For most people in the United States at that time, their family and their local small-town community affairs not only dominated everyday personal concerns (after all, in 1900, 60 percent of the population still lived in rural areas compared with only 25 percent in 1990), but government hardly intruded into their lives. Regulatory agencies were few in number, taxes were low at all levels of government, and what government activities did exist were mostly at the state or local level. How different all this was from the circumstances of today!

At the beginning of the 20th century, government spending at all levels (local, state, and federal) represented 7.5 percent of Gross Domestic Product (GDP), and of that amount 66 percent occurred at the local and state levels. Local government spent 55 percent, state government spent 11 percent, and the federal government spent the remaining 34 percent.

At the end of the century, government spending absorbed more than 28 percent of GDP, but now the proportions have been reversed. The federal government spends 66 percent of that total amount, with 15 percent at the local level, and 17 percent at the state level of government. In 1900 welfare-state spending by the federal government was virtually nonexistent. In 1999, about 60 percent of federal spending was on welfare and income-redistributive activities.

In 1902 all levels of government took in taxes equivalent to about 6.5 percent of GDP, with more than 60 percent of those taxes collected by state and local governments. The government’s tax bite out of GDP has increased today to about 30 percent, with the federal government taking 65 percent of that total.

When the 20th century began, there was no federal income tax. Forty-five percent of federal tax revenues came from customs duties, 35 percent from alcohol excise taxes, 11 percent from a tobacco excise tax, 1 percent from gift and estate taxes, and 8 percent from other revenue sources. In 1999, in contrast, 49 percent of the federal government’s revenue came from personal income taxes, 34 percent from social insurance taxes, 10 percent from corporate income taxes, 4 percent from excise taxes of various sorts, 2 percent from gift and estate taxes, and 1 percent from customs duties.

In 1900 federal public debt equaled 7 percent of GDP, while by the end of the century that debt burden had increased to 40 percent of GDP. One hundred years ago, only about 4 percent of the total American labor force was directly employed by the various levels of government. Now that number has increased to more than 15 percent of the U.S. working population.

Not only has spending and taxing increased at all levels of government during this century, but the preponderance of that spending and taxing has dramatically shifted from the lower levels of government to the national political authority in Washington, D.C. No longer is it relatively unimportant who gets elected to the presidency of the United States or what the ideological biases are of those who vote on the taxing and spending legislation in Congress. The American people have increasingly become the vassals of those who control and dictate a high degree of their fate at the federal level of government.
 

More of the same in presidential politics

And now the presidential decision time is once again approaching. But looking at the candidates and their ideas, the advocate of liberty can only despair at what the next four years — the first four years of the 21st century — offers for a return to an era of limited government, personal and economic freedom, and the arena of peaceful, voluntary market association.

What do the most predominant presidential candidates pre-sent as their respective visions for the future? Nothing but more of the same, with their appeals sometimes wrapped in the rhetoric of “reforms with results,” a “compassionate conservatism,” and government plans to build “bridges to the future” leading to a promised land of renewed government paternalism, planning, and protection from individual independence and responsibility.

No voice is heard that asks us to critically evaluate where we are politically as a nation and at the same time clearly and persuasively proposes a new vista for a future of freedom. As free-market economist and Nobel Laureate James Buchanan recently said, “A vision, an ideal, is necessary. People need something to yearn and struggle for. If the [classical] liberal ideal is not there, there will be a vacuum and other ideas will supplant it.” The advocates of liberty must “focus on the vision, the constitution of liberty, rather than merely on a pragmatic utilitarian calculus that shows [classical] liberalism to yield quantifiably better results than politicized economies.... We need ... to preserve, save, and recreate that which we may, properly, call the soul of classical liberalism.”
 

An ideal presidential candidate

So once again, one imagines what a principled proponent for liberty might say if he was running for that highest political office in the land. (See “If Liberty Mattered — Once More, a Presidential Candidate’s Press Conference, Parts 1 – VIII,” Freedom Daily, February – October 1996.) One fantasizes about how such a candidate might present his case to the American people at a press conference.

