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The Future of Freedom Retrospect and Prospects, Part 3

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Jacob Hornberger and I first met in Dallas, Texas, in 1984. I had recently taken a position as an assistant professor of economics at the University of Dallas. He was practicing law. Acting on the advice of one of my colleagues in the economics department, Jacob asked me if I would be willing to privately tutor him through Ludwig von Mises’s Human Action. I was hesitant-until he told me the hourly fee he was willing to pay; it was an offer I could not refuse.

The arrangement became even sweeter for me when I realized that I had almost no work to do. At first I would take an hour or two before our sessions to write up some notes and read over the sections of Human Action we were to discuss that day. But it soon became clear that I did not have to prepare very much; Jacob often wanted to spend our tutorial time finding out my views on free-market philosophy, how I came to be an Austrian School economist and classical liberal, and how consistent and “uncompromising” I was on various political topics. Even better from my point of view, he would often want to finish our session together over lunch-with him always picking up the tab. I had it made; this was my kind of job: no work, good pay, and a free lunch!

But all good things, unfortunately, come to an end. In a couple of years, Jacob decided to give up his law practice to accept a position as program director at The Foundation for Economic Education in Irvington-on-Hudson, New York. There went my free lunch and my juicy monthly fee. But we kept in touch by telephone, and I would sometimes see him when I came to FEE to lecture for FEE’s summer seminars.

In 1988, I moved to Hillsdale College, accepting a position as the Ludwig von Mises Professor of Economics. In 1989, Jacob called me and said that he was thinking of leaving FEE and starting his own foundation, an idea that had been in his mind for some time. He felt ready to try and wanted to know if I was interested in working with him as vice president of academic affairs. My responsibilities would be to work on various foundation projects and to contribute a monthly article and a book review for the foundation’s publication, Freedom Daily. And thus was born The Future of Freedom Foundation.

The first issue of Freedom Daily was published in January 1990. In that premiere issue, Jacob explained to our first readers:

I have organized The Future of Freedom Foundation not only to show the bankruptcy of the socialist ideal but, more important, to develop and promote the moral and intellectual foundations of the opposite ideal: FREEDOM. . . . In the years ahead, you and I are probably not going to agree on everything. That is not important. What is important is that each of us continues to seek a deeper understanding of the principles of freedom and exchange our respective insights with one another. By sharing our own individual perspectives of truth, and by maintaining a respectful tolerance for each other’s beliefs, we will inevitably contribute to the advancement of liberty as well as to each other’s understanding of the principles of freedom.

At the same time he told our first readers what the Foundation’s final goal was:

It is to the elimination, not the reduction or reform, of the welfare state and the planned economy that The Future of Freedom Foundation is dedicated.

We have tried to remain true to this goal in our articles and in our lectures and seminars around the country and in other parts of the world during the past half-decade.

How much closer are we to achieving that goal? In 1990, there still existed the Soviet Union-the first socialist state. By the end of 1991, it had passed into the dustbin of history. While The Future of Freedom Foundation cannot take credit for this, it might be noted that I was on the streets of Vilnius, Lithuania, in January 1991 with the Lithuanian freedom fighters, resisting the Soviet attack that resulted in the brutal deaths of thirteen unarmed civilians. And I was at the Russian parliament building in Moscow in August 1991 with the Russian freedom fighters, opposing the hard-line coup attempt, the failure of which set the stage for the formal end to the Soviet Union in December 1991.

But while Soviet-style socialism is dead, the socialist idea is very much still alive. And what is worse, many who view themselves as friends of a freer society too often, in their criticisms of the American welfare-interventionist state, accept the premises on which are built the policies of which they disapprove.

For example, in the October 10, 1994, issue of National Review, there was an article by Lawrence Kudlow entitled “Fed Up,” in which he proposed a return to a monetary system backed by gold. His analysis of the failure and abuse of a manipulated paper money system by the government was completely on the mark. At one point, Mr. Kudlow says:

The root cause of inflation was the printing of bad money. By government. That’s right, government. The Federal Reserve is an arm of the U.S. Government, just as central banks everywhere are. And governments are not to be trusted. In the United States, the Fed. . . represents the narrow interest of elite Washington planners and their mistaken theories, not the grass roots interests of the population at large. The latter wants stable money in order to invest, save, borrow, lend, trade, take risks, and prosper. The former want Keynesian fine-tuning, demand management, and economic control.

A reasonable conclusion from Mr. Kudlow’s analysis would be that the Federal Reserve System should be abolished. The Washington elite of planners use the Fed as a tool for monetary central planning, and like all forms of central planning, it leads to disorder and destruction of peaceful, private market activities. But instead, Mr. Kudlow presents his own monetary plan for Federal Reserve policy, one that would focus on pegging Fed monetary policy to movements in the price of gold on the international commodities market, with the Fed increasing or decreasing the supply of money to keep the dollar price of gold “stable” in America.

