Austria is one part of the name “Austrian economics.” How has the country of Austria prospered by applying Austrian economic concepts? The nation regained full sovereignty in 1955. Their form of government is a parliamentary coalition with a prime minister as head of state and a ceremonial office of president.
How would Ludwig von Mises view Austria today implementing Austrian economics? He would not recognize the country he fled in 1934 ahead of the German war machine and its purposeful discrimination of people of Jewish descent. He would probably be thankful Austria’s Jewish population is thriving. He would also see its standard of living and economy flourishing today.
Austria has large services and industrial sectors, and it has a small, highly developed agricultural sector. The nation’s ongoing challenges are assimilation of migrants, strains on labor markets and public finances caused by an aging population, and reliance on Russian energy.
The 2023 Index of Economic Freedom from the US-based Heritage Foundation measures the principles of economic freedom in an annual guide. According to the study, “Economic freedom is the fundamental right of every human to control his or her own labor and property.” The Index covers twelve freedoms composed of four economic freedom pillars, with three categories under each one, in 184 countries using a scale of one to one hundred. A country’s overall score is derived by averaging these twelve economic freedoms, with equal weight being given to each. Each pillar and category is shown below:
Rule of law (property rights, government integrity, judicial effectiveness)Government size (government spending, tax burden, fiscal health)Regulatory efficiency (business freedom, labor freedom, monetary freedom)Open markets (trade freedom, investment freedom, financial freedom)
Austria’s economic freedom score is 71.1, making its economy the twenty-third freest in the 2023 Index. Austria is ranked sixteenth out of forty-four countries in the Europe region, and its overall score is well above the regional and world averages.
Austria’s high scores for property rights and government integrity reflect its strong rule of law and the expansion of economic freedom. The nation does not have a commitment to limited government. Expansionary public spending generates budgetary pressure. The transparent and competitive business environment has been effective.
The overall rule of law is very well respected in Austria. The country’s property rights score is 97.0; its judicial effectiveness score is 95.2; and its government integrity score is 80.9. Each of the three scores is above the world average.
The top individual and corporate tax rates are, respectively, 55 percent and 25 percent. The tax burden equals 42.1 percent of gross domestic product (GDP). Three-year government spending and budget balance averages are, respectively, 53.8 percent and −4.5 percent of GDP. Public debt equals 82.9 percent of GDP. The tax burden score is 45.7, fiscal health is 54.5, and government spending is 13.0. Their federal government has some size.
The overall regulatory framework is transparent and efficient, encouraging business innovation and productivity growth. No nationally mandated minimum wage exists. Fringe benefits costs are among the highest in the world. The business freedom score is 78.5, labor freedom is 78.8, and monetary freedom is 80.4.
The nation has more than six hundred European Union–mandated nontariff measures in force. Red tape is a problem in European countries. Their government policies generally do not interfere with foreign investment. The banking sector offers a wide range of financial services. The trade freedom score is 78.6, investment freedom is 80.0, and financial freedom is 70.0.
Ludwig von Mises might say property rights and rule of law appear to be on track. High taxation of business and personal income paralleled by high government spending is not healthy for the economy in the short and long term. He would encourage much lower business and personal tax rates and government spending. He would recommend the high number of EU regulations be greatly reduced and those regulatory powers be transferred from Brussels, Belgium (EU headquarters), to Vienna, Austria. He could see the healthy per capita income and international trade as hopeful for the country. He might say with long-term optimism that some things are going well and many areas need improvement.

How States Think: The Rationality of Foreign Policyby John J. Mearsheimer and Sebastian RosatoYale University Press, 2023; 304 pp.
How States Think surprised me. John Mearsheimer is a well-known critic of American foreign policy, and his analysis of the Ukraine war has been deservedly influential. As result, I anticipated that this book would expand his critique. The book does contain some critical discussion of American foreign policy, but, for the most part, the aims of Mearsheimer and his coauthor, Sebastian Rosato, lie elsewhere.
They endeavor to show that most of the time states are rational actors in their relations with one another, and their arguments for this thesis take them into areas that students of Austrian economics will find of great value. Their criticisms of competing theories of rationality have parallels in Austrian theory. After Mearsheimer and Rosato set forward their theory of rational action, they apply it to a number of case studies. In these studies they proceed to show that the states they discuss were rational actors, distinguishing between “grand strategy,” roughly a state’s long-term plans, and “crisis situations.” They also give examples in which states acted irrationally, but they conclude that these are atypical.
I have said that Mearsheimer and Rosato raise points of interest to Austrians, but you might suspect from the book’s title that they ignore a basic fact about human action often stressed by Ludwig von Mises: only individuals act and, one presumes, think. If that is so, how can the authors ask how states think? States aren’t individuals. But the authors are well aware of this issue, contending that state actions must be “cashed out” in the plans and decisions of the leaders of these states.
But if state actions consist of the actions of those in charge of state policy, what determines whether these actions are rational? Do rational actors try to maximize expected utility? According to this approach, an actor ranks the utility of each course of action open to him numerically or quasi numerically. Each course of action results in different possible outcomes, depending on what other actors do. The utility ranking of each action is then multiplied by the probability of its outcome, and the action with the highest product is said to have the greatest expected utility.
Mearsheimer and Rosato sound like Austrians in what they say about this theory of rationality. The utilities of the courses of action cannot be ranked cardinally, and the probability estimates of the outcomes are often unknown. They discuss Frank Knight’s views on uncertainty and then say:
In an uncertain world, actors cannot acquire the information needed to evaluate the likely consequences of pursuing different strategies. When “knowledge” is “uncertain,” observes John Maynard Keynes, “there is no scientific basis on which to form any calculable probability estimate whatever.” . . . The difference between worlds of risk and uncertainty—or what are called “small” and “large” worlds—cannot be overemphasized.
The defenders of expected utility have a response to this. Even if the relevant numbers are unknown, we can act as if they were known so long as doing so leads to successful predictions. Austrians will recognize that this was Milton Friedman’s strategy, and Mearsheimer and Rosato reject it:
Friedman went so far as to maintain that the best theories “will be found to have ‘assumptions’ that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions.” This assertion is implausible: a theory whose starting assumptions are descriptively false is unlikely to offer a good explanation of how the world works. As Ronald Coase wrote in response to Friedman’s claim, “Realism in our assumptions is needed if our theories are ever to help us understand why the system works in the way it does. Realism in assumptions forces us to analyze the world that exists, not some imaginary world that does not.”
What do Mearsheimer and Rosato propose to put in place of expected utility theory? They tie rational action to having a credible theory about the way the world works. As they put it, “rationality is about process rather than outcomes.” As it turns out, a whole host of theories meet these requirements, so passing the test amounts to less than the authors take it be. The test doesn’t require that the state actor’s theory of the world be better than competing accounts but only that it has something to be said for it. The authors count as reasonable theories that they themselves believe are bad ones. For example, Mearsheimer was a trenchant critic of the North Atlantic Treaty Organization’s expansion after the end of the Cold War, but the expansionist theory still counts as reasonable. Among the credible theories are several others, such as mutually assured destruction, which could result in the annihilation of human life on earth. This is a low bar indeed for what counts as a credible theory. (By the way, we learn that the technical term for having so potent a nuclear arsenal that you can wipe out your enemy’s ability to retaliate is a “splendid” first-strike capacity.) There is an additional requirement for rational state action, but this too is not very demanding. The policy chosen must result from deliberation among the main policy makers rather than be the decision of a leader in “splendid” isolation.
If Mearsheimer and Rosato’s account of reasonable state action isn’t very demanding, it isn’t vacuous either. Some theories are unreasonable, for example those that go counter to clear historical evidence.
Forcible democracy promotion theory and domino theory [which holds that a revolution tends to spread to neighboring states] are both noncredible. It is clear from the historical record that attempts to force democracy on other states almost always fail. . . . The United States’ dismal track record before the Iraq invasion made this clear. . . . There is also hardly any evidence that domino theory works as advertised.
Though the authors make many valuable distinctions in their discussion of alternative theories of rationality, and though their work rests on prodigious scholarship, they need to toughen up what they require of a credible theory. My readers won’t be surprised that I criticize a view for too much tolerance.

Former US secretary of state and national security advisory Henry Kissinger died on Wednesday. He was 100 years old. Kissinger is perhaps most notable for his work during Nixon Administration when he helped Nixon prolong the Vietnam War and expand it to Cambodia and Laos.
But his influence was certainly not limited to the Nixon years, he served in an official capacity in the Ford administration, and in more informal roles during the Reagan and Bush years as well. Throughout it all Kissinger was a ruthless servant of the American foreign policy establishment. As a Harvard-educated political scientist, Kissinger was employed to provide gravitas and legitimacy to a number of US wars and interventions, most of which ended in bloodbaths for the ordinary people of the countries Kissinger claimed to be improving. 
Kissinger likely had the most freedom to inflict damage under Nixon, and thus his greatest crimes were committed in the Vietnam milieu. Spencer Ackerman this week efficiently sums up much of Kissinger’s worst deeds:
The Yale University historian Greg Grandin, author of the biography Kissinger’s Shadow, estimates that Kissinger’s actions from 1969 through 1976, a period of eight brief years when Kissinger made Richard Nixon’s and then Gerald Ford’s foreign policy as national security adviser and secretary of state, meant the end of between three and four million people. …
No infamy will find Kissinger on a day like today. Instead, in a demonstration of why he was able to kill so many people and get away with it, the day of his passage will be a solemn one in Congress and — shamefully, since Kissinger had reporters like CBS’ Marvin Kalb and The New York Times‘ Hendrick Smith wiretapped — newsrooms. Kissinger … was a practitioner of American greatness, and so the press lionized him as the cold-blooded genius who restored America’s prestige from the agony of Vietnam. 
Not once in the half-century that followed Kissinger’s departure from power did the millions the United States killed matter for his reputation, except to confirm a ruthlessness that pundits occasionally find thrilling. America, like every empire, champions its state murderers….
Kissinger’s criminal mind was frequently employed to push the Gulf War and later the so-called Global War on Terror. Kissinger’s gimmick was to present himself as the “voice of reason” by positioning himself as a “realist”—even though he wasn’t actually a realist—and as a dispassionate critic of other foreign policy advisors.
Yet, Kissinger never came down on the side of actual foreign policy restraint, and he was reliably hawkish whenever the question of a new war came up. He had about as much respect for the sovereignty of foreign states as Vlad Putin on his most militant days. As Rothbard showed, however, Kissinger was able to morph between the roles of hawk and ultra-hawk as political realities dictated. 
For example, during the Reagan years, Kissinger played the role of moderate within the administration. As Rothbard describes it: 
One problem is that the Republican “pragmatists” are not very dovish. Not only are the grand old Republican isolationists of the pre-1955 era dead as a dodo, but there are not even any dovish Establishment realists of the Cyrus Vance or George Ball variety, let alone such Grand Old Men as George Kennan. The battle is between the hawks and the ultra-hawks. On the merely hawk side are the Vietnam war criminal Henry Kissinger and his many followers, war-mongers who, however, want to stop short at the brink of a nuclear holocaust. This evil “pragmatism” is scorned by the ultras, the Kirkpatricks, the Van Cleaves, the Aliens, the Pipeses, all they who want to burn out the universe to the furthest star.
By the time of the leadup to the Gulf War in 1990, however, Kissinger had left this “moderation” behind, at least as far as Iraq was concerned. Rothbard wonders if Kissinger’s “ultra-hawkish views” were perhaps related to Kissinger’s lucrative work as a “consultant” in which his client list included the government (i.e., dictatorship) of Kuwait.  Regardless of his motivations, Kissinger continued to serve an important role in pushing federal war propaganda well into his final decades.
He served this role both as an advisor behind closed doors and as a public intellectual appearing in newspapers and on television. Americans of decades past were no less inclined to blindly accept the pronouncement of government “experts” as they are now. Indeed, Americans of the mid-twentieth century were perhaps more inclined to do as they were told. After all, where were they to find a dissenting opinion except in subscription-only physical newsletters mailed out by the small minority of those who dissented from the dominant narratives? 
As late as the 1990s, Kissinger was still frequently trotted up as the “voice of reason” on foreign policy. Or, as Rothbard put it: 
Kissinger is so Beloved, in fact, that whenever he appears on Nightline or Crossfire he appears alone, since it seems to be lese majest (or even blasphemy) for anyone to contradict the Great One’s banal and ponderous Teutonic pronouncements. Only a handful of grumblers and malcontents on the extreme right and extreme left disturb this cozy consensus.
Kissinger’s views were often predicated—at least publicly—on disproven theories like the “domino theory.” He helped develop the still-used idea that the US must go to war everywhere on earth that some ally is threatened—or else. As Kissinger put it: “We must understand that peace is indivisible. The United States cannot pursue a policy of selective reliability. We cannot abandon friends in one part of the world without jeopardizing the security of friends everywhere. 
Kissinger was demonstrably wrong on this in Vietnam, or course. The US loss in that country did not lead to the spread of a grand communist coalition beyond that country. In fact, Vietnam and China were at war with each other only a few years after the Hanoi regime expelled the Americans from the country. Today, Vietnam’s communist regime has been at peace with the United States for decades. Moreover, as mentioned by Ackerman, Kissinger directly contradicted his own stated “principles” on this matter by being an architect of “the inauguration of an American tradition of using and then abandoning the Kurds.” For Kissinger, “friends” only mattered when they could help draw Washington into yet another war. 
The theory is still employed today and pushed in the form of new crackpot arguments about how the best way to prevent a Chinese invasion of Taiwan is for NATO to “win”—whatever that means—in Ukraine. There is zero reason to assume that Beijing’s views of Taiwan have much of anything to do with Ukraine, but thanks in part to Kissinger, people buy the idea that the US must intervene everywhere for “the security of friends.” 
For nearly seventy years, Kissinger was able to push his faux “realism” which just happened to align repeatedly with the goals of the militant moralists who have perennially sought to invade and carpet bomb foreign people for the sake of saving them from themselves.  Because Kissinger served the regime so well, we must now endure countless paeans in the media and from the respectable classes of Washington. Get ready to see George W. Bush, Michelle Obama, Mitch McConnell, and Hillary Clinton all mourn together at his funeral as they hail one of the history’s great war criminals. 

