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If Liberty Mattered — Once More, a Presidential Candidate’s Press Conference, Part 2

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The Nation: Mr. Candidate, if you intend, if elected, to abolish all of the progressive social legislation of the last seven decades, surely you are condemning millions of Americans to poverty and despair, injustice and discrimination. Your vision of America would take this country back to the darkest, most reactionary, and most exploitive times of the 19th century. Why should any caring, enlightened, socially aware person take your campaign seriously?

The Candidate: It is precisely because I am concerned about poverty and injustice, despair and discrimination that I want to see the end of the welfare state and the government’s interventionist policies. The welfare state has had the seductive power of an attractive but addictive narcotic. Promising to offer security and protection to those in need in the society, it has weakened and undermined the individual’s sense of self-worth and belief in his capacity for self-responsibility. It has created perverse incentives, punishing those who try to kick the welfare habit; the effect has been similar to the withdrawal symptoms of kicking a drug habit.

This has locked in several generations of people in the very poverty that the proponents of these programs claimed that they wished to reduce or abolish. The war on poverty — through governmental means — has been lost. It is time to give people hope and opportunity. The repeal of numerous government regulations and market barriers will, as one of its primary purposes, give those of modest means and limited skills the freedom to apply themselves in various ways, either through self-employment or working for another, which will begin the process of self-support.

When my grandparents’ families came to America near the turn of the century, they had the freedom to start their own businesses with little capital and practically no government red tape. Minimum-wage laws and OSHA regulations did not exist, and thus the cost of hiring unskilled labor was not prohibitive. Within two generations, those who came to this country with often nothing but one or two suitcases, practically no money, and little if any knowledge of English were entering the middle class. Their children’s and their grandchildren’s lives became the American dream.

That is the type of freedom and opportunity, self-respect, personal dignity, and responsibility that I want those who have been born here to be able to experience, as well. But that will not be possible until the reactionary and backward policies of state dependency, state control, and state intrusiveness have been put behind us.

The Wall Street Journal: You say that you have entered this presidential race because the other major candidates have failed to present a vision of freedom. Yet, your call for eliminating various impediments to market opportunities and your appeal for a more competitive economy to provide those opportunities sound not much different from many of the conservative candidates already in the race for the presidency. Some of your opponents in this race and many members of Congress have called for massive cuts in government spending and regulation.

The Candidate: Rhetoric and reality are not the same thing. And I don’t simply mean that what a candidate says and what he does can often be two different things. What my opponents are calling for in their rhetoric is, in fact, not freedom but rather reductions in the rate at which Americans continue to lose their freedoms. If an automobile is racing towards a cliff at 65 miles per hour and the driver releases the pressure on the accelerator pedal so the vehicle is now moving towards destruction at 55 miles per hour, nothing has been changed. The disastrous outcome has merely been delayed by a few seconds.

Look at the reality, not the rhetoric, of what is advocated. Whether it be the Democrats or the Republicans, what is being proposed are “decreases in the rate of increase” of government spending and taxing. Whether it will be the Democrats or the Republicans running the government, when the year 2002 arrives, government will, in real terms, be spending more, and tax revenues will be much larger than they are today. And that will be the reality whether the federal budget is balanced or not.

A balanced budget is important. Government deficit spending siphons off savings in the society that otherwise would have been used to finance private-sector investment and capital growth. Rates of interest are higher in the financial markets when there is a strong government demand to borrow; this results in some private-sector borrowers having to leave their investment plans on the shelf, because some of those private investors just cannot afford to match the interest rates the government offers to pay lenders. What government borrows today is paid for today in the form of available resources being directed away from private uses into the hands of the government through the borrowed dollars the government spends today in the market. But at the same time, today’s borrowing by the government is also a claim against the future income of those Americans who will have to be the taxpayers who pay back those borrowed dollars to creditors in the future.

Furthermore, when government has the ability to borrow to cover its spending programs, it creates a perverse incentive for politicians to offer more and more benefits to present-day voting groups, with the tax cost of paying for them deferred until some tomorrow. Moreover, there will be no certainty today who those future taxpayers will be or the degree of the tax burden that each of those taxpayers will have imposed upon him when tomorrow’s tax bill finally comes due. Thus, the power for deficit spending creates a dangerous illusion of the potential for increased government benefits today with the tax cost seemingly hidden until the future.

