Paul Craig Roberts on Glass-Steagall, Free Trade and the Dangers of an Evolving 'Oligarchy of Private Interests'
The Daily Bell is pleased to present an exclusive interview with Paul Craig Roberts.
Introduction: Paul Craig Roberts is an economist and a nationally syndicated columnist for Creators Syndicate. He served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as a co-founder of Reaganomics. He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. Roberts has been a critic of both Democratic and Republican administrations. He has written or co-written eight books, contributed chapters to numerous books and has published many articles in journals of scholarship. He has testified before congressional committees on 30 occasions on issues of economic policy. His writings frequently appear on OpEdNews, Antiwar.com, VDARE.com. Lew Rockwell's web site, CounterPunch, and the American Free Press.
Daily Bell: This interview will review material that you've gone over in your books and articles, but we hope you will answer the questions nonetheless as some in our audience are not aware of your works or point of view. But let's start at the beginning. Are you a libertarian? Can you briefly describe the belief structure from which you write?
Paul Craig Roberts: I am a libertarian in the sense that I am certain that there must be moral and constitutional limits on power as exercised by both government and private institutions. I am a conservative in the sense that I believe that reform of society must be piecemeal and based on good will. Progress has to be incremental. Reform cannot be achieved by violent revolution in one fell swoop.
Daily Bell: How did you come to your sociopolitical conclusions?
Paul Craig Roberts: During most of my life government power, the power of government bureaucracies, was excessive. The Soviet government was the epitome of unaccountable government power. In the US, government power over business and individuals grew.
Daily Bell: Is that still the case?
Paul Craig Roberts: In recent years there has been a redistribution of power in the US from government to private. The US now resembles an oligarchy of private interests. The most powerful ones are Wall Street, AIPAC, the military/security complex, the oil industry, agri-business, insurance and pharmaceuticals. These private interests control economic and foreign policy, write the legislation that Congress passes and the President signs, and have achieved the monopolization of the US economy by large-scale commercial organizations. As far as I can tell, traditional conservatives scarcely exist in the US today. They have been eliminated by the neoconservatives, essentially militarists committed to US world hegemony.
Daily Bell: That doesn't sound like a very healthy evolution.
Paul Craig Roberts: There's another. The Republican Federalist Society has succeeded in enhancing the powers of the executive over the co-equal branches of government. Many federal judges and Department of Justice appointments are drawn from the membership of the Federalist Society, thus putting in place ideologues to advance executive power. Once executive power becomes dictatorial, we will have lifetime rulers and growing conflict between the executive and private oligarchic interests.
American elections are meaningless as the vast majority of those elected are dependent, or become dependent, on the campaign contributions from the private oligarchic interests. Today government bureaucracies (Child Protective Services and police, for example) have unaccountable power over private individuals, but the power of government over organized private interests has been beaten back. Today the private interests rule the state.
Daily Bell: Can you give us some other examples?
Paul Craig Roberts: The examples are endless. President Obama broke his campaign promises and renewed America's aggression against Afghanistan, because that was what the military/security complex demanded. The health care "reform" was written by the private insurance companies and was designed to provide the insurance companies with 30 million involuntary new customers. Environmental restraints on deep-water drilling were removed at the instruction of the oil industry, resulting, for example, in the extraordinary environmental destruction in the Gulf of Mexico. Wherever one looks, the external costs that private companies are able to impose on others are rising.
This change has occurred more quickly than libertarians have been able to adjust. Historically allied with private interests against government, libertarians have been slow to acknowledge the rise of unaccountable private power.
Daily Bell: It sounds like an ideological rigidity of sorts.
Paul Craig Roberts: In my experience with libertarians, especially during my tenure as Distinguished Scholar at the Cato Institute during the 1990s, I have encountered an ideological inflexibility, dogma if you will, that turns blind eyes to analytical and empirical evidence. Many, most likely most, libertarians regard jobs off-shoring as the beneficial workings of free trade. Those, such as myself, who present the clear facts of the case are demonized as "protectionists," which means that libertarians do not have to examine the facts and encounter the empirical evidence.