The Candidate: Ladies and gentlemen of the press, as I did four years ago, I am once again offering myself to the American people as a candidate for the presidency of the United States of America. I do so with humility and much reluctance. We live in a time when clear and honest speech is rarely spoken in the arena of politics. And when it is, the speaker’s words are soon given a distorted “spin” by his opponents, in the service of their own thirst for political office.

Yet never has clear and plain speaking been more necessary and essential. We are ending one century and are about to enter another. A chapter in American and world history is closing, and a new epoch is before us that can be the freest and the most creative and prosperous ever experienced by mankind. All around us we see the potential of man’s creativity and inventiveness. A revolution in knowledge, communication, and information is rapidly making the world what men have long dreamed of but rarely thought could be made a reality: a global, ecumenical community of mankind.

As never before, man has within his reach a world of the not-too-distant future in which poverty and ignorance can be made things of the past. Tyranny and terror under cruel and covetous governments can be made the sad but closed chapters of man’s long history in the struggle for human freedom, dignity, and tolerance. World peace and material improvement for the billions of men and women around the earth can replace the conflicts, violence, destruction, and physical hardships that war and militarism imposed on so many in the 20th century.

Here at home, in America, the dreams of a life of personal freedom, economic opportunity, material comfort, and intellectual and cultural openness that brought tens of millions of people to our shores in the last 200 years can be restored after the false promises of the last 65 years. For more than six decades in Ameri-ca, government promised a paradise from political paternalism through wars on poverty, illiteracy, racism, and drugs.

The legacies of these government-led wars are all around us: hopeless dependency and stagnant standards of living for too many, especially among some of the ethnic minorities in America; falling educational standards and worsening ignorance about science, history, and the cultural accomplishments of the western civilization upon which our heritage of freedom is based; heightened tension and animosity among various racial and religious groups in every part of the country; and a generation of our youth influenced by or drawn into an underworld of crime and corruption created by the lucrative black market that the government’s anti-drug laws have artificially brought into existence.

America, and indeed the entire world, has followed a false god in the 20th century: the state as savior. It has offered its siren’s song under different names during this past hundred years: socialism, communism, fascism, nazism, interventionism, welfare statism, the mixed economy, the third or middle way. But regardless of its title or ideological rationale, it has meant the same thing in all of its mutations: subjugation of the individual to the power and control of a centralized political authority.
 

The sanction of the victim

The individual has been made small and the government bigger and stronger. The state has narrowed and, in too many cases, eliminated the opportunities for the individual to shape, design, and plan his own life, and it has made the individual conform to designs and plans created by the political authority.

Let me be clear about what I’m saying. The individual no longer fully plans his own life and career; he no longer fully plans his own retirement and its financial requirements; he cannot fully plan and fund the educational options that he considers the most valuable for his own offspring and for others in whose welfare he takes a personal and private interest.

He is not free to hire out his own labor services or to hire the services of others on voluntarily agreed-upon terms of trade; he may not freely move his capital or labor services to any part of the world in which he believes they could earn him the most attractive financial returns, so as to maximize the net income out of which he could acquire all the necessities, conveniences, and luxuries that make up many of the parts of a life worth living.

He is restrained from using his peacefully acquired property as he sees fit, in the context of his values, opportunities, and aesthetic judgments; he may not travel or take up residence in the country of his choice without government approval and surveillance; he may not unrestrictively own firearms for protection against the private predators of society or to resist the state if it were to threaten those rights most fundamental to his life and property.

He may not mind his own business and ignore the state, as long as he does not violate the rights of, and therefore does no harm to, another. Instead, the government records and keeps track of every facet and event of his life from the time of his birth to the day he dies. There is no corner that he may call his own, free from the prying eyes and intrusive regulations of the state.

These are strong statements and radical accusations against the existing order of things in the United States. Before I take your questions, I would like to explain to you, the ladies and gentlemen of the press, my vision, my ideal, and my ideas for achieving the freedom that I believe define the meaning of a truly great and good society.

Professor Ebeling is the Ludwig von Mises Professor of Economics at Hillsdale College, Hillsdale, Michigan, and serves as vice president of academic affairs for The Future of Freedom Foundation.

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