Are the chickens coming home to roost for the US Treasury? As Ryan McMaken noted in a recent Mises Wire article, the United States is in a debt spiral and there’s no easy way out.
The problem is multifaceted, but the origin is profligate government spending. While it typically spikes during crises, spending is increasing at an alarming rate even outside of crisis periods. And tax revenues are not keeping up, which means ever-deepening deficits. Government expenditures spiked during the 2020 crisis, but even ignoring those spikes, annual spending has increased by about $1.6 trillion since 2019, while tax receipts have only increased by about $600 billion.
The government must borrow to make up the difference, which has led to a mountain of debt. Total public debt has ballooned to over $32 trillion, which is over 180 percent of gross domestic product (GDP), excluding government spending and transfers.
Due to the unpopularity of price inflation and the inexorable tendency for the market to reestablish interest rates that accord with people’s real time preferences, the Fed has allowed interest rates to rise. This, combined with the sheer size of the debt has caused the government’s interest payments to increase to unprecedented heights. In 2020, interest payments were a little over $500 billion, but they have almost doubled since then.
Congressional Budget Office projections show that these interest payments will take up ever-larger portions of the federal budget, causing deficits to sink even further. The government will have to use more debt to pay off past debts.
Figure 1: Congressional Budget Office: Deficits as a percentage of GDP

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Source: The 2023 Long-Term Budget Outlook (Congressional Budget Office, June 2023), figure 1-1.
On top of all of this, the US Treasury is running out of buyers for its debt. The Fed, which has always been a ready buyer of government debt with newly created money, is allowing its holdings of US Treasury securities to roll off its balance sheet. It cannot resume monetizing the debt without exacerbating price inflation, which is still above its stated target of 2 percent.
Figure 2: Treasury securities held by the Federal Reserve

Source: “Assets: Securities Held Outright: U.S. Treasury Securities: All: Wednesday Level,” FRED, Federal Reserve Bank of St. Louis, last updated November 22, 2023. Data from Factors Affecting Reserve Balances, Federal Reserve Statistical Release H.4.1 (Board of Governors of the Federal Reserve).
Like the Fed, foreign governments such as China and Japan are also reducing their purchases of Treasurys, leaving the US with a smaller customer base for its debt. As Robert P. Murphy showed in a recent talk, the proportion of debt held by foreigners has been declining since 2014.
Figure 3: Federal debt held by foreign investors as a proportion of federal debt held by the public

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Source: “Federal Debt Held by Foreign and International Investors (FDHBFIN)” and “Federal Debt Held by the Public (FYGFDPUN),” FRED, Federal Reserve Bank of St. Louis, last updated September 1, 2023. Data from the U.S. Department of the Treasury Bureau of the Fiscal Service Treasury Bulletin.
This too-much-supply and not-enough-demand phenomenon came to a head at an October Treasury auction that turned into a fiasco when thirty-year yields reached 4.837 percent and primary dealers, who are required to purchase any leftovers, had to mop up over 18 percent of the auctioned debt.
So, everybody’s appetite for US government debt is running low, and that includes foreigners, the government’s own money printer, and favored financial institutions.
What does this mean for next year, when $7.6 trillion in government debt will mature? This is almost a third of all of the US’s outstanding debt, which means a ton of supply is about to hit this market with already declining demand. Unless the government decides to tighten its belt and dramatically reduce spending (flying pigs are more likely), it will have to replace maturing debt with more new debt.
Here are some possible scenarios:
A financial crisis and official recession occur, which gives the Fed “permission” to flood the economy with new money, lower interest rates, and make another massive purchase of government debt, as it has in prior crises. The issue with this scenario is that the Fed is still in the throes of its battle against price inflation. Although some economists say that recent official price inflation statistics show that the Fed is done with its rate hikes, measures of market inflation expectations have remained elevated in the past few months. We could be heading into a 1970s-style stagflation, in which the Fed must choose (according to the conventional Phillips curve framework) between dealing with unpopular inflation and unpopular unemployment. If we are capable of learning from experience, we know what it takes to get out of such a mess: a painful but healthy and necessary correction precipitated by a Volcker-style sharp increase in interest rates.Treasury auctions continue to founder, leading to a debt crisis. Treasury yields skyrocket as the whole world loses confidence in the US government’s ability to repay its debts. It’s difficult to imagine such a globally catastrophic scenario, especially since the US has its own money printer (see scenario 1). It seems the Fed and the US government would happily choose to inflate as much as necessary to avoid such an outcome.The US government performs a “soft default,” similar to its actions in the 1930s and in 1971, in which the dollar is transformed in such a way as to rescue the government from its debt obligations. In the 1930s, the government devalued the dollar by changing its gold redemption ratio from $20.67 to $35.00 per ounce, as well as limiting and prohibiting gold ownership for US citizens. In 1971, Nixon “temporarily” (read: permanently) reneged on the US’s promise to redeem foreign governments’ dollars for gold. One avenue the US could take along these lines is the implementation of a central bank digital currency (CBDC). A CBDC could be programmed to have negative interest rates and other incentives that would push CBDC holders to buy government debt. Such a tyrannical move would be disastrous for citizens, but the ability to control interest rates, increase tax revenues, and direct and stimulate spending makes this option very attractive to a debt-riddled government that has painted itself into a corner.
Of course, we could see a combination of these unfold in 2024 and beyond. As I stressed in a recent talk, there is a lot of uncertainty surrounding what the Fed will do. We’ve seen the Fed do many unprecedented things in just the past two decades. The Fed is used to stretching its own power and scope in ways that nobody fully realized the Fed could or would.
Some things are certain, however. Reckless fiscal and monetary policy have put the US government and the economy in this mess, and the Fed and the government will use reckless fiscal and monetary policy to try to escape it.

The traditionalist author Álvaro d’Ors emphasized in his work that the political thought of Rome was essentially stateless as it had a personalistic character. In contrast, Greek political thought had a territorial focus, giving rise to the idea of the state. Intellectuals who created and legitimized the idea of the state in modernity drew from Greek political thought. To abolish the state, we need to investigate what both the Greeks and Romans said. This was the work carried out by d’Ors, and it is important to recover it.
The State and Greek Political Thought
The nation-state as we currently understand it is grounded in a territorial conception. Murray Rothbard defines it as “that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area.” It is evident that in the flawed concept of the social contract, where a person becomes free when subjected to the general will, Jean-Jacques Rousseau, like Niccolò Machiavelli, presupposed the territorial nature of the state.
As Álvaro d’Ors appoints, this territorial idea is directly derived from the concept of the Greek polis (πόλις). Greek political thought, as depicted by Aristotle, presupposes man as a political (πολιτικός) animal, which truly means urban. It is within the city (polis), defined territorially, where man reaches his full potential. The citizens (πολίτης) presuppose a polis (πόλις), which is linked to the word πολύς, the Latin translation of which has been lost but in the Tuscan dialect meant touta, justifying the totality of the city that implies the Hellenistic territorial conception.
In Greece, the concept of policing was also understood in a monopolistic manner, as it originates from the Greek term politeia (πολιτεία), which in Plato’s works was translated as “republic” and referred to everything related to the organization of the polis. Álvaro d’Ors reminds us that the subsequent invasion of Alexander the Great and the new paradigm of the Hellenistic basileia (βασιλεύς) did not alter the Greek territorialist conception.
Feudalism and Roman Political Thought
On the contrary, during feudalism in Western Europe, there was no state, as its hierarchical organization through vassalage agreements did not allow for the existence of a supreme judge who would enforce laws. Kings, feudal lords, and bishops could all be dismissed, and vassalage agreements could be dissolved. Various communities, councils, assemblies, or associations were hierarchically structured with patrons, lords, overlords, and feudal lords. A personalistic political concept is seen, owing to the Roman influence imitated by the Germanic peoples.
Álvaro d’Ors explains that Roman politics is characterized by a personalistic idea founded on the nomen Romanun (Roman citizens). He elucidates that what gives unity to the civitas, composed of citizens (cives), is the nomen around the world with their tria nomina. The territory (territorium) doesn’t stem from an urban conception but rather from what was given to colonists, so subsequent Germanic translations of civis indicate a family connection. He goes on to explain that after the union of patricians and plebeians, the populus Romanus is created, with populus having a personal character and being related to pubes, which means pubescent citizen, forming the adjective publicus. This gives rise to the res publica as the assembly of Roman citizens with virile capacity.
In his work, d’Ors continues to explain that the empire (imperium) also implies a personal sovereign conception, not being a power confined to a city but a series of power relations that extend beyond the limits of urban territory. The provinces (provincia) themselves are only an attribution of personal competences. Furthermore, borders didn’t exist as such; limes rather refers to a trench, being a front that advanced and retreated. At the same time, the civitas itself assumes libertas, and vice versa, in contrast to the dominion (dominus), which was linked to kingship (rex). A regnum was considered less civilized.
He concludes that the Germanic provinces seceded around different regnum, and after the fall of Rome, terminology mattered less due to the influence of Christianity, as the civitas terrena is opposed to the kingdom of heaven (regnum caelorum). In the Byzantine Empire, the Greek territorialist idea dominated, but in the West, during the Middle Ages, this personalist idea of politics was not lost and was implemented in feudalism.
Conclusion
The idea of the personalist political order alone will not build a freer (or directly anarchic) society. However, just like the doctrine of natural law extended to the state, examples of territories that ended up being anarchic (like Coto Mixto) or the study of the problems of interventionism by Austrian economists can help build a narrative in favor of greater freedom.
As Professor Miguel Anxo Bastos has emphasized, “Historians are needed; he who controls history controls the narrative. . . . Everything is yet to be written.” Hans-Hermann Hoppe recalls in his study while seeking a libertarian narrative, “Why this particularly unfavorable treatment of the Middle Ages? Because, as many historians, old and contemporary, have of course noticed too, the Middle Ages represents a large-scale and long-lasting historical example of a stateless society and as such represents the opposite of the present, statist social order.”
To conclude, as presented by the traditionalist Álvaro d’Ors in his work, the Greek political organization around the polis (πόλις) is what has aided historians in shaping the ideas of the state. Therefore, historians should reintroduce the concept of the Roman civitas, and intellectuals must build a narrative around it to have a freer political order in the future—a stateless society.

Despite the numerous permanent problems faced by public healthcare systems, a significant number of people (such as citizens, politicians, and doctors) still seem to deem them necessary and believe that the problems associated with them can be solved by, for example, better management, increased expenditure, or central planning. Therefore, in this essay, the main arguments in favor of a gradual departure from public systems will be presented alongside the benefits of (unhampered) market solutions.
1. The Public System Overly Restricts the Role of the Consumer
In the market, despite the important role of entrepreneurs and capitalists, it is the consumer who is the most important link. In the economic sense, the whole process and organization of the production structure is subordinated to consumers. They are the ones to decide the success or failure of entrepreneurs because everything is subordinated to their satisfaction. The greatest “weapon” in their hands is the freedom of choice. Entrepreneurs have no other option than to meet their needs in the best possible way.
Therefore, meeting their health needs under market conditions would produce many benefits. The consumer would be free to choose from the offers of health insurance or entities providing their services directly. Competition processes would emphasize improving quality, lowering prices, or offering a wider range of goods and services.
Meanwhile, in the case of public systems, there is no mention of consumers, only patients, the insured, or beneficiaries. Although the public system seems to be subordinated to them, the impression is false. The insured have little or no influence on how much money will be allocated to specific services, which doctor will be assigned to them and when, or what means or technology they will be treated with. In short, their key role as consumers in the public system is strongly marginalized if not eliminated altogether, while their sovereign decisions are replaced by arbitrary procedures devised by officials and politicians.
2. The Public System Adversely Restricts the Role of the Producer/Supplier
In the case of the manufacturers and suppliers of medical services, the situation is very similar. If they wish to operate within the public system, they must meet a series of criteria imposed on them not by the consumers guided by their value judgments but by a bureaucratic system, which further inflates the costs. Although these manufacturers and suppliers are private entities, they can never fully develop their capacities as they would be able to do under market conditions.
They gain more freedom when operating outside the public system, but due to its universality, the number of customers is limited in advance. Not everyone can afford to pay a second time. Another problem may be further regulations limiting the scope of services offered on the market so that they cannot compete with public solutions.
Furthermore, another adverse effect of this situation may be the belief of a part of the population that public systems, known for their problems, nevertheless offer “free” healthcare, while market solutions, despite the better availability of services, offer higher prices.
3. The Public System Leads to the Creation of an Irrational Structure for the Financing of Medical Services
The universal healthcare system imposes taxes and premiums on the “insured” to finance access to medical services. It also leads to the creation of a single-payer system—a state-owned insurer responsible for the appropriate allocation of the funds obtained in this way. However, such “insurance” has nothing to do with market insurance, where the calculation of premiums based on the health risk of the insured plays a key role. Moreover, one cannot get insurance against all possible occurrences, such as against events that have already occurred or in cases where it is not possible to apply the theory of probability and thus estimate the risk.
“Lumping” everyone together into one “bag” or pot also has the fatal property that the insured do not purchase medical services based on the price system. This applies both to correctly assessed health insurance premiums and to direct payments. The direct expenditure on specific medical goods or services is marginalized, which makes it difficult to discern the situation. “Free” healthcare creates the illusion of abundance and accessibility when, in fact, artificially stimulated demand leads to queues and limited access to services.
Another disadvantage is that the single (public) payer is also the main buyer of medical technology. Because it pays for it with money that is not its own, it does not show the characteristics of a frugal consumer. Suppliers are also aware that there are no mass and individual consumers behind their purchases. Therefore, they do not have sufficient motivation to reduce costs and prices, even tending to artificially inflate them.
4. The Public System Introduces a Bad Relationship between the Patient and the Doctor
Another group that cannot properly spread their wings in the public system are doctors. To save money, they are burdened with a lot of administrative responsibilities that distract them from their patients. Each procedure, order of research, or consultation must be described, and the expenditure of funds on it must be justified. This has at least two negative consequences. First, physicians must comply with systemic guidelines rather than the needs of patients. Second, when attending to patients, physicians spend more time at their desks absorbed in paperwork. As a result, the public system has a negative impact on the development of the relationship between the patient and the doctor.
Health is an intimate sphere of the patient, and therefore, the patient’s problems need to be approached humanly. This requires time, attention, and empathy from doctors. In the rigid framework set by public systems, this is difficult to achieve.
5. The Public System Limits Our Responsibility for Our Own Health
When consumers do not provide medical services for themselves through their own expenses, it is more difficult for them to understand their own needs. I am not arguing that the public system automatically leads to irrational behavior in terms of one’s own health but rather that depriving individuals of much of their decision-making power in this area can result in undesirable consequences.
If society is convinced that the public system gives it the right to healthcare, its attention and vigilance regarding possible solutions offered on the market may be weakened. Thus, the social activity in taking care of one’s own health through proper nutrition, a healthier lifestyle, systematic use of services offered by private institutions in the field of periodic preventive examinations, or the monitoring of the market in search of solutions protecting against the consequences of serious diseases or accidents decreases.
Analogously, spending one’s own money on food makes the consumer pay attention to the quality and price, as well as show more interest in each product in a broader context. On the other hand, when the funds are beyond one’s direct control, the consumer may adopt a more passive attitude.
6. The Public System Leads to Further Interventions in Other Areas of the Economy
Organizing one’s own private healthcare system requires individuals to have adequate funds at their disposal. The more resources that people spend on purchasing medical services, the more satisfactorily their needs will be met. It does not matter whether one must buy private health insurance, buy a medical subscription, or pay for the services directly out of one’s own pocket. Thus, any intervention that directly or indirectly limits this range of possibilities may be met with less public support.
This will also make individuals more aware of their own needs and interests. In addition, such an open environment will increase the opportunity for a better understanding of market processes—in particular, the effects of interventionism in healthcare and the market economy in general.
7. The Public System Limits Aid to the Most Deprived
In contrast to public solutions, there are many charitable institutions on the market that use voluntarily raised funds to help those in need. They do not operate based on rigid rules; thus, their activities are not burdened with additional costs or bureaucracy. Such institutions do not have a centralized structure managing them from above, which allows them to develop quickly where it is most needed. An additional benefit is greater social awareness and the development of appropriate ethical attitudes.
In addition, it is worth noting another important fact: private charitable institutions do not create the illusion of helping. They clearly communicate that for their actions to succeed, they need the generosity of specific people willing to give part of their property to others. By contrast, no politicians who promise additional spending on healthcare to help those in need can show their sensitivity and ethical attitude in the same way because they do not devote their own resources to that purpose.
Conclusion
There are certainly more reasons to abandon public systems. Contrary to popular belief, public systems are not special or specific, and they can be implemented without much concern for our health. It is important for the public not only to be aware of the disadvantages of public systems but also to see the advantages of market-based solutions.