A similar failing has made most libertarians blind to the virtues of countervailing power. Libertarians line up with capital against labor. Libertarians, for example, supported the repeal of the Glass-Steagall Act, thereby setting the stage for the current world financial crisis. For libertarians freedom means no restrictions on capital, and they want labor unions destroyed.
Daily Bell: Libertarians are then naïve in this regard? ...
Paul Craig Roberts: I am convinced that liberty as epitomized by Anglo-American law and civil liberties has been lost. I make this case in my book, The Tyranny of Good Intentions. Both the US and UK governments have acted lawlessly by taking their countries to war based on deception of their domestic populations and the UN. Both have violated their own laws and international laws in torturing detainees, in spying on their own citizens, and in curtailing the civil liberties that historically have defined the UK and the US. Libertarians regard liberty as a natural right when in fact liberty is a human achievement fought for over hundreds of years by people who believed in liberty. Liberty was hard to gain, and it is easily lost.
Daily Bell: You mentioned one of your books. Can you update our audience on some of your other writing?
Paul Craig Roberts: I regard all of my books as important. In my latest book, How The Economy Was Lost, I explain why off-shoring is not free trade. I also explain why the two necessary conditions set out by David Ricardo for the principle of comparative advantage, the basis for free trade, no longer exist. I further explain that when a country moves the production of goods and services that it consumes offshore, GDP growth and consumer incomes are moved offshore as well. Jobs off-shoring or "globalism" is a way to convert US labor income into executive bonuses and capital gains to shareholders. This is the explanation for the rising income inequality in the US.
Daily Bell: And also for rising unemployment?
Paul Craig Roberts: Since 2008 the lowest interest rates and largest federal budget deficits in US history have been unable to stop the rise in US unemployment, much less to call the unemployed back to work. There are no jobs to which to call workers back. The jobs have been given to the Chinese and Indians.
Daily Bell: Good points. Can you mention some other books?
Paul Craig Roberts: My first book, Alienation and the Soviet Economy, was appreciated by libertarians, because it showed that Soviet central planning was a failure, producing outputs worth less than the inputs. However, the deeper message of the book might have passed unnoticed. My book documents speculative excess as a force in history. The Marxist aspirations that gave rise to the Soviet economy were inordinate and did not bear on reality.
Daily Bell: You wrote a famous book about supply side concepts as well.
Paul Craig Roberts: My book, The Supply-Side Revolution, presented supply-side economics as a necessary correction to Keynesian demand management. The Keynesian policy of stimulating consumer demand with easy money while restricting output with high marginal tax rates resulted in stagflation. The supply-side policy, by reversing the policy mix, cured the stagflation. As far as I can tell, few libertarians have understood supply-side economics. Most demonized it as a form of Keynesian tax-cutting.
Daily Bell: It's still a controversial subject.
Paul Craig Roberts: One would have thought that libertarians would welcome lower income taxes as a move toward personal freedom. Historically, the definition of a free person is a person who owns his own labor. Serfs and slaves do not have ownership rights in their labor, and neither do people who pay income taxes. Curiously, libertarians get much more upset over tariffs as infringements on free trade than they do over the income tax's infringement of free persons.
Daily Bell: You raise some intriguing points.
Paul Craig Roberts: Thank you. I trust that these comments will provoke thought among libertarians and help them to reorganize their defense of liberty against the new enemies that now confront freedom.
Daily Bell: It's been an honor to interview you.
This interview though brief is a glimpse of one of the most brilliant conservative minds in the Western world. Paul Craig Roberts' on-point articles and principled insights have set a "gold standard" for those interested in providing conservative commentary to a public that is occasionally receptive and certainly restive.
We are almost too intimidated by Roberts' profundity and perspicacity to wish to attempt an addendum of any sort. But it is our collective job, so we will present some thoughts on the matter, hoping those viewing these efforts will bear in mind they are offered reluctantly and within the knowledge that in no way can they match what has just been presented by the master himself.
