Lockdowns have drastic consequences. Small businesses are closing for good at an alarming rate. Almost 100,000 were gone for good as of September, according to a Yelp survey. The impact on children and young adults is also enormous. Children are out of school, and a recent study shows the loss of learning is significant.

More heartbreaking are increases in mental health issues, abuse, and suicide. A few recent high-profile suicides among young teens, including one eleven-year-old on camera during a distance-learning session, drive the problem home. Opioid deaths are also increasing in over 40 states.

We are told this is the cost of controlling an unusually deadly virus by selected health experts and the corporate media. In fact, Bill Gates appeared on State of the Union with Jake Tapper and said that even with a vaccine, we won’t get back to “normal” until 2022. Dr. Anthony Fauci has told us that even with a vaccine, we will need to mask, social distance, and continue to beware.

One would think in light of these dire predictions and given the horrible toll the response has taken on the economy and young people, the excess deaths due to COVID-19 would be through the roof. But federal data says that does not appear to be the case. The following chart shows annual deaths in the United States, life expectancy, top causes of death, and average deaths per day in the country. Data for 2020 is provisional through December 12th, and all data is taken from the CDC or the National Center for Health Statistics (NCHS):

It appears that an excessive number of deaths for the year is not likely. To reach the level of total deaths in any year since 2017, the United States would need to experience between 8,395 to 10,579 deaths per day every day beginning on December 13th. This would be quite a feat given the fact that the case and infection fatality rates for COVID-19 have fallen significantly since the early pandemic with improved treatment.

This data supports an observation Neal Ferguson from the Imperial College made in testimony earlier this year. Ferguson noted the following when he testified in front of the U.K. Parliament:

“We don’t know what the level of excess deaths will be in this epidemic,” Ferguson said. In other words, we don’t know the extent to which COVID-19 will increase annual deaths above the level that otherwise would have been expected. “By the end of the year, what proportion of those people who’ve died from COVID-19 would have died anyhow?” Ferguson asked. “It might be as much as half to two-thirds of the deaths we’re seeing from COVID-19, because it’s affecting people who are either at the end of their lives or in poor health conditions. So I think these considerations are very valid.”

From the comparison of annual deaths from all causes, it appears the COVID death percentage may be even higher. In these deaths that may have been pulled forward, we have seen excess deaths with dementia and heart disease patients who contracted COVID-19. Further, researchers in New Jersey found that 89% of patients who died with COVID-19 had a Do Not Resuscitate (DNR) order in place before testing positive for the virus in three hospitals. Having a DNR generally means an individual has a terminal diagnosis. In this study, that would mean nearly 9 out of 10 deaths were pulled forward.

Even in an analysis of deaths during the height of the pandemic, from March 1st through August 1st, there is absolutely no correlation between public policy, such as lockdowns and mask requirements, and excess deaths. Georgia and Florida experienced a ratio of 1.16 and 1.17 between observed and expected deaths. These states closed late in March and opened in late April or early May.

New York and New Jersey, which had some of the strictest measures in place for months, saw a ratio of 1.65 and 1.60. Florida and Georgia have also had a persistently lower deaths-per-100,000 rate than New York and New Jersey for the entire pandemic. They come in at roughly half of the northern states, despite having almost no mandatory restrictions.

A study in the U.K. has noted a pattern consistent with Ferguson’s prediction, the New Jersey study, and the lack of correlation between pandemic control measures and outcomes:

Conclusion: a significant amount of displacement has occurred that is reflected in the lower than expected deaths in older age groups and Alzheimer and dementia deaths through the summer. In-hospital deaths with a positive covid test are the highest for any setting; however, they contribute much less to the overall excess in deaths. Deaths in the home remain persistently high, and yet they receive little attention.

In other words, because of COVID-19, deaths occurred a few months earlier than might have been expected in particular populations, including the elderly and dementia patients. The increase in deaths at home concerned U.K. health officials earlier this year because they feared they were a result of people not seeking care or not receiving care because of the pandemic.

It is long past the time for the corporate media and health bureaucrats to pay attention to dissenting voices on lockdowns. The current trend appears consistent with COVID-19 accelerating deaths in people, mostly the elderly, who are already suffering from advanced illness. Pneumonia does this, as do certain types of influenza. History will look back on the severe and extended reaction to the COVID-19 pandemic as one of the greatest overreactions in history.

Stacey Lennox, PJMedia

The American welfare state is expensive, of limited efficacy, and crowds out better options for alleviating poverty.

The US welfare state is much larger than commonly believed. The federal government alone funds and operates more than 100 anti‐poverty or welfare programs, at a cost of more than $700 billion annually. State and local governments contribute an additional $300 billion to these programs, meaning we spend more than $1 trillion per year on welfare. In fact, since Lyndon Johnson first declared “war on poverty” in 1965, anti‐poverty programs have cost taxpayers more than $23 trillion (on an inflation‐adjusted basis).

The question isn’t whether all this spending reduced many of the worst deprivations of material poverty. Of course it did, and does. As George Mason University economist Tyler Cowen notes, under most classical economic theories, “a gift of cash always makes individuals better off.” $23 trillion is a huge sum of money by any measure. Regardless of how dim a view one takes of government competence in general, it would be virtually impossible for the government to spend $23 trillion without benefiting at least some poor people.

Measurements of poverty that fully account for welfare benefits, both cash and non‐​cash, show that the real poverty rate is far lower than the official census‐​bureau estimates. And, even a quick eye test shows that the sort of deep poverty that was widespread as recently as the 1960s–where large numbers of the poor lacked electricity or running water, or where malnutrition was widespread–has been all but eliminated.

This has led some to argue for continuing or even expanding the welfare state. But that would be the wrong lesson to draw. There remain ample reasons to question our current approach to fighting poverty.Among them:

THE WELFARE STATE IS UNSUSTAINABLE

Given the escalating cost of anti‐​poverty programs, it is fair to ask, even if those programs provide short‐​term benefits to the poor, whether they are sustainable into the future without seriously endangering economic growth. After all, one cannot redistribute wealth that doesn’t exist.

