01 Nov 2012

The System Is Rigged: The Futility of Politics

Economics, Federal Reserve, Foreign Policy, Ron Paul, Shameless Self-Promotion 155 Comments

[Such is the title of my article in the October issue of the Lara-Murphy Report (sample issues and subscription info here). This month we interview Dr. Murray Sabrin, who--among other things--is Professor of Finance at Ramapo College of New Jersey, is producing a documentary on the 100th anniversary of the Fed, ran for governor of NJ, and is co-founder of Conger LH, the world's first lubrihibitor.]

The System Is Rigged:

The Futility of Politics

Robert P. Murphy

As this October issue will be published just before the presidential election, and especially because our interview this month with Murray Sabrin touches on the subject, I thought it appropriate to share my general thoughts on the so-called “political process.” To cut to the chase: I think it can be entertaining, but that people who revere liberty should focus their energies elsewhere.

What About Ron Paul?

The first thing that many self-described Austrians and libertarians will say in response to my claim is, “What about Ron Paul? Are you saying we just wasted our time and money spreading his message of Constitutional government, which necessarily includes his stress on genuine national defense and sound money?”

No, I’m not saying that the “Ron Paul Revolution” was a waste. But the purpose of the Ron Paul movement wasn’t to put him in the White House.

For one thing, that objective was impossible in the present climate. Look, if Ron Paul is right in his diagnosis of what ails the Republic, then the Federal Reserve and what Eisenhower famously called the “military-industrial complex” literally makes hundreds of billions of dollars annually by keeping the American public in a constant state of fear: Fear about collapsing banks, fear about terrorist attackers, fear about “paranoid” militia groups, fear about superflu viruses, you name it. Many of Ron Paul’s most ardent supporters—and I’ve talked with literally thousands of them over the years—think it’s clear as day that a small ruling clique manufactured bogus “evidence” to justify the invasion of Iraq. Yet if the Ron Paul supporters thought these shadowy figures are capable of starting wars to keep the money flowing, did they really think these nefarious characters were going to let somebody waltz in and end the gravy train?

For those who followed the Ron Paul campaign this last time, it was an amazing sight to behold. His insistence that, say, the Constitution said a formal declaration of war was necessary before U.S. forces occupied another country for a decade, was treated like the ravings of some lunatic. Yet when Newt Gingrich talked of building a moon colony by 2020, this was all taken in stride—at least among the Fox News crowd—as an interesting position from the “intellectual” in the pack.

It wasn’t just the media treatment, either. I talked with many people—and not just “angry guys in their 20s” but adults with careers—who had become Ron Paul delegates in their state’s primary or caucus process and told me astonishing stories of how their local GOP bosses either skewed things or outright violated the rules to try to minimize Paul’s impact. (For those who never heard of the story, go to YouTube and search for “Ben Swann Maine Ron Paul” and see how a local pastor explained that Ron Paul clearly had votes stolen in the Maine caucus.)

The purpose of the Ron Paul Movement was education. His campaigns for both 2008 and 2012 were exciting, wonderful vehicles for getting out his message of smaller government, individual responsibility, and honest (sound) money. But there was no way in the present environment—not until we reach the 10%—that he would be elected and could singlehandedly roll back this monstrous system.

No Genuine Conservatives in the Field, Either

I realize some LMR readers may not share my enthusiasm for Ron Paul’s foreign policy views. I understand that perspective; I used to be a military hawk myself. But our difference of opinion here isn’t central to my argument. It’s not just the libertarian Ron Paul who has been excluded: There are no genuine conservatives either.

Stop for a moment and think about this: Barack Obama was rated one of the most liberal members of the Senate, and yet he managed to get elected in 2008 when the very word “liberal” is supposed to be the kiss of death in recent American politics. Now, four years into it, Obama may very well be re-elected even though “on paper” with the economy this awful, he shouldn’t stand a chance. How is this possible?

The answer is that in both 2008 and 2012, the Republican nominee was just about the least conservative candidate imaginable. John McCain was famously a “cross the aisle” kind of Republican, who introduced signature bills on immigration, campaign finance reform, and cap-and-trade legislation to arrest global warming. Regardless of what one thinks of these moves, they were generally anathema to right-wing fans of, say, Rush Limbaugh. And this was the guy the Republican establishment put up against Obama in 2008.

In this cycle, there was actually a chance to roll back “ObamaCare.” A large segment of the American people were outraged by it; in addition to the bank bailouts it was one of the rallying cries of the new Tea Party movement. When I spoke at the Cincinnati Tea Party event at Fifth Third arena on April 15, 2010, I told them that if they managed to clean house (literally!) in November, and then those “conservative” freshmen Republicans didn’t actually do anything, that the Tea Party needed to drop those guys. Well, the Republicans did enjoy major gains in 2010. So if they could just get their guy in the White House in 2012, we might actually turn back the move toward medical socialism…

But nope, instead what happened is the nominee is the single least credible Republican politician on planet Earth to roll back ObamaCare. That is because Mitt Romney introduced his own version of the plan while governor of Massachusetts. When the issue came up during one of the debates against Obama, Romney made sure to clarify that he wasn’t opposed to government intervention in health insurance per se. No, he is just going to give us more cost-effective medical central planning (though he didn’t use that latter term, of course).

My point is, this essay isn’t mere griping over Ron Paul. Even if one doesn’t like his “isolationist” views, there are still plenty of law-and-order, tough-on-Iran, fire-breathing, eloquent, principled conservatives in the Republican Party. And yet, for some inexplicable reason, they never make their way to the final ticket. It’s not a matter of “focusing on winning rather than principle,” either: History shows that someone like Ronald Reagan would have crushed Obama in this election. But because Romney is such a flip-flopper and doesn’t actually believe in the free market, Obama may actually win despite his awful first term.

So how can we explain this? The Republican Party keeps putting up extremely weak candidates, which makes no sense in terms of ideology or even smart politics. And the last guy who won, George W. Bush, ran massive deficits, expanded federal drug prescription coverage, and literally nationalized major banks. What the heck is going on here?

The System Is Rigged

These strange outcomes aren’t a coincidence. The establishment leaders of the two major parties don’t want actual anti-Warfare State progressives going head-to-head in elections against actual anti-Welfare State conservatives. Most of our current readers probably come down more on the laissez-faire, “right wing” perspective. But they must realize that Barack Obama as president is not at all the “radical Marxist” depicted by Fox News. No, actual progressives who thought Obama would bring the troops home, repeal the Patriot Act, close Guantanamo Bay, and provide universal health care while sticking it to the pharmaceutical companies are just as disgusted with Obama, as fiscal conservatives were with George W. Bush.

No, we must realize the sickening truth that the “great debate” in our major media outlets is a sham. Here Noam Chomsky’s famous observation is quite apropos: The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum.”

This is why our “serious” candidates—not kooks like that wacky Ron Paul—debate things like, “Should we pull our troops out of Afghanistan at a definite date in 2014, or should we give no timetable whatsoever? Regarding Iran, should we say we will use conventional bombers and our flying killer robots only, or are nuclear weapons also on the table? Of course we are going to have the federal government telling insurance companies they must cover pre-existing medical conditions, but how exactly are we going to say it? Of course we are going to have a central bank monopolizing the money and controlling banking, but in what quarter should it begin raising interest rates?” And so on.

The same thing happens every election cycle. The conservative Republican outlets like Fox News, Rush Limbaugh, and the Wall Street Journal get their base fired up about what an awful Big Government Candidate the Democrat is. The liberal outlets like CNN and the New York Times (there’s no real analog on the left to Rush) get their base fired up over what a hypocritical deficit-spender and proponent of corporate welfare the Republican nominee is. And you know what? They’re both right!

When is this cycle ever going to end? How many Republicans thought, “It can’t possibly get worse than Bill Clinton,” and now think the same of Obama? If Romney wins, and continues the trend of the warfare state abroad with the police surveillance state at home, many Democrats who thought, “It can’t get worse than George W. Bush” will realize the shortsightedness of that judgment.

What Then Shall We Do?

Am I preaching a counsel of despair? No, I’m not. In his column last month (September 2012), Carlos summarized the viewpoint of Étienne De La Boetie, who pointed out that an oppressive State can only survive if the people support it. The ruling class is but a tiny fraction of the population. If the mass of public opinion withdrew its consent, the regime would collapse of its own weight. This is why totalitarian regimes devote so much effort to controlling schools and newspapers; they know that all of their prisons and firing squads are impotent against ideas.

This is why education is so important. We must teach our fellow Americans the true legacy of the Founding Fathers, and the ideals of liberty upon which this country was built. We need to stop accepting the major media figures who tell us what the relevant “issues” are in today’s campaigns. This is all a smokescreen, to keep the public from seeing how they are getting bilked of trillions of dollars.

