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Three Malignant Overlays

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In 1890, Americans lived in a society without income taxation, the IRS, Social Security, Medicare, Medicaid, public (i.e., government) schooling, farm subsidies, foreign aid to dictatorships, minimum-wage laws, price controls, paper money, the Federal Reserve, Departments of Education, Labor, Commerce, Energy, and Homeland Security, occupational licensure, immigration controls, huge standing army, military-industrial complex, foreign military bases, CIA, kidnapping, rendition, torture, indefinite detention, kangaroo military tribunals, and state-sponsored assassinations of citizens and non-citizens.

Sure, it wasn’t a perfectly free society. There were various economic regulations, especially at the state level. There were land grants to the railroads. There were government-business partnerships. There were trade restrictions. There were Jim Crow laws and suppression of voting rights.

But the fact remains: There were none of those enormous things enumerated above that characterize the society in which we live today.

What happened? Given that Americans lived without all those things, how is that we were born and raised in a society that has them all?

The answer lies in the fact that after a fierce ideological battle that took place in the early to mid-20th century, statists succeeded in having three overlays placed on American society. Those three overlays were socialism, interventionism, and imperialism.

Socialism came in the form of the welfare state. Yes, it’s true that the government didn’t nationalize everything like what happened in Cuba, North Korea, and other countries that embraced pure socialism. Instead, knowing that Americans would never go along with anything that extreme, American statists settled for foisting socialistic programs upon our land. That’s where progressive income taxation, Social Security, Medicare, Medicaid, farm subsidies, foreign aid to dictatorships, food stamps, and other welfare-state programs come into play.

The idea of the welfare state was that people’s income and wealth would be unconditionally subject to the government’s power to tax. The IRS would collect the tax and the government would distribute it to others. Over time, people on the receiving end would become dependent on whatever dole they were receiving, reinforcing the power of the government to continue expanding the reach of the welfare state.

Interventionism came in the form of the government’s power to regulate, control, manipulate, and interfere with economic activity. The Sherman Antitrust Act of 1890 reflected the beginnings of the ideological battle between the advocates of the free-market and the advocates of statism that would culminate in the next century.

With interventionism, we’re talking about such things as tax incentives, price controls, economic regulations, stock market regulations, Federal Reserve monetary manipulation, paper money, minimum-wage laws, drug laws, and fiscal policy. The idea was that it would be the government’s job to bring economic prosperity and personal responsibility to the nation. That presidential candidates from both political parties run on the basis of which candidate would be the better “job-creator-in-chief” reflects the mindset of interventionism.

The idea of turning America into a military empire has its roots in the 1898 Spanish American War, when the U.S. government insisted on taking control over Cuba, Puerto Rico, Guam, and the Philippines after helping them secure their independence from the Spanish Empire. Then there was the military intervention in World War II whose aim was to make the world safe for democracy and to end all wars in the future. It didn’t work. Within a short time, there was Adolph Hitler and the Nazis and World War II. That was followed by the Cold War, wars in Korea and Vietnam, and the formal establishment of a “national-security state,” characterized by an enormous permanent and ever-growing military force and intelligence apparatus not only here in the United States but also abroad. The concept of a national-security state was integrated with a foreign empire of military bases all over the world, with the goal of maintaining “order and stability” by installing pro-U.S. regimes around the world. Coups, invasions, occupations, assassinations, and interference with politics in foreign countries became the foreign policy of the United States, maintained in large part by the Pentagon and the CIA. Recognizing the new order of things, the federal judiciary declined to declare any of it unconstitutional, effectively immunizing the military and CIA from judicial review.

The problem is that many Americans have no idea that these three overlays were placed over American society. They think that Americans have always lived under the same system.

Even worse, Americans have been inculcated with the notion that all this statism is “freedom.” That’s why they so proudly sing how proud they are to be living in a “free” country and so grateful that imperial troops are defending their “freedom” thousands of miles away. They epitomize Goethe’s dictum that none are more hopelessly enslaved than those who falsely believe they are free.

The truth is that these three overlays are not freedom. They are the opposite of freedom.

Equally important, these three overlays are the root cause of America’s many woes.

Out of control federal spending and debt. Decades of monetary debasement (i.e., inflation). Ever-growing welfare-state spending. A national of people dependent on the welfare dole and scared to death of losing it. An IRS with the power to terrify and destroy Americans. Monumental economic distortions producing regular cycles of boom and bust and permanent unemployment. A vicious drug war that does nothing but enrich drug cartels and government officials and infringe on the liberty and privacy of Americans. A vast, permanent, and ever-growing military establishment and intelligence apparatus that, as President Eisenhower pointed out, constitutes a grave threat to our democratic way of life. Horrible anger and hatred toward the United States on the part of foreigners culminating in threats of terrorism. Support of and partnerships with brutal foreign dictatorships. Torture, denial of due process, warrantless searches, incarceration without trial in military dungeons, assassination.

All of this is the product of those three malignant overlays: socialism, interventionism, and imperialism.

Unfortunately, all too many Americans continue to believe that it’s possible to fix these three overlays and make them work. It will never happen. The overlays are inherently defective. No matter what reforms are put into place, the problems will only continue to get bigger and bigger.

There is only one solution to America’s many woes: Lift all three malignant overlays. Restore a free society, the free market, and a constitutionally limited republic to our land. There is no other way.

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.