Even if welfare spending is a relatively small portion of overall federal spending, especially when compared with programs for the elderly like Social Security, Medicare, it nonetheless imposes a significant burden in the form of taxes or debt. Measured as a percentage of GDP, federal welfare spending has increased more than fivefold, from just 0.83 percent of GDP in 1965 to 4.4 percent today.

Moreover, even if future welfare spending can be accommodated without increasing debt or taxes, such spending will likely occur at the expense of other forms of government spending that are more likely to lead to economic growth. Most social welfare spending is pure consumption‐​based spending, rather than anything that could even tangentially be considered an investment. As such, it is far less stimulative of future growth.

Finally, as Tyler Cowen points out, both the poor and taxpaying non‐​poor will reduce their labor force participation in a welfare state. As a result, future economic growth may be slower than it has been in the past. Any policy that encourages more otherwise‐​able workers to drop out of the labor force would further slow growth.

Hundreds of years of history show that a growing economy lifts more people out of poverty that any government program. Yet, the welfare state perversely reduces that growth. This means not only more impoverished people in the future, but also fewer resources with which to provide welfare benefits. That, in turn, means higher taxes or debt, which will further slow growth, and so on, in a vicious cycle. Thus, even if we agreed that our current welfare policies were beneficial and wished to continue them, they may not be economically optimal.

THE WELFARE STATE IS BUREAUCRATICALLY INEFFICIENT

As noted above, the federal government alone runs more than 100 anti‐​poverty programs. Some 70 of these provide benefits directly to individuals, while the remainder are targeted to low‐​income communities. On top of this, there are a multitude of state and local programs. These programs come with overlapping (and often contradictory) eligibility rules, work requirements, and other restrictions, rendering the American welfare state a patchwork system of unaccountability and opaqueness.

It becomes difficult, if not impossible, to determine which programs are effective and which are not, a problem compounded by their being overseen by at least nine cabinet departments, six independent agencies, and dozens of congressional committees. Moreover, the systems complexity can mean that similarly situated individuals can receive wildly different benefits, based solely on their ability to navigate the system. And, while fraud and abuse are smaller than many believe, there is still far too much waste and duplication.

THE WELFARE STATE GETS THE INCENTIVES WRONG

It seems obvious that a successful welfare state would promote–or at least not inhibit–behaviors that have been proven successful at lifting people out of poverty and reducing long‐​term dependence, notably work and marriage. However, our existing welfare programs too often create precisely the wrong set of incentives.

Take work, for example. The interplay of taxes, welfare benefits, and the costs of employment can mean that someone leaving welfare for a job faces some of the highest marginal tax rates of any group. As soon as an individual earns outside income, welfare benefits begin to phase out. At the same time, the new worker must now pay taxes (payroll taxes, for instance, start with the first dollar of income). And, the worker will now incur expenses for such things as transportation, work clothing, and child care. In some states with very high welfare benefits, people can actually be left worse off financially in the short term by taking an entry‐​level job.

THE WELFARE STATE FAILS TO ADDRESS PEOPLE’S REAL NEEDS

It is impossible to walk through many poor neighborhoods, from inner cities to isolated rural communities, and believe that our welfare system is working the way it should. These are areas where the government has spent heavily to reduce poverty. A high percentage of residents are receiving some form of government assistance. And as a result, the poor may well be better off financially than they would be in the absence of government aid. Yet no one could honestly describe those communities or the people living in them as thriving or flourishing in any sense of the word. By that measure, at least, our welfare programs are a failure.

Perhaps The Economist put it best:

If reducing poverty just amounts to ushering Americans to a somewhat less meagre existence, it may be a worthwhile endeavor but is hardly satisfying. The objective, of course, should be a system of benefits that encourages people to work their way out of penury, and an economy that does not result in so many people needing welfare in the first place. Any praise for the efficacy of safety nets must be tempered by the realization that, for one reason or another, these folks could not make it on their own.

If we were to consider welfare according to Maslow’s Hierarchy of Needs, we do a mostly successful job of tending to the base of the pyramid–people’s essential physiological needs. Nearly all Americans have food, shelter, clothing, and so on. But the higher up the pyramid we go, the less our welfare programs accomplish. In the end, we do next to nothing to assist people with needs on the social, ego, or self‐​actualization levels.

That is because satisfying those needs requires a degree of autonomy and self‐​sufficiency that is compromised by reliance on government assistance. People cannot be said to have control over their own lives if they are perpetually dependent on others.

Adding to this, welfare programs are painfully paternalistic. The vast majority of welfare is provided not in the form of cash, but as “in‐​kind” benefits like food, housing, or health care. The government decides how the poor should budget or spend their money. Moreover, legislators often attach a variety of demeaning conditions to benefits. Work requirements are widespread, and might even be justified, but some state legislators also have attached restrictions preventing the poor from purchasing seafood or limiting the number of daily ATM withdrawals they can make.

THERE ARE BETTER ANSWERS

Finally, we should recognize that welfare is not the only way to help the poor. It is possible to achieve similar or even greater levels of poverty reduction through other mechanisms.

For example, private charity is capable not only of dealing with material poverty but can often do a better job of dealing with underlying problems. Americans, after all, are extraordinarily generous. In 2015, we donated $373 billion to charity. Roughly $265 billion of that, or fully 71 percent, was given by individuals (the rest came from corporations, foundations, and other organizations). More than 83 percent of adult Americans make some charitable contribution each year. True, a substantial portion of that giving went to entities like universities, hospitals, and the arts, rather than to direct human services to the poor. But even so, Americans voluntarily gave tens of billions of dollars to help the poor. And it wasn’t just money. We also donated more than 3.2 million hours of our time. Roughly 65 percent of Americans perform some form of volunteer work. And that doesn’t include the countless hours given informally to help friends, family members, neighbors, and others outside the formal charity system.