Reform of “the system” will not occur by picking the right man (or woman) to ride into Washington and beat back the hordes. That’s like fighting drug addiction by locking up dealers. No, we won’t roll back the welfare state until the American people don’t want handouts from the government, and instead encourage their own family members and neighbors to find private solutions to the genuine problems that occur in life. If we could somehow get to that happy scenario, it wouldn’t matter what elected officials promised or didn’t promise.

This is why Carlos and I chose “Building the 10%” as the motto and mission of the Lara-Murphy Report. We want to play our small role in spreading the ideas of liberty to this generation and the next. We appreciate your support and your active role in spreading this message as well.

155 Responses to “The System Is Rigged: The Futility of Politics”

  1. Dan says:

    Love it

  2. Blackadder says:

    History shows that someone like Ronald Reagan would have crushed Obama in this election.

    Or go down to overwhelming defeat, a la Goldwater vs. LBJ.

    Or fight it out to a narrow victory/defeat, as Romney is currently doing.

    If you don’t like the candidates of the two main political parties, it might be that the parties have joined in a grand conspiracy to deny people a real choice in the election. Or it might be that your views are not representative of most voters.

    Probably it’s the latter.

    • Bob Murphy says:

      Says you.

    • Bob Murphy says:

      Incidentally Blackadder, the unemployment rate in November 1964 was 4.8 percent. But don’t let that stand in the way of a smarmy comment about my argument. (And you are officially on record as believing every number the government puts out, don’t forget…)

      • Blackadder says:

        Bob,

        The state of the economy obviously is a big factor in how a candidate does. If Reagan had been the nominee in 1964 he would have lost in a landslide. If Goldwater had been the nominee in 1980 he would have won.

        However, given the state of the economy (and other such factors) in a given election, a candidate is more likely to win if he is more to the center than if he is farther to one extreme or another. I don’t say that because I like it. I wish that being more conservative also made you more likely to win. But sadly that’s not true.

        • Bob Murphy says:

          Blackadder, you’re patiently explaining stuff to me like I’m 8. I understand that conventional wisdom, but there’s the offsetting factor that if a candidate is so blah, that his base stays home.

          • Blackadder says:

            I understand that conventional wisdom, but there’s the offsetting factor that if a candidate is so blah, that his base stays home.

            Potentially, yes. However, if you look at things like a candidate’s DW-NOMINATE score, it turns out there is a connection between how far from the middle a candidate is and their odds of election. Plus, it is in politicos self-interest to push candidates with policies that have the greatest chance of being elected (unless you think that they are all part of a giant conspiracy, which I think is unlikely).

  3. Daniel Kuehn says:

    Your subtitle is considerably better defended than your title.

    • Bob Murphy says:

      Just like the Hulk is considerably stronger than Captain America.

    • Daniel Kuehn says:

      Not that you don’t make good points… they’re just points in favor of a different argument.

      “Not structured in a way that is likely to make me happy” is probably better than “rigged”. Although I admit it doesn’t have the same ring to it.

      • Daniel Kuehn says:

        And that, my friend, is unfortunately the case for all of us. At least you have Ron Paul. There’s no candidate out there that genuinely knows or advocates Keynesian economics! Yours has publications at the most important Austrian think tank! Do you understand how incredible that is?

        • Major_Freedom says:

          But do you think, apart from Murphy’s article, that there is indeed rigging taking place?

        • Matt Tanous says:

          “There’s no candidate out there that genuinely knows or advocates Keynesian economics!”

          Given that even Keynes didn’t know or advocate “Keynesian” economics, but instead a mishmash of contradictory gibberish, that isn’t surprising.

          • Major_Freedom says:

            Hey now, there is only a boatload contradictions between his Economic Consequences of the Peace, and his General Theory, and only a shipload of contradictions within the General Theory.

            Give the guy a break. He was probably too busy with being an anti-semetic pederast gold investor to worry much about economics.

          • Gene Callahan says:

            “but instead a mishmash of contradictory gibberish”

            Matt, you should ask a libertarian you respect, but who has studied Keynes deeply, if Keynes advocated “a mishmash of contradictory gibberish.” Hmm, who might you ask… hmm… I know! Wasn’t there some Murphy guy who just presented a whole course on Keynes, and certainly did not claim the above? But that’s because he STUDIED Keynes, you know, rather than having his opinions spoon fed to him by others.

            • Major_Freedom says:

              Reisman, who is no slouch when it comes to Keynes, in his book “Capitalism”, which contains an original and thoroughly devastating critique of Keynesianism, wrote:

              “…Keynesianism ends exactly where it began: a piece of flotsam and jetsam from the wreckage of critical thought that is carried along by the tide of irrationalism and anticapitalism.”

              • Lee Waaks says:

                I agree that Reisman thoroughly devastates Keynes, but I also agree with Gene Callahan that it is not fair to characterise Keynes’ system as gibberish as opposed to simply erroneous. Reisman also shows there are errors in Austrian economics too, but his take is more charitable due to his view that Mises & Co. are much closer to the truth. Please friend me on FB.

            • Matt Tanous says:

              I’ve read Keynes myself. The contradictions and absurdities are pretty evident. If you need them pointed out explicitly, there is that book Where Keynes Went Wrong. And Hazlitt’s book The Failure of the New Economics, of course.

              The most obvious contradiction is his claim that savings = investment (by definition, he gives:

              Income = value of output = consumption + investment.
              Saving = income – consumption.
              Therefore saving = investment.

              ) AND that savings is NOT equal to investment, so the government has to step in.

              If savings is by definition the same as investment, there is no possibility of what he later claims. He further informs us “that there should be such a thing as a market value for output is [...] a sufficient condition for the aggregate amount which saving individuals decide to save to be equal to the aggregate amount which investing individuals decide to invest.” In other words, that there is no possible way the paradox of thrift makes sense, even accepting Keynes’ arguments.

              Hence, you get Keynesians saying such absurd things as “Keynes showed that the fact that [...] that saving equals investment, does not imply [...] that there’s always enough investment to make use of the saving.” (?) How is this anything other than contradictory gibberish?

              • Major_Freedom says:

                You think that’s bad?

                Keynes’ “multiplier” doctrine and his “marginal efficiency of capital” doctrine contradict each other.

              • Matt Tanous says:

                Yes, but that is a bit more subtle than claiming a is not-a.

              • Major_Freedom says:

                Agreed.

                Yes, the saving = investment and saving != investment was the more conspicuous contradiction.

            • Gene Callahan says:

              “The most obvious contradiction is his claim that savings = investment (by definition, he gives:

              Income = value of output = consumption + investment.
              Saving = income – consumption.
              Therefore saving = investment.

              ) AND that savings is NOT equal to investment, so the government has to step in.”

              Matt, that is explained quite satisfactorily in any decent macro I class: you have confused “intended investment” and “actual investment.”

              This is very typical: the people who say “Keynes just wrote gibberish” turn out not to have a clue about the most elementary aspects of his work.

        • Bob Roddis says:

          As I never tire of repeating, if the public ever came to understand that inflation is a purposeful government policy, they would revolt. The elite advocates of Keynesianism know that it is a hoax the purpose of which is to loot the public. They are smart enough to obfuscate about its true nature.

          Obama: “Look, I get the Keynesian thing. But it’s not where the electorate is.” Really?

          http://factsandotherstubbornthings.blogspot.com/2012/08/obama-and-keynesian-thing.html

          • Major_Freedom says:

            DK: “Imagine if President Johnson said “Look, I get the equality of the races thing. But it’s not where the electorate is”.”

            Oh ya, imagine if someone can insinuate that being blasé towards Keynesianism is on par with being blasé about racism.

            Talk about rhetoric.

            • Matt Tanous says:

              Ironically, LBJ didn’t get the “equality of the races thing”, and only signed the CRA to win votes. He said, in private, his motivation was something to the effect of “we’ll have those n******* voting Democrat for the next hundred years”.

              • Major_Freedom says:

                Sounds like he was channeling Lincoln.

          • Lord Keynes says:

            “Obama: “Look, I get the Keynesian thing. But it’s not where the electorate is.””