Let us deal specifically with issues of free-trade and Glass-Steagall. Regarding both of these subjects, we plead guilty to the libertarian zeal that Roberts identifies above with such devastating effect. We have written in numerous articles, especially, that the emphasis on rebuilding a fire-wall between banking and commercial/merchant banking so that the latter may not take advantage of the former's customers gives the misleading impression that government can regulate the marketplace. In other words, if only the RIGHT regulations were implemented, the difficult issues would be resolved and the world would be a better place.
With all due respect (we do not believe it to be an inordinate amount), the argument that government CAN legislate correct as well as incorrect regulations only perpetuates the idea that governments are occasionally competent. But in our view this misreads such elemental economic laws as marginal utility, which is the dividing line between classical and neo-classical economics and the reason that Keynesianism and econometrics ultimately fail. Why is that? Because fundamentally, government cannot foretell the future.
A trend projected by government is bound to become undone before it is realized. This is the basic truth, often misunderstood, around which Austrian economics is built. Human action, the profound sacrament of Austrian economics and one of the most resonant presentations of modern philosophy, tells us that people will not sit idly by in the face of drought, famine, illness, etc. People will DO something. And thus it is that no catastrophic trend shall continue to its logical conclusion and no tree shall touch the sky.
People's propensity for taking human action is the reason that Thomas Malthus's dismal predictions proved wrong. It is the reason that Marx's predictions failed; it is the reason the USSR toppled and why centralization of governance and planning is always doomed to failure. Having isolated a trend, those who predict it in any sort of numerical or statistical way, are inevitably doomed to failure. One can make some general observations to be sure (we do it all the time to be sure) but to try to create by regulatory fiat what natural law has not already developed is likely a futile exercise.
We are not inclined to cede ground to government on these principled grounds. We have the advantage of course of being a minor adornment in the splendid brilliance of the blogosphere. We don't have to make policy, only comment on it. We don't have to try to put our ideas into action on anything but an individual basis. From Paul Craig Roberts point of view, then, we are hopelessly naïve if not jejeune.
Roberts sees his role, obviously, as one of principled realism. He presents his arguments within the context of the world as it is, while we have gaily if not carelessly assumed the prerogatives of perfectionism. We argue, therefore, from the logic of an ideal world, and, within this ideal, it is evident to us that trade – free trade – ought to be pursued by individuals in pursuit of individual self-interest.
Within this admittedly proscribed perspective, there is no room for tariffs, trade negotiations, managed trade, protectionism, etc. As we see it, if people were free to do business as they pleased, then they would do so in a way that promoted their individual and, therefore, their aggregate self interest. If counter-parties were trying to take advantage of such trading, it would be immediately evident and obvious. Then trade would diminish and go elsewhere until such behavior was rectified. But this would take place on an informal, ad-hoc basis, as business ordinarily does. There would be no great fuss about it, no blasts of windy rhetoric, no legislative or military preemptions.
It can be seen in these two examples that we find ourselves on the other side of the table from Paul Craig Roberts, not because we want to be but because this is where we have chosen to take our (ample) seat. The Bell is a modest blog about the problems caused by power-elite promotions and how free-market thinking might provide a palliative. Having breakfasted with idealists, you could say, we dine with zealots.
Yes, it is likely one of the more unattractive qualities of our reprobate characters ... we are interested in the way things MIGHT be. Paul Craig Roberts is a practical genius, interested in building a more friendly free-market government today. It is the reason he served in lofty positions in the most powerful government in the world during one of its most successful regimes. We remain gravity bound, firmly anchored to our ink-stained wretchedness on an inhospitable planet that has little notion of perfectibility and less ambition as regards its realization. Roberts is the realist. We have never felt endangered by accusations of practicality.
A final note: Above, we have attempted to present some thoughts on free-trade and banking from a principled free-market perspective. We could write an another entire "after thought" on Paul Craig Roberts' brilliant observations regarding the dangers of the creation of an 'Oligarchy of Private Interests.' We have identified the danger similarly, only our preferred nomenclature is "power elite." Also, while the danger is private, the mechanism utilized by the power elite is resolutely public. What is evident and obvious is that the elite seeks to control the levers of PUBLIC power in order to operate under color of law for private gain. This process called MERCANTILISM and has nothing to do with the legitimacy or value of the private sector, which is considerable. The problem may lie with the private sector, but the problem would not exist without the availability of the public one. No government, no problem – within this context at least.