In his new book Only a Voice: Essays (Verso, 2023), the critic and essayist George Scialabba brings to our attention the wisdom of two authors who analyzed the dangers of war: Randolph Bourne and Dwight Macdonald. In this week’s column, I’d like to discuss what Scialabba says about them.
Bourne will be a familiar name to many readers owing to Murray Rothbard’s praise of him, but he was not a libertarian. Like John Dewey, he was a Progressive and a pragmatist who looked forward to “scientific management” as the way to solve America’s social problems. Scialabba describes Bourne’s view in this way:
In the experimental, antidogmatic, and—not least important—communal character of scientific practice, pragmatists beheld the image of a possible future. Dewey had shown, Bourne wrote, that the “scientific method is simply a sublimely well-ordered copy of our own best and most fruitful habits of thought.” From this apparently innocuous formulation, Bourne drew a radical (though not fully worked out) conclusion: maximizing the national welfare was a technical problem.
In the phrase “apparently innocuous,” Scialabba has hit upon the key problem with the program of Dewey and Bourne. If you equate the scientific method with what works best in practice, it by no means follows that a planned economy is what should be established, and the same is true for the various other programs the Progressives favored. “Scientific” has become in their usage an empty word of praise, bereft of meaning.
Bourne was not wrong, though, to favor being open-minded, and, unlike his mentor Dewey, he recognized that you could not be open-minded and an avid participant in war. Scialabba observes that “America’s entry into World War I concentrated [Bourne’s] mind wonderfully and provoked the series of furiously eloquent essays for which he is best known today.”
Scialabba succinctly describes Bourne’s most important insights about war.
“The war—or American promise,” he pleaded, “one must choose.” As censorship and irrationalism increased throughout the country, Bourne insisted, nearly alone, that cultural pluralism could not survive national mobilization. War enhances state power and undermines local, decentralized initiative; it makes passivity, apathy, conformism, and cynicism the normal relation between the citizen and the state; paradoxically, modern bureaucratized war makes public-spiritedness superfluous. In Bourne’s memorable phrase: “War is the health of the state.”
Bourne’s argument is interesting. It does not stress war hysteria, the way that people become emotionally involved in fighting the hated enemy, although of course plenty of that existed in World War I. The bigger danger, according to Bourne, is that people tend to follow the dictates of the government blindly. With a centralized bureaucracy in charge of the war, there was no need for the public to suggest ideas independently. Underlying Bourne’s argument there is an implicit tension between the “scientific” planning supported by the Progressive intellectuals including Bourne himself and his advocacy of individual initiative. In a centrally directed economy, there is little or no room for individual initiative.
Why didn’t Dewey, Herbert Croly, Walter Lippmann, and other Progressive intellectuals, all friends of Bourne, agree with his warnings about war? The answer does them little credit. They thought that opposing the war would make them lose influence with both the government and the public. Their fear of being marginalized was not mistaken, but to alter your views to gain attention is cynicism at its worst. Scialabba remarks:
All this outraged Bourne, who replied with a combination of penetrating analysis and coruscating sarcasm. In his colleagues’ eagerness to subserve official policy he saw the corruption of pragmatism and, more generally, the proneness of intellectuals to a mystique of “action” and “commitment.” They had supported intervention, he charged, from a “dread of intellectual suspense”—a readiness to minimize their own principled objections to the war for fear of ending up in a posture of futile opposition or of offering an appearance of sentimental idealism. They convinced themselves that power would allow itself to be guided by expertise—their expertise.
Dwight Macdonald is probably best remembered today for his indictment of “middlebrow” culture, but he also made a fundamental point about the nature of war and collective responsibility which has libertarian implications. During World War II, reports of German and Japanese atrocities inflamed public opinion, and many called for collective punishment of the German and Japanese people. Macdonald objected that the notion of “collective responsibility” is abhorrent. People are responsible only for what they themselves do, not for what their governments do. If collective responsibility were to be accepted, the American people would be in a difficult situation. Scialabba notes that in Macdonald’s 1945 essay “The Responsibility of Peoples,”
he asked why, if all Germans were held responsible for Nazi atrocities, all Americans should not be held responsible for Allied atrocities. The latter included the saturation bombing of German and Japanese cities (which took more than a million civilian lives), widespread starvation in “liberated” Europe, bloody repression of the Greek Communist resistance, refusal to allow more than a few European Jews to immigrate to the United States, and the reckless initiation of atomic warfare.
Macdonald’s provocative argument was “a challenge to national chauvinism, a rebuttal of the tacit assumption that the other side’s atrocities somehow extenuate one’s own.”
In what way does Macdonald’s rejection of collective responsibility have libertarian implications? Scialabba’s answer is that accepting people’s collective responsibility for state-mandated crimes rests on viewing people as organically unified by the state, which becomes the “brain” controlling the public’s “body.” If you reject the organic conception, you will wind up with the Austrian and libertarian view that only individuals act. (I say more about collective responsibility in my review of Susan Neiman’s Learning from the Germans.)
In these days of wars and massacres, we have much to learn from Bourne and Macdonald.

In my experience of public policy discussions, one of the most frequent weasel words used as an intended trump (not Trump) card has been “fair.”
Like another commonly played political trump card, “need,” fairness does not have a clear meaning. That provides a great deal of wiggle room for equivocation, almost always used to justify forcing some Americans to pay for what someone else wants.
Fairness has no universal meaning beyond “more for me or those I care about” or “I want, but I do not want to pay for.” I learned that decades ago from my children, who wielded the word almost exclusively to advance their narrow self-interests. For instance, when my daughter—who as the oldest had more responsibility and a bigger allowance—complained, it was because having more responsibility was “unfair” (but with no mention of the greater allowance). My son—who as the youngest had fewer responsibilities and a smaller allowance—however, applied “unfair” to having a smaller allowance (but with no mention of having fewer responsibilities).
Claims of fairness also imply that there is agreement on what fairness means both in principle and in practice. However, fairness is in the eye of the beholder, varying dramatically from person to person. Judging from common usage, charges of unfairness are mainly the rhetorical garnish necessary to justify using political coercion to plunder those who have a different view of fairness.
Leonard Read understood what so many today fail to understand about market fairness. One of the places he made that clearest was in his essay “Business is Entitled to a Fair Profit” in Clichés of Politics.
The notion that a business is entitled to a fair profit has no more to commend it than does the claim that workers are entitled to a fair wage, capitalists to a fair rate of interest, stockholders to a fair dividend, landlords to a fair rent, farmers to a fair price for their produce. Profit (or loss), regardless of how big, cannot properly be defined as fair or unfair.
To demonstrate why fair should not be used to modify profit as a right to which someone is entitled, merely imagine a businessman, heedless of the market, persisting in making buggy whips. If no one were willing to exchange dollars for whips, the manufacturer would fail. . . . Would you have any feeling of guilt or unfairness for having refused to buy his whips? Most certainly not!
Profit is the residual, after costs have been met, derived from willing customers. Consumers using their own money to associate with whichever supplier under whatever terms they choose do not deny any rights or claims held by disappointed suppliers:
We do not think of ourselves as unfair when we search for bargains. We have no sense of unfairness when employing a competent rather than an incompetent helper, or borrowing money at the lowest rate offered, or paying a low rather than a high rental. . . . When we shop around, our choices cause profits to accrue to some businesses, losses to others. We do not relate these exercises to fairness or unfairness or consider that anyone’s rights have been infringed.
There is no such thing as a right to a “fair” profit. All that any person is entitled to in the market place, whether a business proprietor or wage earner, is what others will offer in willing exchange.
So, as with other weasel words, we should ask why resort is so commonly made to unfounded “unfairness” claims. The answer lies in government’s coercive power and the true unfairness it can impose on others:
When it is claimed that business is entitled to a fair or reasonable profit, the claimers must have something else in mind than what they can obtain through willing exchange. Otherwise, they wouldn’t mention the matter.
The “something else” . . . must necessarily mean something other than individual freedom of choice.
In short, it must mean the only alternative to freedom of choice: authoritarianism. When the market—freedom in exchange—is cast aside, there remains but one other determinant as to who will get how much of what, namely, government! And when government determines or controls profits, prices, wages, rents and other aspects of production and exchange, we have socialism.
When fairness is demanded as a substitute for what can be obtained in willing exchange, the asker, consciously or not, is insisting on what naturally and logically follows: a planned economy . . . government’s only means of “fairness.”
These measures institutionalize unfairness.
So, how does addressing asserted unfairness cause unfairness?
The declaration that business is entitled to a fair profit connotes equalitarianism; that is, a coerced evenness in reward to the competent and incompetent alike . . . to have the state take from the mince pie makers and give to the mud pie makers . . . entitled to a “fair profit.”
Assuming the market is free from fraud, violence, misrepresentation, and predation, the economic failure or success of any individual is measured by what he can exchange in willing exchange—fairness being a state of affairs that is presupposed in the assumption.
Everyone, according to any moral code I would respect, is entitled to fairness in the sense of no special privilege to anyone and open opportunity for all; no one is entitled to what is implied by a fair price, a fair wage, a fair salary, a fair rent, or a fair profit . . . one is entitled to what others will offer in willing exchange. That is all!
As Read wrote in his 1948 Pattern for Revolt, “Given freedom of opportunity, protection from fraud, violence and predation, and a dependence for our welfare on our own initiative, we can and will look out for ourselves better than will any other person or any government agency.” In other words, protecting what should be our inalienable self-ownership is fair to all; violating it is unfair to all but tyrants.

With the release of Ridley Scott’s new film Napoleon, viewers encounter a cinematic version of Napoleon caught up in a tumultuous romance against the backdrop of the upheavals of the Napoleonic wars. 
This has revived interest in the French military commander and left many wondering what they are to make of the real, historical Napoleon. For many Americans in the audience—who, unlike Europeans, devote virtually no time to Napoleon in school—this may be the first time they’ve thought much about Napoleon at all. 
Overall, this question certainly isn’t new. Napoleon does not have a reputation like Hitler, for example. Even people who have never read a history book in their lives know they’re not supposed to like that guy. Nor are we routinely told that Napoleon is benign like, say, George Washington. Rather, Napoleon’s legacy remains very much unsettled. Even in France, there is apparently no consensus, as noted in a relatively recent France24 article titeld “Napoléon: Tyrant or genius – or both?” His legacy is “complicated” the Washington Post tells us, and it’s unclear in general if we are to regard Napoleon as a hero or a dictator or an agent of “enlightenment.” 
The question is an important one, of course, because one’s views of major historical figures is often an important part of how one views historical questions overall. In America, for instance, someone who views Franklin Roosevelt with great admiration is likely to subscribe to different ideological views than someone who admires Richard Nixon. Similarly, one’s ideological views are likely to color—or be colored by—one’s views of figures like Lenin, Churchill, Cromwell, Louis XIV, or Bismarck.
Today, pundits and reviewers on both Left and Right still have many kind words to say in favor of Napoleon whenever his legacy is a topic of conversation in the media. Many tout his allegedly enlightened policies as a “modernizer.” Conservatives, who are easily impressed by military pomp, often insist Napoleon provides us with a model of impressive masculinity as a general. 
From the perspective of the ideology known as classical liberalism (i.e., libertarianism), however, Napoleon’s legacy is less ambiguous. Napoleon was a military dictator who implemented a police state in France, and was a proponent of greater state power. War was his chief instrument, conscripting hundreds of thousands of men to carry out his conquests. If viewed from the perspective of freedom, peace, and opposition to state power, it is easy to conclude that Europe would have been better off without Napoleon. 
Why They Still Defend Napoleon 
Part of the reason that Napoleon’s legacy remains ambiguous to so many is that, in spite of his warmongering and status as a dictator, Napoleon also appears to many as someone who “modernized” Europe by carrying on the “good parts” of the French Revolution. In politics, he centralized state power, opposed the papacy, and crushed many of the old medieval polities of Europe. For modern scholars who still cling to the idea that all things modern are better than all things “medieval,” Napoleon’s legacy contains much to praise. 
For example, we can find a succinct summary of the center-right view in the words of historian Andrew Roberts. Roberts, a Thatcherite neo-conservative, writes that Napoleon should not be remembered for his wars, but for “the Code Napoleon, that brilliant distillation of 42 competing and often contradictory legal codes into a single, easily comprehensible body of French law.” Roberts also tells us Napoleon was great because “He consolidated the administrative system based on departments and prefects. He initiated the Council of State, which still vets the laws of France, and the Court of Audit, which oversees its public accounts. He organized the Banque de France…” In other words, Napoleon was great because he expanded the role and power of the central state. The Napoleonic Code, for example, was key in a process that abolished local legal independence and customs in favor of a single centrally-controlled legal apparatus. 
In his spree of conquest across Europe, Napoleon helped to centralize power both in France and in foreign polities. Napoleon’s conquests in Germany and Italy helped to abolish or weaken decentralized resistance to national unity, paving the way for the German and Italian national states in later decades.
Roberts also tells us Napoleon was great because he was a patron of fine architecture. So, don’t bother remembering those countless young men drafted by Napoleon and sent into the meat grinder. Remember, rather, than Napoleon heroically spent tax dollars on some pretty buildings. 
A similar assessment comes from lifestyle-magazine magnate Bryan Goldberg who gives us a typical center-left view. For Goldberg, Napoleon ought to be remembered as someone who spent his time “advancing science, sponsoring artists, writing egalitarian codes of laws, and integrating marginalized people into a more enlightened society. ”
If so, then Napoleon can perhaps be credited as an early pioneer in the idea of the egalitarian, enlightened police state. Historian Jacques Godechot, for example, labeled Napoleon’s regime “perhaps the precursor of the modern police states” and historian Eugen Weber labels the regime a police state without qualification. Napoleon’s regime was kind and gentle compared to twentieth-century police states, of course, but there is little reason to praise the regime, either. Michael Sibalis concludes “Napoleon’s police nevertheless did exercise tight control over all public expressions of opinion, did pay a network of secret agents to keep the nation under surveillance, and did detain the regime’s enemies in special state prisons without charge or trial. In short, they regularly ignored proper judicial procedures and systematically violated the civil rights that the French Revolution had proclaimed…”
Napoleon, Enemy of Liberalism
Napoleon was an enemy of classical liberalism in other important aspects as well.  Napoleon had little respect for free commerce and bourgeois values. Unsurprisingly, Napoleon squandered much of France’s wealth on war and government property. As Steven Pinker has put it: “Napoleon, that exponent of martial glory, sniffed at England as ‘a nation of shopkeepers.’ But at the time Britons earned 83 percent more than Frenchmen and enjoyed a third more calories, and we all know what happened at Waterloo.” (Napoleon’s authorship of the quote may be apocryphal, but it is nonetheless in character.)
Napoleon had a devastating indirect effect on European liberalism. Since Napoleon marched under the banner of enlightened, egalitarian, “liberal” France, his conquering armies came to be associated with liberalism itself. The long term effect was to turn many against the ideology overall. Historian Ralph Raico notes that classical liberalism had been on the rise in German states during the eighteenth century. But this went into reverse in the nineteenth. Why? Raico contends that  “There is no doubt that a major — perhaps the major — reason for the change lies in the political and military history of the period: basically, the attempt of revolutionary France to conquer and rule all of Europe.”
By the mid 1790s, Raico writes, “The rights of man, popular sovereignty, the French Enlightenment with its hatred of the age-old traditions and religious beliefs of the European peoples would be imposed by military might. To this end, the victorious, irresistible French armies invaded, conquered, and occupied much of Europe.” The end result was resistance to anything associated with the official ideology of the French regime—which, of course, wasn’t actually liberal at all. As a result, 
In the nature of things, these invading armies, bringing with them an alien ideology, produced hostility and resistance against that ideology, a militant nationalist reaction. That is what happened in Russia and in Spain. Most of all, that is what happened in Germany. Individualism, natural rights, the universalist ideals of the Enlightenment — these became identified with the hated invaders, who subjugated and humiliated the German people. This identification was a burden that liberalism in Germany had to carry from that time on.
As the Americans would repeatedly claim after 1945, Napoleon claimed foreign countries either welcomed invasion—or at least required invasion—in order to embrace enlightenment and equality.  Napoleon insisted “the peoples of Germany, as of France, Italy and Spain, want equality and liberal ideas” thus justifying Napoleon’s abolition (by conquest) of the old regimes. Not surprisingly, many foreigners didn’t appreciate Napoleon’s generosity.
Those who buy into the ideas behind America’s modern wars for global democracy today might therefore find Napoleon’s rationale convincing.  For those of us, on the other hand, who actually value self-determination, free markets, peace, and freedom, Napoleon provides little to be admired. He was a despot, a warmonger, a centralist, and a hypocrite who claimed to spread freedom to justify his own lust for conquest and power. 