Additional giving may be necessary to replace the welfare state, of course, but numerous studies have documented a “displacement effect,” whereby government programs crowd out private giving. For example, a comparison of charitable giving across countries confirms the finding that government welfare spending reduces private charitable efforts. Among rich countries, those with lower social expenditures as a share of the economy see a higher portion of their population donate to charity.

At the same time, other reforms–of education, of the criminal justice system, of barriers to economic participation–can reduce the need for welfare. Nothing will do more to reduce poverty than allowing the poor to become full participants in a growing economy.

Libertarians share a goal with those across the ideological spectrum: to reduce poverty and enable every American to rise as far as their individual talents will take them. Our answer to poverty has largely been to create more and more programs, while throwing more and more money at the problem. That has failed to truly empower the poor. There are better alternatives.

Michael D. Tanner, libertarianism.org

All of a sudden Elon Musk has become the second richest man in the world. How did he do it? With Tesla, the electric car company, whose stock has risen 650% this year.

How come I always miss out on these deals? It’s not as if Tesla is a secret.

Sensibly, Musk is heading out of California for Texas. After all, why would he want to pay California state income tax on his stock options?

But, let’s face it, Musk has become the second richest man in the world on gubmint subsidies. Electric cars, batteries, you name it: our ruling class is all in on it: to save the world from climate change, and there is money to be made.

Now I don’t know if Elon Musk believes in climate change. But he sure knows how to make money on it.

And now that it looks like Joe Biden is going to steal the election fair and square in the good old American tradition, it’s first and ten for climate change, and both the opponent’s cornerbacks have been sent off the field.

James Delingpole is mourning today that the climate change skeptics have lost. He quotes a Telegraph columnist: “Whatever the merits of their case, climate change sceptics have lost the argument.”

Well, yes, because the whole global ruling class is all-in on it. But why? It’s simple.

Ruling Class gotta have a war.

It’s not hard to figure out. The whole point of being the leader of your tribe, your barony, your princedom, your nation, is to be the brave leader braving everything to save your country — or our planet.

Why else do you think President Wilson injected the U.S. into World War I? Or President Roosevelt into World War II? Or President Johnson into the War on Poverty? Or Joe Biden into the Double War on Climate Change and Systemic Racism?

Because there is nothing more superfluous in this world than a ruling class without a war to fight.

Ruling Class gotta have a war.

That’s why the Dem governors are all rehearsing Shakespeare’s Henry V.

Once more into the mask, dear friends, once more;
Or close the bar up with our COVID dead.

You might ask: what in the world was King Henry doing in France, attacking the innocent town of Harfleur? Didn’t he have enough systemic problems back in England?

You might just as well ask our Democratic governors what bombing bars and restaurants until the rubble bounces is all about.

But if we are going to have a global war on climate change, we may as well do what Elon Musk, the white guy from Pretoria, South Africa, is doing. Go all in as a war profiteer.

But do you notice that nobody is calling Musk a war profiteer? At least not yet? That is because all my liberal neighbors are queueing up to buy Teslas. There is a fine line between a war profiteer and a Henry Kaiser, heroic builder of Liberty ships, and I don’t have the moral chops to know that line. Let’s see what La Wik has to say:

A distinction can be made between war profiteers who gain by sapping military strength and those who gain by contributing to the war.

Ah yes, silly me. Elon Musk is in the clear, because he is gaining “by contributing to the war.”

And then there is the war on systemic racism. Do you know, I suspect that there is nothing to compare with the ruling class’s usual war except a Holy War.

Ruling Class gotta have a war.

You see, in a Holy War, the ruling class politicians get to join up with the ruling class priests. Boy, oh boy, do they have fun together. Of course, we moderns have to go back eons to find a Holy War to study, way back in the dim and distant past in ancient China when the political priests decided to purge all the Evil Ones from society in the Maoist Great Proletarian Cultural Revolution.

So, what do you think our Great Woke War on Systemic Racism is all about? Chopped liver?

Yep, ruling-class men still need to show that they are man enough to send the Forlorn Hope into the breach, and ruling-class women still need to out-virtue-signal the other women, who are probably witches, anyway.

For if the ruling class doesn’t have climactic climate change wars and moral systemic racism wars to fight, what would the robin do then, poor thing?

Elon Musk has the answer to that: Go to Mars! And I dare say that in a twinkling of a nose-ring, the Wokies will be complaining about Systemic Spacism, and the next Sandy O will be advocating for a Blue Space Deal.

But I tell you what I think of those next-gen Wokies: “To the Moon!”

Christopher Chantrill @chrischantrill runs the go-to site on US government finances, usgovernmentspending.com. Also get his American Manifesto and his Road to the Middle Class.

The concept of “natural rights” was core to America’s original Bill of Rights and Declaration of Independence. “Natural rights” means you HAVE rights whether they are recognized, or not. Rights have OBJECTIVE power. Tyrants despise this concept. They view rights as things for themselves to give out or take away, based upon whatever whims or standards they deem acceptable. That’s why the tyrants in charge of America’s statehouses are so perversely gleeful as they issue new edicts by the day. You have to understand: America’s governors and mayors are morally and mentally sick people. They GET OFF on what they’re doing, i.e., the giving and taking away, and giving back, and then taking away of rights again. Rights don’t work that way. Not in reality. Sadly, tyrants have ruled throughout human history. But the interesting thing is that, in the end, they are always defeated, when their victims have had enough. Americans don’t have to wait 100 or 500 years to rise up. We can do so any time. We have a legacy of freedom and liberty to end this now. Our rights are natural, a given at birth and by our very natures; THIS is the recognition that the Cuomos, Newsoms, Kamalas and Bidens of the world hope you never recognize. It’s their Kryptonite.