Posted by Bill on 07/18/10 12:02 PM
SUPPLY SIDE ECONOMICS DID NOT WORK FOR REAGAN. READ THE TRUTH ABOUT SUPPLY SIDE ECONOMICS BY MICHAEL EVANS. HE PRESENTS A BALANCED VIEW AND EXPLAINS WHY HE BELIEVES THE CONDITIONS WERE NOT CONDUCIVE TO ITS SUCCESS. Many theories sound correct in a controlled environment. The trick is to predict how the real world works.
Reply from The Daily Bell
Caps off, please. Thanks.
Posted by Adrian W. on 07/18/10 11:59 AM
Did the "Iran-Contra Affair" qualify as a form of free trade agreement?
Posted by J M Garvey on 07/18/10 11:58 AM
@ Ed "Two hundred years ago a ten year old could drive a team of horses down a country road. Would you allow a ten year old to dirve your car . . . today?"
While taking a lunch break at the side of a gravel back road, I heard a commotion and looked up to see an Amish farm wagon approaching at uncharacteristically high speed. Surely, something was amiss. As the vehicle thundered past, handsome draft horses at full gallop, I burst out laughing at the sight of the apple-cheeked driver nonchalantly holding the reins and his two companions standing perfectly at ease behind him on the rocking, unladen flatbed, hands in their pockets. The contrast to their spoiled-rotten fellow "English" (i.e., non-Amish) sixth-graders could not have been more memorably demonstrated.
Incidentally, the Amish are routinely persecuted (cf. prosecuted) by local governments for "violating building codes" when they build their houses the way they prefer.
@ Bionic: I realize I didn't claim copyright, but I believe I beat you to the punch on PCR's libertarian-lumping.
Posted by SP on 07/18/10 11:40 AM
It would have been nice to have heard more from Mr Roberts, having been so close to the power that makes the rules. I get a sense that this man has seen the destuction of the government first hand and has been left with a veiw of the current situation that is not very pleaseing. Its clear to him that the big corporte interest run the show, and the men who run the corporations(The Power Elite) manipulate our lives on a hourly bases. I will look for his books.
Posted by Anon on 07/18/10 11:12 AM
The whole thrust of the fight for liberty, from the enlightenment forward, culminating in the writing of the US Constitution, has been to protect the public from the power of the state.
Must we now give a thought to protecting the state from the undue influence of the (powerful) public?
Posted by Peter J. Ritter on 07/18/10 11:08 AM
In an article in Counterpunch some time ago, Paul said he was done and signing off. Upon that I wrote him the following mail:
It is hard to believe and accept that a hero of truth is giving up just like that. What would have happened to Scotland without a William Wallace, to Switzerland without a William Tell or Arnold Winkelried, or many other places where historical heroes on the side of the people finally prevailed over evil tyrants?
The battle for truth and morality in government is raging. Thanks to the internet some people are aware of what's going on. Most are still asleep and need more alerts and information before they finally wake up.
As a former highly placed government man and mainstream journalist you carry more weight and credibility than many without such credentials.
The battle for truth and defeat of evil will go on. Today's economic condition says that something will have to give, rather sooner than later. Whether the war for truth is lost or won in favor of the people, can you allow it to be said that Paul Craig Roberts quit at a crucial moment in the battle? What kind of legacy do you want to have? Can a true believer (and hero) ever leave his comrades in arms behind and just quit? I hope your sign off was written in a moment of weakness and will be strongly renounced soon. Truth needs you Paul, and your quitting would be an immense victory for the tyrants and their fellow travellers.
Regards, Peter J. Ritter
Couldn't be happier to see him back. :-))
Posted by Hugo on 07/18/10 10:45 AM
About Glass-Steagall Act:
Some people talk about the repeal of the Glass-Steagall act as a big part in the formation of this crisis. But I still have to find a good explanation to why.
The reality is that mixed banks (the ones Glass Steagall did not allow) have gone through the crisis better than the non-mixed banks (the ones Glass Steagall allowed). For example, Lehman Brothers, Bearn Sterns or Goldman Sachs where pure investment banks (the ones that Glass Steagall allowed) and are some of the banks that were in worse position when the crisis arrived.