Depression-era bank robber Willie Sutton, when asked why he robbed banks, replied, “Because that’s where the money is.” By “money,” he meant United States currency. He never indicated how he scheduled his robberies, but some days of the year may be more profitable for bank robberies than others.
Disclaimer: Neither I nor the Mises Wire in any way endorses bank robbery, which is a federal crime.
First, here are some facts about US “folding money,” Federal Reserve notes in denominations of $1, $2, $5, $10, $20, $50, and $100. The Fed no longer issues $500, $1,000, $5,000, and $10,000 bills, but they are still legal tender and may still be in circulation.
This currency is printed by the Bureau of Engraving and Printing division of the US Treasury, then supplied to Federal Reserve banks for public circulation. Coins, on the other hand, are produced by the US Treasury at several mints around the country and then deposited at the Fed banks for circulation.
Recent reports show that the total currency in circulation (Federal Reserve notes and coins outside the US Treasury and Federal Reserve banks) is about $2.3 trillion.
The Role of Depository Institutions and the Public
Commercial banks, credit unions, and savings banks are the sources of currency whenever the public desires it. We expect banks to have sufficient vault cash to satisfy all withdrawal requests. How would you react if your bank or ATM ran out of cash and told you that they won’t have any until tomorrow?
Contrary to popular belief, the US Treasury and the Fed do not determine how much currency and coins circulate at any given time. Instead, the public decides how much of its wealth to hold in the form of cash versus other asset choices such as bank account deposits, stocks and bonds, collectibles, cryptocurrency, and real property.
Depository institutions, then, must determine the proper level of vault cash to maintain for their customers. For example, banks usually experience greater cash withdrawals during the summer months and three-day weekends when people tend to travel, shop, and visit entertainment venues.
How Depository Institutions Acquire Cash
If banks run low on cash and coins, they can request more from their local Federal Reserve bank, paying face value for the cash with the reserve accounts that they are required to maintain at the Fed. However, banks avoid maintaining too much vault cash because it is “dead money” that does not earn interest, whereas they do earn interest lending to customers or keeping excess reserves at the Fed.
The Fed will always have sufficient currency to meet customers’ requests because the 1913 Federal Reserve Act provided for an “elastic currency,” meaning a currency that would easily expand or contract in response to the public’s needs and preferences. Throughout US history, the banking system has been subject to periodic bank runs (called “panics”) when depositors demanded the balances of their accounts in cash if they didn’t trust the banks.
Bank runs this past year at Silicon Valley Bank, Signature Bank, and First Republic Bank occurred because of the speed at which large online withdrawals can be made and because the market value of these banks’ bond investments had fallen as interest rates had risen. The lack of bank vault cash was not a factor in these bank runs per se, as it had been in earlier times.
Cash Makes Round Trips among Consumers, Merchants, Banks, and the Fed
Note that after the public has spent the cash they had earlier withdrawn from banks, merchants normally deposit the cash into their own bank accounts, and banks then add it to their vault cash or return it to the Fed. Although some cash may be hoarded under the mattress or in safety deposit boxes, much of it makes regular round trips in and out of bank vaults and Fed banks, which is exactly what currency elasticity was designed for.
Note also that the “elastic currency” paradigm works equally well whether the US dollar is gold-backed or is a fiat currency. The US was on a full gold standard when the Fed was created in 1913, with gold coins in circulation until Franklin Roosevelt called in those coins in 1933. The US dollar has been a fiat currency since 1971, when Richard Nixon “closed the gold window” and abandoned the Bretton Woods arrangement that had fixed the US dollar to gold.
Large Amounts of US Currency Are Held Abroad
The Federal Reserve Board of Governors estimates that foreigners hold about $1 trillion in Fed notes, representing about 45 percent of all notes outstanding, including two-thirds of all $100 bills. This US currency is accepted around the world in both legal and illegal transactions, including the international illicit drug trade.
Once the currency leaves the US, moreover, much of it tends to remain abroad permanently or for long periods of time. Interestingly, the “markup” on the currency’s value (the difference between its face value and the small cost of printing the notes) constitutes profit to the Fed (and ultimately to the US government and to American taxpayers). This profit is called “seigniorage.” If a $100 Federal Reserve note costs twenty cents to print, for example, the Fed’s profit on that bill is $99.80.
What Do These Facts Have to Do with Bank Robberies?
Bank robbers target currency that banks hold in tellers’ drawers and in the vault. Since the public determines how much currency is in circulation, banks maintain sufficient cash to satisfy the public’s demand, and the Fed can always supply enough cash to banks, when might a clever person ideally schedule a bank robbery?
Consider a robbery of a bank branch at a major regional shopping center in Seattle at about 5:30 p.m. on the day before Thanksgiving 1996. This is a true story, and retired Seattle police detective Ann Rule later wrote a book about the thieves: three colorful characters with a ringleader who became known as “Hollywood” because of his imaginative costumes. I was living in a nearby Seattle residential neighborhood at the time and recall the incident well.
We heard gunshots shortly before 6:00 p.m. that Wednesday and then the breaking story on the six o’clock news. These robbers, who had managed to elude law enforcement after previously robbing several other nearby banks, walked into the bank branch armed and costumed and successfully walked out minutes later with more than a million dollars in cash. None of the customers in the branch at the time attempted to intervene, and no one was harmed.
However, after their seemingly successful robbery, the threesome encountered some mishaps. Attempting to drive away from the scene of the crime with their loot, they were trapped in congested holiday rush-hour traffic. It was dark and pouring rain, this being Seattle in November. Stuffing as much of the cash as possible into backpacks, they abandoned their vehicle in the stalled traffic jam and began running through residential neighborhoods with police in pursuit.
They ran into the neighborhood I lived in, dodging police bullets. Two of them were shot and wounded, easily captured, later convicted of bank robbery, and sentenced to prison. The third robber, the mastermind of the escapade, was not apprehended and managed to find shelter in an abandoned camper in a homeowner’s backyard. He remained hidden in the camper from Wednesday night through Thanksgiving Day as police SWAT teams scoured the neighborhood, locking down the entire area because he was considered armed and dangerous. When the police discovered him in the camper, he refused to come out, and gunshots were exchanged. He ultimately died in the camper, his death deemed a suicide. HistoryLink.org has the complete news accounts of this story.
What can we conclude from this story? This bank branch at the major regional shopping center was supplied with sufficient cash to satisfy all customer demands over the busy four-day Thanksgiving holiday weekend. It was scheduled to close at 6:00 p.m. that Wednesday, remain closed during the holiday, then reopen for business on Friday and Saturday for the Black Friday kickoff of the Christmas shopping season.
These bank robbers were either serendipitously lucky to have scheduled their heist on the Wednesday before Thanksgiving or may likely have known that banks are normally flush with cash at such times. However, their plans quickly dissolved into failure, and their Thanksgiving that year ended badly.
As for the Federal Reserve, one might conclude that its responsibility for monetary policy may not align well with its responsibility to provide an elastic currency. The Fed’s policymakers failed to realize that price inflation was inevitable after years of near-zero interest rates and massive purchases of US Treasury bonds and mortgage-backed securities.
Thus, the Fed permits the government to “rob” its citizens through inflation. At the same time, however, the Fed’s policy of providing an “elastic” currency also provides bank robbers the opportunity to engage in a theft “windfall” as the central bank beefs up its currency deliveries to the banks.

On Sunday, the populist Austrolibertarian Javier Milei was elected president of Argentina. In the United States, the reaction ranged from concerned curiosity on the part of the political establishment to enthusiastic celebration across the populist Right—including, notably, some economic nationalists. Several renowned libertarians also brought attention to some of Milei’s many flaws, such as his views on geopolitics.
Milei’s libertarian skeptics make many good points. And odds are a man with a legislature stacked against him will not be able to address Argentina’s many problems without some political backup. But still, there is much to admire about Milei’s rise and plenty to learn from his campaign’s bold, spirited rhetoric. Because our country is also in desperate need of a similar course change.
Many Americans are in a tough spot right now. Eighty years of inflationist monetary policy has made life more expensive. And the heavy government involvement in many of the most important sectors—including healthcare, housing, education, and energy—has made it harder for younger Americans to afford the same lifestyles as previous generations.
Further, the Federal Reserve’s manipulation of interest rates has left the American people heavily in debt, low on savings, and forced to weather the recurring nightmare of the boom-bust cycle. Meanwhile, as Washington’s decades of foreign intervention predictably blow up in its face, politicians are calling on the American people to fork over an ever-increasing amount of money in the futile effort to sustain an unchecked global empire. All while, at home, the government remains unable or unwilling to protect the lives and property of millions of Americans.
We may not yet have a poverty rate over 40 percent or inflation north of 140 percent like Argentina, but we’re on a trajectory that leads straight to that kind of economic ruin. It doesn’t have to be this way. We know the way out.
That way involves dissolving the politicized monetary system and returning to a system of sound money—where prices and interest rates are determined by economic realities, not the whims of bureaucrats. That can only be achieved with a total abolishment of the cartelized banking system. Depoliticizing money and banking would put the American people back in control of their own money for the first time in over a century and bring an end to permanent inflation and ceaseless recessions.
We ought to end the disastrous policies, regulations, and departments that have constrained the supply of housing and energy and that have made education and healthcare services prohibitively expensive.
And, crucially, we need to put an end to Washington’s drive for a globe-spanning empire. The American people have been forced to fund coups, bombing campaigns, and full-on wars that have killed millions and made the world less stable. History is full of empires overextending themselves and collapsing. Let’s opt out of our own downfall.
Javier Milei has demonstrated, as Ron Paul did before, that it is possible to get millions of people to understand the necessity of radical liberty and to get them energized about it. And that’s important, because the political class is never going to give up any power unless a strong grassroots movement leaves them no choice.
Milei’s victory reiterates that liberty can win. But it requires strong, uncompromising voices that can speak to regular people about their most pressing problems and offer a compelling vision of a freer, safer, and wealthier future.

