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Hornberger's Blog is a daily libertarian blog written by Jacob G. Hornberger, founder and president of FFF.
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We’re All Socialists Now, Except for Libertarians


The Sunday edition of the New York Times published an interesting article that is certain to make some Americans who read it uncomfortable. Why is that? Because the article, which is entitled, “What’s a Socialist?” makes a point that many ordinary Americans hate hearing: that by adopting the welfare state, Americans in principle became socialists, just like Europeans.

European Joschka Fischer, a spokesman for the Green Party, points out, “Even in the United States, you have a sort of welfare state, even if you don’t want to admit it — you don’t allow people to die on the street.”

According to the article, Daniel Cohn-Bendit, who used to be called “Dany the Red” but who is now known as “Dany the Green,” points out that modern socialism is characterized by more reliance on the state and higher taxes on the wealthy. The article also points out that European Bernard-Henry Levy observes that European socialists are like American Democrats.

Levy, however, is only half-right. European socialists are also like American Republicans.

American statists had two monumental achievements during the New Deal revolution in the 1930s.

The first one was the revolutionary transformation of America’s economic system. Seizing upon a temporary economic emergency, one caused by the U.S. government’s central bank, statists were able to transform America’s economic system from one based on free enterprise, private property, voluntary charity, and individual responsibility to one based on paternalism and the welfare state.

America was founded on libertarian economic principles — that people should be free to engage in economic enterprise without state interference, accumulate unlimited amounts of wealth, and do whatever they wanted with their own money. Government had nothing to do with charity; it was private and voluntary. People were responsible for their own healthcare, education, food, employment, and other essentials of life.

From the 1930s on, however, the primary function of the federal government became to take care of people, by taking money from people to whom it belonged and giving it to people to whom it did not belong. Effectively, everyone’s income was nationalized in the sense that it was now available, through taxation, to be taken and given to others.

It began with Social Security, a program that had originated among German socialists. It was a program designed to take money from one group of people — the young and productive — and give it to another group of people — the elderly.

The floodgates of the welfare state were thrown wide open. Medicare, Medicaid, farm subsidies, education grants, foreign aid, SBA loans, bailouts, subsidies, regulation, and many others. The federal government, in the words of the French free-market economist Frederic Bastiat, became the great fiction by which everyone tries to live at the expense of everyone else.

Not surprisingly, the welfare state was accompanied by exorbitant spending, debt, and monetary debasement, decade after decade.

The alien nature of FDR’s programs was perhaps best epitomized by his National Industrial Recovery Act, a fascist program that could easily have been found in Italy under Benito Mussolini. The NIRA entailed partnerships between American industry and the federal government, by which the industries were legally empowered to set their own prices rather than letting prices be set in a free market. The government’s propaganda campaign for the program was entitled the Blue Eagle and was straight out of the fascist handbook. The Supreme Court declared the entire scheme in violation of the Constitution.

The second monumental achievement of the statists was in convincing Americans that nothing had changed in a fundamental sense. The revolutionary transformation in America’s economic system was sold as simply a “reform” that was necessary in order “to save America’s free-enterprise system.”

That achievement was absolutely brilliant because Americans could now feel good about embracing socialism because, in their minds, it wasn’t socialism at all. It was nothing more than a free-enterprise “reform,” one that actually saved the free-enterprise system.

Thus began the life of the lie and life of denying reality. To ensure that the lie and unreality were continued, America’s children were herded into America’s public (i.e., government) schools and government-licensed private schools , where they were inculcated with the notion that nothing fundamental had changed during the New Deal. Unlike Europe and much of the rest of the world, America still had a free-enterprise system, not a socialist one.

The battle between economic liberty and socialism was waged not only in the political sphere and the intellectual arena, but also in the Supreme Court. For a time, the Court was declaring New Deal programs unconstitutional, implying that if American statists wanted to transform our country’s economic system, they would have to pursue the procedure outlined in the Constitution for constitutional amendments.

The statists would have nothing of that. They were bound and determined to revolutionize America’s economic way of life without going the Constitution-amending route. President Roosevelt resorted to attacking the Supreme Court and, ultimately, to coming up with an infamous plan to pack the Supreme Court with additional legal cronies in order to overcome the judicial resistance to the European-like socialist and fascist programs that FDR was foisting upon the land.

Ultimately, the Supreme Court caved, thanks to another Roberts on the Court named Owen Roberts. His vote in West Coast Hotel v. Parrish became known as the “switch in time that saved nine.”

Thus, since 1937 the Supreme Court has steadfastly held that the Court will never declare any law that regulates economic activity or takes care of people through the welfare state in violation of the Constitution. The Court might have to come up with contorted reasoning, like stretching the Interstate Commerce Clause or calling a fine a tax, but whatever it took, the Court made it clear that economic statism had become a permanent feature of American life and that Americans had just better get used to it.

For a time, conservatives and Republicans held their ground in favor of economic liberty. Concerned, however, with a possible loss of credibility among the mainstream statist press and, more important, with a loss of votes and political power, conservatives and Republicans quickly threw in the towel and began competing with liberals and Democrats over who was the bigger, more enthusiastic supporter of welfare-state programs.

Thus, the fact is that Americans are all socialists now — except for us libertarians. We libertarians are the only ones continuing to hew to America’s founding principles of free markets, private property, limited government, voluntary charity, and individual responsibility.

Thus, while conservative and liberal statists continue to compete over which reform plan should be adopted to address the ever-growing crises associated with statism, both conservatives and liberals continue to support Social Security, Medicare, Medicaid, farm subsidies, foreign aid, bailouts, and the overall paternalistic philosophy of the welfare state — all of which libertarians would repeal without hesitation, immediately.

Even worse, conservatives and liberals continue to live the life of the lie and the life of unreality by continuing to maintain that America, unlike Europe, continues to embrace economic liberty rather than socialism. Worst of all, they continue to do their best to inculcate this lie and unreality into the minds of the young.

We libertarians confront Americans with the truth and with reality, which is undoubtedly why statists wish we would just go away or at least remain silent. That’s why they do everything they can to marginalize us, both in the mainstream statist press and in the political arena. The last thing statists want to hear is someone telling them that they’re living the life of the lie, the life that denies reality.

But as they are learning, we libertarians will not shut up and we’re not going anywhere. We’re standing fast and we’re fighting to restore economic liberty to our land.

After all, the reality is that statism has brought nothing but conflict, envy, discord, impoverishment, bankruptcy, chaos, monetary debasement, and political plunder to our land. The truth is that economic liberty would restore peace, harmony, prosperity, responsibility, charity, and moral principles to America.

The statists are seeing the rise of libertarianism, and they’re clearly anxious about that. They’re seeing the remarkable number of young people who have broken free of the lies and the unrealities and embracing libertarianism. Equally significant, the statists are seeing that many young libertarians are also helping their parents break free of the lies and the unrealities that were inculcated in them when they were children.

If the statists could effect a revolutionary transformation of America’s economic way of life, libertarians can do the same. Just as socialism was foisted upon our land, it can and should be eradicated from our land. It would be the best thing that ever happened to our country.

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.