So it seems the repeal of Glass Steagall was a good thing and if it was not repealed the crisis would have been even worse.
The Gramm-Hill-Bliley Act, the act that repealed Glass Steagall, had its mistakes, f.e. giving FDIC coverture to a lot of banks that did not have it before, but giving the evidence removing Glass Steagall was a good thing.
People should stop repeating some "mantras" for the sake of it.
Posted by NanoFly on 07/18/10 10:20 AM
It was a bit of a disappointment to me to see TDB pull its punches here. Roberts resides in a an equivocal community. It is of his own choosing. Having spent some formative years in executive government, he was forced to be a political advocate " a pragmatic viewpoint. Then, his work at the CATO Institute forced him to think principles vice pragmatics. His books, as he describes them (and which I have not read) seem to try to justify his apparent poorly grounded beliefs.
We have all heard of the various left to right spectrums: liberal to conservative, collective to individual, monarchy to anarchy, serfdom to freedom. I suggest another: pragmatics to principles. We all can be placed on that spectrum. I wonder where TDB would put Roberts.
Reply from The Daily Bell
Did we pull our punches? We stated our beliefs in After Thoughts ...
Posted by Ed on 07/18/10 10:09 AM
I disagree with supply side economics. Just does not work. Like a family running up your credit card bills and then reducing your wages to continue living. Taxes are the cash flow or wages of the government.
When you run up spending it is only more debt. Like pushing on a string. Otherwise Roberts makes good sense in regards to the private sector taking control and becoming an Oligarchy. I am new to Libertarianism and Austrian Economics. The problem with the two is based on the "assumption" that ALL men have access or transparency to what is going on around them and can make a "reasonable choice or adjustment" to their economic life.
This is great and workable in a small community; Like the City-State of Ancient Greece. Since the advent of the Industrial Age and Nationalism it is impossible to maintain the equilibrium between to competitive entities. Looking back the past forty years through my rose tinted glasses I can only conclude that Capitalism's nature is a "natural progress" towards a Monopoly or an Oligarchy.
The only thing that has prevented this is the intervention of men with some form of regulations to stem the concentration of capital and ultimately absolute power.
Two hundred years ago a ten year old could drive a team of horses down a country road. Would you allow a ten year old to drive your car down city street today? Some might.. but we have regulations that stipulate that he or she is not mature enough until he or she is sixteen years of age and has training. The world is far more complex and treacherous today and more stratified with special skills.
As time goes on most will realize that large corporations like government regulation. It prevents competition. Secondly, employees are nothing more then a commodity.Ultimately, their is no pure Libertarian or Progressive. Life is a blend of what works for the good of ALL.
I am biased with my opinion based on my education in Psychology, Sociology, Philosophy, Geography, and twenty odd years in manufacturing.
Here is link on a CitiGroup memo in 2005 that supports Roberts conclusions on an Oligarchy:
Click to view link
Reply from The Daily Bell
Thanks for the link.
Posted by Bionic Mosquito on 07/18/10 09:55 AM
On the whole, I am disappointed in this interview. Much too short from a person whose writings I have enjoyed. Also, with all of the issues PCR has written so wonderfully about, he spent much venom on "libertarians" (as if there is one category). Ron Paul, for example, has blasted "free-trade" agreements -- yet PCR lumps all libertarians into one bunch.
He uses as an example the Reagan supply side tax cuts, and complains that libertarians don't view this as a success -- set aside Reagan passed some of the largest tax increases in history up to that time.
Reagan changed things forever for traditional conservatives, and ended hope for any libertarian tradition in the Republican party. For example, he made deficit spending cool for conservatives -- now neither party could claim any high ground on this subject. He never met a bill he didn't like -- with all his popularity railing against government, he did nothing about it via the veto whilst he certainly could have.
No shot against DB, but I was hoping for more and something else from this interview. With PCR's wonderful writing and his recent announcement that he would write no more, I really thought I would get something worth sinking my teeth into today. Not to be....
Reply from The Daily Bell
We provide what we receive ...