Central banks around the world target a stable price inflation rate of 2 percent annually over the medium term. This is widely considered to be monetary policy’s most important contribution to the smooth functioning of a dynamic economy. This view is wrong on multiple grounds, but there is one problem with it that is commonly ignored. Inflation, even if it remains relatively moderate, can contribute to rising inequality and undermine social mobility. It therefore poses a serious threat to a free and market-based economy. Few things are as potent as inequality, especially inequality caused by the inherently unjust process of inflation, in stimulating further fiscal interventions, higher taxes, and redistribution.
Inflation, even if it remains around 2 percent, creates strong incentives for households to change their saving and investment behavior. Both kinds of changes affect the distribution of income and wealth.
As money loses its purchasing power over time, households are incentivized to redirect their savings into asset classes that can potentially protect them against that loss. Inflation therefore generates an overproportionate shift in demand from nominal assets, such as cash and deposits, to real assets, such as stocks and real estate. The inflationary process thus generates overproportionate asset price inflation. European real estate markets provide one of the most striking examples in recent decades: housing price inflation has swept all European Union countries, though the onset has admittedly been staggered.
When the euro was introduced in 1999, it took only eight years for average housing prices in France and other southern European countries to double. During the same period housing prices in Germany remained constant. Only after the outbreak of the financial crisis of 2007 and with the advent of quantitative easing did housing prices in Germany begin to increase. They have since doubled. In France there was no correction of housing prices after the crisis. They remained high and have increased even further in recent years.
Overproportionate asset price inflation can be observed in many other markets. The German stock market index DAX, for example, has increased by about 4.5 percent annually since the introduction of the euro. During that same period, the German economy has grown only by about 1.2 percent per year in real terms and average consumer price inflation has been calculated to be about 2.0 percent per year, including the most recent spike.
The overproportionate rise of asset prices has direct implications for wealth inequality. The gap between those who own assets and those who do not (yet) own assets increases. Households that own assets whose prices rise overproportionately enjoy a positive wealth effect from inflation and become richer relative to others.
As the existing wealth distribution is reinforced, it becomes harder to climb up the wealth ladder without a higher income. Social mobility is thus undermined. One common statistic used to analyze social mobility is the wealth-to-income ratio. As the graphic shows, both France and Germany have seen strong increases in their wealth-to-income ratio. These increases are closely tied to the inflation of housing prices. An increase in the wealth-to-income ratio indicates that the monetary value of total wealth has increased relative to total annual income. The higher the wealth-to-income ratio, the higher the opportunity costs of climbing up the wealth ladder.

the_austrian-graph.png

This can be illustrated by a back-of-the-envelope calculation. Imagine a wealth-to-income ratio of 3.5, as in France during the mid-1990s. At that time the monetary value of total wealth in France was 3.5 times as high as the total annual income of the French population. This ratio implies that starting from zero with an average income and a saving rate of 10 percent, all else held constant, it would take thirty-five years to build up an average wealth position from zero. If the wealth-to-income ratio is 7.0, as in France today, it would take seventy years. This means that people starting from zero must work longer and sacrifice more in terms of consumption forgone to make it to the average wealth position. Discouragingly, building up wealth for the future has become harder.
The situation is even worse when you keep in mind that most people do not receive an average income. The income distribution is skewed, and many people remain below the average.
Households that are dependent on labor income are especially harmed by rising wealth-to-income ratios because the growth rate of wages lags far behind that of asset prices.
This, too, can partly be explained by inflation and a crowding-out effect in investment behavior. Overproportionate asset price inflation makes speculative investments, that aim at making a profit from simple price hikes by buying and selling at the right moment, more attractive relative to productive investments in the real capital stock. But productive investments are needed to increase labor productivity and real wages in the long run. A lack of productive investments undermines the growth of real wages and thus hits wage earners hardest.
To understand the above analysis, it is important to realize that the wealth-to-income ratio does not say anything about the living standard. The ratio can be high in very poor countries, and it can be low in very rich countries. The ratio of the United States, for example, is lower than that of France, despite the fact that Americans are richer on average. Even though we observe the same overall trend toward a higher ratio in the US, the American ratio had never exceeded 5.4, its value at the peak of the housing bubble, until 2020, when it was pushed above 6.0.
One reason why the wealth-to-income ratio is still lower in the US than in many European countries is taxation. In Europe, income, especially labor income, is taxed more heavily than in the US. This is one thing that the US has still going for it: incomes are allowed to be relatively high, and it is easier to make it to the top half of the wealth distribution even if you come from a modest background. In Europe it is difficult to advance without owning wealth in the first place.
This is, of course, only a relative advantage for Americans. The overall trend is the same. It certainly does not hurt to inherit some wealth as an American. In the US, too, there are big strata of the population that feel left behind and have the suspicion that the system is rigged against them. And this suspicion is not entirely unjustified. These developments can be very dangerous if their causes are not properly understood.
The European administration is currently preparing to create a centralized wealth registry of all European households, which would make the implementation of wealth taxes easier and more efficient. The official goal of the registry is to fight crime. The administration is not openly saying that taxation of wealth is planned, but the registry would be an obvious means to fight against inequality—an issue of growing concern. And the people are more likely to fall for such fiscal measures if they feel that the inequality is fundamentally unjust, which it is if it is based on inflation.
The right way to tackle the problem of inequality is to end inflationary monetary policies. This would not eliminate inequality completely because any dynamic and prospering economy will bring about inequalities. But if inequalities are the result of productive action, they do not go against a common sense of justice. A fortune made through production is a fortune made by serving others. But a fortune made from inflation is a fortune made at the expense of others. Putting an end to inflationary monetary policies would prevent the latter and the unjust inequalities that come with them.

It has become popular, especially in certain fields and among certain crowds, to glorify failure. So-called entrepreneurs and social influencers often brag about their failures. Multinational corporations publish poems encouraging failure. Vapid mottos rejecting the fear of failure are ubiquitous on motivational posters and T-shirts.
These efforts are apparently meant to convey an enterprising spirit and a fearlessness about trying new things in an effort to push the boundaries of a particular field.
While there’s tremendous value in attempting to achieve something worthwhile despite the risk of failure, failure itself is never the goal. And “learning from our failures” is part of the process of success, not an end in itself. Rejecting the fear of failure is not only impossible but harmful to human achievement.
They’re from the Government, and They’re Here to Help
What lies behind the attempt to bypass fear of failure is the perceived lack of any substantial cost to failure. And this lack is precisely why those who spout these trite mottos continue to fail. Rationalizing backward, it’s only natural for them to glorify the result they achieved.
The reason for this perception of the low cost of failure is that government involvement in every aspect of life has underscored the idea that someone will always be there to provide a safety net.
Can’t hold a job? Apply for welfare.
Gained three hundred pounds or twisted your ankle? Get on disability.
Your industry is falling behind cheaper and more efficient foreign suppliers? No worries, there are tariffs for that.
Can’t run a profitable company? Lobby the government for subsidies. Still not profitable? Encourage your colleagues in government to print money and create a financial bubble that allows you to use your inflated stock price to pay expenses. Still not profitable? Sell some of that inflated stock and cash in.
Picked a worthless field of study in school and nobody wants to hire you? Your student loan debt is cancelled.
And so on.
Lest the investment community get left out, this concept has carried over into capital markets as well, beginning with the Greenspan put of (mostly) the 1990s—an easing of monetary conditions anytime the stock market declined more than a trivial amount, most notably after the 1987 crash and the bursting of the dot-com bubble in 2000. Incidentally, this behavior was mimicked by all of Alan Greenspan’s successors and has had implications for asset prices across the board.
Burn Your Boats
Hundreds of years BC, the Macedonian army arrived in Persia to conquer their enemies. Questioning the feasibility of conquering the mighty Persians, the less weighty Macedonian army began to doubt their mission. Under the leadership of Alexander the Great, the decision was made to burn their own boats after landing on the Persian shore, leaving no possible escape. Hernan Cortez reportedly made the same maneuver when conquering the Aztecs nearly two thousand years later.
What these men knew is that a backup option would only diminish their sense of urgency. Cutting all cords and facing the decision to succeed or die instilled that sense of urgency, and glory followed.
With time, reliance on government, as opposed to a desire for freedom, has become more commonplace in America. If the trend continues, that reliance will be the source of severe disappointment. It’s already the source of a gelded populace that no longer values self-reliance and productive ability.
The state is incapable of helping anyone or anything but itself, and as Canadian American psychotherapist and writer Nathaniel Branden often has said, “No one is coming to save you.”

On Sunday, Javier Milei was elected president of Argentina by a comfortable margin, with 56 percent of the vote. He will be sworn in as president on December 10. 
Over the past year, however, Milei has made a name for himself as an extremely vocal critic of socialism, central banks, and many types of government intervention in general. He has become memorable for fiery commentary condemning the Left’s ideology and tactics while expressing an interest in immediate (i.e., not gradualist) change. He has said he seeks to abolish Argentina’s central bank and introduce the US dollar as the country’s dominant currency. 
His fiscal policy is far more in the free-market direction than any other head of state in a country as large as Argentina (with 46 million residents). Milei has expressed admiration for the work of Murray Rothbard, F.A. Hayek, and a variety of economists who are more centrist than Rothbard and Hayek, but which we might reasonably describe as more-or-less free market. Moreover, Milei self-identifies as a supporter of the Austrian School of economics. 
If Milei remains committed to reining in (or abolishing) the central bank, lowering taxes, and cutting government spending, Milei has the opportunity to push through real economic reforms that could provide relief to the beleaguered Argentinian middle class. These people have suffered greatly under decades of easy-money-induced price inflation, and an ever-growing burden of taxation and regulation. 
Many libertarian supporters of Milei (both inside and outside the country) have responded to Milei’s candidacy with celebratory enthusiasm. Some have declared him the next Ron Paul, and many others seem to assume that his election will translate into actual implementation of his stated policies.  That could happen, but unfortunately, the hard part has only begun.
It is entirely possible that Milei is sincere in his stated goals and in his apparent commitment to radical opposition against the disastrous status quo in Argentina. If so, that is excellent news. After Milei’s election comes the real test, however. Assuming that Milei is sincere right now, that doesn’t mean he won’t later be unwilling to carry out such policies if they prove to be unpopular as his administration unfolds. Given his short history of serving in political office, we have little to suggest a likely outcome one way or another. 
Another possibility is that we may find that he lacks the political skill necessary to harness and exploit what free-market sentiment in the country presently  exists. He will have to do this to actually push through any of these reforms. What political skills are necessary? Milei must be able to convince a sizable portion of the voting public that his policies will work or are working. This doesn’t necessarily mean a majority have to be enthusiastically with him at all times. But he at least has to be able to use public opinion to pressure the legislature and powerful interest groups. Since Milei will not be a dictator as president, he will be forced to somehow squeeze concessions out of countless socialists and interventionists in government who quite literally hate him and his policies. 
This is not just a problem in countries with democratic institutions. Not even dictators can simply enact radical policies at will. As absolutist monarchs and countless military dictators have found in their days, chief executives meet fierce opposition from entrenched interests within the state in all types of regimes—except, perhaps, in fully totalitarian ones. The sorts of reforms Milei wants will hurt many interest groups who have benefited from inflation and high government spending. The productive class may suffer greatly under these policies, but there are also millions of politically active voters who believe they benefit from Peronist-style economic policy. Those who think they stand to lose from reform will resist.
No Victory Is Possible with Progress in the Battle of Ideas 
For the sake of argument, however, let’s say that Milei is both sincere in his views and is also among the most skilled politician we’ve seen in decades. Let’s say he is skilled at the tricks successful politicians employ to confound adversaries and build coalitions. 
Ultimately, not even these skills can bring about the successful implementation of true radical free-market reforms if Milei and his supporters lose the battle of ideas in the meantime. Milei can only succeed if the public agrees that Milei’s policies are “worth it.” After all, as Milei tries to push through reforms such as tax cuts or limits on monetary inflation, his political opponents will flood the media with explanations of how Milei is hurting ordinary people, destroying the economy, or is somehow “a threat to democracy.” Milei’s intellectual opponents will trot out economists to explain how high taxes and inflation are actually good. The public will hear from various “experts” about how Milei is wrong, and the usual socialists and interventionists have it right. 
These tactics are especially dangerous in the short term because efforts by Milei to cut spending and rein in price inflation will be sure to cause plenty of short-term pain in the economy. Cuts in government spending and an end to easy monetary policy tend to pop financial bubbles and drive government-dependent industries into decline. Surging unemployment results in the short term as bankruptcies spike. That, of course, is bad news for any elected politician. 
Unless the public can be convinced that this pain will lead to better days ahead, the public is likely to abandon Milei and his policies in short order. Then, four years form now, the Peronists will return to power and the status quo will proceed as if nothing ever happened. 
The only antidote to this is to relentlessly fight the battle of ideas in academia, in the media, and with the public. Free-market intellectuals, activists, columnists, and speakers must never tire of endlessly recapitulating the truth about freedom, free markets, and peace.  So long as a sizable portion of the public thinks the Peronists “get it right,” no free-market reformer can win.   
After all, the only reason any people—including Milei—quote Austrian School economists or appreciate the wisdom of free-market classical liberals is because those people learned those ideas from some teacher, publication, or organization. Without scholars like Rothbard, Hayek, and the others that Milei says he admires, there would be no Milei campaign as we know it. Without organizations like the Mises Institute, it is a safe bet we would not be hearing Milei call for the abolition of a central bank. Without hardcore classical liberals like Mises, Rothbard, Hayek, Molinari, and Bastiat, there would be virtually no one, anywhere, calling for radical cuts to taxes, spending, and state power overall. 
Those who wage these battles of ideas provide the foundation for the political movements that build upon the ideas. Yet, these movements can only succeed if the public learns—to at least some extent—why fiat money is bad, why state power is a problem, and why high taxes are disastrous. The public doesn’t need to know the technical details behind these arguments, of course, and is probably not interested. But the public must believe on some level that freedom and free markets are good things. 
It remains to be seen if the voting public is willing to give Milei a chance to try beyond the very short term. Much of that will depend on whether or not Argentine libertarians have managed to sufficiently preserve or advance some lingering measure of pro-liberty sentiment. If they have not, Milei will fail politically, regardless of his political skills. If that happens, free-market activists and intellectuals will have to simply keep up the fight until the political situation again favors a viable free-market candidate.  
The situation is very similar for the rest of us in the rest of the world.

