Archive for the ‘Liberty’ Category
Yesterday (September 29th ) was Ludwig Von Mises’s birthday. The man whose guiding principle in life was – “Tu ne cede malis sed contra audentior ito” . Translated, this means
Do not give in to evil but proceed ever more boldly against it
In my opinion he was the most honest man to have walked the earth in a long long time. When he revived the Austrian school of economics and patiently explained the reason why markets and only markets can bring prosperity and happiness, his ideas were brushed away as out-dated by his contemporaries, who were drunk with Socialism. When the mighty evil empire came crumbling down in the nineties, Mises was finally proved right. He had conclusively demonstrated fifty years earlier that Socialism was an impossibility and would only result in poverty, starvation, slavery and death whenever and wherever it is tried. Even some prominent socialists admitted that Mises had been right all along.
Personally too Mises was a gem of a human being. Though an ardent advocate of Capitalism and prosperity, he had little material profit in life. No university was willing to open it’s doors to him, for fear of being targeted by the vindictive socialist intellectuals. While he advocated classical liberalism and tolerance in social matters, in private life he was a deeply conservative man. He married just once and lived a content life with his wife till his last breath. His wife recounts an anecdote in her bio-graphy of him, which tells us a lot about his deeply compassionate nature. Mises who fought the violent labour union ideas that were being promoted at the time, once refused to change his ageing secretary when she could no longer efficiently work. He said that if he removed her, she would find it tough to make ends meet and said he could manage with her. Contrast this with the great friends of the labourers in the Soviet Union, who mercilessly massacred the very same laborers who trusted them. Mises would not compromise his beliefs at any cost. Once he stormed out of a meeting of economists who were discussing various methods of collecting income tax, declaring that they were all a “Bunch of Socialists”.
Even today Mises’s contribution is rarely acknowledged. Today the mainstream media and academic establishment occasionally come down from their throne and acknowledge the Austrian school’s remarkable ability to explain so many things that confounds the Ivy league schooled economists. But even then they only mention F A Hayek’s name. F A Hayek was Mises’s student, who brilliantly expanded Mises’s business cycle theory and even got the Nobel for it. But Hayek was soft towards his opponents. He attributed all their crimes against humanity to just intellectual mis-judgement. But Mises was more forthcoming and would call a spade a spade. He never had kind words for the Socialists. That’s probably why no university will ever mention that such a man walked on the earth and provided us with all the tools necessary to defend civilization from the hands of the Socialist butchers. His magnum opus – “Human Action” is a must-read for every honest man who loves his and his loved ones’ freedom and wants to preserve it. But beware. Mises is a wise old man – like the Bheeshma of our own Mahabharatha. His moral convictions are incorruptible. He would patiently but surely prove to be wrong, all that our collectivist intellectuals teach us. A true teacher does not provide one with fish. He teaches one how to fish. Mises teaches us to think for ourselves. He doesn’t force anything on us. He does not manipulate our emotions. His voice is calm, clear and dis-passionate. At the end we learn what is true and what is false. What is right and what is wrong. But it is a different question what we choose to do with this knowledge, for we have to remember that
Truth will set you free. But it will make you miserable first.
You can read a short bio-graphy of Mises as penned by Rothbard here
And a video on the man he was,
Some quotations of his, that demonstrate his courage, wisdom and integrity
If history could teach us anything, it would be that private property is inextricably linked with civilization.
Once the principle is admitted that it is the duty of the government to protect the individual against his own foolishness, no serious objections can be advanced against further encroachments
The common man is the sovereign consumer whose buying or abstention from buying ultimately determines what should be produced and in what quantity and quality
It is irrelevant to the entrepreneur, as the servant of the consumers, whether the wishes and wants of the consumers are wise or unwise, moral or immoral. He produces what the consumers want. In this sense he is amoral. He manufactures whiskey and guns just as he produces food and clothing. It is not his task to teach reason to the sovereign consumers. Should one entrepreneur, for ethical reasons of his own, refuse to manufacture whiskey, other entrepreneurs would do so as long as whiskey is wanted and bought. It is not because we have distilleries that people drink whiskey; it is because people like to drink whiskey that we have distilleries. One may deplore this. But it is not up to the entrepreneurs to improve mankind morally. And they are not to be blamed if those whose duty this is have failed to do so.