            And Obama is wrong, just as you are. Evidence over the past few years shows otherwise:

            2012:
            “Those who had heard at least something about the stimulus program were then asked whether the stimulus was the right or wrong thing to do for the country. A solid majority (55 percent) thought the stimulus program was the right thing to do.
            http://www.americanprogress.org/issues/public-opinion/news/2012/09/17/38031/public-opinion-snapshot-stimulus-plan-not-so-bad-after-all/

            2009:
            Americans overwhelmingly want Congress to pass an economic stimulus bill, a USA TODAY/Gallup Poll finds,

            http://usatoday30.usatoday.com/news/washington/2009-02-02-poll-stimulus_N.htm

            “Fifty-two percent of Americans interviewed Wednesday night are in favor of Congress passing a roughly $800 billion economic stimulus package; 38% are opposed.”

            http://www.gallup.com/poll/114184/public-support-stimulus-package-unchanged.aspx

            “The latest Gallup poll shows that support for the stimulus package has reached 59 percent in favor and just 33 percent opposed, despite the fact that the question mentions a price tag of “at least $800 billion.” That’s up from 52-38 in favor on February 4″

            http://www.americanprogress.org/issues/public-opinion/news/2009/02/16/5629/public-opinion-snapshot-support-for-economic-stimulus-package-increases/

            • Bob Roddis says:

              Because they do not understand that the “stimulus” is nothing but more debt and money dilution. And having heard nothing else and nothing absolutely nothing, a bare majority wanted “stimulus”. If you knew nothing because you’d been lied to by the pubic schools and media all of your life, why wouldn’t you want “stimulus” too? Of course, that’s why the Democrats swept the congressional races in 2010.

            • Major_Freedom says:

              “Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one’s government is not necessarily to secure freedom.” –Friedrich August von Hayek

              Perhaps not…

          • Matt Tanous says:

            Oh, and remember. People only care about nominal wages. They can have no understanding of price inflation in relation to steady wage rates as a decreased standard of living. Thus, we – as good Keynesians – can inflate to trick them into accepting lower real wages and thus coming back to work!

            “As I never tire of repeating, if the public ever came to understand that inflation is a purposeful government policy, they would revolt.”

            Don’t you know the Fed fights inflation by causing inflation? How does that not make sense? (*S)

            • Bob Roddis says:

              It doesn’t hurt to repeat it over and over. The essence of Keynesianism is to trick people into accepting lower real wages with inflation because they are allegedly too dumb and stubborn to lower their wages on their own without the helping and guiding hands of Keynes and Kuehn.

              Put that on the Keynesian Party election sign high over Times Square.

          • Ken B says:

            ” if the public ever came to understand that inflation is a purposeful government policy, they would revolt.”
            Didn’t Bob (Murphy) just post a vid of Rogoff and Krugman agreeing they want more inflation? So are Rogoff and Krugman trying to keep this a secret, and just suck really bad at secret-keeping, or are they the vanguard of the uprising, raising the pitch-forks high?

            • Bob Murphy says:

              They are relying on people like you, Gene, and Daniel to say, “No no no, the words coming out of their mouths–the very titles they pick for their own blog posts–don’t mean any of that. We can strengthen their case by assuming there isn’t an alien invasion and that there’s massive deflation.”

              • Major_Freedom says:

                This is the real function of the unoriginal intellectuals Hayek spoke about in spreading ideas.

                Hayek unfortunately assumed that the game of telephone is NOT taking place.

              • Ken B says:

                Well then it’s a good thing more people read me, Gene, and DK than Paul Krugman.

                And please shsush about the alien invasion. We’re here incognito, don’t louse it up.

          • Silas Barta says:

            Even supposedly “free market” economists like Landsburg and Sumner are out there claiming that, “meh, inflation’s a wash, no big deal”, completely ignoring the impact of being the first one to spend the new money before prices adjust, and how the Federal government is able to perpetually roll over its “loans” from the Federal Reserve, essentially getting free money.

        • Slywalker says:

          They don’t understand it Daniel, but they certainly support it. It seems like that makes you better off in the representation stakes than any Austro-lib.

      • Dan says:

        I’m sure he would’ve went with your title if he was trying to make a different point.

        • Gene Callahan says:

          “The essence of Keynesianism is to trick people into accepting lower real wages…”

          Bob, you ignorance is only exceeded by the belligerence and arrogance with which you display it.

          • Bob Roddis says:

            I heard Mr. Hayek say this on TV in 1977 and there is no reason to think that it isn’t true.

            http://www.youtube.com/watch?v=gaQcbGoW2C0&feature=relmfu

          • Bob Roddis says:

            Then there’s the irresponsible spending aspect of Keynesianism

            Hayek: You see, another political element was that, of course, politicians just lapped the argument and Keynes taught them if you outspend your income and run a deficit, you are doing good to the people in general. The politicians didn’t want to hear anything more than that — to be told that irresponsible spending was a beneficial thing and that’s how the thing became so influential.

            http://www.youtube.com/watch?v=N364sN5E0hQ&feature=plcp

          • Major_Freedom says:

            Profound and enlightening rebuttal.

            • Bob Roddis says:

              For the future, we’re going to have to decide how we deal with our infantile and clueless opponents like Tom Hickey and LK:

              http://tinyurl.com/bztyvtm

              Plus the totally disengaged hordes of “average voters”.

          • Matt Tanous says:

            “Involuntary unemployment, therefore, is constituted by those, who in the event of a small fall in real wages (and a rise in the aggregate demand for their labor), are willing and able to work.”

            So the only solution to “involuntary” unemployment is, by definition, a “small fall in real wages”. (Ignore that this would create a new set of marginal individuals who are now “involuntarily” unemployed, of course.)

            • Matt Tanous says:

              Further, you have to ignore that a rise in aggregate demand for labor would increase, not decrease, real wages – that a decrease would be a market-clearing operation to account for the SUPPLY of labor (which Keynes claims cannot be done voluntarily, as workers don’t care about real wages – despite evidence to the contrary over the last 100 years or so – so must be forced through by an increase in prices through government-driven inflation. Obviously. Hence the Phillips Curve’s connection between inflation and employment.)

            • Lord Keynes says:

              So you’re selectively citing this by Catalan:

              http://www.economicthought.net/blog/?p=1066

              Yet somehow fail to notice in the same post:

              “The Classical economists, Keynes argues, attribute involuntary unemployment to wage rigidity, or an agreement “amongst themselves” (i.e. labor unions) to refuse to work for a lower wage. In other words, there is something stopping wages from falling to a level which would employ all those willing and able to work (minus the frictionally unemployed). Keynes presents two arguments against this claim, one of them casual and the second fundamental.

              First, nominal wages may not be equal to real wages, in the sense that the hypothetical market clearing wage is tied to the marginal productivity of labor. For example, while a fall in nominal wages might cause a certain number of workers to leave the labor market, out of protest, these same workers may not respond the same way if there were a reduction in their real wage as a result of an increase in prices. This brings in an element of subjectivity: how do workers themselves decide what their reservation wage is (on the basis of real wages or nominal wages)? According to the Classical theory, a fall in real wages (due to an increase in prices) ought to increase voluntary unemployment, yet empirically we can verify that the exact opposite has occurred.

              Neither does Keynes buy the argument that mass cyclical unemployment is caused by a refusal to accept lower wages (amongst those who are employed). He suggests that, empirically (the Great Depression), we see “wide variations in the volume of employment” despite the fact that the we see no change in the “minimum real demands of labor” nor in its marginal productivity. Keynes also notes that the relationship between nominal and real wages tends to be inversely direct, in that as nominal wages rise real wages fall and vice versa.”

              • Matt Tanous says:

                “So you’re selectively citing this by Catalan”

                No, I misquoted Keynes, by confusing the actual quote with Catalan’s summary. Let me correct that quote:

                “Men are involuntarily unemployed if, in the event of a small rise in the price of wage-goods relatively to the money-wage, both the aggregate supply of labour willing to work for the current money-wage and the aggregate demand for it at that wage would be greater than the existing volume of employment.” (He then goes on to point to an alternative definition on p. 26 that doesn’t even exist.)

                Again – in direct language, he states that “involuntary” unemployment is that unemployment for which a little bit of price inflation (or other reduction in real wages) would cure. Unless your contention is that Keynes is just super happy about his “involuntary” unemployment, and wants to just leave it alone, the conclusion that he wanted to lower real wages to increase employment is unavoidable.

          • Joseph Fetz says:

            Gene, I am not being a jerk or anything, but I was always under the impression that Keynes accepted that in order to decrease unemployment that wages must decline, and that he saw inflation is a tool in order to do this.

          • Silas Barta says:

            Wha … you’re denying Keynesians’ explicit desire to exploit money illusion to push real wages down???

      • Bob Roddis says:

        I have yet to hear a single statement in the mainstream media to the effect that Ron Paul advocated the ABCT for which Hayek won the Nobel Prize and which holds that current “stimulus” policies are the cause not the cure of our present problems. How hard would it be to say that on 24 hour cable channels? On the evening news? Newspapers are losing readers by the zillions and they still can’t bear to say the truth. The system is rigged.