Posted by Gary T on 07/18/10 09:55 AM
First, it is obvious that understanding the fundamental elements of a central government's power provided by and through the Constitution should be a must for the likes of Mr. Roberts, and I'll get to that in a moment.
However, the strengths of Mr. Roberts' presentation are associated with the economic management (his experience in the Treasury Department) mixed with a colorful background in specific historical studies of various nations' economic plans/controls.
To be sure, I am in complete agreement with Mr. Roberts' observations, perspective related to the redistribution of power in the United States from government to private. I, too, view the 'private interests' calling the shots for the three (allegedly) separate branches of the United States government.
Undoubtedly, I wholeheartedly agree that the most powerful 'puppeteers' pulling the strings (yanking the chains) of the federal government are indeed Wall Street, AIPAC, the military/security complex, the oil industry, agri-business, insurance and pharmaceuticals--all of which to some degree have a connection to Leo Strauss' general philosophy that, bluntly speaking, the 'peasants' are too shallow-minded to make the 'right' decisions, so, someone (a decider) must make the decision for the peasants and the peasants will be (as a result) a lot better off for it, too.
A whiff of Strauss' philosophy slips out from time to time from Mr. Roberts' lofty self-image and confidence in his astute knowledge of crisis management in an already wrecked ship by rearranging the deck chairs and calling it something different, like, "supply side" economics. This leads me to the Constitution topic related to Mr. Roberts' stint as the Assistant Secretary of the Treasury Department--the IRS if you will.
One may agree that Mr. Roberts knows and has good reason to know federal income taxation. Assuming this to be true, I found his explanations related to the off-shoring of jobs/businesses fairly disingenuous. The truth is, when domestic corporations move to foreign countries, the U.S. (federal) tax benefits actually go away. Especially in the case of a domestic corporation having more than 50% stock ownership in foreign corporations established (in a trade or business) to import goods back into the United States.
As an aside, a citizen of the United States (living and working within the United States) with less than a 10% interest in a foreign corporation has neither a reporting requirement or a federal income tax liability of that (less than 10%) share of a foreign corporation's stock. On the same hand, a citizen may own 100% of the stock in a domestic corporation--and as long as the corporation does not engage in foreign trade or business, there is no federal income tax liability at all--that goes for employment (FICA and FUTA) taxes as well!
This is where I believe Mr. Roberts runs afoul with the Constitution and the point of federal taxes. Frankly, one may look at this significant problem in one of two ways. (1) If Mr. Roberts is well-versed in economics and the federal income taxing structure, he would have been explaining tersely that federal (income) taxation is strictly limited to: (a) nonresident aliens and foreign corporations engaging in a trade or business within the United States; (b) citizens and residents of the United States residing abroad; and, (c) domestic corporations engaging in foreign trade.
So, as a former Treasury executive and expert on the United States and its economic levers, he would be (in my view) showing up at this interview rattling the foundation of the IRS's fleecing of domestic corporations and citizens (and lawfully admitted residents) of the United States living and working within the United States--because there is no (lawful) federal income tax liability generated by a U.S. payee receiving pay for services provided to service recipients within the United States. The law is clear on this subject.
(2) Conversely, if Mr. Roberts is clueless with respect to the proper application of federal income tax law, it would be a serious disservice to both his loyal reader base as well as to this nation to remain ignorant to the facts, circumstances and the future of the United States in this crucial issue. Imagine life in a "free" country where each new day begins with a 20 to 30% raise for the working class of this once great nation--and as influential as he is, Mr. Roberts is merely a step away from making that happen, if he truly intends for it to happen.
Posted by George on 07/18/10 09:44 AM
Interesting interview. Let's not forget that the Federal Reserve's easy money policy's got us here today too.. You know, inflation?
We "regular folk" struggle with that every day. Every time the Fed spews some more rag money, it makes life more difficult for us because things cost more. It would be okay if our salaries inflated with it but unfortunately it doesn't work that way.
The only regulation we need is regulation on the Fed and let the free market work the rest of it out on its own naturally. There's an algorithm in everything including life cycles. When they try to control that natural algorithm, that's when things get distorted. For America to get control of its debt, the government MUST cut spending drastically.