Michael J. Hurd, Daily Dose of Reason

ya’ll remember the Country Club Republicans? They held sway over the GOP for many years. East Coasters like Nelson Rockefeller and the Bushes. None of them liked Ronald Reagan, but we did. They did everything they could to side-line our dear Ronnie.

True patriotic Republicans have had to put up with being dismissed by the Country-Clubbers, we were not hoity-toity enough for them. Or pro-choice enough for them.

Then comes the TEA Party which embarrassed the crap out of them. The George Will’s of the world denigrated us. The Karl Rove’s of the world worked to displace us. But then Donald Trump came along and without a stitch of blue-bloodness in his system he got our motors running.

The Country-Clubbers have morphed into Never-Trumpers.

Well, guess what? The GOP is now the Party of Trump.

Oliver Wendall Holmes once said that a mind that is stretched by a new experience can never go back to its old dimensions.

The Party of Trump will never go back to being second place because we are this country’s truest citizens.

Slyfox

Looking at a map of blue Democratic states and red Republican states, it is easy to fall into the trap of concluding that the U.S. is divided along geographic lines into separate societies. On the basis of this assumption, Democrats during Republican administrations and Republicans during Democratic administrations often revive old theories of states’ rights to defend their constituencies from the other party. But this is a potentially fatal prescription based on a mistaken diagnosis. The consequence of placing false hopes in federalism could be ceding power by default to the national managerial overclass.

For most of American history, the Mason-Dixon line was the major division in political geography. From the 1800s until the late 20th century, there was a Southern elite party allied with much of the Northern white working class—the Jeffersonian Republicans to the Roosevelt-Johnson Democrats. And for two centuries there was a Northern elite party—the Federalists, Whigs, and Lincoln-to-Eisenhower Republicans—based in New England and the upper Midwest, which sometimes found allies among alienated white Southern hill country populists and championed the rights of black Southerners, on the realist principle that “the enemy of my enemy is my friend.”

There is no longer a Southern gentry with values and lifestyles and dialect that are distinct from those of the old Northeastern patrician elite. The former regional oligarchies have fused into a single homogeneous national overclass, mostly hereditary but partly meritocratic. Its geographically mobile, careerist members attend the same selective private and public universities, speak the same homogenized non-regional elite dialect, read the same newspapers and ‘zines, watch the same TV shows and movies, follow the same fashions and have the same diets.

There are no red and blue states. The most accurate maps of voting are county maps, not state maps. And the county maps show that the major partisan division, in every region of the U.S., is between urban cores and everywhere else. Outside of densely populated metro areas, California is red. Most metro areas in Texas are blue. Because cities and counties are mere creations of state governments, the moment that politicians representing a slight majority of statewide voters capture power in state government they can use that power to overrule local governments everywhere in the state. This means that, once a majority of voters in a few large metropolitan areas capture a state legislature and governor’s office, there may be no way for their exurban and small-town rivals to fight back.

Describing this as an “urban-rural” divide is wrong. Only 1.3% of American workers actually work on farms. The major divide everywhere is within metro areas: between downtown business districts and inner suburbs, on the one hand, and outer suburbs and exurbs, on the other.

The New Class Geography

Does this partisan divide reflect different societies, each of which could exist apart from the other? No. It reflects different classes as well as different racial and religious groups within the same highly centralized, deeply integrated society. The populations of hub cities in the U.S., as in Europe, tend to include the mostly-white, college-credentialed economic elite in business, finance, the professions, the academy, media, and government, and a largely-immigrant working class that labors for them for low wages in menial service jobs. While some commute from the outer ring to the urban cores, most working-class Americans of all races live and commute and work in the suburbs and exurbs. In addition to providing low-prestige services like fast food and discount retail, mostly to each other, the exurban working class works in logistics, infrastructure, manufacturing, energy, agribusiness and other “dirty” productive industries exiled from the hub cities of the overclass.

Think of today’s highly nationalized and urbanized U.S. as the United City-State of America. Imagine putting all of the blue hub city cores—the downtowns and inner suburbs of New York, San Francisco, Los Angeles, Chicago, Dallas, Houston, Austin, Atlanta—together in a single big blue circle. Then imagine putting all of the exurbs of the same cities together in a much larger red ring around the blue inner circle, with a checkerboard pattern of contested suburbs.

This imaginary diagram illustrates the new reality that modern American national politics is essentially New York-style urban politics, replicated everywhere. All of the hub city cores are the equivalent of Manhattan today, and all of the peripheries are the equivalent of New York City’s outer boroughs. This explains why nobody thought it odd that both presidential candidates in 2016 were New Yorkers. And it explains why a contributor to National Review’s Never Trump issue in 2016 mocked Trump’s “outer borough accent.”

The newly consolidated national managerial and professional overclass is still divided among the two parties, although it is becoming more Democratic in partisanship, now that the Democrats are the party of the college-educated and of the most politically influential U.S. industries, Silicon Valley and Wall Street. But whether they are Clinton-Obama-Biden Democrats or Bush-Romney-Ryan-Haley Republicans, the hub-city oligarchs tend to share the same public philosophy of woke neoliberalism—moderately progressive on cultural and social issues, while economically center-Right, in favor of the free market when it comes to trade, immigration, regulation of tech and finance and hostility to private sector unions (as distinct from public sector unions, part of the Democratic coalition). In each party, the donors and managers and professionals have far more in common with those of the other party—in terms of education, lifestyle, and values—than they do with most of their own party’s non-elite voters, whom party elites manipulate with various “culture war” issues—cost-free gestures of affirmative action tokenism on the Left, insincere rhetoric about outlawing abortion on the Right.

The consolidation of almost all political, social, and economic power in a single national ruling class whose members congregate in a few major cities is unprecedented in American history, though not in the history of Latin America or France or Britain. The new geography of class has two implications for champions of the non-elite working-class majority of Americans and their few overclass allies today.