Mr. Kudlow fails to recognize that his is still a plan for government manipulation of the value of money. His plan aims to achieve a different target than the ones aimed for by the Keynesian and Washington social engineers whom he forcefully criticizes.

In a free society, it should be left to the market transactors themselves to choose the medium of exchange they find most convenient to use. And its value, as with every other commodity on the market, should be determined by the forces of supply and demand, with no government influence on this process.

In the October 1994 issue of Commentary magazine, one of the more interesting of the neo-conservative publications, there were two articles on the problem of “What to Do About Education,” one by historian Gertrude Himmelfarb about “The Universities” and the other by Chester E. Finn, a professor of education at Vanderbilt University, entitled “The Schools.” Professor Himmelfarb’s contribution focused on the dangers and damage from affirmative action, multiculturalism, and political correctness on American campuses of higher learning. Professor Finn’s article discussed the decay of quality and standards in the public schools and the extent to which the public schools have become politicized battle grounds.

The authors summarized the problems with great clarity and effectively warned of the worsening disaster if the situation in the schools and universities is not turned around. Both writers emphasized the usefulness of more openness and competition and more consumer control over the content of what the universities and schools offer to the youth of America. But they both, again, merely propose their own plans for reforming the existing institutions as government-controlled factories for education. Neither author even suggested that the solution would be to totally privatize the educational system from kindergarten to graduate school. A totally private system of education would cut at its root the taxpayers’ funding that feeds these hothouses of collectivist indoctrination. Education at every level would be depoliticized; and only what parents and students actually desired would tend to be supplied in the market for education.

What these two examples-central banking and state education in America-bring out is just how embedded the socialist mentality is in America. Now that the Soviet Union is gone and leftists can no longer accuse the critic of looking for a communist under every bed, perhaps we can calmly confront the fact that the ten points for transforming “bourgeois” society into a socialist utopia proposed by Marx and Engels in The Communist Manifesto- of which central banking and mandatory public education are two-basically have been implemented in both America and the rest of the “noncommunist” world in the 20th century.

I am not a believer in conspiracy theories about control of the world. But I do believe in the power of ideas. And for over a century, the socialist idea has more and more come to dominate the thinking of our world. In 1950, Austrian economist Ludwig von Mises observed:

The world is split today into two hostile camps, fighting each other with the utmost vehemence, Communists and anti-Communists. The magniloquent rhetoric to which these factions resort in their feud obscures the fact that they both perfectly agree in the ultimate end of their program for mankind’s social and economic organization. . . . They want to substitute . . . government control for the market economy.

The totalitarian socialists of Soviet Russia have been defeated in this global struggle. But the intellectual and political battlefield has been conquered by the democratic socialists. The rule of a “democratic” social engineer may be gentler and less brutalizing than that of his “totalitarian” cousin, but the essence of the system they desire to create remains the same: Power over human affairs is to pass out of the hands of the people, through their private dealings in peaceful market transactions, and is to be transferred to the control of the planners who wish to manage and manipulate our lives and destinies for us.

However, just as Soviet socialism withered and died as faith in its power to design Utopia was abandoned by people on the far side of that cruel Iron Curtain, the ideological strength and moral high ground of the welfare-state version of the socialist idea has been drained of power on our side of that now-gone Iron Curtain. But like the “undead” in those vampire movies we all grew up watching, the welfare state may not be ideologically “alive,” yet it still stalks the land, sucking the blood out of the living, productive members of the society, creating new zombie victims dependent upon the state’s redistributive largess.

Just as the vampire could finally be killed only by confronting it with the bright light of day and a stake driven through its heart, this last variant of the socialist idea will only be defeated and put to rest if its premises are directly challenged and opposed root and branch. We must have the understanding and the courage to say that “social justice” is compulsory redistributive plunder; that the vast majority of society’s ills today are not the product of market forces, but the result of a century of increasing state control and planning over every corner of our lives; that the welfare state is socialism; that political paternalism, no matter how packaged and labeled, is a false utopian promise of security; that reform and reconstruction cannot make the welfare state work; that everything that the state has taken under its control or political influence must be privatized and depoliticized; that unless men plan their own lives, care for themselves and their own families, and associate with their fellow human beings on the basis of voluntary agreement and mutual consent, they are either serfs or political taskmasters-there is no in-between.

To foster an understanding of these things and to help fight this intellectual battle in each corner of our society is why Jacob Hornberger and I founded The Future of Freedom Foundation five years ago. It is still our mission. And together we can win. The future of freedom depends upon it.

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).