Power & Market

In 1958, Foundation for Economic Education guiding light, Leonard Read, presented a series of lectures in Argentina against the backdrop of an economy decimated by mis-government which shares a great deal with the same country six decades later. The lectures became a small book-- Why Not Try Freedom?—an excellent encapsulation of Read’s thought.

Particularly interesting is his first chapter, “Government—An Ideal Concept,” because in a world where “each man must actually live his own answer to the challenges posed by his existence,” knowing the appropriate ideal for government is an indispensable guide to growth and social cooperation. Sixty years later, that deserves revisiting, as the ideal is almost unrecognizably distant from current reality.

The problems of man, society, and government are approached most constructively…within a moral and spiritual frame of reference.

Man’s purpose is…to come as close as he can to the realization of those creative potentialities peculiar to his own person.

Any behavior, personal or collective, which tends to retard man in his pursuit of the ideal life is, in my judgment, ipso facto bad, evil or immoral. Any behavior, personal or collective, which tends to promote or complement this objective is, in my judgment, ipso facto good, virtuous or moral.

Any person has a moral right to inhibit the destructive action of another or others. However, no person has a moral right to forcibly direct or to control what another shall invent, create, or discover; no right to dictate where he shall labor, how long he shall work, what his wage shall be, what and with whom he shall exchange, or what thoughts he shall entertain. No single person has any such moral right. No combination of persons has any such moral right. No agency, political or otherwise, has any such moral right.

There are no moral sanctions for government to intervene in any manner whatsoever with productive or creative actions. The moral sanction for establishing government springs from the right of the individual to inhibit or prohibit or restrain the destructive actions of others.

It is necessary to know why government should exist--what it is for--in order to gain an awareness of what it is not for. We must know government and its purpose…to limit it to its purpose.

An ideal theory of government and liberty is to be derived from the necessity for the free, uninhibited flow of all creative human energy .

We are all dissimilar. However, we have …one common necessity if we are to live and progress. It is that prohibitions against, or restrictions upon, the release and exchange of our creative energies be at the lowest minimum possible…this removal of inhibitory influences--the kind imposed by man on men--serves to benefit all of us in common.

Each individual in his own upgrading…builds only upon free will and volition.

Inhibitory influences are fraud, violence, misrepresentation, and predatory practices. All are immoral, be they done legally or illegally. The problem here is to remove inhibitory actions. This can be accomplished by restraining aggressive force.

No individual has the moral right to use aggressive force against any other individual. He has the moral right to use only defensive or repellent force.

If a person has a right to life…he has a right to protect and to sustain that life, the sustenance of life being nothing more nor less than the fruits of one’s labor—one’s honestly acquired property…the rights to the fruits of one’s own labor involves the restraint or the removal of obstacles to…one’s own exchange, but also the obstacles to other people’s exchange.

If one has a right to life and livelihood, every other person has a similar right… the requirement that life and livelihood be protected are coterminous with society .

The source of all creative and variable human energy…rests in…the individual, in such voluntary and cooperative actions as he may freely choose to take. This is the province of the individual and not of society. This is the vast, unlimited area of liberty, of self-reliance, and of self-discipline.

If the purpose of man on earth is self-realization…it follows that the law, the book of rules and prohibitions for social administration, can logically serve only the purpose of deterring man’s destructive actions for the sake of giving full flower to his creative actions…no just object beyond removing social obstacles to the release of the human spirit. An organized arm of society, within its proper bounds, can be but the handmaiden of liberty; government, within its proper bounds, can be but the protective servant of all individuals equally against antisocial marauders.

Cooperation for creative purposes must be left to voluntary action. Men can cooperate to use force, but they cannot be forced to cooperate…However, cooperation for creative purposes requires, as an auxiliary, cooperation to annul destructive purposes. Cooperation for creative purposes requires that inhibitory influences against creative action be neutralized.

Society’s political apparatus…[is] to inhibit, repel, restrain, penalize. [Members] can do everything else better outside the apparatus than in it. What should be inhibited, restrained, penalized? Those actions of man which are characterized by aggressive force, namely, those actions which themselves inhibit, restrain, destroy, or penalize creative effort. Defensive force may be used to neutralize aggressive force, and such a use of forces serves a social end. This use of defensive force should be the guiding principle of the political agency.

Cooperation is required among members of society to perform the negative function of prohibiting obstacles to production, communication, and exchange… limited to those actions which have a common benefit to creative effort. Ideally, the only dissenters would be those who want to live by predation.

Any logical and just organization by society derives its existence from…the common need for every man to protect himself against those who would limit his creative opportunities. Every human being is born with as much right to live his life creatively as any other man. Man, however, is incapable of protecting his life as a personal, individual project, and at the same time of realizing his human potential…By reason of this social circumstance, he is committed, in principle, to cooperating with his fellow men in the protective project…that should make no distinction whatever as to persons…where all ought to be regarded as equal… where special privilege should be unknown.

In short, the law’s limitation inheres in its justification. Force is a dangerous thing. Therefore, society's organized arm is a dangerous instrument. It is not, as some assert, a necessary evil. When limited to its proper defensive scope, it is a positive good. When exceeding its proper limitations and becoming aggression, it is not a “necessary” but a positive evil.