Freedom is indivisible. He who has not the faculty to choose among various brands of canned food or soap, is also deprived of the power to choose between various political parties and programs and to elect the officeholders. He is no longer a man; he becomes a pawn in the hands of the supreme social engineer.
A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings
There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final total catastrophe of the currency involved.
Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles. But when the fresh impression of the crimes of the Bolsheviks has paled, the socialist programm will once again exercise its power of attraction on the masses. For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted to really combat socialism, it would have to oppose it with ideas. There is, however, only one [emphasis in original] idea that can be effectively opposed to socialism, viz., that of liberalism. It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error*
I included the last quote specifically because that is one and the only quote that can be used against Mises. When the Socialists can no longer pretend that Mises did not exist, they resort to slinging mud that he was sympathetic to Fascism. This is his quote that they use to support their accusation. Nothing can be farther from truth. The above quote has to be specifically understood in context. What Mises says is true and was the prevalent view in Europe then. Lenin and Stalin had massacred millions of Russians in their labour camps and were openly threatening the free countries. The spectre of communism was definitely haunting Europe as Marx had black-mailed. That is why the western nations adopted a policy of appeasement towards Hitler, hoping that he will contain the onslaught of Communists. But it proved to be a jump from the fire to the frying pan. Mises was talking about this prevalent view only and rightly pointed out that Fascism will not prevent the spread of Communism. He then proceeded to demonstrate in his works that Fascism was also Socialism in disguise only. Infact the Nazis and the Fascists themselves acknowledged that Mises was their enemy. When Hitler’s army invaded Austria, the Nazis stormed Mises’s residence to arrest him. as they were irritated by his ideas of liberty. Fortunately Mises had already escaped to freedom. And not surprisingly the Russians also wanted Mises and his works in their hands. When it came to destroying freedom, Fascism and Communism joined hands.
Freedom is still the most radical idea of all – Anonymous
When I started this blog, I wanted this to be a place where I could explain to people how and why free markets work. And I read verociously, collecting evidences to prove the efficiency of free markets. But in the process I have come to realise that this is not an argument that can be won solely on the merit of evidence alone. I for example did not become convinced of the benefits of free markets because I read some obscure economics text book filled with statistics of South Korean economy out-performing India. I did read them, but only later. Before I came to love free markets, I fell in love with something else first – FREEDOM. My college had an electrifying effect upon me in the first few months. I was a pond fish thrown into the ocean. I learnt my first lessons on freedom there. And freedom is a harsh teacher. When you are under the all protecting embrace of some one, you can afford to be irresponsible. You have neither freedom nor accountability. But a day does come in everyone’s life when one has to leave the safety of one’s nest and find his own place under the sun. Then we realize that freedom is not free. With it comes great responsibility. You have to remember that every word you say is a promise and every act you do is set in stone. This huge accountability is what makes freedom too hot to handle for many. But even during the worst of days when I had messed up everything ( There were many ), never once did I want to trade my freedom for security. And that is something I will always be proud of. Freedom is the lifeblood of my soul. It is not for sale.
As I fell in love with freedom, I wanted to make sure that she will never leave me. I searched for the best way to defend my newly found love. I still remember the night when Atlas Shrugged shattered all my existing notions of justice. Ayn Rand is a ruthless fighter. She is the perfect match for that wily old fox, Karl Marx. Ayn Rand was not an economist. She talks little about markets. Infact her heroes often hate ordinary people like us who in fact constitute the markets. But she convinced the world that there is justice in freedom. That all talks of morality are meaningless without freedom. I have moved on after Atlas Shrugged. Ayn Rand cannot explain the world. Her philosophy is too rigid and uni-dimensional. You cannot convince people that selfishness is a good quality. She has created a cult following. And cults are poisonous to freedom. But this is not to speak less of her influence on the philosophy of freedom. It is just that freedom is a very simple and natural idea and has to be supported by a simple and intuitive philosophy.