      • Bob Murphy says:

        “Not structured in a way that is likely to make me happy” is probably better than “rigged”. Although I admit it doesn’t have the same ring to it.

        While you’re graciously admitting stuff, will you admit that I also said how even hawkish law-and-order Republicans, and antiwar progressives, aren’t getting what they want? Although I admit your witty comments would lose some of their sting in that scenario.

  4. Major_Freedom says:

    Look, if Ron Paul is right in his diagnosis of what ails the Republic, then the Federal Reserve and what Eisenhower famously called the “military-industrial complex” literally makes hundreds of billions of dollars annually by keeping the American public in a constant state of fear

    Fun fact. Did you know that Eisenhower, in his famous speech, originally intended to use the phrase “military-industrial-congressional complex”, but his advisers warned him of the political fallout from using that phrase, so he dropped the “congressional” part of it?

    • Bob Murphy says:

      No I didn’t know that MF. I’m too busy fuming at Blackadder and DK for abusing a defenseless man made of straw.

      • Major_Freedom says:

        Seems like BA and DK are providing a de facto version of the function of the media Chomsky was talking about.

      • Ken B says:

        Preemption resentment? I think that’s in the DSM.

  5. Christopher says:

    Wonderful article!

  6. President Awesome says:

    Hey, I’m very glad you wrote this; I feel like I live in bizarro world with whats been going on. You wrote almost every thing i think about the current process. When TARP happened I stopped being a republican, and since then been looking at things very differently. happy to come across your blog.

  7. Bob Roddis says:

    When one finally learns that fiat funny money dilution is a mechanism for theft without the victims knowing what hit them, normal people are repulsed. Not those sociopaths, the MMTers. They say: “Let’s go for it!” MMT queen Stephanie Kelton is going mainstream by being interviewed by minor celebrity Harry Shearer:

    http://mikenormaneconomics.blogspot.com/2012/10/harry-shearer-interviews-stephanie.html

  8. Bob Roddis says:

    And LK is still out there strutting and claiming he’s won the Graeber battle because informal credit transactions are not spot transactions:

    http://mikenormaneconomics.blogspot.com/2012/11/lord-keynes-my-posts-on-origin-of-money.html

  9. Bob Roddis says:

    From Sen. Obama’s Floor Speech, March 20, 2006:

    The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.

    http://www.snopes.com/politics/obama/debtlimit.asp

    • Bob Murphy says:

      Obama clearly was familiar with the work of James Buchanan and Nick Rowe’s apple models.

    • Major_Freedom says:

      No no no no no, debt is only bad when it is accumulated by conservatives.

  10. Gene Callahan says:

    Bob, a better title would have been “The futility of politics in today’s America.” (Which I agree is true!)

    Because your recommendation, of people withdrawing their support, is, in fact a *political* action.

    • Bob Murphy says:

      Gene, I’m not seeing how that would fix it. If my recommendation is a political action, then shouldn’t I have titled it, “My Recommendation for Effective Political Action in Today’s America”?

    • Major_Freedom says:

      Because your recommendation, of people withdrawing their support, is, in fact a *political* action.Because your recommendation, of people withdrawing their support, is, in fact a *political* action.

      If supporting politics is a political action, and if according to you withdrawing one’s support of politics is also a political action, then it follows that all actions are political, because all actions are either A or non-A.

      Or, we could cease butchering the English language, and stop calling geese ducks just because you are unable to see geese.

      • Bharat says:

        Hello, sir, I’m a political activist. I’m not active in politics.

        Hm? Confused? Well, hopefully someday you can be as erudite as me.

        • Gene Callahan says:

          Bob is very, very active in politics. He spends most of his life in political activism. He just doesn’t spend it within the current political system, but spends it advocating the replacement of that system with another one he prefers.

          I know if you are not only not erudite but in fact rather dull that it may be hard to conceive that playing lacrosse instead of football is not being “inactive in sports,” its promoting a different sport than the mainstream one.

          • Ken B says:

            Yes. He’s like Lenin.
            (Or John Lilburn to be less provocative.)

          • Bharat says:

            We’re not talking about Dr. Murphy though, we’re talking about what he’s advocating. What he’s advocating could easily be rephrased a recommendation to be inactive in politics rather than a recommendation for people to withdraw their support. And then what you’re saying really(here I mean this word as in ‘extremely’ rather than the opposite of ‘imaginary’) wouldn’t make any sense.

          • Major_Freedom says:

            I know if you are not only not erudite but in fact rather dull that it may be hard to conceive that playing lacrosse instead of football is not being “inactive in sports,” its promoting a different sport than the mainstream one.

            Bad analogy.

            What you said is equivalent to withdrawing one’s preference for football, and then you say that is a according to you, “is” an act of preference for football.

      • Gene Callahan says:

        Right, that would be a better title than your original or mine. So: “The Futility of Participation in Mainstream Politics in Today’s America.”

      • Gene Callahan says:

        “If supporting politics is a political action, and if according to you withdrawing one’s support of politics is also a political action…”

        Bob is not “withdrawing his support of politics.” Doh. That is my whole point. That would be to go off and live in a cave or something. No, he is recommending *withdrawing support for the current constitution,” and withe the POLITICAL goal of replacing it with a different one (anarcho-capitalism).

    • Arthur Krolman says:

      What is the essence of “politics”? Here’s my definition: politics is “forceology”, ie. the science of applying force to individuals. Whenever you see the word “politics”, think “force-itics” to see things more clearly. So when Bob titles his piece “The Futility of Politics” my response is, what did you expect? Humans aren’t barnyard animals. The Founding Fathers were actually big-government believers and had in mind a splintered monarchy I think. They were used to the idea of the king controlling things, like minting coins. The average man on the street, unfortunately, still believes that people should rightly be forced to do this or that for our economy to work. Politics sadly makes sense to them. Hayek foresaw that men might evolve beyond “primitive economicus” (my term) towards upright thinkers who understand how property rights, specialization of labor, voluntary trade etc. maximize overall prosperity. Perhaps Bob’s 10% can be at the vanguard of this evolution and concurrently understand that “force-itics” belongs in the dustbin of history.

      Politicians will point to a large voter turnout and announce they have received a “mandate” from the people to stuff this or that central plan down our throats. What if voter turnout dwindled from 50% to 10%. Wouldn’t the force-iticians mandate to rule by threats of violence wither and die? (I see no problem with government or any government program provided that it is voluntary).

      Conclusion: Be civilized. Don’t vote.

    • Jason B says:

      This is going to read snarkily, Gene, but it’s an honest inquiry: so when did sitting at home, minding my own business, become a political action? What if, instead of voting, I decide to cook pancakes and not spread butter on top of them? Did I just cast a ballot against Betty Crocker?

    • Joseph Fetz says:

      Gene, I am guessing that you would also call atheism a religion.

      • Zippy says:

        Rejection of religion is a form of religious expression. Have you noticed how zealous secularists have become in fighting religious symbols (3 cases in Rhode Island in 1 year) recently? An anti-holy war, it appears. So, yes, atheism is a religion by its nature. Kind of proves the old saw: you become what you hate.

  11. Z says:

    Does “Building the 10%” mean you want to convert 10% of the people to libertarian ideals and then you can have an impact?

  12. J Cortez says:

    Thanks for the article, I enjoyed it.

  13. Gamble says:

    What do you all think of this vid? (not sure if embedding works here?)

    http://www.youtube.com/watch?v=lsmbWBpnCNk&feature=player_detailpage

    • Major_Freedom says:
      • Major_Freedom says:

        The video also became a Greenbacker propaganda piece at the hour mark.

        • Gamble says:

          If you watch vid 2 and 3, you see he is all about the bitcoin. The bitcoin is his alternative to the FRN greenback.

          He appears to think government spending as the point of entry and government taxes as the point of exit regarding money supply although he rips on government all the time.

          I do think it does a good job explaining the inherent flaws of FEDFRACFIAT though.

          Not sure about his entire message but the bitcoin is gaining steam, not saying it is good. It seems hard money is safer especially if the power were to ever go out…

          Let the market decide.

          Vid 3 is the final video.

          http://www.youtube.com/watch?feature=player_detailpage&v=f6uuAupT4AQ

  14. Marc says:

    Bob,

    Who are the “establishment leaders” of the two parties that want to limit the options of the people? Do the leaders of each party cooperate with each other? How do they accomplish limiting the options of the people? Do they have massive pull in the mainstream media? What benefits do these party leaders have in limiting the options of the masses? Are they undercover dictators?

    This is not to say that I don’t agree with you that this country is heading down a dangerous path. I do.

    I seriously enjoy your posts, but I just don’t get this one.