Nationalism or Nothing

First, given the decline of churches and private-sector labor unions and membership-based rather than donor-based political parties, the only remaining national institution in which high-school-educated working-class Americans have any influence at all is the government. By means of their vote, ordinary people still have some partial influence over government, however diluted it may be by the influence of donors and the college-educated elite.

In contrast, the national overclass, in addition to controlling most but not all of the government, has unchecked domination of the private sector, including the media, and the nonprofit sector, including the universities and major philanthropic foundations. If the elite fails to persuade the electorate to vote for race and gender quotas in democratic referendums like California’s failed Proposition 16, then the elite will use private commercial power instead of government power to impose them, as NASDAQ has done by imposing race and gender quotas on the boards of corporations that it will list—quotas which will be filled by elite white women, as well as members of minority-group elites.

From this it follows that smaller-government conservatism is inimical to the interests of the working-class majority of all races, whose champions need to increase their power in the only institution they influence, the government, and wield it aggressively on behalf of ordinary Americans to check the abuses of concentrated private power of oligarchs in business, media, and the nonprofit and academic sectors.

Second, the battle must be for control of the federal government and the institutions of national government power. It is a delusion to believe that a hostile national elite, in charge of the national government, will nevertheless allow dissenters and enemies to shelter behind states’ rights or localism. In the United States of 1820, when states’ rights protected Northern antislavery activists against the Southern slaveholders who controlled federal offices most of the time in that era, defensive localism might have been possible. In 2020 defensive localism is anachronistic.

Anti-government conservatism is not the answer to the threat posed to the values and interests of America’s transracial working-class majority by overclass control of all sectors, including the private sector and the nonprofit sector. On the contrary, mindless anti-statism threatens to throw away the only instrument available to the American working-class majority for defending its values and interests against the ongoing managerial revolution from above—democratic government.

In the centralized United City-State of America, the inhabitants of the outer boroughs cannot secede. They have no choice but to fight to control city hall or lose by default.

Michael Lind is the author of The Next American Nation: The New Nationalism and the Fourth American Revolution.

In “Remembering Henry Hazlitt”, Bettina Bien Greaves lays out Hazlitt’s importance. However, something important was left out of that account. Out of some 10 million words he wrote, nothing of what he said about liberty was included. Therefore, to provide a taste of some of the words that made Hazlitt so important, consider just a few:

“Liberty is the essential basis, the sine qua non, of morality.”

“Those of us who place a high value on human liberty…find ourselves in a minority (and it sometimes seems hopeless minority) in ideology…we are the true adherents of liberty…who believed in limited government, in the maximization of liberty for the individual and the minimization of the coercion to the lowest point compatible with law and order. It is because we are the true liberals that we believe in free trade, free markets, free enterprise, private property in the means of production; in brief, that we are for capitalism and against socialism…”

“The ‘private sector’ of the economy is, in fact the voluntary sector…the ‘public sector’ is, in fact, the coercive sector.”

“The future of human liberty…means the future of civilization.”

“Only if the modern state can be held within a strictly limited agenda…can it be prevented from regimenting, conquering, and ultimately devouring the society which gave it birth.”

“I’ve been preaching liberty against coercion; I’ve been preaching this doctrine in every form without any excuse, and yet the world is more socialized than when I began…”

“The ideas which now pass for brilliant innovations and advances are in fact mere revivals of ancient errors, and a further proof of the dictum that those who are ignorant of the past are condemned to repeat it.”

“There is a passion built into a very large number of men to rule over others. In established democracies this takes the form of candidates for office determined to outbid their rivals in promising handouts or other favors to pressure groups in their districts at the expense of some unnamed minority.”

“Government has nothing to give them without first taking it away from somebody else—or from themselves.”

“The mounting burden of taxation not only undermines individual incentives to increased work and earnings, but in a score of ways discourages capital accumulation and distorts, unbalances, and shrinks production. Total real wealth and income is made smaller than it would otherwise be. On net balance there is more poverty rather than less.”

“The ‘conquest of poverty’ is a product of the capitalist system which protected private property…”

“Government can’t give us anything without depriving us of something else.”

“[Forgotten are] the ones who are always called upon to stanch the politician’s bleeding heart by paying for his vicarious generosity.”

“The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians.”

“Capitalism, the system of private property and free markets, is not only a system of freedom and of natural justice — which tends in spite of exceptions to distribute rewards in accordance with production — but it is a great co-operative and creative system that has produced for our generation an affluence that our ancestors did not dare dream of. The superior freedom of the capitalist system, its superior justice, and its superior productivity are not three superiorities, but one. The justice follows from the freedom and the productivity follows from the freedom and the justice.”

Henry Hazlitt’s most famous line, from Economics in One Lesson, is that: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing that policy not merely for one group but for all groups. By itself, that recognition, echoing Frederic Bastiat, is an important antidote to the recycled errors in understanding government and its effects that he continually battled. But his recognition of liberty as the only approach that can ultimately benefit all groups was just as important. And in a world where, unfortunately, those errors have just been pursued with ever more resources taken from others without their consent, his words are certainly no less important today.”

Descriptive terms which people use are often quite misleading. In talking about modern captains of industry and leaders of big business, for instance, they call a man a “chocolate king” or a “cotton king” or an “automobile king.” Their use of such terminology implies that they see practically no difference between the modern heads of industry and those feudal kings, dukes or lords of earlier days. But the difference is in fact very great, for a chocolate king does not rule at all; he serves. He does not reign over conquered territory, independent of the market, independent of his customers. The chocolate king—or the steel king or the automobile king or any other king of modern industry—depends on the industry he operates and on the customers he serves. This “king” must stay in the good graces of his subjects, the consumers; he loses his “kingdom” as soon as he is no longer in a position to give his customers better service and provide it at lower cost than others with whom he must compete.