Aggressive force…is always evil. There are no exceptions. No man has any moral right to use aggressive force against any other man. Nor have any number of men, in or out of societal organizations, any moral right to use it.

One of the most distressing fallacies having to do with government and liberty is the assumption that the State, an agency presumably of the people, has rights beyond those possessed by the people…no reasonable person can logically believe that any such control belongs to a multitude of citizens…It has no derivation. It is an arrogation.

Any person has the natural and moral right to use repellent or defensive force against any other person who would aggress against him. No person on this earth has any moral right of control over any other person superior to the defense of his own life and livelihood.

Every living human being…has a vested interest in the creative emergence of every other human being…in the free, uninhibited flowing and exchange of the energies thus released; the true interests of all, therefore, are in harmony…every individual has a vested interest in common with all other men in restraining all inhibitory influences to creative energy and creative energy exchanges. All else is individual, voluntary, and cooperative as individuals may choose; for all else is creative.

Leonard Read provides a valuable touchstone—the universal liberty to grow or emerge--to understand what should ideally characterize a government of self-owning individuals. That, in turn, reveals a sharp contrast with “What Is and What Should Never Be,” (apologies to Led Zeppelin) about government and its impositions in our lives. We have, in many ways, moved farther from the ideal in the 60 years since Read articulated it. But he continues to offer us the wisdom necessary to retrace our mis-steps and reopen “the vast, indeed, the infinite, area of emergence” that is possible to us. And we have a lot to gain if each of us would convert our “massive potential for growth,” as Bill Murray put it in Stripes, into reality.

The Colorado Civil Rights Commission is at it again. It's going after Masterpiece Cake Shop owner Jack Phillips for refusing to "make a cake with a pink inside and a blue outside, celebrating a gender transition from male to female."

This comes only months after the US Supreme Court ruled against the Commission's regulatory attack on Phillips for not baking a cake for a gay wedding.

Although the Supreme Court ruled in Favor of Phillips, it nevertheless took a very narrow view.

Instead of criticizing the very existence of laws that trample on property rights by mandating that people be forced — under threat of state violence — to provide services for certain privileged groups, the Court only took issue with the reasoning employed by the Colorado Civil Rights Commission when it ruled against Phillips.

When the ruling came down, I commented on the specifics of the Court's narrow ruling:

The US Supreme Court today ruled 7-2 in favor of a Denver small business owner who has been threatened, sanctioned, and ultimately driven out of business by the Colorado Civil Rights Commission. The controversy arose when the cake shop owner, Jack Phillips of Masterpiece Cakeshop, refused to bake a cake for a gay wedding, claiming to be motivated by religious beliefs.

The cake shop was hauled up before the Colorado Civil Rights Commission where the commission ruled that the shop must "change its company policies, provide 'comprehensive staff training' regarding public accommodations discrimination, and provide quarterly reports for the next two years regarding steps it has taken to come into compliance and whether it has turned away any prospective customers."

Justices Kennedy, Roberts, Alito, Breyer, Kagan, Gorsuch and Thomas all voted to overturn the earlier appeals court's decision to uphold the Commission's ruling against Phillips. Only Ginsburg and Sotomayor dissented.

In the decision , authored by Justice Kennedy, much of the reasoning centered on the fact that the Colorado Civil Rights Commission had demonstrated an apparently obvious bias against religious people, even though "neutrality" is legally required in such cases. The ruling states:

As the record shows, some of the commissioners at the Commission’s formal, public hearings endorsed the view that religious beliefs cannot legitimately be carried into the public sphere or commercial domain, disparaged Phillips’ faith as despicable and characterized it as merely rhetorical, and compared his invocation of his sincerely held religious beliefs to defenses of slavery and the Holocaust.

The SCOTUS ruling also noted that both the Commission and the appeals court largely ignored and glossed over the fact that the Commission had on three prior occasions ruled in favor of bakers who had refused to bake cakes with anti-gay slogans on them. There was an enormous double standard at work.

As Kagan notes in her concurring opinion, the Civil Rights Commission was abandoning neutrality in favor of making decisions “based on the government’s own assessment of offensiveness.”

In other words, the Commission was deciding, based on the members' own personal prejudices and biases, who shall be forced to bake cakes, and who shall not.

With this ruling, the court took a small step in the right direction by taking exception to the Commission's claim that freedom of religion doesn't exist. As noted by Justice Kennedy, the Commission essentially dismissed the very idea that religious conviction could be a valid reason to claim an exemption from the Commissions rules and regulations.

The Court came back and slapped down this reasoning, but it left the Commission plenty of leeway to rule against Phillips using different reasoning.

Thus, as long as the Commission can manufacture a different rationale for ruining Phillip's business, it is free to do, as far as the US Supreme Court is concerned.

The court's limited approach here illustrates the problem with the Court's strategy on the matter of anti-discrimination law has always been problematic.