    • Bob Murphy says:

      They own the media, so yes the have “massive pull” within it.

      • Dan says:

        Where did you come with an idea like that.

        http://opengov.ideascale.com/a/dtd/David-Rockefeller-s-book-Memoirs-admits-secretly-conspiring-for-a-NWO/4007-4049
        In David Rockefeller’s book ‘Memoirs’ he admits he is part of a secret cabal working to destroy the United States and create a new world order.Here is the direct quote from his book, pg 405:

        | Some even believe we [Rockefeller family] are part of a secret cabal working against the best interests of the United States, characterizing my family and me as ‘internationalists’ and of conspiring with others around the world to build a more integrated global political and economic structure – One World, if you will.If that’s the charge, I stand guilty, and I am proud of it |

        | David Rockefeller |

        | We are grateful to The Washington Post, The New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the work is now much more sophisticated and prepared to march towards a World Government.The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries |

        | David Rockefeller to Trilateral Commission in 1991 |

        • Bob Roddis says:

          In 1980, the Libertarian Party thought it was going places when it nominated Ed Clark to run for president. David Koch was the vice presidential candidate and was supposed to spend a ton of his own money on the campaign. Suddenly, at the end of the Republican primaries which Reagan won, one of the Republican losers, John Anderson, a previously unheard of moderate from Illinois, announced he was running as an independent candidate. He suddenly got equal billing with Carter and Reagan in the media day and night and was even allowed into some debates. Ed Clark was never mentioned. Ever. Anderson got 6%, Clark under 1%. Whatever happened to John Anderson? He’s the guy in this video introducing Walter Cronkite for some mysterious award. Hillary shows up at the end. I’m not paranoid.

          http://www.youtube.com/watch?v=BaS6bLQixkM

        • Marc says:

          Dan, I haven’t seen the actual book, but those quotes reek of fabrication. For example, if he was part of a secret cabal, why would he then publicly admit it? Doesn’t that defeat the purpose of a secret cabal? At best, these quotes are taken completely out of context.

          • Ken B says:

            They reek of irony and sarcasm.

            I’d like to thank the thousands who kept their mouths shut for decades while we hatched our evil plot before their eyes.

          • Bob Roddis says:

            That format has worked quite well for the Keynesian, a ruse for the elite to loot the masses out in the open for everyone to see. When anyone complains, just call him a fringe nutcase. It works every time.

            • Marc says:

              I consider myself Austrian, not Keynesian. Ken and I are not calling anyone nutcases. We are showing how Dan’s quotes don’t make any sense.

              • Ken B says:

                @Marc: Exactly.

              • Dan says:

                They’re not my quotes. Rockefeller said them, and the first one is from his own book. You can look online for that whole section where he says that. He goes on to complain that people who complain about him in that regard are overlooking all the “good” things those like him have done.

  15. Blackadder says:

    Here Noam Chomsky’s famous observation is quite apropos: “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum.”

    This is like a lot of Chomsky in that it’s a good line, but it doesn’t hold up under scrutiny. You can go into any Barnes and Nobel and find copies of Chomsky’s books. The guy is on TV all the time. If most people don’t buy into his ideas, it’s not because they are being suppressed by the “establishment media.”

    • Nursie says:

      Laissez-faire libertarians have much in common with Chomsky. Both believe that the unpopularity of their extreme and empirically-dubious theories proves beyond doubt that the system is rigged and that the public has been brainwashed by the media. How to explain that the majority of intellectuals, who might well be familiar with their arguments, also reject them? Why, they must be paid lackeys and mandarins of the establishment! Everything is so logical and clear if you can analyze the world like Chomsky!

      • Ken B says:

        This is a fair cop.

      • Major_Freedom says:

        What “extremely dubious” theories?

        • Ken B says:

          That the Khmer Rouge only killed a few thousand. Will that suffice?

          • Major_Freedom says:

            I was actually thinking about what kinds of dubious libertarian theories he had in mind. I realize Chomsky has made some large gaffs.

    • Ken B says:

      +1

    • Mike T says:

      “If most people don’t buy into his ideas, it’s not because they are being suppressed by the “establishment media.”

      >> Blackadder, surely you jest. I can count the number of times on a fingerless hand how often Chomsky has appeared on one of the 5 major news networks. On the other hand, the public is force fed the likes of Dick Morris and Matt Halperin’s deep analysis on endless polls while they reinforce the same status quo that people like Chomsky and many others decry and denounce. The “establishment media” depend on political access for their livelihoods. I wouldn’t doubt it was at least part of the reason why fairly high rated primetime shows such as Napolitano’s and even a guy like Cenk Uygur (who is tough to stomach at times; but as it was reported on later, was essentially forced out due to his criticism of Obama on MSNBC) were dismissed during an election season. Just look at how hard during the past year and a half those in the media attempted to squash, dismiss, and delegitimize Ron Paul’s run in the Republican Primary. You don’t think if the establishment media (on either side of the ideological or political spectrum) treated him with the same dignity and seriousness as other establishment candidates that the public at large would have received his message differently and perhaps “bought into his ideas”?

      • Blackadder says:

        I can count the number of times on a fingerless hand how often Chomsky has appeared on one of the 5 major news networks. On the other hand, the public is force fed the likes of Dick Morris and Matt Halperin’s deep analysis

        Chomsky’s media appearances tend to be in places that care less about ratings, e.g. PBS, C-SPAN, etc. (ironically these are the places where the government has a bigger role than normal). If you’ve ever heard him speak, it’s not hard to see why that might be. Dude is dull. Dick Morris is a knave and a fool, but if more people tune in to hear his analysis than watch Chomsky’s, I don’t think that’s because they are being forced to do so.

        • Mike T says:

          “Dick Morris is a knave and a fool, but if more people tune in to hear his analysis than watch Chomsky’s, I don’t think that’s because they are being forced to do so.”

          >> My point isn’t necessarily about personalities, but rather the common narrative that is projected from the five major news networks which have a much higher viewership than either PBS or C-SPAN. Sure, people aren’t forced to watch, but they do, and under the guise that they are reciving news. And I don’t see how Chomsky’s quote is in any way controversial.

    • Major_Freedom says:

      Chomsky has been banned from mainstream television.

      Your “scrutiny” is rather superficial.

    • Matt Tanous says:

      All of that is true. But in terms of politics, the line still stands. Let’s say that a large chunk (like 20%) of American adults *did* buy into Chomsky’s ideas, at least on war. Which candidate would they vote for? Obama or Romney? Or would they vote for a third party candidate and have tons of fun not accomplishing anything?

      So, yeah, you can have an opinion like Chomsky’s or Rothbard’s. It’s not going to qualify as “acceptable opinion” in the realm of politics, which Murphy is discussing here.

      “If most people don’t buy into his ideas, it’s not because they are being suppressed by the “establishment media.””

      I think it has more to do with building up a strong critique of democracy, and then complaining that only the political sphere, and not the economic, is democratic. But the state indoctrination centers the youth go to for 12 years do constrain “acceptable opinion”. That’s why you get papers children are supposed to write on “Why Government Matters” and “Why Nuking Japan Was Justified”, and my favorite one that I had to do “Why Columbus Was An Asshole Who Came To Kill Lots Of People He Didn’t Even Know Existed”.

  16. Ken B says:

    There’s no conspiracy. There’s “demosclerosis” and the public choice effects Mancur Olson talked about. I think Olson underestimated how many groups would care about self-image not self-interest, but since they do this via many different issues the analysis carries through.

    Rauch’s book is very good http://www.amazon.com/The-End-Government-As-We-Know/dp/1588264947/ref=sr_1_1?ie=UTF8&qid=1351862445&sr=8-1&keywords=end+of+government

    I don’t think this contradicts Bob’s 10% idea. Quite the reverse.

  17. joeftansey says:

    “who pointed out that an oppressive State can only survive if the people support it.”

    I suppose slavery was only stable because the slaves supported it.

    And don’t object that the majority were never slaves. According to wikipedia:

    “Slaves and serfs made up around three-quarters of the world’s population at the beginning of the 19th century.[10]”

    “In 1649 up to three-quarters of Muscovy’s peasants, or 13 to 14 million people, were serfs whose material lives were barely distinguishable from slaves. Perhaps another 1.5 million were formally enslaved, with Russian slaves serving Russian masters. ”

    “In Senegambia, between 1300 and 1900, close to one-third of the population was enslaved.[51][59] In Sierra Leone in the 19th century about half of the population consisted of enslaved people.[51]

    In the 19th century at least half the population was enslaved among the Duala of the Cameroon, the Igbo and other peoples of the lower Niger, the Kongo, and the Kasanje kingdom and Chokwe of Angola. Among the Ashanti and Yoruba a third of the population consisted of enslaved people.[51]”

    etc etc etc. You do yourself a disservice by using terms like “the people”. Such sloppy vocabulary is usually reserved for extolling the virtues of democracy and socialism.