Two hundred years ago, before the advent of capitalism, a man’s social status was fixed from the beginning to the end of his life; he inherited it from his ancestors, and it never changed. If he was born poor, he always remained poor, and if he was born rich—a lord or a duke—he kept his dukedom and the property that went with it for the rest of his life.

As for manufacturing, the primitive processing industries of those days existed almost exclusively for the benefit of the wealthy. Most of the people (90 percent or more of the European population) worked the land and did not come in contact with the city-oriented processing industries. This rigid system of feudal society prevailed in the most developed areas of Europe for many hundreds of years.

However, as the rural population expanded, there developed a surplus of people on the land. For this surplus of population without inherited land or estates, there was not enough to do, nor was it possible for them to work in the processing industries; the kings of the cities denied them access. The numbers of these “outcasts” continued to grow, and still no one knew what to do with them. They were, in the full sense of the word, “proletarians,” outcasts whom the government could only put into the workhouse or the poorhouse. In some sections of Europe, especially in the Netherlands and in England, they became so numerous that, by the 18th century, they were a real menace to the preservation of the prevailing social system.

Today, in discussing similar conditions in places like India or other developing countries, we must not forget that, in 18th-century England, conditions were much worse. At that time, England had a population of 6 or 7 million people, but of those 6 or 7 million people, more than 1 million, probably 2 million, were simply poor outcasts for whom the existing social system made no provision. What to do with these outcasts was one of the great problems of 18th-century England.

Another great problem was the lack of raw materials. The British, very seriously, had to ask themselves this question: What are we going to do in the future, when our forests will no longer give us the wood we need for our industries and for heating our houses? For the ruling classes it was a desperate situation. The statesmen did not know what to do, and the ruling gentry were absolutely without any ideas on how to improve conditions.

Out of this serious social situation emerged the beginnings of modern capitalism. There were some persons among those outcasts, among those poor people, who tried to organize others to set up small shops which could produce something. This was an innovation. These innovators did not produce expensive goods suitable only for the upper classes; they produced cheaper products for everyone’s needs. And this was the origin of capitalism as it operates today. It was the beginning of mass production, the fundamental principle of capitalistic industry. Whereas the old processing industries serving the rich people in the cities had existed almost exclusively for the demands of the upper classes, the new capitalist industries began to produce things that could be purchased by the general population. It was mass production to satisfy the needs of the masses.

This is the fundamental principle of capitalism as it exists today in all of those countries in which there is a highly developed system of mass production: Big business, the target of the most fanatic attacks by the so-called leftists, produces almost exclusively to satisfy the wants of the masses. Enterprises producing luxury goods solely for the well-to-do can never attain the magnitude of big businesses. And today, it is the people who work in large factories who are the main consumers of the products made in those factories. This is the fundamental difference between the capitalistic principles of production and the feudalistic principles of the preceding ages.

When people assume, or claim, that there is a difference between the producers and the consumers of the products of big businesses, they are badly mistaken. In American department stores you hear the slogan, “the customer is always right.” And this customer is the same man who produces in the factory those things which are sold in the department stores. The people who think that the power of big business is enormous are mistaken also, since big business depends entirely on the patronage of those who buy its products: the biggest enterprise loses its power and its influence when it loses its customers.

Fifty or 60 years ago it was said in almost all capitalist countries that the railroad companies were too big and too powerful; they had a monopoly; it was impossible to compete with them. It was alleged that, in the field of transportation, capitalism had already reached a stage at which it had destroyed itself, for it had eliminated competition. What people overlooked was the fact that the power of the railroads depended on their ability to serve people better than any other method of transportation. Of course it would have been ridiculous to compete with one of these big railroad companies by building another railroad parallel to the old line, since the old line was sufficient to serve existing needs. But very soon there came other competitors. Freedom of competition does not mean that you can succeed simply by imitating or copying precisely what someone else has done. Freedom of the press does not mean that you have the right to copy what another man has written and thus to acquire the success which this other man has duly merited on account of his achievements. It means that you have the right to write something different. Freedom of competition concerning railroads, for example, means that you are free to invent something, to do something, which will challenge the railroads and place them in a very precarious competitive situation.

In the United States the competition to the railroads—in the form of buses, automobiles, trucks, and airplanes—has caused the railroads to suffer and to be almost completely defeated, as far as passenger transportation is concerned.

The development of capitalism consists in everyone’s having the right to serve the customer better and/or more cheaply. And this method, this principle, has, within a comparatively short time, transformed the whole world. It has made possible an unprecedented increase in world population.

In 18th-century England, the land could support only 6 million people at a very low standard of living. Today more than 50 million people enjoy a much higher standard of living than even the rich enjoyed during the 18th-century. And today’s standard of living in England would probably be still higher, had not a great deal of the energy of the British been wasted in what were, from various points of view, avoidable political and military “adventures.”

These are the facts about capitalism. Thus, if an Englishman—or, for that matter, any other man in any country of the world—says today to his friends that he is opposed to capitalism, there is a wonderful way to answer him: “You know that the population of this planet is now ten times greater than it was in the ages preceding capitalism; you know that all men today enjoy a higher standard of living than your ancestors did before the age of capitalism. But how do you know that you are the one out of ten who would have lived in the absence of capitalism? The mere fact that you are living today is proof that capitalism has succeeded, whether or not you consider your own life very valuable.”

In spite of all its benefits, capitalism has been furiously attacked and criticized. It is necessary that we understand the origin of this antipathy. It is a fact that the hatred of capitalism originated not with the masses, not among the workers themselves, but among the landed aristocracy—the gentry, the nobility, of England and the European continent. They blamed capitalism for something that was not very pleasant for them: at the beginning of the 19th century, the higher wages paid by industry to its workers forced the landed gentry to pay equally higher wages to their agricultural workers. The aristocracy attacked the industries by criticizing the standard of living of the masses of the workers.