There's no question about it. Maybe some day, we'll have a system where money isn't used anymore like in a futuristic sci-fi movie. Until then, we should let the "invisible hand" do its' job.. Man has always failed at controlling it...
Posted by Ajk on 07/18/10 09:32 AM
A real money supply (gold, silver, etc) which the government could not debase (no central banks or Fed) would go a long way in reducing gov't power...that's what me thinks, anyway, mate.
Reply from The Daily Bell
We're with you, C'ptan.
Posted by Andrew McKillop on 07/18/10 09:24 AM
Any attempt at presenting the sombre Reagan period as "wildly successful" and "possibly tending towards balanced budgets" is wild itself. Extreme supply-side notions of kicking the economy into shape were as counter-productive as demand-side Keynesian notions, and both made government, finance, consumer society and the economy even more dysfunctional and unsustainable.
We are not able to be sure, but could guess that if the USA and other big nations were broken up into Switzerland-sized chunks, it could or might be possible these newly individual chunks performed as semi-rational economies. One reason would be the downsizing of government apparatuses and the number of apparatchiks, due to a smaller "underlying security", the nation and its real economy.
Unfortunately continental drift is tending to weld the continents back together, so it will be quite a long time before the second break-up of pangea. We must therefore hope that other forces lead to a downsizing of nations.
Posted by J M Garvey on 07/18/10 09:07 AM
"Libertarians regard liberty as a natural right when in fact liberty is a human achievement fought for over hundreds of years by people who believed in liberty. Liberty was hard to gain, and it is easily lost."
Having first encountered Mr. Roberts's excellent writings at Click to view link (I confess I am familiar only with some of his essays, not his books), I was surprised to find him early in this interview implicitly lumping Beltway Libertarians (i.e., "Libertarian" only in name) with Austro-libertarians (i.e. anti-state, free-market; cf. TDB, Lew Rockwell, et al) along with the small "l" libertarians that I believe would characterize most Americans I know.
Whether we are talking about "The Founding Fathers," some rebellious teenager objecting to being daily jailed in an indoctrination camp (i.e., public school), or an average middle-class neophyte such as myself revived from political apathy by the courageous Ron Paul (and sustained by, especialliy, TDB!), each of us either enjoys an epiphany or struggles towards a gradual realization of the value of individual liberty.
I do not see anything incompatible with both regarding liberty as a "natural right" (i.e., our birthright--along with life and any property we lawfully obtain) and at the same time understanding that liberty didn't just fall like manna from heaven, but that others before and around us have fought and continue to fight to secure its blessings.
We know full well that "liberty was hard to gain" and that "it is easily lost." We intend to hold on to the little we have left and to reclaim the rest--however long it takes and however tough the going.
Posted by Jim Theriault on 07/18/10 08:30 AM
"What is evident and obvious is that the elite seeks to control the levers of PUBLIC power in order to operate under color of law for private gain. This process called MERCANTILISM . . ."
What a concise summary of the true problem. If only the solution were as easily expressed, carried out and preserved. Power is the goal of these mercantilists, surreptitiously implemented and exercised against an uneducated citizenry with no respect for existing laws or individual sovereignty. The solution appears to be anarchy, which is no solution at all! Are laws the tools of mercantilists to keep the citizenry in line and which are then ignored by the mercantilists altogether?
Reply from The Daily Bell
"Are laws the tools of mercantilists to keep the citizenry in line and which are then ignored by the mercantilists altogether?"
Yes, sadly today law is form of socialist attack.
Posted by Puzzled on 07/18/10 08:19 AM
If "PCR" is correct then we(Americans) can undo the problems:
1. Identify the business/consortium who obtained the legislation.
Result: not buy their product.
2. GET ALL voters to the Polls in Nov!!!!!!
3. Vet all gov't introductee's!
By withholding our $, voting & looking closely at our electee's we can regain control of our Great Country.
Now, we need to scrutinize the laws pushed through Congress by barry soetoro, reid & pelosi!!!!!!
We can only hurt anyone by withholding our money & and will only get what justice that we have dollars in our pockets!