    “The ruling class is but a tiny fraction of the population. If the mass of public opinion withdrew its consent, the regime would collapse of its own weight.”

    Of course. But “ruling class vs the masses” is a false dichotomy. There’s a continuum of state beneficiaries. Swarms of teachers, unions, licensed professionals, etc, who all have relatively sweet deals with this government thing.

    Maybe it’s a thieves’ market, where everyone would prefer private property rights for society, but special rights for themselves. Maybe teachers could convincingly be antiwar, but never would they support deregulation of education that would throw all the glorified babysitters into the flames of competition. And, as we so often point out, we all lobby much harder for our own special interests, such that one’s general libertarianism hardly matters.

    “This is why totalitarian regimes devote so much effort to controlling schools and newspapers; they know that all of their prisons and firing squads are impotent against ideas.”

    But they do much more. Like our familiar examples in America, non-democracies employ ingratiating resource distribution. The presidente does not keep it all to himself. He makes swarms of powerful political allies for himself. This pattern is stable in *many* countries with varying levels of information suppression.

    “This is all a smokescreen, to keep the public from seeing how they are getting bilked of trillions of dollars.”

    Because everyone is walking around in a blind stupor. http://pewresearch.org/databank/dailynumber/?NumberID=1400 Oh wait, it was never hard to convince people that they’re victims of evil fatcat bankers.

    By the way, the victim mentality is not empowering.

    “This is why Carlos and I chose “Building the 10%” as the motto and mission of the Lara-Murphy Report.”

    Now I don’t want to straw man you here, but the Misesians got pretty excited when they saw that paper on “unshakable beliefs”, and how you only needed a small percentage of people to agree with you until your ideas unstoppably spread to the whole. I won’t bother critiquing it unless this really is your anchor point, but I see no evidence for the unshakable minority approach.

    “What happens when an unstoppable force meets an immovable object?”

    • Tel says:

      You cannot measure slavery in terms of material lifestyle. If you do that then since technology has improved our material lifestyle then we could conclude that we must all be much freer than our ancestors.

      Indeed, the technological improvements that we benefit from make it much easier for big government and big business to offer the plausible case that since we are better off materially than anyone in the 19th Century, therefore our governance must also be superior.

      Getting back to whether government requires the consent of the people, you have to accept that the world is shaped to a large extent by military technology. In the 1500′s a good horse, armour and weapons were prohibitively expensive, whereas today a Chinese knock-off AK47 is much more lethal and in terms of relative cost might be a factor of 1000 times cheaper, possibly more. More than that, training in medieval combat might take 10 years to be proficient, but a rifleman takes just 6 months to train.

      The whole structure of warfare has changed, and now with robot drone aircraft we can expect it to change again.

      • joeftansey says:

        “If you do that then since technology has improved our material lifestyle then we could conclude that we must all be much freer than our ancestors.”

        This objection aside, it is still the case that *many* people were enslaved in various societies in history. It was the norm. And unless you think the slaves supported their masters, this proves that the opinions of the masses aren’t the only thing that matter.

        “The whole structure of warfare has changed, and now with robot drone aircraft we can expect it to change again.”

        What’s your point? Murphy’s is that government depends on the (passive) consent of the governed.

        • Tel says:

          “What’s your point? Murphy’s is that government depends on the (passive) consent of the governed.”

          My point is that in a world where rifles are the best weapon you can get, and everyone already has a rifle or two, then government absolutely depends on the consent of the governed. In a world where a small team of well trained and well equipped knights can easily slaughter 1000 peasants in an afternoon, government mostly needs the consent of those few knights. Those two examples represent two different worlds, neither of which is the world we are in right now.

          • joeftansey says:

            So you’re saying that a Knight vs 3 peasants is more lopsided than the status quo?

            Because the government has helicopters, tanks, heavy armor, assault weapons, explosives, and most importantly, communications networks and training.

            Oh and they have a navy and air-force. Which we can’t do anything about because we can’t swim or fly very fast.

            But even if you’re right, it never comes to that because of the public goods problem. Each individual would not significantly influence the outcome of a bloody rebellion. To minimize his chance of dying, the individual tries to free ride. This was true in the past, and true now.

            And I don’t think Murphy is making the physical force point. He’s not calling for all libertarians to arm themselves. Note that Murphy is (rightly) a pacifist

            • Tel says:

              Murphy is welcome to be a pacifist, as is his choice, but the majority of people on Earth never will be pacifists.

              The power of the medieval knights was weakening even before the invention of firearms. The English had a social class of Yeoman who were not peasants because the Yeoman could own land and carry arms, but they were not a knights either because the Yeoman was not wealthy enough to have access to the best weapons, horses and armour.

              What they discovered was that certain mass formations of cheap weapons were effective. Well known is the Welsh longbow (devastating enough at a distance if you can gather enough archers together) but less well known was the pole arms that were little more than hooks (and whatever you had at hand) tied to the end of a stout pole. These weapons would not kill a knight, but they would unseat him from his horse. A dismounted knight is still pretty lethal from front on, but lightly armoured men can move more quickly, and grapple at close range, and the weapon of choice for dispatch was the misericord — a long, thin dagger specialized for exploiting weaknesses in armour such as stabbing through the visor, or between the legs or under the arm (to slash a major artery). Also easy to carry and conceal.

              Needless to say, bringing down knights required teamwork and was dangerous business at the best of time, but the yeoman class didn’t back down easily because they had a small plot of land (thus something to lose), and they were defending their homes, their families, and their mates. A close knit community spirit and a feeling of genuine place in society solved the free rider problem.

              I should add that fighting with bill hook, entanglement and misericord was considered despicable, unchivalrous and dishonourable, but it was bloody effective at the time. A man’s honour goes to what he really cares about, not what he is instructed to feel honour towards.

              Lest I be accused of a Major Freedom attempt to achieve higher word count than the national debt, I’ll split the modern section.

            • Tel says:

              I’ll try to connect this up with the modern situation (which is a technological moving target), but let me start with the recent failed Israeli attempt to invade Lebanon (2006), where the two primary weapons of the invading army were heavy tanks and jet aircraft.

              In some ways, a battle tank is a lot like a medieval knight in terms of “the man in the can” methodology, combining weight, speed, high impact weaponry, and they are similarly expensive in terms of equipment and training costs. Hezbollah demonstrated that they also have similar weaknesses. By using lightly armed and highly manoeuvrable infantry plus the use of cheap but powerful short range missiles, they were able to impose losses on the IDF that were both unexpected and unsustainable. They did this even in the face of strong air superiority and after Israel had bombed and destroyed large amounts of the Lebanese infrastructure.

              In other ways a battle tank is a bit different to medieval warfare. Going back to World War II, although the tank was the supreme weapon on the battlefield, the turning of the war did not revolve around tanks… it revolved around supply lines and attrition. The automotive factories of Detroit were every bit as important in winning the war. A tank needs to be manufactured, from large numbers of little pieces, it need to be transported, it needs fuel depots, maintenance, ammunition, communications so they know where to attack and when, and strategic planing so all of these things are well coordinated.

              Hitler used what was essentially slave labour in his factories, the Albert Speer economy was very much a central planned economy (although in the early years Hitler had not intended for this, but we know about intentions and what happens to them). What did these German factory workers care about victory? Many of them were not even German, they were imported Slavs and they knew the regime regarded them at little more than expendable animals.

              The Germans learned about the limitation of their Panzers and their dive bombers when they fought for Stalingrad. Of course, Stalingrad was a stupid thing to fight for in the first place, it had no strategic value and the only reason they went for it was because of the name. Anyhow, those Panzers didn’t work well in an urban ruin, they got bogged in the rubble, and the Russian defence consisted of sneak attacks like snipers and mines. The defenders hung in there very determinedly, even though their only choice was between Stalin and Hitler, they stuck with the devil they knew. With ridiculous casualties on both sides,
              the Germans slowly took the city one block at a time, only to see their victory turn into defeat when the Russian counter attack cut the Germans off from their supply.

              You see why even dictators need to keep a large fraction of the population onside?

              Modern warfare is about very large scale coordination, requiring teamwork and trust between lots and lots of people. If you don’t have a strong economy, you can forget about having a strong military.

              • joeftansey says:

                Re Knights vs Peasants:

                So, TLDR, you’re saying that peasants vs knights was doable for the peasants. I’m asking why slave societies endured for many centuries despite this fact.

