws that reward them at the expense of other people. It is not in their interests to vote for equitable laws that treat all people equally. Without a coercive State, however, the situation is reversed. Anybody wanting to create a coervice State has to accept that his creation will be turned on him, therefore, it's not in his interests to help create one. However, keeping the State abolished is in his interests.

What you describe is basically the public goods problem of democracy and the illustration of Friedman's point above.

[TokyoTakarazuka]

Put in this way, it looks more like imperialism than anything else, and perhaps Jefferson should have taken his own advice.

The naval squadrons which Jefferson and his successors deployed across the world were not intended to extend American control over new territories, only to protect American merchants by ruining those states and individuals who sought to deprive them of their rights to life and liberty. Jefferson believed war to be an appropriate policy to deal with those mercenaries who bolstered their extortions and threats against the United States government by kidnapping and torturing American civilians.

The trouble is that China is increasingly liberalising its economy, whereas the USA is steadily deliberalising. Soon enough, China going up will pass the USA going down, unless these trends reverse.

Virtually the entire world is today undergoing some degree of economic liberalization, and relative to the rest of the world China’s reforms have not gone very far. Between 1980 and 2002 China global rank has, according to the Fraser Institute, risen from the 93rd freest economy to the 90th. Although it’s true that much of the world, including China, has for the last 20 years been liberalizing faster than the United States, they have so far failed in all cases to match or exceed the economic liberties enjoyed by Americans. Whether any of them will eventually develop a capitalist system as efficient and durable and that operating in the United States remains to be seen. Currently, the United States still remains the 3rd freest economy in the world, eclipsed only by Hong Kong and Singapore, countries which liberalized their economies not recently, but during the 1950’s.

The embargo is probably the only thing keeping Castro in power right now, since it is his main excuse for the failure of socialism. Compare it to the example of China and Taiwan. The trade and openness of Taiwan to China has undoubtedly been a major influence in the liberalisation of China.

The United States has realized since the 1970’s that because most of the world will not participate in the embargo, it will not succeed in weakening Cuba. Its purpose today is more so a statement of peaceful protest against Fidel Castro’s government, indicating to him that the United States does not intend to seek closer relations with his country. However, the removal of the US embargo would not serve to undermine the political or economic systems currently prevalent in Cuba. The entry of Taiwan into Chinese business during the late-1980’s was made possible only because of thoroughgoing market reforms made in China during the mid-1970’s. On the other hand, if the embargo with Cuba were lifted today, American foreign investment in Cuba would remain minimal and most foreign trade would be with the state-owned corporations that dominate the Cuban economy. Although a limited number of foreign firms have been allowed to establish themselves in Cuba since the early-1990’s, even now foreign investment of any kind is officially banned under Cuban law. In fact, it was this very issue that resulted in the imposition of the embargo in the first place. Recall that the first American sanctions were established in 1961 when Castro seized the property of American corporations in Cuba with little or no compensation. Castro’s refusal to allow free investment in Cuba was opposed by the United States. Similar sanctions and investment bans existed at various times between Taiwan and China, and it was not until 1987 that Taiwanese companies were first able to invest freely in China. By this time, the transition to capitalism was, unlike in Cuba, already well underway. Since 1987, economic liberalization in China has progressed steadily, although not a faster or slower rate than prior to that date. Political and civil freedoms, however, have not improved at all. The human rights foundation Freedom House has actually reported a significant decline in civil liberties since 1987, in part due to the repercussions of the Tiananmen Square incident. Despite increasing Taiwanese foreign investment, diplomatic relations between Taiwan and China are not much better than Cuban-American relations; at least the United States recognizes the autonomy of the Cuban nation. Whereas the United States has not threatened Cuba with invasion since 1962, the Chinese army was as recently as 1995 practicing amphibious landings and firing missiles within 40 kilometers of Taiwanese territory in a blatant attempt at intimidation. Although foreign investment has no doubt benefited the economic growth of both China and Taiwan, it has not made China particularly less hostile towards Taiwan, nor has it induced any political and economic liberalization within China. Considering Cuba’s apathy for significant economic reforms, free trade between Cuba and the United States would likely be even less effective at changing Cuba than Taiwanese trade has been at changing China.

There has been a veritable flurry of Bushite protectionist programs. There's the Vietnam catfish fiasco, the textile industry, the South Korean computer chips affair, drug reimportation, and so forth.