By limiting Philipp's free use of his property only to cases in which he can prove some sort of religious conviction, the Court — and the law in general — relies essentially on mind reading in determining whether or not Phillips should be allowed to use his property as he sees fit:

This has led to a number of absurd legal and legislative acrobatics in which property owners must prove that their business decisions are motivated by artistic choices or religious conviction, but not by some other motivating factor. Thus, government commissions and courts are required to read the minds of business owners and determine whether or not their internal feelings and religious views fall under some government-approved motivation for refusing some sort of business service.

Proving or disproving internal motivations, of course, has always been an extremely sketchy way of doing things. After all, the Colorado Civil Rights Commission concluded that Phillips was using his religious views to justify unlawful discrimination. This, of course, requires that the commission members somehow have certain knowledge about the thoughts in Phillips's head.

This sort of reasoning also has the habit of working against business owners who hold views that are held only by small minority or otherwise might be considered especially idiosyncratic. One might argue that one is religiously opposed to providing some sort of service. But unless those views are recognizable to judges and bureaucrats as part of a known religious movement, the business owner is likely to be accused of simply making up an ad hoc religion to "mask" unlawful discrimination.

Ultimately, this sort of subjectivity invites just the sort of corruption and bigotry we see on the Colorado Civil Rights Commission.

There's a far less complicated way of protecting rights in these cases, however, we should stop talking about "freedom of religion," and focus on ordinary property rights instead. In practice, freedom of religion can only be truly protected by protecting property rights overall. After all, all rights — including freedom of speech and freedom of religion — depend on the ability to exercise control of one's own body and property.

As Murray Rothbard has demonstrated, rights to religious expression and speech are simply types of property rights. Consequently, religious liberty and free speech can be protected with a more general respect for property rights. By saying that Phillips ought to be forced to bake a cake, the Commission is asserting that Philipps does not enjoy ownership over his own body, or the shop and tools he acquired by using his body to perform labor.

Having refused to acknowledge these property rights, though, the Supreme Court has empowered the Colorado Civil Rights Commission to continue its war against small-time bakery owners who are no threat to anyone and impose their views on no one. The Commission already knows how it's going to rule. Its hostility to Phillips is apparent, and there's not reason to believe the Commission will stop until it has succeeded in ruining him. The challenge the Commission faces, however, is in reverse engineering a ruling that can survive a legal challenge. I'm sure that with the help of a sufficient number of taxpayer-funded lawyers, the commission can succeed in this endeavor.

Recently Mark Thornton joined the Tom Woods Show to discuss his new book The Skyscraper Curse, and How Austrian Economists Predicted Every Major Economic Crisis of the Last Century.

Download the show here.

Are President Trump’s senior cabinet members working against him? It’s hard not to conclude that many of the more hawkish neocons that Trump has (mistakenly, in my view) appointed to top jobs are actively working to undermine the president’s stated agenda. Especially when it seems Trump is trying to seek dialogue with countries the neocons see as adversaries needing to be regime-changed.

Remember just as President Trump was organizing an historic summit meeting with Kim Jong-Un, his National Security Advisor, John Bolton, nearly blew the whole thing up by making repeated references to the “Libya model” and how it should be applied to North Korea. As if Kim would jump at the chance to be bombed, overthrown, and murdered at the hands of a US-backed mob!

It seems that Trump’s appointees are again working at cross-purposes to him. Last week, Secretary of State Mike Pompeo announced that he was invoking a 1991 US law against the use of chemical weapons to announce yet another round of sanctions on Russia over what he claims is Putin’s involvement in the poisoning of a former Russian spy and his daughter in the UK.

The alleged poisoning took place in March and only now did the State Department make its determination that Russia was behind it and thus subject to the 1991 sanction law. Was there new information that came to light that pointed to Russian involvement? According to a State Department briefing there was none. The State Department just decided to take the British government’s word for it.

Where do we get authority to prosecute Russia for an alleged crime committed in the UK, by the way?

President Trump’s own Administration is forcing him to accept the State Department determination and agree to sanctions that may well include, according to the 1991 law, a complete break of diplomatic relations with Russia. This would be a de facto declaration of war. Over unproven allegations.

Trump has authority to reject the imposition of new sanctions, but with his Democrat opponents continuing to charge that he is in league with the Russian president, how could he waive sanctions just before the November US Congressional elections? That would be a windfall for the Democrats seeking to take control of the House and Senate.

The only way Russia could avoid the second, most extreme round of these sanctions in November is to promise not to use chemical weapons again and open its doors to international inspections. What government would accept such a demand when no proof has been presented that they used chemical weapons in the first place?

Certainly it is possible that President Trump is fully aware of the maneuverings of Bolton and Pompeo and that he approves. Perhaps he likes to play “good cop, bad cop” with the rest of the world, at the same time making peace overtures while imposing sanctions and threatening war. But it certainly looks like some of his cabinet members are getting the best of him.

If President Trump is to be taken at his word, that he welcomes dialogue “without pre-conditions” with leaders of Russia, North Korea, Iran, and elsewhere, he would be wise to reconsider those in his employ who are undermining him every step of the way. Otherwise, it is hard to believe the president is sincere. Let’s hope he does choose dialogue over conflict and clips the wings of those under him attempting to push him in the other direction.