                Re Modern-ish war:

                So, an obvious counterexample is that in the middle east, the United States takes very few casualties and inflicts heavy losses on the enemy, despite being in the tiny minority. WWII SNAFU notwithstanding.

                Do you think Russia maintained the general consent of the governed? It only collapsed for economic reasons.

                And, all your examples of people winning against occupying big-militaries are people fighting on behalf of statist political factions. But libertarianism suffers from a public goods problem since our faction can’t loot everyone if we win.

                Also note that invading another country and occupying it is *different* from occupying and oppressing your own country. You always have the option to leave a foreign country. But if you’re trying to oppress people domestically, you aren’t going to retreat as readily. Occupying a foreign country is usually only short term. But the home country is to be occupied and milked for centuries.

              • Tel says:

                The yeomen who fought at the Battle of Cressy under King Edward were not peasants. They represented a technological innovation — a military innovation, and a social/political innovation. The king had the choice of repressing the yeoman class, disarming them, and beating them down to peasants, but if the king had made that choice (which was what happened in France) then the yeomen would not fight for him, and the king would lose battles.

                No king wants to lose battles.

                Not only did the kings of France weaken their military, but they also finally resulted in revolution because they were unable to make that compromise.

                In Russia, during WWII the common folk had only a choice between Stalin and Hitler, not much of a choice. However, with Hitler gone and facing a choice between grinding Soviet poverty and the thriving Western European states right next door, it was fundamentally impossible for the Soviet state to keep going. Eventually it collapsed under its own weight of inefficiency, but there’s a saying from the time: “If they think they are paying us, then by all means let them also think we are working.” It summarises the undercurrent of resentment and subversion that comes as a result of a slave culture; and makes it clear why those cultures collapse.

                As for the Americans in Afghanistan, you guys have inflicted heavy losses on someone, maybe on your enemy, maybe on random bystanders, no one knows. I don’t think you have achieved much in terms of military objectives — the poppy harvest is bigger than ever (but maybe that was an objective, it’s difficult to say because the real objectives are never revealed).

                The Islamic jihad extremists were friends of the USA while they were resisting the Russian invasion (and the Russians never could stamp them out), then they were enemies of the USA while they were resisting the American invasion (and the US military hasn’t stamped them out either) and now the USA is sponsoring them again in countries like Libya, Syria and Egypt. I’d say there are wheels within wheels; a game of who know who knows who knows what.

                However, take a look at someone like Allen West — started from humble beginnings, joined the army, fought for his country , and now he is in Congress. Sometimes the school of hard knocks can pay off. Not every time, but often enough that people will give it a try. In a way, Allen West is the yeoman of the modern world. Someone willing to take the danger of a military career starting at the bottom, in exchange for the opportunity of improving social status. West owes his success to the military, but in return the military would not be able to function without people like West.

                Abraham Lincoln didn’t free the slaves for ethical reasons — he wanted to win battles, and he did!

  18. Christopher says:

    I’m a little confused that so many readers interpreted this article as a conspiracy theory. I did not and I wonder if Dr. Murphy really thought of a bunch of cigar smoking fat guys literaly rigging the system. The way I understood this was that there are inherent flaws built into the current system that cause outcomes that the vast majority doesn’t want to have.

    • Ken B says:

      Some of Bob’s language attributes these “inherent flaws” to the deliberate deceitful action of “party leaders” and “the ruling class”.

      For example:
      “These strange outcomes aren’t a coincidence. The establishment leaders of the two major parties don’t want actual anti-Warfare State progressives going head-to-head in elections against actual anti-Welfare State conservatives”

      Or how Ron Paul Wuz Robbed!

      Or how Chomsky’s theory about “striclty limit[ing] ” debate. That sure sounds like “powerful forces” (to quote Mr Gore) not impersonal inherent flaws.

      It’s jft and myself citing Olson who are really latching onto inherent flaws. Bob seems to imply obfuscated intentional motivated behaviour by a few.

      • Major_Freedom says:

        You have never read Chomsky have you?

        It’s more nuanced than outright conspiracies. It is more to do with things like unintentional filtering processes, which reinforce biases, and how social institutions based on the legal framework encourages certain types of behavior and discourages other types of behavior, along with other cultural and ethical norms that make dissenting opinions ex ante suspect.

        The fact that you are only able to see calls of “conspiracy theory!” in what you read, because you WANT to be able to mock the authors for reasons apart from the actual statements that they are making, doesn’t mean that is what the authors are in fact saying.

    • Bob Murphy says:

      I can’t speak to their weight or smoking habits, but yes there are a few people rigging the system. They don’t have unlimited power but it’s not like half of them are Republicans and half are Democrats. They don’t care who wins next week; either way it’s their policies.

      • Christopher says:

        Well, yeah. But that’s not really a “conspiracy theory”, is it? I mean not in the sense of “The moon landing was a hoax”-conspiracy.

        If someone doesn’t believe that a major bank that donates a lot of money to the candidates’ campaigns and whose CEO has dinner at the white house on a regular basis has more influence on actual politics than you and me, that’s fine.
        But I don’t think it’s fair to call people who doubt that conspiracy theorists.

        • Tel says:

          It isn’t even slightly a conspiracy, it is all perfectly above board an legal… it just happens to be unfair.

          Note the number of banks and financial institutions who donated to Obama in 2008 when there was a real possibility that “hope and change” might actually happen. Note the same institutions donating to Romney in 2012.

          Of course, I can’t tell private people how to spend their money, but government and banks are now so tightly entwined that it is impossible to figure out who’s money actually is being used here.

    • Marc says:

      Christopher,
      The title of the article would have you think that, but the content of the article is clearly conspiratorial.

      • Ken B says:

        And there’s Bob explicit statement right above. But I discount that as it may be a plant by the guyz wot robbed Ron Paul.

        • Marc says:

          Yeah, I didn’t see that statement, because I started writing my reply before he said that.

          As for your Ron Paul having an unfair election — there actually happens to be considerable evidence of rigging done by leaders of the Republican party. I don’t have anything against conspiracies as long as there’s evidence. Conspiracies are a matter of historical record. It’s a historical fact, for example, that the Russian Secret Police forged the Protocols of the Elders of Zion in order to use Jews as a scapegoat.

          Unfortunately, there’s not a shred of evidence in Bob’s claims about a group of people limiting the spectrum of debate. Although don’t get me wrong — I do agree that the spectrum of debate happens to be very limited.

          • Ken B says:

            Oh there may have been rigging, but we had threads on this before and the case was weak tea. There are unfortunately laws governing these things in many places. Why no lawsuits if the evidence is so compelling?

            Plus a few Romneyites in Upper Rubber Boot Dakota playing dirty wouldn’t count for Bob’s purposes. They wouldn’t be part of the few, they’d be dupes of the few, so their actions wouldn’t be evidence of Bob’s claim. We saw ACORN trying vote fraud too. People cheating is normal in and out of politics, not proof the Illuminati rule over us.

            • Marc says:

              Right. I wasn’t saying it was the Illuminati or anything like that. I was just saying there was evident cheating going on. No lawsuits doesn’t mean no evidence of cheating. Do you really think that if they brought a successful lawsuit, they’d kick Romney off and put in Ron Paul? There are loads of examples of Obama violating the constitution, but he hasn’t been impeached. But these things are actually inherent flaws in the political system — so yeah, the point is, I was not making the same exact claim as Bob with the Ron Paul thing.

              • Ken B says:

                Yeah, I see your point. I think we agree that robbed or not, the claims of foul play by Paulines is not evidence for Bob’s claim.

              • Bob Murphy says:

                Right. I need to deliver an actual lizard man’s confession in open court with Clarence Thomas swearing him in, before Ken B. will say, “Perhaps I am overconfident in my claims here.” Oh wait, Ken B. would then just start reminding everyone of the problems with the Bible, I take it back.

              • Ken B says:

                You disagree with the point that some local GOP official playing dirty is no evidence of the Illuminati? I mean my point seems pretty simple. If the conspiracy reaches into every local caucus it’s too huge to be plausible. If it doesn’t this bit of cheating isn’t part of it.

            • Matt Tanous says:

              “There are unfortunately laws governing these things in many places.”

              There are literally NO laws governing the selection of party nominees as such. As private organizations, the RNC and the DNC can select the nominee in any way they want. And there is considerable evidence of subtle “rigging” to alter the outcome towards candidates more palatable to the leaders of those organization.

              I don’t think anyone claimed it was the Illuminati or anything. Just some people with some power who have incentives to cheat often do, and they often cheat to bring about the same outcome, as it helps them – D or R – to gain more power and prestige.

              • Ken B says:

                There most certainly are laws on primaries. Look at California.