Reagan similarly levied a series of tariffs on foreign steel and textiles and inaugurated import quotas on foreign automobiles and semiconductors. Clinton sponsored oil and steel duties aimed at foreign imports from Brazil and Russia and established textile sanctions on China and luxury car quotas on Japan. Despite these specific incidents, America’s overall tariff rate declined from more than 6.6% in 1975 to 2.6% today. Judging from the veritable flurry of Bushite free trade programs that have been ratified so far, I expect that we will see from this administration more steady progress towards a globalized economy. The fact that this progress has been steady can largely be attributed to lingering hostile attitudes among the American population towards free trade. The 50,000-man anti-globalization protest in 1999 at the Seattle WTO conference and Ralph Nader’s decent showing in the subsequent presidential election are indicative of this. Because Americans are still worried about the effects of free trade, politicians aren’t willing to take a leap into the dark on this matter. The last time the United States took a true plunge towards free trade was ironically under Franklin Roosevelt, a man who believed he had earned an electoral mandate to institute radical and immediate change to alleviate the Great Depression. His administration implemented tariff reductions of more than 10%, one of the largest single reductions in tariff rates seen in American history.

Currently, social security funds subsidize other areas of government. Remove that subsidy and the government has to borrow more money from elsewhere, i.e. it exactly offsets the new loanable funds available. The only way to reduce government intervention is the old-fashioned way: cut government spending. But that isn't even on the table.

I think you may be forgetting to factor in the large reductions in government expenditures that will eventually occur once enough people have switched to private accounts. This year the US government earned 658 billion off the money in the social security trust, of which 502 billion was immediately paid to retirees, leaving a 156 billion surplus, comprising 8% of the budget, to spend on other programs. Although taxation would not necessarily decrease under a system of private accounts, expenditures would be cut vastly because each person would be paying for his or her own retirement. When Chile introduced private social security accounts in 1981 it had within several years convinced 50% of its population to rely entirely for their retirement on money they saved individually. If the United States can similarly motivate half of Americans to switch to private accounts then within twenty years or so the number of people receiving government pensions will also drop by half. If government payouts were to be cut in half, from 502 billion to 251 billion annually, then of course the government would be able to keep 251 billion more in surplus dollars than it previously could’ve. Even if this massive revenue increase does not open the door for a tax rebate, it should at least reduce the possibility of tax increases in the future. Some scholars estimate that today nearly 90% of Chile’s population relies largely or entirely on private accounts to provide for their retirement. If the United States can achieve the same thing then government revenues will eventually rise astronomically without any corresponding increase in taxation.

No, what you've described is a private investment account like a mutual fund or savings account. That's not what this is.

The current proposal is to allow each person to invest their money in their choice of a combination of index funds, of which five have been outlined so far including corporate bonds, treasury securities, or a variety of stock market portfolios. Although all the details have yet to be hammered out, it seems like individuals can also choose to make riskier investments so long as they agree to contribute more than a minimum amount to their account. Thus, the new system will give customers considerably more freedom of choice than public social security.

Government obtains money through coercion and awards it to various businesses.

Describing taxation as anti-capitalist requires the use of a definition of capitalism that is exclusively anarcho-capitalist. To the vast majority of economists capitalism simply refers to an economic system in which the means of production are privately owned and operated for profit, and there is nothing that makes such a system incompatible with a government funded by ‘coercive’ taxation. In fact, most economists argue that capitalism cannot function properly at all without a government that will at very least protect property rights. Most neoliberal economists such as Milton Friedman believe that government funded through taxation is “a necessary evil” in order to ensure that markets can operate free of chronic civil strife. This opinion is not restricted to ‘leftists’ like Friedman but is also popular with Austrian School economists, such as Friedrich Hayek, Wilhelm Ropke, and Henry Hazlitt. Friedrich Hayek, the only Austrian to have won a Nobel Prize for Economics, advocated that government, among other things, enforce contract law and provide welfare for the destitute (see The Road to Serfdom). Wilhelm Ropke, praised by the Ludwig Von Mises Institute as a man who “fought collectivist and statist power in every way an intellectual could”, believed that government, necessarily funded by taxation, should control a system of universal education and a network of public infrastructure (see The Social Crisis of Our Time). Henry Hazlitt has likewise received many accolades from the Mises Institute, yet he believed firmly that publicly-provided “policemen, firemen, street cleaners, health officers, judges, legislators, and executives… make it possible for private industry to function in an atmosphere of law, order, freedom, and peace” (see Economics In One Lesson). Hayek, Ropke, and Hazlitt, among other Austrians, agreed that an intrusive government is not only compatible with capitalism, but in fact serves to strengthen and enhance the free market by securing private property rights, encouraging entrepreneurship, and spreading opportunity. Even the thoroughgoing Austrian radical George Reisman has confidently declared that “The existence of freedom requires the existence of government” (see Capitalism: A Treatise On Economics). Therefore, it ought to be stressed that anarcho-capitalism is unique among economic philosophies for proposing that taxation and capitalism are irreconcilable. Not being an anarcho-capitalist myself, I disagree that government contracting to the private sector should be considered an ‘anti-capitalist’ practice.

