Libertarian Book Reviews

Economics

The Case Against Socialism

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There are several classic books that make the case for individual freedom over the collectivist state. Friedman’s Capitalism and Freedom, Hayek’s The Road to Serfdom, and Mises’s Liberalism come to mind. But for all the virtues they have, with the commanding sweep of their vision and their penetrating social analysis, the reader of today often struggles in understanding the argument due to the reliance on examples that today are dated, even obscure. The reader of 2019 reads these classics for their evergreen ideas, but often ends up baffled by discussions of 19th century English politicians, New Deal legislation, the Bretton Woods currency system, or Nixon-era price controls.

Against this background, Rand Paul’s new book, The Case Against Socialism, is a most welcome addition to the literature of freedom. He does not innovate—not need he—on the fundamental arguments in favor of liberty. Instead, Sen. Paul does an admirable job refreshing the argument for a reader of today, with 39 short, conversational chapters discussing topics such as Venezuela, Scandinavia, authoritarianism, economic inequality, climate alarmism and fake news.

The text is organized into six parts, containing 39 short, conversational chapters. The text is well-documented, with hundreds of footnotes citing sources, many of which I’ve copied down for further exploration.

This is a good, easy read, one I recommend heartily. It is the right argument, at the right time.

Capitalism and Freedom

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When Milton Friedman’s Capitalism and Freedom came out in 1962, his was a rare voice defending classical liberal values and the free enterprise system.  For years his ideas were unloved in ruling circles, as the leviathan unleashed by F.D.R.’s  New Deal pressed its tentacles even further into the flesh of American society through Johnson’s Great Society and beyond.

But after nearly a generation wandering in the wilderness, Friedman lived to see the vindication of his ideas, as big government solutions repeatedly failed, and free market approaches out-performed.

The fall of the Soviet Union and communism in Eastern Europe should have sealed the argument.  But bad ideas never truly die.  They merely go dormant.  The anti-liberal contagion awaits the day to entice and poison new audiences, in new generations, with the false promise of heaven on earth, for the price of their soul and their freedom.

A major source of objection to a free economy is precisely that it does this task so well.  It gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

The fascinating thing is how far ahead of his time Friedman was in 1962, and also how advanced his thinking remains, even for today.

Among the things Friedman proposed were: school vouchers to replace public school funding, elimination of agricultural price support programs, elimination of all tariffs and trade restrictions, repeal of rent control and minimum wage laws, elimination of Social Security, repeal of occupational licensure laws, ending military conscription, privatizing national parks and public toll roads,  reeling in the Federal Reserve System to remove discretionary powers (he’d essentially have it run on auto-pilot), eliminate foreign economic aid,  balance the federal budget, on average, year to year, elimination of public funding for state colleges and vocational/professional training, allowing equity-based investment (pay a percentage of future earnings) for college education, elimination of anti-discrimination laws, fair employment, fair housing laws, anti-segregation laws, application of antitrust laws to labor unions and other government-granted monopolies,  elimination of corporate income tax (but have tax on retained corporate earnings for individual income tax returns), a flat individual income tax rate, rejection of “social responsibility” instead of profit as the primary duty of corporate officials, elimination of estate taxes,  a negative income tax to replace other forms of welfare (in a way, similar to a UBI), etc.

It is amazing how much of these items has already been accomplished or are at the forefront of debate today, nearly 60 years later.

I’d recommend reading (or re-reading) Capitalism and Freedom to anyone interested in girding themselves for mental strife, to do battle with the modern opponents of freedom, whether they are Facebook friends, or college professors.  Friedman’s mastery of the economic matters (he won the Nobel Prize in Economics in 1976) and his gift for explaining his arguments in a non-technical, but rigorous fashion, is unparalleled.

Income Tax: The Root of All Evil

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Before there was a libertarian movement of that name there was, in the United States, the Old Right.  These were anti-Progressive, anti-interventionist Republicans and conservative Democrats (remember them?) opposed to the New Deal.  They were staunchly individualist.  During the war hysteria that came in the 1940s, the the following Cold War hysteria, the Old Right was pretty much swept off the stage of public discourse.  But you probably know some of their names:  Albert Jay Nock, Senator Robert Taft, Gov. Al Smith,  H.L Mencken, and Frank Chodorov (1887-1966).

Frank Chodorov was involved in a variety of magazines, through the 1940s and 1950s, including his own journal, analysis,  and the Foundation for Economic Educations’s The Freeman, which he edited.

However, Chodorov is best known today for his 1954 book,  Income Tax: The Root of All Evil, his indictment of the 16th Amendment and the havoc it unleashed on the American way of life.  By Chodorov’s audit of the ill-effects of the income tax, it caused a long list of ailments, such as making us more bellicose, enabling the imperial presidency, upsetting the balance between the states and the federal government,  feeding class warfare, corrupting our charities,  and exploiting the poor.

In name, it was a tax reform. In point of fact, it was a revolution. For the Sixteenth Amendment corroded the American concept of natural rights; ultimately reduced the American citizen to a status of subject, so much so that he is not aware of it; enhanced Executive power to the point of reducing Congress to innocuity; and enabled the central government to bribe the states, once independent units, into subservience. No kingship in the history of the world ever exercised more power than our Presidency, or had more of the people’s wealth at its disposal. We have retained the forms and phrases of a republic, but in reality we are living under an oligarchy, not of courtesans, but of bureaucrats.

The remedy?  The same as used to repeal Prohibition:   Ratify an new amendment to repeal the 16th Amendment, 3/4 of state conventions.  It is an intriguing idea, certainly. Republicans currently control the state legislatures in 30/50 states,  or 60%.

Although one wishes a 1954 book on the income tax would no longer be relevant, the intervening years and the full range of tax “reforms” have not undone Chodorov’s original analysis or his recommendations.  And not only relevant, Income Tax: The Root of All Evil is a delight to read, a propose full of energy and grace.