Even though support for the free market has become stronger in the last decades, libertarianism can still only be considered a fringe movement. Most people still believe that many social problems are due to “market failure” and therefore require state intervention to be “solved.” Despite the obvious flaws of modern socialism—with its unlikely combination of a redistributive welfare state and globalist crony capitalism—and despite libertarianism’s robust philosophical and empirical foundations, the liberalism of Ludwig von Mises is still far from enjoying the majority support that it so amply deserves.
There are many reasons for this. Of course, media bias and public education prevent the dissemination of the ideas of freedom in society and limit the understanding of the free market. However, an often overlooked, yet equally important, reason is a general disregard for causality. When the real and underlying causes for social and economic problems are unknown or misunderstood, the public’s support for wrong-headed statist solutions to these problems is not surprising.
The Importance of Causes
The importance of causes to human inquiry has been grasped since early antiquity, crystalizing with Aristotle and his theory of causality. Following in this tradition, Herbert Spencer considered the discovery of causal laws the essence of science; those who disregard the importance of the identification of causes, whatever the subject matter, are liable to draw erroneous conclusions.
In the Twilight of the Idols, Friedrich Nietzsche chastised modern society for still making errors of causality; namely, “the error of false causality,” “the error of imaginary causes,” and “the error of the confusion of cause and effect.” Unfortunately, these errors are made frequently in all areas of economic and political life.
In the realm of international relations, for instance, a disregard for contemporary history has led to an ignorance of the real causes of serious political events. Today’s conflicts could arguably have been avoided if their many and deep causes had been soberly and objectively considered by decision-makers. When George Santayana said that “those who cannot remember the past are condemned to repeat it” and when George Orwell wrote in his masterpiece 1984 that mastering the past is the key to mastering the present, both had in mind the crucial importance of knowing the actual causes of political events.
Nietzsche considered the error of the confusion of cause and effect to be the most dangerous one; he called it the “intrinsic perversion of reason.” This was not an exaggeration, considering the impact of this all-too-common reversal of causality. For example, this error happens when the state is absolved of the nefarious consequences of its previous actions, thereby empowering the state to legitimize policies that “solve” problems for which the state was itself originally responsible.
Examples: Recessions, Inflation, and Unemployment
As an example, it is possible to mention the boom-and-bust cycles of the typical state capitalist economy. The original cause for this cycle is the state, through its monopolistic monetary policy. As Murray Rothbard wrote, “The business cycle is generated by government: specifically, by bank credit expansion promoted and fueled by governmental expansion of bank reserves.”
Yet, during hard times—because this original cause of recessions is not generally recognized—the state itself is looked to by society to “save” the economy through measures such as bailouts or interest rate reductions (which mostly benefit big banks and strategic industries). This in turn sets the stage for the next artificial boom, and the cycle continues.
The problem of high inflation and high unemployment may be seen in the same way. Price inflation is caused by the state when it increases the money supply to pay for its chronic budget deficits, with the added benefit of reducing the relative size of its enormous debt. Yet, when prices increase in the economy because of such actions, then the state itself is expected to come to the rescue—for instance, by artificially imposing price controls or hiking interest rates, thus slowing economic activity—to the further detriment of society.
High unemployment is also a phenomenon caused by the state, of course, when it imposes rigid labor laws and high taxation on companies, when it redistributes “generous” unemployment benefits, and when it allows uneducated immigration for which there is no demand from the private sector. Yet, when unemployment becomes “too” high because of these actions, then the state itself is expected to solve the problem—for instance, by providing tax incentives to companies for hiring low-skilled workers or by hiring more civil servants.
The Fallacy of “Market Failure”
It seems counterintuitive to believe that an agent responsible for social problems should also be the one to solve those problems. The only reason this flawed logic continues to be accepted is because of errors of causality. The real causes for economic problems are not well understood by the general public and are often confused with its consequences. In economics, this disregard for causal connections has probably wrecked as much damage upon societies as the international conflicts mentioned earlier by giving free rein to those who see few limits to the state’s regulation of economic and social life.
The same reasoning is applicable to an aspect that is usually blamed on the free market: “externalities,” or the “external” costs that third parties sometimes bear. The extreme case of this is the concept of the “tragedy of the commons,” which is often used to justify the many globalist “green” initiatives to “fight” climate change. Quite apart from whether there are apocalyptic grounds to support such extreme social top-down policies, the libertarian view is that the real cause of many “externalities” is generally that private property rights have not been adequately defined.
Since causality is disregarded, social and economic problems such as those mentioned earlier are generally attributed to “market failure,” thereby reducing the credibility of libertarianism among the general public. Indeed, libertarianism is usually rejected by the majority as a political and economic system because social problems are attributed erroneously to an incapability of the free market to provide solutions. There is rarely any perception that the real causes of these problems are statist interventions in the free market in the first place.
Libertarians have always recognized the importance of causality, as per the title of Mises’s magnum opus Human Action. Carl Menger, the founder of the Austrian School of Economics, explicitly mentioned that he had “devoted special attention to the investigation of the causal connections” as an important means of gaining insight into economic processes. Importantly, this was not only the position of the Austrian School at the time because “the search for these causal laws of reality was very much an international enterprise among economists in the last quarter of the nineteenth century and up to World War I.” However, for several reasons, this focus on causal connections in economic research was then lost.
As this article has tried to show, it is essential for causality in both economics and politics to be better understood by the general public. This is key to rein in the authoritarian inroads from governments that are taking place in all areas of life. A better understanding of causal connections would lead to an increase in the popularity of libertarianism by demonstrating that the market only fails when it is constantly disrupted by state intervention.

Regardless of one’s opinion on Israel and Palestine, people can agree that killing innocent civilians, wherever they’re from, is horrible, and whoever takes hostages for bargaining chips in negotiations is a horrific human being.
Such is the case of the ongoing siege of Gaza. One has to wonder why Hamas decided that the best course of action was to commit atrocities and kidnap civilians, only to elicit a response amounting to war crimes against Gaza, where most of the people didn’t approve of their actions. While Hamas is starting to realize what they did might contribute to the end of Gaza as we know it, some people disagree and argue that what happened in Southern Israel was justified.
Of course, I’m talking about the next generation of scholars, doctors, and engineers from oversubsidized universities demonstrating their solidarity with Palestine. First came the Chicago branch of the disgraced Black Lives Matter posting on Twitter (now X) an image of a Palestinian riding a paraglider and celebrating the attack as an attempt to “decolonize” Palestine. The intersectional crowd turned the matter into “solidarity” between reproductive, LGBT, black, etc. rights and “Hamas liberators,” appearing no better than an idea from the editors of the Babylon Bee.
Behold, the “working class” was even corrected by longtime democratic socialists on numerous occasions. Antiwar skeptics on both the left and right are quick to point out that Hamas was initially a project funded by Tel Aviv intended to justify annexing the Gaza Strip. Ex-reporter from The Intercept Lee Fang (and others) pointed out that the incoherence of the woke solidarity crowd showed that they neither understand how reactionary Hamas is nor realize there is not a similar precedent for blacks in the US. Pretty much everyone on the right and portions of the antiwar left had either laughed at or corrected the woke crowd.
But those were only corrections for an ever more narcissistic crowd of activists who don’t know much other than basing their worldviews on questionable ideologies. They may have received a free ticket for rioting throughout 2020 because Black Lives Matter (BLM) riots were politically correct, but attacking the golden calf of the foreign policy establishment will take them nowhere. When Ivy League activists went out justifying the attack on Israel, it didn’t take long for the benefactors of those universities to inquire about their behavior and pull funding. Then came damaging implications for many of the protestors, where well-known companies demanded names to be put on their blacklist, damaging their career choices (at least for the time being).
While I don’t back blacklisting naïve and idiotic students living in a coddled environment, there is a sense of irony for the people who supported BLM riots and justified it by talking about insurance without knowing anything about insurance or the plight of middle-class business owners and workers. It is hilarious that the people who advocated throwing milkshakes at political opponents and shutting down other perspectives in a debate are at the receiving end of tactics they utilize. No doubt, libertarians and antiwar right-wingers should take note that those corporations and billionaires had little problem with BLM riots, as evidenced by their donations to the now-disgraced organization, but are now withdrawing support over the Hamas paraglider tweet.
After all, the activists are little more than pawns for the Beltway Left. If the Occupy movement can be goaded into backing lockdowns and forced vaccinations, believing in the idea that democracy at home depends on the survival of a kleptocratic regime in Ukraine, and thinking that printing money doesn’t cause inflation but greed does, then don’t expect them to be any better. While Israel has been a favorite for the Democrats and Republicans, it doesn’t make left-wing “populism” a good choice either. Remember, while the woke Hamas supporters are being “disciplined,” it doesn’t mean they’ve fallen out yet. Taxpayer money is devoted to subsidizing their universities and their student loans, thus the creation of a generation that hates freedom.
Revolution from the Top and Bottom against the “Deplorable” Middle
After all, that’s just a single “disciplining” compared to the many vile tactics left-wing charlatans have endorsed against the populist Right that will never be “disciplined.” Remember, the pro-Israel Anti-Defamation League calls predominantly leftist Muslim, pro-Hamas, pro-Palestine demonstrations somehow “white supremacist.” Student loans and universities will remain subsidized, especially in a politically fraught situation.
It shouldn’t be surprising when taxpayer money goes to critical race theory programs and funnels into other woke programs. Ever since the Democrat and hard-line neocon meltdown over the 2016 general election, their main fear is the potential change to foreign and, to a lesser extent, domestic policy. Not only did Donald Trump pave the way for normalizing distrust of interventionism, but he opened the floodgates for openly satirizing and mocking the old establishment. While the Trump era has proven to be better than other twenty-first-century contemporaries, the bar set by his contemporaries is extraordinarily low. The once “moderate,” “bipartisan” Middle America no longer believes in its own ideas and experiments. Florida is no longer purple but red.
While Middle America might not have all the right ideas, the left and the top of the foreign policy interventionists see them as a liability. During the fighting over who should be Speaker of the House after the ousting of Kevin McCarthy, hard-line pro-Ukraine Republicans cooperated with the Democrats on who should be in the position. Meanwhile, Democrat Brad Sherman floated the idea of George W. Bush for House Speaker. In the end, pro-Ukraine and pro-Israel Mike Johnson came out on top.
It certainly wouldn’t be the last time foreign policy crosses party lines. In the aftermath of 2016, Bill Kristol heartily embraced the political Left and declared that “we [neoconservatives] are all Democrats” (clarification is mine). Likewise, Nikki Haley made an exception for antiabortion policies just to keep the military up and running, presumably for more wars in the Middle East and elsewhere.
But they already don’t have any form of relevancy other than being merely a name checklist for the increasingly leftist war machine. Hypothetically, if war-skeptic Middle America and actual antiwar right-wingers in Congress disappear, so too do “principled conservatives” Bill Kristol and Nikki Haley as they can’t be promoted in front of the war-skeptic Right as right-wingers for war. The affluent neighborhoods and suburbs are left-wing, and the university graduates are left-wing. They agree with Far-Left domestic policies and hawkish foreign policy (except for giving taxpayer money to Israel), so even if DC manages to establish a permanent Pax Americana (which is impossible), there will be no free markets, nuclear energy, or fossil fuels.
The experts too (including former Defense secretary Robert Gates) demanded Republicans, during the lead-up to a potential shutdown, compromise with the Democrats on green energy and foreign aid and not create a PR disaster in front of China (emphasis added). That alone should have questioned the consciences of Nikki Haley and Bill Kristol when many Western leftists praised China’s model until the current cold war between DC and Beijing. Remember, the average Chinese citizen is far poorer than the average American, combined with a litany of problems that will ensure the continuation of the trend.
For the time being, the motto of the antiwar Right is “The Democrats are evil, and the Republicans are stupid.” They’re 50 perfect correct, as the reality shows that “the Democrats and Republicans are stupid and evil.” There won’t be a politician who is strong enough or realizes that the government does more harm than good. Liberty can’t be delivered by the state as the state sacrifices liberty for what it deems to be the “common good,” usually to the detriment of everyone other than politicians.

The United States regime has picked sides in the Israel-Hamas war and has committed to funding Israel’s ongoing bombing of non-combatant men, women, and children in the Gaza strip. Northern Gaza’s infrastructure is now all but destroyed, with millions of Gazans displaced and homeless. Nearly ten times more Gazans than Israelis have now died in the conflict. Many Gazans have fled to the southern portion of Gaza, but homelessness and abject poverty awaits them there. 
By employing what is essentially the carpet-bombing approach, Tel Aviv has made the choice of adopting a policy that is sure to produce hundreds of thousands of refugees—or perhaps even more than a million. Indeed, many in the Israeli regime are motivated to maximize refugees, and push Gazans out of the country altogether using the Orwellian phrase “voluntary migration.” 
On a military, tactical level, the Israeli state will have no problem accomplishing this. Tel Aviv has an air force, a deep reservoir of American-funded weapons, and a nuclear arsenal. The Israeli military can easily reduce all of Gaza to rubble. But what is sure to result from this is a humanitarian disaster accompanied by a global debate over which foreign country will host the refugees. 
Israeli mouthpieces are already at work pushing the cost onto foreign taxpayers, including American ones. This week, two Israeli politicians—one from the militarist Likud party, and one from the center-left Yesh Atid party—took to the pages of The Wall Street Journal to demand that “countries around the world should offer a haven for Gaza residents who seek relocation.” According to these politicians, “[t]he international community”—i.e., not Israel—”has a moral imperative” to resettle Gazans somewhere outside Israel at not-Israel’s expense. 
It is significant these claims appeared in an American publication. Tel Aviv is the latest welfare-queen regime—in the tradition of Ukraine’s Volodymyr Zelensky—repeatedly haranguing the American public with demands for free money. It’s no coincidence that Israel’s Benjamin Netanyahu is now seemingly ubiquitous on American prime-time news programs. His primary job right now is to demand money and favors from Washington and from other Western regimes. 
It will probably work. Americans should get ready for plane-loads of Gaza refugees arriving in their cities, funded by the American taxpayers who can now barely afford to keep up with the price of groceries. This will be sold as a “humanitarian” effort, but anyone who sees through the propaganda will see that it’s really all a cynical effort to please pro-Israel interest groups and Israeli politicians. 
A Pattern of War and Refugees 
This was all predictable from the minute the war started last month. 
The US and its allies have settled into a predictable pattern in foreign policy over the past thirty years: force the taxpayers to pay for the regime’s wars which involve bombing various poor foreign countries “back into the stone age.” Then, once the refugees start pouring out—and the Americans have lost the war, of course—Western regimes then tell the taxpayers back home to cough up even more money to pay for resettlement of all those refugees whose countries were needlessly destroyed by the bombs dropped by Washington and its allies. 
This is no small phenomenon. A 2020 report from Brown University estimated that 37 million people have been made refugees by the US-led “War on Terrorism.” By 2016, 5.2 million of them reached Europe. In 2022 alone, more than 159,000 refugees arrived by sea in Italy, Greece, Spain, Cyprus, and Malta. Thousands more arrive at the land borders of the EU every year.
Thanks to the distance from western Asia and North Africa, refugees totals have been smaller in the United States. Nonetheless, the total number of refugees has ranged from 50,000 to 90,000 per year in most years since the US began its war in Afghanistan. This has transformed a number of communities in the United States, however, since refugees often tend to concentrate in specific places along ethnic or religious lines. In the decades of the US’s endless on-again, off-again military meddling in Somalia, tens of thousands of Somali refugees have been relocated to Minnesota at taxpayers’ expense. Since 2018, Minnesota has hosted more than 40,000 Somalia-born migrants (many classified as refugees). Most of the refugees, of course, are concentrated within Minneapolis’ metro population of only 3.5 million. In democracies, this has political consequences. 
It is also important to remember that migrants who enjoy the legal status of refugees are not normal immigrants. Ordinary immigrants arrive at the United States at their own expense. The vast majority must find work on their own if they wish to have an income. They are eligible for few social benefits. Those seeking legal residency, of course, must go through a lengthy administrative process. For example, Mexicans who obtain a work visa in the United States have to work. They don’t show up and receive “free” help from government-funded refugee agencies in finding jobs, apartments, and other government freebies. 
In contrast, all of that is fast-tracked for people labeled “refugee” by the federal government, and most of these refugees are immediately eligible for a wide array of taxpayer funded benefits. In total, this all costs the taxpayers nearly two billion dollars per year, or $80,000 per refugee per year in the form of federal and state programs including food stamps, child care, and public housing.
It’s not enough that you pay for the bombs that create the refugees, dear American taxpayer. You’ll also have to pay to resettle those refugees in your town. 