Of course, from our viewpoint, the workers’ standard of living was extremely low; conditions under early capitalism were absolutely shocking, but not because the newly developed capitalistic industries had harmed the workers. The people hired to work in factories had already been existing at a virtually subhuman level.

The famous old story, repeated hundreds of times, that the factories employed women and children and that these women and children, before they were working in factories, had lived under satisfactory conditions, is one of the greatest falsehoods of history. The mothers who worked in the factories had nothing to cook with; they did not leave their homes and their kitchens to go into the factories, they went into factories because they had no kitchens, and if they had a kitchen they had no food to cook in those kitchens. And the children did not come from comfortable nurseries. They were starving and dying. And all the talk about the so-called unspeakable horror of early capitalism can be refuted by a single statistic: precisely in these years in which British capitalism developed, precisely in the age called the Industrial Revolution in England, in the years from 1760 to 1830, precisely in those years the population of England doubled, which means that hundreds or thousands of children—who would have died in preceding times—survived and grew to become men and women.

There is no doubt that the conditions of the preceding times were very unsatisfactory. It was capitalist business that improved them. It was precisely those early factories that provided for the needs of their workers, either directly or indirectly by exporting products and importing food and raw materials from other countries. Again and again, the early historians of capitalism have—one can hardly use a milder word—falsified history.

One anecdote they used to tell, quite possibly invented, involved Benjamin Franklin. According to the story, Ben Franklin visited a cotton mill in England, and the owner of the mill told him, full of pride: “Look, here are cotton goods for Hungary.” Benjamin Franklin, looking around, seeing that the workers were shabbily dressed, said: “Why don’t you produce also for your own workers?”

But those exports of which the owner of the mill spoke really meant that he did produce for his own workers, because England had to import all its raw materials. There was no cotton either in England or in continental Europe. There was a shortage of food in England, and food had to be imported from Poland, from Russia, from Hungary. These exports were the payment for the imports of the food which made the survival of the British population possible. Many examples from the history of those ages will show the attitude of the gentry and aristocracy toward the workers. I want to cite only two examples. One is the famous British “Speenhamland” system. By this system, the British government paid all workers who did not get the minimum wage (determined by the government) the difference between the wages they received and this minimum wage. This saved the landed aristocracy the trouble of paying higher wages. The gentry would pay the traditionally low agricultural wage, and the government would supplement it, thus keeping workers from leaving rural occupations to seek urban factory employment.

Eighty years later, after capitalism’s expansion from England to continental Europe, the landed aristocracy again reacted against the new production system. In Germany the Prussian Junkers, having lost many workers to the higher-paying capitalistic industries, invented a special term for the problem: “flight from the countryside”—Landflucht. And in the German Parliament, they discussed what might be done against this evil, as it was seen from the point of view of the landed aristocracy.

Prince Bismarck, the famous chancellor of the German Reich, in a speech one day said, “I met a man in Berlin who once had worked on my estate, and I asked this man, ‘Why did you leave the estate; why did you go away from the country; why are you now living in Berlin?'” And according to Bismarck, this man answered, “You don’t have such a nice Biergarten in the village as we have here in Berlin, where you can sit, drink beer, and listen to music.” This is, of course, a story told from the point of view of Prince Bismarck, the employer. It was not the point of view of all his employees. They went into industry because industry paid them higher wages and raised their standard of living to an unprecedented degree.

Today, in the capitalist countries, there is relatively little difference between the basic life of the so-called higher and lower classes; both have food, clothing, and shelter. But in the 18th century and earlier, the difference between the man of the middle class and the man of the lower class was that the man of the middle class had shoes and the man of the lower class did not have shoes. In the United States today the difference between a rich man and a poor man means very often only the difference between a Cadillac and a Chevrolet. The Chevrolet may be bought secondhand, but basically it renders the same services to its owner: he, too, can drive from one point to another. More than 50 percent of the people in the United States are living in houses and apartments they own themselves.

The attacks against capitalism—especially with respect to the higher wage rates—start from the false assumption that wages are ultimately paid by people who are different from those who are employed in the factories. Now it is all right for economists and for students of economic theories to distinguish between the worker and the consumer and to make a distinction between them. But the fact is that every consumer must, in some way or the other, earn the money he spends, and the immense majority of the consumers are precisely the same people who work as employees in the enterprises that produce the things which they consume. Wage rates under capitalism are not set by a class of people different from the class of people who earn the wages; they are the same people. It is not the Hollywood film corporation that pays the wages of a movie star; it is the people who pay admission to the movies. And it is not the entrepreneur of a boxing match who pays the enormous demands of the prize fighters; it is the people who pay admission to the fight. Through the distinction between the employer and the employee, a distinction is drawn in economic theory, but it is not a distinction in real life; here, the employer and the employee ultimately are one and the same person.

There are people in many countries who consider it very unjust that a man who has to support a family with several children will receive the same salary as a man who has only himself to take care of. But the question is not whether the employer should bear greater responsibility for the size of a worker’s family.

The question we must ask in this case is, Are you, as an individual, prepared to pay more for something, let us say, a loaf of bread, if you are told that the man who produced this loaf of bread has six children? The honest man will certainly answer in the negative and say, “In principle I would, but in fact if it costs less I would rather buy the bread produced by a man without any children.” The fact is that, if the buyers do not pay the employer enough to enable him to pay his workers, it becomes impossible for the employer to remain in business.

The capitalist system was termed “capitalism” not by a friend of the system, but by an individual who considered it to be the worst of all historical systems, the greatest evil that had ever befallen mankind. That man was Karl Marx. Nevertheless, there is no reason to reject Marx’s term, because it describes clearly the source of the great social improvements brought about by capitalism. Those improvements are the result of capital accumulation; they are based on the fact that people, as a rule, do not consume everything they have produced, that they save—and invest—a part of it. There is a great deal of misunderstanding about this problem and—in the course of these lectures—I will have the opportunity to deal with the most fundamental misapprehensions which people have concerning the accumulation of capital, the use of capital, and the universal advantages to be gained from such use. I will deal with capitalism particularly in my lectures about foreign investment and about that most critical problem of present-day politics, inflation. You know, of course, that inflation exists not only in this country. It is a problem all over the world today.