What has made the deficit and debt important issues today is precisely that the borrowings of the past have been catching up with the country — in the form of the amount of collected taxes that must be used to make the interest payments on government’s excesses of the past. The deficits that are looming ahead — if something is not done about the extrapolated rate of government spending due to what has become so-called “entitlement” programs — have forced the issue to the front burner of the political debate.

But the government deficit and debt problems will be solved only in the context of asking the fundamental issue: What is the function of government — what are its essential responsibilities in society? The proposals made by my opponents all skirt this issue, which is the most important question in any political debate. Neither in any consistent political philosophy of freedom nor in the body of the U.S. Constitution is there any role for the government in redistributing wealth, regulating free-market activity, or establishing privileged “entitlements” on the basis of income level, gender, or race. In my opening statement (see Freedom Daily, February 1996), I enumerated all of the government departments, bureaus, and agencies that I believe need to be abolished.

Their abolition would, in my opinion, bring the federal government in line with a role in society more consistent with such a philosophy of freedom and the intent of the original Constitution. The function of government is to protect the life, liberty, and property of the citizens of the United States. Every piece of legislation that has moved government beyond this function has, therefore, served as a vehicle for a loss of freedom and the establishment of privileges and political benefits for some at the expense of others in the society who have been made to pay for them.

Have my opponents in this race called for the abolition of these programs and government activities? Unfortunately, no! How do they propose to solve the problem of the welfare state? The Republican Congress has called for block grants to the state governments, which would now have an enhanced responsibility for the provision and management of welfare-state activities. The federal government would still be taxing the American people, and those tax dollars would then be funneled through Washington to the state governments.

Under the principle of separation of powers among the sovereign states, the people of any of those states may choose to elect legislators who impose welfare and redistributive programs for their state. I would still disagree with the morality of and economic consequences of instituting such programs at any level of government. But I am running for the office of president of the United States. And in that capacity, I consider that the only appropriate stance should be to oppose any redistributions of wealth by the federal government, either directly through programs managed and controlled by federal agencies or via transference of tax dollars collected by the federal government to the state governments. If it is inappropriate for the federal government to tax Peter to give to Paul in general, then it is equally inappropriate for the federal government to tax the Peters in some states to give to the Pauls in other states through block-grant transfers.

To speak bluntly, the block-grant approach is a method for those who may desire to cut back government spending to avoid confronting head-on the issue of government redistributions of wealth. They talk about transferring the control over tax-collected dollars to a level of government closer to the people; and they talk about state and local governments needing to have the discretion and resources to match funds with the specific “social needs” of their respective communities. What they are trying to avoid saying is that the federal government should not be involved in such welfare schemes at all — that the programs should be abolished, which, of course, would mean that the federal government would no longer need to collect the taxes to pay for the programs.

From then on, it would be up to the residents of the various states to decide whether to have such programs or not, paid for and run at the state level.

Instead, my opponents are trying to move in that direction on the sly, so to speak. This is a strategy of deception. People cannot be “fooled into freedom.” This is especially the case, since by leaving the premise of redistributivism untouched, the proponents of this scheme are leaving the terms of the debate in the hands of those who think government has a role in redistributing wealth and bestowing privileges on some at the expense of others. Either the electorate accepts a change towards the free society or they do not. Too many conservatives believe that the arguments for freedom cannot be understood by people or that people are too weak to accept the rigors of the free society.

For the first 150 years of United States history, the vast majority of the American people not only understood the principles of freedom, they lived them. And they usually opposed proposals for abridging that freedom. Freedom has been increasingly lost in America, especially during the last seventy-five years, precisely because the socialist, interventionist, welfare-state advocates persuasively argued that the state should do more than merely protect the freedom of the people. That freedom will not be regained until the clear, articulate, and persuasive case is made that the socialist, interventionist, welfare-statist philosophy is morally wrong, politically dangerous, and economically harmful.

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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).