The TSA has been promising to end its boneheaded ways for more than 20 years. Flying out of Dallas International Airport last week, I ruefully recognized that all TSA reform promises are malarkey.
As I neared the end of a TSA checkpoint line, I saw two women loitering behind a roped off section for CLEAR, a new biometric surveillance program that works with 35 airports and coordinates with TSA. CLEAR involves travelers standing in photo kiosks that compare their faces with a federal database of photos from passport applications, driver’s licenses, and other sources. The Washington Post warned that airport facial recognition systems are “America’s biggest step yet to normalize treating our faces as data that can be stored, tracked and, inevitably, stolen.”
Though the CLEAR program is purportedly voluntary, TSA agents at Washington National Airport recently threatened long delays for any passenger who refused to be photographed by CLEAR, including U.S. Sen. Jeff Merkley (D-OR). Merkley said that TSA falsely claimed there were signs notifying people that the facial scans are optional. But the clock is ticking down on seeking voluntary cooperation. TSA chief David Pekoske announced in March that “eventually… we will require biometrics across the board.”
“Idle hands are the tool of the devil,” as the old saying goes, and the same is true of cell phones. I raised my phone camera, snapped a few shots of the women, and the howling commenced.
“What are you doing?” screamed a young woman wearing a CLEAR jacket. “You can’t take my photo!”
“But you’re scanning people’s eyeballs,” I replied. What could be more intrusive?
“That doesn’t matter because you can’t take our photo – it’s not allowed!” She sounded as if I had desecrated a federal temple.
I gave her a Chesire cat smile. With her three-inch artificial fingernails, I wondered if she planned to audition for a Dracula movie. Her colleague speedily exited, perhaps to summon police to end my assault. But if airport officials had sought to seize those photos, they would have faced a legal ruckus.
The queue finally reached the stern middle-aged TSA dude sitting behind plexiglass who checked identification and boarding passes. He stared at my driver’s license and then gave me an intense look. TSA considers a “cold, penetrating stare” a terrorist warning sign, but I assumed this guy was above suspicion. I was tempted to ask how many TSA Watch Lists included my name thanks to TSA bashes I wrote for New York Times, USA Today, New York Post, Washington Times, and other publications. Was this TSA dude reading about how the TSA chief denounced me in 2014 for “maligning” TSA agents?
TSA protocols make flying vexing without making travelers safe. As I approached the luggage scanner, I removed my wallet and stuffed it in the bottom of my carry-on bag. More than 500 TSA agents have been fired for robbing passengers. In July, three TSA agents at Miami International Airport were arrested because they pilfered property “while the passengers were distracted with their own screenings and not paying attention to their items,” the New York Post reported. A TSA agent admitted to partnering with another TSA employee to steal a thousand dollars a day, including grabbing cash from wallets sent through TSA x-ray systems.
TSA decrees are wildly inconsistent, but every command is presumed sacrosanct. Flying out of Washington Dulles Airport the prior week, I was told to keep my laptop in my courier bag. Fine by me. In Dallas, a TSA drill sergeant wannabe barked orders for everyone to remove their laptops and lay them out before sending through the x-ray machines. TSA agents have been caught selling stolen laptops on eBay, so I tried to keep an eye on my computer.
TSA lunacy also obliged me to modify my attire. Instead of good ol’ blue jeans, I was , wearing Dockers. Prior to entering TSA’s Whole Body Scanner at Washington National Airport for a recent flight, I did everything right – emptied my pockets, removed my belt and boots, and sported a friendly smile (ok, not that friendly). But as I exited the scanner, a TSA supervisor grimly announced, “We have to do a supplemental patdown.”
“What the heck are you talking about?” I groused. 
He pointed to the large screen next to the scanner that showed the problem: an illuminated thin line directly in front of my groin.
“That’s the zipper on my pants,” I exclaimed.
“Sir, we have to do a supplemental patdown. If you want it conducted in a private room, we can do that,” came the rote TSA reply.
“Hell no. Let’s do it where the TSA surveillance cameras record the search.” Never, ever go into a private room with TSA agents.
A tall, heavyset TSA agent with his hair tied in a bun atop his head came up and began vigorously grappling my ankles. Did TSA agents have a daily quote for groping or what? As I left the checkpoint, I muttered about TSA standing for “Too Stupid for Arby’s.”
 Dockers were slightly less likely to trigger this boneheaded alert than blue jeans. But it wasn’t my fault that TSA screeners failed to detect 95 percent of the test bombs and weapons during covert tests by federal inspectors.
I had no trouble in the Whole-Body Scanner in Dallas last week, but my carry-on bag failed the TSA inspection.
A beefy young female agent hoisted my bag and carted it to the end of the checkpoint area. She was the final participant in the gauntlet of village idiocy that I had to pass before reaching my plane. She summoned me to explain its contents and my depravity. “Is there anything sharp in this bag?”
“No,” I replied. Geez, how much did TSA pay for x-ray gizmos that were more obtuse than a presidential speechwriter?
She unzipped my bag and began pawing through it. In lieu of a machete, she found a small half-full jar of peanut butter. “You can’t take liquids on a flight,” she announced solemnly.
“It’s peanut butter. It’s not liquid.”
“It’s liquid and it’s prohibited,” was her decree. Did TSA covertly classify peanut butter as a bioweapon, or what?
“Ya, whatever,” I said as I abandoned the jar to federal custody.
Chatting with another jaded traveler as I put my boots back after clearing the checkpoint, he asked if I was upset about losing my peanut butter.
I smiled: “I’ll settle accounts with TSA later.”

The Federal Reserve’s Federal Open Market Committee (FOMC) last week left the target policy interest rate (the federal funds rate) unchanged at 5.5 percent. This “pause” in the target rate suggests the FOMC believes it has raised the target rate high enough to rein in price inflation which has run well above the Fed’s arbitrary two-percent inflation target since mid-2021. I say “believe,” but perhaps the more appropriate word here is “hope.” 
That is: the Fed hopes it has raised the target interest rate high enough. Moreover, the Fed hopes this will both reign in price inflation and also avoid raising unemployment too high. (See below for what is meant by “enough” and “too high.”)
After all, the Fed has no idea what the “correct” federal funds rate is to achieve the goals that the Fed has set for itself. Nor does the Fed know what the “neutral” interest rate is at any given time. As even chairman Jerome Powell admitted at this month’s press conference, “you can’t identify [the neutral rate] with any precision in real time and we know that.”
Nonetheless, we can see here that the target federal funds rate has been held steady by the FOMC since July of this year. The length of the pause is significant because once the target rate has been flat for more than two months in a tightening period, the Fed’s next step is nearly always to begin lowering the target rate. 

Whether or not the Fed does that this time is not a sure thing, and it has become increasingly obvious the voting members of the FOMC have no idea—or are unwilling to reveal—what they’ll do next, either. 
Gone are the days when the Fed repeatedly suggested that it had a long-term plan or any sort of clear strategy for manipulating economic conditions. Over the past several months, Powell has made it increasingly clear in his post-FOMC press conferences that the Fed is—if we believe what they say—playing it all by ear on a meeting-by-meeting basis. Its “strategy” consists of tinkering with its monetary policy and then crossing its fingers and waiting. 
This month, the first hint at this came in the form of the FOMC’s official press release which states: 
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
This is just a fancy way of saying “we have no idea what will happen next.” This may seem like just an admission of the obvious reality to many people, but this all contradicts the decades of propaganda we’ve been told about the Fed and its technocrats. We’re supposed to believe the Fed has the nation’s “best” economists and the “best” economic models and pursues policies based on apolitical economic science. Yet it all turns out that the Fed has nothing in its tool box other than tinkering each month with a few knobs and levers, and hoping price inflation goes down. 
This was further revealed during this month’s press conference’s Q and A where Powell repeatedly emphasized the tenuous nature of the Fed’s current policy. Here’s a smattering of phrases Powell used to answer questions about whether or not the Fed has plans to raise or lower the target rate: “we’re monitoring. … you know, things are fluctuating back and forth. … we haven’t made any decisions about future meetings. … We have not made a determination.” 
Some reporters tried to nail the Fed down on some sort of criteria for how the Fed determines policy. For example Nick Timiraos of The Wall Street Journal asked Powell “what makes you confident the tighter financial conditions will slow above trend growth when 500 basis points, the rate hikes, QT, and a minor banking crisis have not thus far?” Powell’s sagacious response was “Well, I just—that’s—you know, the way our policy works is and sometimes it works with lags, of course, which can be long and variable.”
Oh. 
There are reasons for this utter lack of precision and planning. Some are economic and others are political. 
The first reason is that the Fed is terrible at forecasting. FOMC members and chairmen are consistently behind the curve when it comes to understanding trends in price inflation and economic growth. For example, Chairman Bernanke was still insisting there was no recession coming as late as mid-2008. Months later, the nation was in a full-blown financial crisis. In mid 2021, Minneapolis Fed president Neel Kashkari claimed there was no price inflation in store and the Fed would keep the target rate near zero until 2023. Powell, of course, famously insisted throughout 2021 that price inflation was “transitory” and that there was no need to curb the Fed’s relentless easy-money policies to rein in price inflation. In other words, there is no correlation between the Fed’s economic forecasts and what actually happens in the economy. 
Other reasons for the Fed’s evasiveness are political. Contrary to the longstanding myth of Fed independence and political neutrality, the Fed is a deeply political organization committed to kicking the can down the road to get the regime through just one more election without a fiscal or monetary disaster. The Fed is also expected to ensure that the federal government has easy access to liquidity and deficit funding while also ensuring that price inflation and unemployment remain at levels politically palatable to the voters. 
If the Fed allows price inflation to surge, this will undermine the regime’s credibility and damage the administration. This is what the Fed is worried about when it is concerned that it has raised the target rate “enough.” “Enough” is a political definition. On the other hand, the Fed doesn’t want unemployment to rise to politically problematic levels. That would also be bad for both the Fed and the administration. This is what the Fed worries about in terms of raising the target rate “too much.” What constitutes “too much” is a political question. 
Meanwhile, the regime wants the Fed to help keep interest rates on government debt low so the costs of deficit spending don’t get out of hand.  That means pushing down the federal funds rate and other interest rates through its open market operations (but risking more price inflation). 
Debt costs, unemployment, and price inflation are all political problems the Fed must manage at once. But the time horizon is strictly short-term. There is no long-term thinking here about building a sound economy, fostering investment, or helping the working man save for retirement. The Fed’s concern is keeping up appearances,  and this requires constant open-ended tinkering with policy rates (and the Fed portfolio) and hoping for the best. 