An often-unrealized fact about capitalism is this: savings mean benefits for all those who are anxious to produce or to earn wages. When a man has accrued a certain amount of money—let us say, $1,000—and, instead of spending it, entrusts these dollars to a savings bank or an insurance company, the money goes into the hands of an entrepreneur, a businessman, enabling him to go out and embark on a project which could not have been embarked on yesterday, because the required capital was unavailable.

What will the businessman do now with the additional capital? The first thing he must do, the first use he will make of this additional capital, is to go out and hire workers and buy raw materials—in turn causing a further demand for workers and raw materials to develop, as well as a tendency toward higher wages and higher prices for raw materials. Long before the saver or the entrepreneur obtains any profit from all of this, the unemployed worker, the producer of raw materials, the farmer, and the wage earner are all sharing in the benefits of the additional savings.

When the entrepreneur will get something out of the project depends on the future state of the market and on his ability to anticipate correctly the future state of the market. But the workers as well as the producers of raw materials get the benefits immediately. Much was said, 30 or 40 years ago, about the “wage policy,” as they called it, of Henry Ford. One of Mr. Ford’s great accomplishments was that he paid higher wages than did other industrialists or factories. His wage policy was described as an “invention,” yet it is not enough to say that this new “invented” policy was the result of the liberality of Mr. Ford. A new branch of business, or a new factory in an already existing branch of business, has to attract workers from other employments, from other parts of the country, even from other countries. And the only way to do this is to offer the workers higher wages for their work. This is what took place in the early days of capitalism, and it is still taking place today.

When the manufacturers in Great Britain first began to produce cotton goods, they paid their workers more than they had earned before. Of course, a great percentage of these new workers had earned nothing at all before that and were prepared to take anything they were offered. But after a short time—when more and more capital was accumulated and more and more new enterprises were developed—wage rates went up, and the result was the unprecedented increase in British population which I spoke of earlier.

The scornful depiction of capitalism by some people as a system designed to make the rich become richer and the poor become poorer is wrong from beginning to end. Marx’s thesis regarding the coming of socialism was based on the assumption that workers were getting poorer, that the masses were becoming more destitute, and that finally all the wealth of a country would be concentrated in a few hands or in the hands of one man only. And then the masses of impoverished workers would finally rebel and expropriate the riches of the wealthy proprietors. According to this doctrine of Karl Marx, there can be no opportunity, no possibility within the capitalistic system for any improvement of the conditions of the workers.

In 1864, speaking before the International Workingmen’s Association in England, Marx said the belief that labor unions could improve conditions for the working population was “absolutely in error.” The union policy of asking for higher wage rates and shorter work hours he called conservative—conservatism being, of course, the most condemnatory term which Karl Marx could use. He suggested that the unions set themselves a new, revolutionary goal: that they “do away with the wage system altogether,” that they substitute “socialism”—government ownership of the means of production—for the system of private ownership.

If we look upon the history of the world, and especially upon the history of England since 1865, we realize that Marx was wrong in every respect. There is no Western, capitalistic country in which the conditions of the masses have not improved in an unprecedented way. All these improvements of the last 80 or 90 years were made in spite of the prognostications of Karl Marx. For the Marxian socialists believed that the conditions of the workers could never be ameliorated. They followed a false theory, the famous “iron law of wages”—the law which stated that a worker’s wages, under capitalism, would not exceed the amount he needed to sustain his life for service to the enterprise.

The Marxians formulated their theory in this way: if the workers’ wage rates go up, raising wages above the subsistence level, they will have more children; and these children, when they enter the labor force, will increase the number of workers to the point where the wage rates will drop, bringing the workers once more down to the subsistence level—to that minimal sustenance level which will just barely prevent the working population from dying out. But this idea of Marx, and of many other socialists, is a concept of the working man precisely like that which biologists use—and rightly so—in studying the life of animals. Of mice, for instance.

If you increase the quantity of food available for animal organisms or for microbes, then more of them will survive. And if you restrict their food, then you will restrict their numbers. But man is different. Even the worker—in spite of the fact that Marxists do not acknowledge it—has human wants other than food and reproduction of his species. An increase in real wages results not only in an increase in population; it results also, and first of all, in an improvement in the average standard of living. That is why today we have a higher standard of living in Western Europe and in the United States than in the developing nations of, say, Africa.

We must realize, however, that this higher standard of living depends on the supply of capital. This explains the difference between conditions in the United States and conditions in India; modern methods of fighting contagious diseases have been introduced in India—at least, to some extent—and the effect has been an unprecedented increase in population, but, since this increase in population has not been accompanied by a corresponding increase in the amount of capital invested, the result has been an increase in poverty. A country becomes more prosperous in proportion to the rise in the invested capital per unit of its population.

I hope that in my other lectures I will have the opportunity to deal in greater detail with these problems and will be able to clarify them, because some terms—such as “the capital invested per capita”—require a rather detailed explanation.

But you have to remember that, in economic policies, there are no miracles. You have read in many newspapers and speeches, about the so-called German economic miracle—the recovery of Germany after its defeat and destruction in the Second World War. But this was no miracle. It was the application of the principles of the free market economy, of the methods of capitalism, even though they were not applied completely in all respects. Every country can experience the same “miracle” of economic recovery, although I must insist that economic recovery does not come from a miracle; it comes from the adoption of—and is the result of—sound economic policies.

Author:

Ludwig von Mises

Ludwig von Mises was the acknowledged leader of the Austrian school of economic thought, a prodigious originator in economic theory, and a prolific author. Mises’s writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science in human action, a science that he called praxeology.