Posted by Pat Fields on 07/18/10 08:14 AM
The iteration of challenges set out by Mr. Roberts could as easily have been argued by a Keynesian, since Friedmanist Monetarism that economists in the Reagan Administration propounded, is merely a variation of it. Each camp surreptitiously avoids probe of the origin underlying any specific difficulties addressed, but rather forces concentration on the effects and how they particularly propose dealing with them, masking their philosophical similarities with polemic rhetoric.
For instance, Mr. Roberts laments the universally excessive power of government bureaucracies, but conveniently sidesteps the fact that all evolve such power to ultimately declare and defend the trade values of their currencies. An endeavor, itself arising from their prior universal failure, to come to grips with why their practice of fixing arbitrary valuation to their specie money had proved untenable in the first place.
The truly unique approach economists may seek to engage should rather be to look completely afresh at our entire monetary history through our newly developed capabilities and dispense with accusatory preconceptions (however justifiable they may appear to be) to derive a clear recognition that this monetary 'Original Sin' of insisting on fixed money-value has sequentially led to the pantheon of ills we've suffered from antiquity through to the present.
Posted by Victor Barney on 07/18/10 07:51 AM
I know that Paul Craig Roberts is a brilliant economist and I disagree with your answer to an extant! I know that America really is "Israel" through the seed of Joseph(Genesis 48:16) and "Judah" was only given the promise of "grace"(Messiah), not "race,"(the name Israel)! Israel lost it's identity by not keeping the weekly "Sabbath Covenant" and lost knowledge of it's identity(name)! Furthermore, I know that Israel through the seed of Joseph, not Judah, was absolutely forbidden by this covenant made with their Elohim from putting a "foreigner"(non-Israelite) over them as their leader(Deuteronomy 17:15)! I also know that "intellectualism" is akin to "Anti-Messiah" and even relates to man's first sin! Plainly speaking, the spiritual leader of this world still is "Lucifer," and he gives power to those who love him! Do you? If you don't think that the present administration does not "know" that they are creating a future financial meltdown of our economy(as the previous administration also did:follow the original Bush's WW II history) and out to cause intimidation and violence during the coming election, if there even is one, then you are completely blind! Marxism(anti-messiah by definition)does things that way! It's called divide and conquer! Ever hear of the weatherman's terrorist movement in the 60's out of Chicago that Charles Manson took off on in California? Well, terrorist William Ayers and company are now in the white house and I don't think to bring peace! If I'm still able, we'll talk about it again after the coming election! Watch!
Posted by Grekko on 07/18/10 07:18 AM
I tend to agree with most of PCR's views, though not all. As an avid believer in Free Market Economics, there must be room for debate on the correct way to implement it. For example, most all Libertarians believe that shipping jobs overseas (never to return) is just fine. They believe that some enterpreneur will fill the spot created by this loss with another idea. I tend to disagree with this thesis. I believe that the government is responsible in the end for every job loss through legislation, whether written by them or a powerful lobby. They lay expensive regulations on private firms where the cost of shipping jobs overseas ends up taking less of a toll than keeping jobs here. For example, a few years back, I had worked at a major firm in the southwest.
At the time, I was down on my luck and earning an hourly wage of $24/hour. I thought it was a pittance, however, the company stated that, on the average, it cost them $85/hour per employee due to satisfying federal and state legislation in the form of taxes, insurance (both individual and workers comp), social security, OSHA, etc, etc, etc.
Today, that company has shipped off over 60% of its labor force to former Soviet countries in Eastern Europe. The company execs patted themselves on the back for saving the company a fortune. I really can't blame those execs as Fedzilla made having Americans as employees restrictive to them. My pay was cheap, but having to shell out $61/hour more to have me as an employee really had to hurt the bottom line. If the government really wanted to put a dent in the unemployment rates, then they should get their boot off the throats of business so they make more money by staying here. This is not rocket science, merely common sense.
As for me, I left this firm for greener fields (and pockets). I'm just sorry for all those really talented people who now have no other choice for good employment. It matters not who wrote the bills for all these regulations, Leviathan signed it into law and thereby Leviathan is responsible.