Any tarriff is, by definition, mercantilist.

The only tariffs which are mercantilist are those specifically designed to bolster the national economy by shutting out foreign good and shielding domestic industries. Although I don’t know how much of America’s (already small) average tariff rate represents such protectionism, it’s likely that the WTO would keep purely mercantilist tariffs to a minimum. Tariffs which are designed to raise revenue for the government or to prevent diseased animals from entering the country (mad cow or foot-and-mouth disease, for instance) do not fit the definition of mercantilist. The only point I was trying to make though, is that, with an average tariff rate of only 2.6%, American advocates of free trade do not, by global standards, have much to complain about.

Ownership is the right to control. The US government has pretensions to the right to control a large part, if not most or even all, of the means of production on US soil by setting controls, laws, rules, tarriffs, etc.

This broad definition of ‘ownership’ effectively disqualifies every country in the world from being capitalist. There is no country that allows its citizens to use their property in a way that violates the law, yet that doesn’t mean they don’t own it, nor does it automatically make that country socialist. As I noted previously, most economists believe that a uniform set of public law is vital in any capitalist economy. Although George Reisman is fairly radical in his economic philosophy, even he is careful to nuance between a socialist economy like Cuba, a mixed economy like Sweden, and a distinctly capitalist economy like the United States. Remember that the world’s most fervent critics of socialism have included John Maynard Keynes, John Kenneth Galbraith, and Robert Heilbroner, who managed without difficulty to lean far to the left of Milton Friedman without converting to Marxism or socialism. Although every government in the world does maintain the right to seize private property, in the United States it is unconstitutional to do so “without just compensation”, thus implicitly recognizing that the right to ownership lies with the property holder. Although such eminent domain laws are sometimes abused, the power of government is, in most democracies, prudently tempered through the establishment of several ‘checks-and-balances’. The Supreme Court of the United States, for instance, frequently reviews the legality of property seizures, such as the case of Youngstown v. Sawyer, where the court overruled Truman’s attempt to nationalize the steel plants, or Dolan v. Tigard, where the court blocked a local government from expropriating a strip of land under zoning regulations. Thanks in part to these checks-and-balances, government does far more good than bad in ensuring the right of ownership. Few would doubt that, on a global level, by far the biggest threat to property rights is not government, but anarchy. Because of the importance of private property rights in a free market economy, capitalism today is much less stifled even in mixed economies like Sweden and Israel than it is in the chaotic conditions which prevail in most of the Third World. In defunct or defective ‘nations-states’ such as Liberia, Somalia, or Pakistan, large areas of the country are under the influence or control of warlords, tribal authorities, and organized criminals who have no checks or balances on their power. Under these fragile, powerless governments, capitalism is thoroughly dysfunctional. By contrast, stable, efficient governments rule over some of the world’s most prosperous people. In Sweden, for instance, government expenditures reach nearly 70% of its GDP and taxation rates are among the world’s highest, but would anyone argue that the free market functions better in anarchic Somalia than capitalist Sweden? The Swedish people are wealthy because they benefit from a transparent judicial system and effective police force. Somalia, however, has no police or judicial system to speak of, and real security can be bought only from armed gangs. Singapore, a third world country only sixty years ago, is more reliant on state-owned corporations than any other country in Asia and employs eminent domain more frequently than any other developed country. Yet would anyone argue that the free market is functioning better in chaotic Chad than authoritarian Singapore? In Chad, government authority is weak in the cities and non-existent in the countryside. Singapore, on the other hand, takes pride in its disciplined and rigid bureaucracy. Thus, the areas of the world where property rights are most tenuous today do not suffer from bloated, rapacious governments, they suffer from governments that, despite frequently claiming adherence to ‘socialist’ or ‘liberal’ principles, in reality wield little or no effective control over their own people. The Fraser Institute’s 2004 report on Economic Freedom In The World demonstrates this principle well. The United States and Canada were ranked alongside Sweden as the world’s top-15 most effective nations at protecting the right of private property. On the other hand, countries where property rights are exceedingly tenuous included Guatemala, Chad, and Tajikistan, where government expenditures do not even exceed 20% of their GDP. Liberal economist Mancur Olson, after having observed “Hobbesian anarchy” in countries such as these, notes that too little government has often proven to be just as bad for the economy as too much. In his recent book, ‘Power and Prosperity’, Olson concludes that “There is no private property without government”, and argues that only markets which are “governmentally contrived” can ensure economic progress. The popular political scientist Francis Fukuyama elaborates on this matter further in his latest book. Fukuyama anticipates that one of the greatest challenges of the 21st-century will be reforming these “failed states”, as he calls them, by strengthening their “core functions”, particularly their vital role in stamping out ‘the rule of lawlessness’ and thus guaranteeing the right to property. Therefore, the existence of government isn’t inherently anti-capitalist, and limited governments like those of the United States, Australia, Japan, and other countries, have often served to promote and propagate the development of free markets. I thoroughly disagree that either the economy of the United States, or the overall economic and social policy of the present US administration, can accurately be described, in aim or effect, as socialism. In reality, the United States is, and always has been, a pinnacle of capitalism in the West, and in the world.