                What’s up this week? At TBQ I ran into a guy denying Jim Crow laws segregated buses.

              • Matt Tanous says:

                California primaries are not run by political parties, but the state. The presidential nominees are only determined by the process of the RNC and DNC respectively, and there are no laws regarding this. If the DNC wanted to just have Obama pick every Democratic nominee until he dies, they could do that. Just have to change their own rules.

          • Mike T says:

            Marc:
            “Unfortunately, there’s not a shred of evidence in Bob’s claims about a group of people limiting the spectrum of debate. Although don’t get me wrong — I do agree that the spectrum of debate happens to be very limited.”

            >> Yeah, this is where things can get dicey. I don’t disagree with what Bob is really saying here though. And certainly there’s evidence that the debate is limited by a group of people. After all, TV personalities and producers control the content with which they present to a large segment of the population, so they are effectively controlling the range of debate. However, I can see where the conspiratorial charge can come into play if we begin to ascribe specific motives to individuals or groups of people. This isn’t helpful in the sense that a) it’s nearly impossible to prove, b) there’s not much to gain from it. Observing the fact that we have a limited spectrum of debate and that this is largely controlled by the media establishment is enough to build Bob’s case. It’s unnecessary to presume nefarious motives, for example, and I don’t see how Bob is doing that in this post.

            • Marc says:

              Bob very clearly presumed nefarious motives with his Chomsky quote.

              • Mike T says:

                “Bob very clearly presumed nefarious motives with his Chomsky quote.”

                >> I don’t see how that quote is even controversial. And reading Bob’s paragraph that follows, do you not agree with those examples of serious issues and how the media frames a very narrow range of allowable opinion? And the effect is that people do by and large become very passive and obedient. It’s why, for instance, around 70% of the public still believed Iraq had WMD and were directly involved in 9/11…. several years after the invasion and no evidence was ever provided. It’s also why nearly 70% of the public believe that Iran has nuclear weapons (not are on the verge, or might someday, or are planning to… but actually have them now) despite there being no evidence from any government or the IAEA. That’s not to say that this is the actual motive behind media elites.

              • Ken B says:

                How does this make sense Mike T? Chomsky is talking about narrowing the range of opinions. There are that I can see 3 possible views on whether Iran has the bomb for instance. They have it, they don’t have it, I don’t know. That seems like the range of possible opinion. How has that range been narrowed on this issue? I’ve seen all three argued on just blog.

              • Marc says:

                Mike T

                The quote itself is not controversial. I agree that the media frames a very narrow range of allowable opinion. I also agree that it has the effect of making people passive. I’m not sure though if you can conclude from this, that there are a select group of individuals making that happen.

              • Mike T says:

                Ken,
                You don’t think that the narrow range with which the media and political class discuss Iran (see Bob’s example: “Regarding Iran, should we say we will use conventional bombers and our flying killer robots only, or are nuclear weapons also on the table?” ) leads people to believe things about the issue that aren’t true, or at the very least, not supported by any evidence?

                http://www.pollingreport.com/iran.htm – scroll down to the CNN poll taken in early 2010 with the question “Do you think Iran currently has nuclear weapons, or not?”

                Do you think 71% of the public polled that question respond in the affirmative if the debate surrounding US govt policy toward Iran were widened?

              • Z says:

                @Ken B:
                Iran is the perfect issue to demonstrate this. There are three choices just as you say. But not exactly the ones you list. The choices are: Either Iran already has a bomb and we need to bomb and sanction them or they are about to get a bomb and we need to bomb and sanction them or we don’t know if they have a bomb but we know they want one and so we need to bomb and sanction them.

              • Ken B says:

                “Do you think 71% of the public polled that question respond in the affirmative if the debate surrounding US govt policy toward Iran were widened?”

                What I think is you are doing just what Nurse said. You are citing disagreement with your conclusion as evidence there must be something nefarious going on.

              • Ken B says:

                Nursie not Nurse. Sorry Nursie; yours was a good comment.

              • Mike T says:

                Ken,

                “You are citing disagreement with your conclusion as evidence there must be something nefarious going on.”

                >> Absolutely not. Where do I suggest that there is anything “nefarious” going on? I’m simply suggesting that the debate about US policy around Iran is narrow (not nefarious) and that this could shape public opinion as shown in actual public polling data (not nefarious). Of course, I’m assuming that public opinion is often shaped by what people here in the news and from their elected representatives. Do you disagree with that assumption?

  19. Tel says:

    I agree that education is the only peaceful way forward. There are so many people out there, seemingly reasonably intelligent, who can’t cope with basic logic, and basic arithmetic (even using a calculator). There has been a lot of dumbing down.

  20. Bob Roddis says:

    What about the futility of online debates with Keynesians? In lieu of understanding “the knowledge problem” or economic calculation, Tom Hickey, chief blogger for the Mike Norman MMT site asks:

    Bob, have you ever actually run a business that you know how pricing really works in practice, theory aside. I have, and It’s obvious that you don’t have a clue.

    http://tinyurl.com/a8zpasa

    We’re doomed.

    • Gamble says:

      Hi Bob,

      I followed you link and really appreciate the following comment from you.
      “I’m not missing anything. What you are missing is that the fiat funny money system has caused the essential information system of a prosperous society, a sound pricing process, to completely dis-coordinate so that nobody can tell the true amount of supply and demand in society. It is similar to what happens under socialism.”

      People take for granted just how socialistic things have become and how our market is an illusion. The end consumer has little to no say.

      1913 was a bad year for freedom. Fed reserve, direct election of senators and income tax. The statist trifecta.

      All the kindergarten propaganda, land of the free, etc. is hard to shake.

      • Bob Roddis says:

        Actually, this may be the worse economics blog post I’ve ever seen.

        Federal Gov’t delivering millions of gallons of gasoline to NY. WTF…das Frei MarKet didn’t do it????

        The Department of Defense is trucking 12 million gallons of gasoline (that’s a lot of gas) to New York. Until now there has been no gas. In other words, the Federal Gov’t is supplying gas.

        Where was the “invisible hand” of the free market? Where were the suppliers anticipating conditions as a result of listening to the perfect information supplied by the perfect, all-knowing market?

        I just had to post this hysterical comment that Rob Parenteau put on my Facebook page. It’s hilarious.

        Wait, Mike, you mean das Frei MarKet, with its illustrious and ever innovating Invisible Hand, didn’t deliver the goods already? WTF? Must be price controls or sumpin inhibiting all those entrepreneurs from buying and selling and bartering and trucking all that fuel from transnational oligopolistic oil companies into place in near perfect anticipation or at least nearly complete knowledge of future demand schedules. And now, back to Atlas Slouched.

        I’m sure Libertards and conservatives will be all over this with lame excuses like it was gov’t regulation or some other crap that blocked the ability of businesses and entrepreneurs to supply gas.

        The subsequent Mike Norman comments are interesting too.

        http://tinyurl.com/a28yvh8

        • Major_Freedom says:

          Wow, what a bunch of buffoons.

          Government price controls put on the sale of gasoline. Norman blames the free market for the resulting shortage.

          Can you say ideologically biased?

          • Bob Roddis says:

            That post does make it easier to understand why they seem unable to process simple concepts like intertemporal discoordination, economic calculation or the knowledge problem. I don’t we will be reaching them any time soon.

            • Bob Roddis says:

              That should have said:

              I don’t THINK we will be reaching them any time soon.

              The post also solves the mystery of the MMTers’ unstated economic theory: The government is omniscient and benevolent. Thus, it can solve all problems of living cost-free because it can never run out of “dollars”.That’s not exactly a “monetary” theory.

        • Matt Tanous says:

          I knew MMT stood for Massively Mentally reTarded.

          Of course, I always knew that it is based on an explicit refusal to take into account Bastiat’s admonition to analyze both the seen and the unseen.

        • dt says:

          I saw that Norman post and then deleted his blog from my reading list because it was then that I realized this so-called ‘economist’ was utterly clueless about economics.

  21. kurtu5 says:

    Beat that drum! It worked for the abolitionists!

    Slavery is wrong! Slavery is wrong! Slavery is wrong!

    Bob, you are one hell of a drummer.

  22. Ken B says:

    Why did the Illuminati desegregate?

    Bob doesn’t present concrete evidence of a cabal. Instead he argues from media ownership that there must be one. Well doesn’t that apply a fortiori to the past, before the internet, before TV? Bob seems to think so: “The same thing happens every election cycle. ”

    So in 1950 the country was largely segregated, de jure and de facto. And by 1970 it was desegragated, de jure, and to some considerable extent de facto.

    Why did the Illuminati do it? Doesn’t Bob’s argument imply that they did?

  23. Spooner says:

    Excellent!

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