That philosophy is called Laissez Faire. It literally means “Leave Us Alone”. Western nations were governed by this philosophy in the late nineteenth century and they sowed the seeds of the greatest triumph of mankind in the several thousand years of its existence, when Capitalism lifted millions out of poverty within a span of a couple of decades and human population witnessed a dramatic boom.* America and Britain, the two freest nations on earth also became the most prosperous. People realised that markets had the midas touch. Whenever people were left free to trade, they generated unimaginable quantity of wealth. Then there were no economists telling people how to spend their money and how to live their lives. The subject of macro-economics was not even born. People did not care about GDP. They cared about freedom. The statesmen of that age were wise enough to know that freedom was the absolute necessity for human life. And once people are left free, they can generate all other material comforts.
Today laissez faire and capitalism are dirty words. The condition is not as bad as the 60s and 70s when several youngsters spent the prime of their life trying to be their country’s Che Guevara. ** But still even those who understand the benefits of capitalism are apologetic about it. If only I had a nickel everytime I heard someone say this – “Socialism is noble, but Capitalism works”. What is noble about an ideology that refuses to grant people even the basic right to spend their hard earned money as they please? What is noble about attaining equality in starvation? Why is it so important that everyone should be equal, when the most special moments in one’s life are the ones when he realizes that he has done something sublime, something no one else could have done? What is progressive about public ownership of property, when all of human civilization is due to man’s attempts to attain greater privacy and control over one’s life?
Do not confuse charity and socialism*** Socialists hate charity, because it reduces the need for an all encompassing big state. The root of socialism is envy. Envy poisons human mind. It makes one want to destroy rather than create. That is why socialists never talk about creating wealth. They always want to re-distribute others wealth. In George Orwell’s words socialism is ” A boot stamping on a human face, FOREVER“.
However poisonous it is , Socialism is an idea. And ideas cannot be fought using facts. If that was possible, just a look at the Korean peninsula would have sufficed. The difference between South and North Korea is all the difference there is between Capitalism and Socialism, between the morality of freedom and the (im)morality of equality. But people still love to flaunt Che Guevara on their shirts as if he were a rock star. We have to fight ideas with ideas. To believe in free markets and capitalism, one has to believe in freedom first. Milton Friedman, the most popular economist on the side of freedom said this -“Underlying most arguments against free markets is an argument against freedom itself”.
Today free markets have clearly shown their superiority. But we should not forget that we are always one generation away from tyranny. It takes just one determined mad politician and a crisis to lose this fragile freedom we have. Freedom needs to win it’s battle against equality. If you are convinced of the tremendous importance of this cause, join me in defending freedom. Educate yourself about the working of free markets. Convince others that freedom works. I am planning to share whatever I have understood about the economics of freedom in a series of posts. Spread the word if you find that useful.
There is one scene from the first episode of FRIENDS that inspires me whenever I watch it. Rachel has freed herself from her benevolent family, but still uses her dad’s credit card to shop. Her new friends convince her to shred the cards. Then Monica tells Rachel this – ” Welcome to the real world. It sucks. You are gonna love it“.
To me that sentence captures all that I have learnt about freedom.
Noted in Passing:
* Yes. Do not be frightened by population. Despite all it’s problems it is good that mankind is populating the earth and not rats
** Che was a monster. To consider him an icon of liberty is equivalent to holding Madonna as an icon of chastity
***Anbe Sivam, a Tamil movie does this dirty trick
It is not midnight in America yet. So I guess I can very well make this 4th of July post. What better day to start a blog on free markets than the day America was born.
Someone said this – “There is a word sweeter than mother, home or heaven. That word is liberty.”
I know another word – America. A word that has given hope and inspiration to millions of frustrated souls around the world. Whenever the rulers of their land became predators, whenever their life and property were no longer theirs, people always had one escape – a flight to the land of opportunities. America was the exceptional nation, a nation devoted to a great cause, an island of hope and joy amidst the hell that the world was becoming. It was indeed a paradise on earth. It was.