The impending decline of the dollar is apparently imposing a real Halloween scare on the American foreign policy establishment. An August 22, 2023, article on the Council on Foreign Relations website entitled “The Future of Dollar Hegemony” explained that 
the dollar’s global hegemony gives the U.S. government power to impose crippling sanctions and wage other forms of financial welfare against adversaries. . . . In 2022, more than twelve thousand entities were under sanction by the Treasury Department, a more than twelve-fold increase since the turn of the century. U.S. sanctions . . . do ensure that targeted adversaries pay a significant price for continuing to engage in actions the United States opposes (emphasis added).
This reminds yours truly of a very memorable bumper sticker that had an American flag in one corner and read: “Do as We Say or We Will Bring Democracy to Your Country!” The bumper sticker is memorable because it speaks truth to power in a very sarcastic manner. It also highlights how “sanctions” are an act of war that has long assisted the US government in acting as the bully of the world. Dollar dominance is the cornerstone of such bullying since so many dollars are held in so many other countries as their reserve currency. This allows a massive amount of foreign policy blackmailing to occur.
The bullying is always all about the money, one way or another, just as “follow the money” is always good advice when one investigates the causes of any war anywhere. But a golden rule of politics is to never, ever admit that one is interested in anything but the moral uplifting of mankind, the eradication of poverty in foreign lands, saving the widows and orphans of the world, or some other selfless, magnanimous gesture. Protectionists never admit, for example, that their real goal is to use the powers of the state to plunder and legally steal from their customers. They must cloak their greed in nationalism, national defense arguments, anything but the truth.
In the foreign policy realm one must never speak the truth about the real purpose of imperialistic wars and invasions, as did Marine Corps General Smedley Butler in his famous essay, “War is a Racket.” General Butler was a two-time Congressional Medal of Honor winner and is said to have been the most highly decorated Marine ever. Published in the post World War I era, General Butler explained what he really spent his illustrious career doing:
I spent most of my time being a high class muscle man for big business, for Wall Street and for the bankers. . . . I helped make Mexico safe . . . for American oil interests. . . . I helped make Haiti and Cuba a decent place for the National City Bank. . . . I helped purify Nicaragua for the International Banking House of Brown Brothers. . . . I brought light to the Dominican Republic for American sugar interests.
The Mother of All U.S. Government Lies
For at least the past century and a half American imperialism has been cloaked in a monstrous lie about the supposed moral exceptionalism of Americans and their government. The lie was never better exposed than by the great novelist Robert Penn Warren in a 1961 book entitled The Legacy of the Civil War. Warren was asked by Life magazine to write the book to commemorate the centennial of the Civil War. The most important point of the book is that, after the war, the US government claimed to possess what Warren calls “a treasury of virtue.” The Republican Party, which monopolized federal politics for the succeeding half century, called itself “the party of great moral ideas.” Lincoln was of course deified after his assassination with court historians comparing him to Jesus Christ, reminding their readers that he died on Good Friday, and claiming that he died for America’s sins just as Jesus died for the sins of the world. Harper’s magazine published a lithograph of an angel ascending to heaven above an opened tomb with the head of the angel being that of lifelong atheist Abraham Lincoln.
Everything related to Lincoln and his war was all of a sudden sacred and supremely virtuous. No more draft riots. No more massive battlefield desertions. No more firing squads for Union Army conscripts who had deserted. No more mass imprisonment without due process of Northern state critics of the Lincoln regime. No more shutting down of hundreds of opposition newspapers in the North and imprisonment of their owners and editors. No more deportation of opposition party congressmen like Democrat Clement Vallandigham of Ohio. No more calls to deport (euphemistically called “colonization”) all the black people as Lincoln and his idol, Henry Clay, had done throughout their adult lives.
One early biographer claimed that Lincoln’s mother was the most chaste woman in world history, next to the Virgin Mary herself. His father, said another Lincoln biographer, was so illiterate that he could never even sign his name, but nevertheless somehow “read the Bible.” Boobus Americanus ate it up and embraced every bizarre, nonsensical story about Lincoln as God’s truth, for Boobus was happy to equate Lincoln’s supposed saintliness with his own. The deification of Lincoln eventually led to the effective deification of the presidency in general in the minds of many Americans, and then to the government itself.
Robert Penn Warren wrote that this massive and unprecedented propaganda barrage created “a plenary indulgence, for all sins past, present, and future.” The US government emerged from the Civil War “so full of righteousness that there is enough overplus stored in Heaven . . . to take care of all the small failings and oversights of the descendants of the crusaders” By “crusaders” Warren apparently meant the likes of General Sherman’s army of plunderers, arsonists, rapists, and murderers of civilians.
The American state adopted “a moral narcissism,” wrote Warren, which fueled “the crusades of 1917–1918 and 1941–1945 and our diplomacy of righteousness, with the slogan of unconditional surrender and universal rehabilitation—for others.” “The effect of this conviction of virtue is to make us lie automatically,” he wrote.
In order to buy into the “treasury of virtue” ideology, however, one must forget an awful lot about actual American history and fill one’s head instead with false narratives concocted by state propagandists, said Warren. One must forget, for example, that the Republican Party platform of 1860 contained an ironclad defense of slavery; that the War Aims Resolution of the US Congress declared to the world that the war was about saving the union and had nothing to do with slavery; that the Emancipation Proclamation freed no one since it only applied to rebel territory; that Lincoln said in one of the Lincoln-Douglas debates that “I am not, nor ever have been, in favor of bringing about in any way the social and political equality of the white and black races”; and that in his first inaugural address Lincoln pledged his support of a constitutional amendment (the Corwin Amendment) that would have enshrined the protection of slavery explicitly in the text of the Constitution. The Corwin Amendment was in fact the work of the Lincoln administration and it passed the House and Senate after Southern secession had occurred. Lincoln himself instructed William Seward to do the heavy lifting with the Corwin Amendment in the US Senate—and then claimed in his inaugural address that he had never seen such an amendment but supported it nevertheless!
What Did the U.S. Government Do with All that Virtue?
Three months after the end of the War to Prevent Southern Independence, General William Tecumseh Sherman was put in charge of the Military District of the Missouri, which was all land west of the Mississippi. His assignment was to commence a twenty-five-year war of genocide against the Plains Indians. “We are not going to let a few thieving, ragged Indians check and stop the progress” of the railroads, Sherman declared. (Sherman had been given a large amount of stock in the government-subsidized transcontinental railroad corporations). The mass killing of the Plains Indians was to be a veiled form of corporate welfare for the massively subsidize Union Pacific and Central Pacific Railroad corporations.
“The great triumvirate of the Civil War,” wrote Sherman biographer Michael Fellman in Citizen Sherman, which included Generals Grant, Sherman, and Sheridan, would pursue what Sherman called “the final solution to the Indian problem.” Their “solution” resulted in the death of some forty-five thousand Indians, including thousands of women and children, and the maiming of far more at the hands of other Civil War “luminaries” such as George Armstrong Custer, Winfield Scott Hancock, John Pope, and Benjamin Garrison.
Fellman writes of how Sherman boasted of his objective of “a racial cleansing of the land,” and he was not above employing ex slaves (called “Buffalo soldiers” by the Indians) to assist in the task. “All of the Indians will have to be killed or maintained as a species of paupers,” Fellman quotes Sherman as announcing. As such, wrote Fellman, “Sherman gave Sheridan prior authorization to slaughter as many women and children as men” because it would be too time consuming to discriminate. Sherman promised to handle the east coast press should anyone find out what was really going on in the West. S.L.A. Marshall, the official US government historian of the European theatre of war in World War II and the author of thirty-five books on US military history called Sherman’s order to Sheridan and Custer “the most brutal orders every published to American troops.” Such was our first exhibition of the vaunted treasury of virtue created by Lincoln’s war.
The Indian Wars were over by 1890 and Sherman was dead. In 1899 the Filipinos finally got rid of the Spanish Empire, but little did they know that they were about to be forced to become a part of the American empire. Their three-year fight for independence was known as the Philippine Insurrection, during which some two hundred thousand Filipinos were killed by the most virtuous people on earth, American soldiers, many of whom had honed their genocidal skills during the Indian Wars. Teddy Roosevelt, the biggest blowhard in American political history, cheered on the slaughter and assisted with rhetoric denouncing Filipinos as “Chinese half-breeds,” “savages,” “barbarians,” “wild and ignorant people,” and “a lesser race.” Roosevelt denounced “the menace of peace,” shortly after which he was awarded the Nobel Peace Prize. US senator Albert Beveridge of Indiana bloviated that it was “America’s duty” to “bring Christianity” to the Philippines, unaware that Filipinos had been Catholics for about four hundred years at that point.
The Spanish-American War of the same era is considered by many to have been the final turning point where America abandoned the idea of a constitutional republic and became an empire. This was eloquently stated by the great libertarian Yale University scholar William Graham Sumner in his famous essay, “The Conquest of the United States by Spain.” Sumner wrote of how the war created for the first time a regime of “war, debt, taxation, diplomacy, a grand governmental system, pomp, glory, a big army and navy, lavish expenditures, political jobbery—in a word imperialism.” The “jobbery” created “enormous wealth for a few schemers” and was “a grand onslaught on democracy.” Sound familiar?
Also in the early 1890s American corporations had their eye on the wealth of Hawaii and got the US military to conquer yet another “inferior race.” One John Stevens was appointed as a US government “envoy” to Hawaii. He arranged for troops to land there and take control, which they did, placing Judge Stanford Dole as head of the new puppet government. The troops held the Hawaiian king at bayonet point and forced him to sign a new “constitution” that disenfranchised all native Hawaiians along with Asians who lived there, once again denouncing them all as “an inferior race,” as apparently was the routine of “the party of Lincoln” at the time. James Dole, the cousin of Judge Dole, then founded the Dole Fruit Company. Once again the idiotic Teddy Roosevelt opened his big mouth with his giant horse teeth and declared, “I feel it was a crime . . . against the white race that we did not annex Hawaii three years ago.”
And so it went with the treasury of virtue, which morphed linguistically into “American exceptionalism.” This is what paved the way for the never-ending military interventionism of the twentieth century and beyond, up to the present day. The “treasury of virtue” has always been the moral cover for all of this greed, racism, barbarianism, and worse. The good news today is that it is hard to think of anyone with a sound mind who would sincerely believe this any longer. Of course, it is human nature to deny that one has been duped and lied to for one’s entire life, so there with always be the Boobus americanus class, so named by H.L. Mencken, that will chant USA! USA! for every bomb dropped on civilian populations anywhere in the world. But the gig is up. The party in power as of this writing is run by a man described by Naomi Wolf as “a senile puppet of the Chinese Communist party” whose main mission as president has been to align himself—and his country—with what is generally acknowledged as the most corrupt society on earth, Ukraine. The “uniparty” in Washington is finally crumbling, David Stockman has recently declared. If he is right, it is because Boobus americanus is finally outnumbered and the false treasury of virtue has been proven beyond doubt to have been the mother of all government lies. There is no longer any moral authority to use “sanctions” to destroy a country’s economy for failing to “do as we say.” The decline of the dollar will inevitably speed up this process, which is good news for the world.

As I wrote in my previous piece on statism and the Israel-Hamas conflict, states are organized crime rackets. Wars between states thus represent warfare between rival gangs. The proper libertarian position with reference to such gang wars is neutrality, or the opposition to all state parties to war. Neutrality includes opposition to interventionism, including opposition to sending arms and aid to other nations. Foreign aid increases the tax aggression on the taxpayers of the country that sends aid and increases the recipient state’s control over its own population and over those subject to its aggression.
But I asked a question in that piece that I did not fully answer: Does the libertarian position with reference to war significantly change in considering conflicts between states and nonstate agents? After all, this is the situation in the “war” between Israel and Hamas, or what has become the “war” of Israel on the people of Gaza and the West Bank.
This question goes to the heart of statism itself. States have appropriated for themselves the exclusive use of force that violates the nonaggression principle (NAP)—that is, force that is used for other than defensive purposes. And, as Murray N. Rothbard pointed out in “War, Peace, and the State,” states cannot undertake exclusively defensive wars. Given the technologies of modern warfare, innocent people and their property rights will necessarily be violated in war.
In the case of Israel’s bombing of, and incursion into, the Gaza Strip—in a supposed effort to root out Hamas—Israel has aggressed upon an estimated 2.3 million people—by killing nearly ten thousand people to date (over half of them women and children), by injuring another twenty thousand, by displacing much of the population, and by destroying homes and other property. That Gazans voted to have Hamas represent them makes no difference in terms of the violation of their rights. Gazans did not vote for the “right” of Israel to attack them, and even if they had, it would not exonerate Israel. People cannot be held responsible for what their governments do. And in any case, Israel is the de facto government of the Gazan people and has funded, supported, and propped up Hamas for decades.
But how do states manage to undertake, under the cover of war, and with the implicit or even explicit approval of their constituents, what individuals are not permitted to do, and, in fact, should not do? That is, how has the initiation of aggression against persons and property by states come to be accepted as legitimate? State violence is only seen as legitimate because people have come to accept the idea that states are exempt from the moral obligations that obtain for individuals and nonstate groups. States arrogate to themselves a monopoly on violence, and people have been so habituated to this presumed monopoly status that they have come to believe that it is legitimate.
Likewise, when states undertake violence, it is routinely called “war,” while when individuals and nonstate groups initiate violence against groups or states, it is often called “terrorism.” I am not hereby suggesting that the violence of so-called terrorists is more legitimate than that of states, but rather that state violence is more often regarded as legitimate, while the violence of nonstate actors is routinely vilified.
The differing nomenclature and regard for state and nonstate aggression is explicable in terms of statist ideology. Statist ideology lends states their peculiar, supposed exemption from liability. Ideology is nothing but the representation of the truth as its inverse. But the hocus pocus of state ideology does not make state violence any more legitimate than that of individuals and nonstate groups.
Yet, ironically, states use war to establish and fortify their legitimacy. As Rothbard put it:
It is in war that the State really comes into its own: swelling in power, in number, in pride, in absolute dominion over the economy and the society. Society becomes a herd, seeking to kill its alleged enemies, rooting out and suppressing all dissent from the official war effort, happily betraying truth for the supposed public interest. Society becomes an armed camp, with the values and the morale—as Albert Jay Nock once phrased it—of an “army on the march.”
The root myth that enables the State to wax fat off war is the canard that war is a defense by the State of its subjects. The facts, of course, are precisely the reverse. For if war is the health of the State, it is also its greatest danger. A State can only “die” by defeat in war or by revolution. In war, therefore, the State frantically mobilizes the people to fight for it against another State, under the pretext that it is fighting for them.
While libertarians do not exonerate any parties to war, Rothbard suggested that war guilt usually cannot be equally distributed. The case of Israel’s war on Gaza and the West Bank is no exception. Even though Hamas violated the NAP on October 7, 2023, it is Israel which has the most war guilt on its side. The primary reason that it has managed to elude this guilt, in its own mind and in the minds of many Americans, at least, has to do with its status as a state and as a religious state to boot—that is, as a state with an ideology that is particularly bewitching to many. But this status, as I have suggested, is hardly an endorsement of its innocence.

In 2002, President George W. Bush cited the now famous “axis of evil”—Iraq, Iran, and North Korea—as he tried to get the American people to look beyond those responsible for the 9/11 attacks and greenlight a global military campaign to “rid the world of the evil-doers.”
The result was the $8 trillion global war on terror that continues to this day.
Now, in the wake of the Hamas attacks in southern Israel one month ago, the same language is being employed to justify another massive increase in military spending. In a series of statements and interviews, Senate minority leader Mitch McConnell defined a new axis of evil—Russia, China, and Iran—and argued the United States must simultaneously confront the threats posed by all of these regimes.
In his interview with Fox News, McConnell described the situation as he sees it:
If you go back to the fall of the Berlin Wall, it was widely said that we went into a holiday with history. We had a couple of conflicts related to terrorism in Afghanistan and in Iraq, but no big power competition. Fast forward to today, we still have the terrorist challenge, which the Israelis are trying to deal with. And we have big power competition, with China, Russia. So, in many ways the world is more in danger today than it has been in my lifetime.
On its face, this may seem like a good reason for taxpayers to tighten their belts and prepare for Washington to confiscate even more of their paychecks. But in reality McConnell is telling us to “fast forward” right over the important question of where these tensions came from.
A quick look at the history McConnell wants us to skip over reveals that he is presenting the situation exactly backwards. The geopolitical tensions with Russia, China, and Iran are the direct consequence of military spending gone awry.
At the beginning of McConnell’s “holiday with history,” the Communist regime in Moscow fell, and the Russian Federation took its place. The occasion marked not only the start of Washington’s unipolar moment but also the first opportunity for friendship between the governments of Russia and the United States in half a century.
Unfortunately, the decision was made early on not only to continue funding the anti-Soviet military alliance and its infrastructure in Western Europe, but to expand it toward Moscow. In his book Prisoners of Geography, Tim Marshall explains why Russian leaders are especially troubled by a potentially hostile foreign power’s presence in Eastern Europe.
Between Poland and Russia lies one big, flat plain. No mountains or oceans stand in the way to prevent an army from marching straight into Moscow. And so, since the days of Ivan III, Russia has used distance for defense. That defense has worked to repel several invasions in the last five hundred years, most famously those of Napoleon in 1812 and Hitler in 1941.
Even in the age of nuclear weapons, when long infantry supply chains are less relevant, the greater the distance a ballistic missile needs to travel to reach Russian cities, the more time the Russian regime has to detect, assess, and respond. Distance is still a factor in their defense strategy.
None of this is to say that the Russian government has a justified claim on the land of Eastern Europe, only that spending American tax dollars to move Western military infrastructure closer to Moscow was a surefire way to transform the Russians back into Washington’s enemy—something even the head of the North Atlantic Treaty Organization (NATO) now acknowledges.
The current tensions with China can similarly be understood using geography. Since the death of Mao Zedong, the Chinese Communist Party (CCP) has been able to hold on to power thanks mainly to its partial rollback of communism, which resulted in the nation’s miraculous climb out of poverty.
According to Tim Marshall, the explosion of wealth has helped fund Beijing’s effort to quash resistance in the remote provinces of Tibet and Xinjiang, and it has pacified the 1.4 billion people living under the regime’s authoritarianism. But China is almost entirely reliant on its coast to keep its economy growing.
The same mountains and deserts that keep armies from marching into the Chinese heartland also make overland trade especially difficult. That hasn’t stopped the CCP from trying (the Belt and Road Initiative is all about building alternative trade routes to China’s west), but for now, the Chinese economy is still dependent on maritime trade.
On top of that, China’s waters are themselves surrounded by several island nations. And so, accessing the world’s oceans is not as simple as pushing off from shore. Chinese vessels need to navigate through and around waters claimed by other governments.
And so, the territorial disputes off China’s coast—especially in the South China Sea, which connects China to most of the world—are a source of tremendous anxiety for the Chinese regime. Any capable naval presence off China’s coast is a credible threat to the CCP’s source of power.
So, predictably, when Washington decided to maintain a heavy naval presence in the waters around China, in addition to the hundreds of heavily armed US bases in the region and the numerous weapons deals and defense agreements with nearby island nations, tensions between Washington and Beijing increased. As long as control of the South China Sea remains an American priority, we should expect the Chinese government to see the United States as an enemy.
Lastly, there is Iran. The roots of the current US-Iran tensions go back to 1953, when Washington secretly overthrew Iran’s democratically elected government to help protect British access to oil. The dictatorship that the US set up in its place lasted only twenty-six years before it fell in the 1979 revolution that brought the current authoritarian theocracy to power.
Then, in 2003, George W. Bush ordered the invasion of Iraq and overthrew Saddam Hussein, the Iranian regime’s chief rival. Realizing the US had mistakenly handed Iran way more power, the Bush and Obama administrations turned around and started attacking factions and regimes allied with Tehran—some of whom had been American allies in the fight with the Hussein regime. The result has, again unsurprisingly, been tensions between the US and a now more powerful Iran.
Just like the George W. Bush administration twenty years ago, Senator McConnell and his allies want us to see the governments of Russia, China, and Iran as a combined force of darkness that leaves Washington no choice but to spend untold sums of our cash to eradicate. But a look at history quickly illustrates how earlier military spending made today’s tensions inevitable. Politicians refuse to face their role in creating our dangerous international situation. Giving them even more money will only make things worse.