In a State, good law is a public goods problem. David Friedman identified that where a coercice State exists, it is in people's best interests to vote for laws that reward them at the expense of other people.

There are enough checks-and-balances in the United States and Canada that this usually does not happen in practice. Although it's true that each member of the House of Representatives and the House of Commons is influenced by the demands of their constituents, they are equally influenced by other forces and institutions which serve to moderate self-interest. For instance, each delegate is responsible to his or her party, and therefore advocates an agenda similar to the party’s platform. In the United States, for instance, there are only two parties with any clout in government, and each party promotes one set of policies which vary from election to election. Obviously, however, America does not consist of only two highly partisan factions determined to undermine one another and use the state to reward themselves. The thousands of diverse ethnic, social, and political groups that comprise the United States each have their own special interests far beyond what only two parties can offer. Nonetheless, those who seek a voice in politics must compromise in order to fall behind either the Democrats or the Republicans. In order to avoid losing their bases of support, neither party can advocate a policy which would blatantly disadvantage one of those bases to the benefit of another. Because the Republicans and Democrats both represent a vast conglomeration of thousands of special interests, each interest must compromise their ambition to reach an internal consensus. Such accommodation becomes even more necessary due to the checks-and-balances established within the American government. For instance, before a law can be passed it must receive majority approval by two legislative houses consisting of delegates who represent different constituents and geographical bases. Moreover, when the House of Representatives is controlled by a different party than the Senate, then the party introducing the legislation cannot stop at appeasing their own members, they must also ensure that each bill avoids inconveniencing their opponents’ supporters as well. Furthermore, if one party does gather enough internal support to promote a policy that actively undermines their political opponents, and manages to get it through both segments of the legislature, they will still have to deal with the executive veto which the President may exercise over any bill, as well as the Supreme Court, which may strike down a law as unconstitutional.

Thus, in order to ensure that a law is passed, it has to be in the interests of the various factions comprising the party that controls the House of Representatives. At the same time, it must also be in the interests of the various factions comprising the party that controls the Senate. It has to be in the interests of the President and his advisors as well. Finally, it has to be in the interests of the members of the Supreme Court who interpret the constitution. Any one of these groups has the power to throw out faulty legislation. For those laws provisional on the support of state and local governments, there is yet another level of potential bulwarks. Although it’s true that the separation of powers isn’t as distinct in Canada as in the United States, like the United States Canada does maintains an independent judiciary to interpret the constitution, strong provincial governments, and a House of Commons representing both party and constituent interests. The consensus politics at work in the United States and Canada force millions of individual interests to cooperate to create policies which will benefit the entire country. A compromise coalition such as this will almost invariably serve the public interest.

Although most laws apply equally to all citizens, there are of course intentionally discriminatory ones as well. Having passed through a rigorous legislative process, such laws are determined in a bipartisan consensus to benefit the public good. However, it is thanks to the checks-and-balances of democratic political systems that the few blatantly discriminatory policies that are promoted within the United States or Canada are not so great as to cause significant harm to those disadvantaged. For instance, despite affirmative action, which burdens those of European descent, whites still have higher average real incomes than blacks or Native Americans; despite progressive taxation, which imposes on the wealthy, the gap between the rich and poor remains the same. David Friedman’s theory of the state as a tool of avaricious special interest groups may perhaps be valid in dysfunctional democracies like populist Venezuela, oligarchist Indonesia, or ethnically-polarized Nigeria, but in most Western democracies, especially the United States, his prophesy has not materialized to a significant degree.

[mirror]

WTF is a neocom?