This post will not be a commentary on the present state of America. It will just be an attempt to remind myself and the world around what the idea of America means to us. Some people seem to relish America’s fall from grace. I have a lot of issues with the way America functions today. But to discredit the idea of America itself? The day the American dream is finally forgotten, will be the day when we would have hit the final nail in the coffin of civilisation and prosperity. It will be the day when finally barbarians would have run amok on our cities.
On this day in 1776 was born the American dream. This was the day the declaration of Independence was ratified by the Congress. No other document before or after has so beautifully captured the essence of human struggle for liberty.
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.”
It is hard to believe that this was written two hundred and fifty years ago. Freedom is still a radical idea to many. To constitute a nation with freedom as the underlying fabric required great courage, imagination but more importantly enormous restraint on the part of the founding fathers. These were a group of men who had just won a war and had the immense trust of their people. But they had the farsight not to take this trust for granted. They did not misuse this trust to create a government that would have given them personal profit. Nor did they impose their vision of utopia on the people like the other bloodier revolutions did. They were wise enough to understand the best government is the least government. And they codified this into a written document to protect generations to come. Note the crispness of the words and the succinctness of the message. The document declares that men are created equal, thus shunning all the elitist and aristocratic impulses that characterised Europe’s rulers then. But the founding fathers were also careful on what the word equal meant – Equal before law, not the monstrous idea of compulsive equality that other latter day revolutions imposed on their people. The words are very clear – every man has an unalienable right to his life, liberty and pursuit of happiness. The keyword is pursuit. Each person has to pursue his own happiness. No one else has the right to hinder your pursuit as long as you don’t hinder someone else’s. All of America’s prosperity was due to this single line. People are free to profit from their dreams. Call it whatever you want – free market, capitalism, laissez faire. The idea is simple, what I do is none of your business as long as it doesn’t touch your nose. If America is to stay the land it’s founding fathers meant it to be, then it can only be a capitalist nation . And what role does government play here then?Again it is very clear, governments are instituted among men only to secure these rights. In other words government’s only business is to protect the people’s right to their life and property. They have made it very clear that conducting business is not government’s business. And the framers also make it very clear that a government is just only as long as it has the consent of the governed. This leaves no room to doubt that the framers did not intend for America to become an imperial power.
The declaration is an exceptional document that attempted to create an exceptional nation. And it did indeed serve the nation well for several years. A century later, America had become one of the most proserous nations on earth. And it derived it’s prosperity from the sense of liberty, innovation, competitiveness that characterised it’s people. The American entrepreneur was a special breed of mankind. He was the ultimate ideal of manhood. He was the one who took challenges head on. One whose spirit of resilience was matched only by his thirst for freedom. For the first time in human history, men from ordinary station grew to extra-ordinary prosperity within a life time. All this was achieved peacefully, without the violent wars that characterised Europe. At the dawn of the twentieth century it would have seemed to the average American that he was in God’s own land. No they did not have air cooled apartments we have today. They did not have fancy cars to drive around. They did not have TV, they did not have internet. But they had one thing I am not sure Americans have today- Freedom. Freedom to lead their lives as they pleased. People did not emigrate to America then to get free food, free lunch or free health care. They went there because they knew that America was the only nation on earth where any person with a great idea in mind, a few saved pennies in pocket and a burning ambition in the stomach could make it big in life. And many did. There were innumerous rags to riches stories. And prosperity was not confined to the best among men. America’s was a unique system where a person could get prosperous only be making others prosperous. Ford became rich by bringing automobiles within the reach of common man. Transport was no longer a luxury. Edison was not a lonely scientist working on a stupid mathematical problem. He was a prolific inventor who profitted by giving his countrymen a new product every day. The Statue of Liberty stood proud and tall knowing that she was indeed the beacon of hope and aspiration for millions. At that point of time, any person who had said that the twentieth century would be a century of wars, mass murders, endless expansion of government and growth of horrific ideas like Communism and Fascism would have been dismissed as a crackpot.
A decade later, the first world war would break out. America would drag itself into the conflict. Lenin would begin the mad experiment in Russia. A few years later Hitler would rise to power in Germany. Thirty years later New Deal would have been put in place in America that would send a tailor to jail for daring to price less than his competitors in the free land. But that is another story.