Blogroll Category: Current Affairs

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The interesting implication of Baumol's Cost Disease

Adam Smith Institute - 5 hours 3 min ago

Sadly, letters to The Times need to be short:


Sir, Harry Wallop (“Going shopping? Here’s the proof that you’ve never had it so cheap”, Sep 13) wonders why university, theatre and healthcare have risen in price while women’s shoes, calculators and tennis rackets seem to have fallen. It’s called Baumol’s cost disease. As a society gets richer manufactured items will fall in price relative to services. It’s one reason why the NHS budget has to increase faster than general inflation every year.

Tim Worstall

Senior fellow, Adam Smith Institute, London SW1

It’s the “what do we do next” part of this which is so interesting.

The observation is that wages - the costs of labour - are set by the general level of productivity in the society. Further, that it’s easier to increase productivity in manufacturing via automation than it is in services. For if we can automate it then it’s no longer a service, it’s a manufacture. Thus the value of the embodied labour in those services will rise more than that in manufactures. And rising wages is that very signal, proof perfect, of the increasing richness of the society.

So, services will rise in cost relative to manufactures. And thus Polly Toynbee’s repeated observation that the NHS needs a 4% budget increase every year just to stand still.

OK. But what do we do about it?

We know that the way to increase productivity is via markets and their competition. Thus we need more markets and competition in services than we do in manufactures. That productivity increase is harder, d’ye see, therefore we must make more effort to achieve it.

It’s the very fact that the NHS inflation rate is above the general one that insists we have that competition.

Categories: Current Affairs

Archbishop Okoh condemns “modernism” as heresy

Anglican Ink - 11 hours 46 min ago

“There’s stability in God and those who follow Him must not deceive themselves that through sophistry they can confuse Him; because there is nothing like ‘modern God’, it does not exist.”

These were the words of the Primate of all Nigeria Anglican Communion, and Bishop of the Diocese of Abuja, the Most Rev. Nicholas D. Okoh at the dedication of a new place of worship for the parishioners of All Saints’ Anglican Church, Wuse Zone 5, Abuja, pending the building of a new ultra-modern church building to replace the old one.

The Primate, who described dedication as separateness, said that this is the call of every Christian, to be separate from the world through the way they live and do things. He opined that there was a time when there was a clear cut difference between what is acceptable and what is unacceptable, and what is Christian and what is unchristian. According to him, today, people have reasoned things so much that anything has become acceptable and people, including those who profess to be Christians, now talk of relativism, whereby there is no absolute truth. This, he said is the crux of the problem, the reason there is so much crises in the Church today.

Primate Okoh further explained that dedication is to make a place holy and set it apart from all forms of common uses. He stressed that the dedication of a church building makes it a colony of Jesus and a place where Christians can run to in times of need and when in trouble, to receive answers and solutions to their problems, as well as safety. The cleric said the church is not a place to brag or misbehave, but a place where all must be clothed with humility.

The Bishop of Abuja Anglican Diocese pointed out that in the relationship between God and man, the gap is very wide and man cannot challenge God; because He is the creator while man is the creature. He described God as the immortal one, who is not confined by space and time, as man; stating that God does not take permission from anyone to do anything and therefore believers must be humble whenever they come into His presence. He quoted the Bible verse that states that God resists the proud and exalts the humble to corroborate his point; adding that when a person is humble, he or she will receive answers to his or her prayers and also be able to fellowship peacefully with others.

The Most Rev. Nicholas Okoh ended his sermon with a charge to all present to run to the house of God, to seek His face when they are joyful, sad, in need, in trouble or when they are being persecuted unjustly and God will answer their prayers, protect them and fight their battles. He however added that one must make sure that one is suffering for Christ’s sake and not for one’s sin. He said if suffering comes as a result of personal sin, one must first repent, before one’s prayers can be answered, because the spirit of God cannot cohabit with sin.

Highpoints of the dedication include the dedication of the Font, Lectern, Pulpit, Prayer desk, Choir stall, Chancel step, and the Holy table (Sacrarium). The alternative church building though modest is commodious, with modern gadgets and big enough to accommodate two services as if it were the old structure. It is a beauty to behold.

The post Archbishop Okoh condemns “modernism” as heresy appeared first on Anglican Ink © 2019.

Anglican Church to consider request from Royal Commission to waive victim confidentiality agreements

Anglican Ink - Mon, 16/09/2019 - 23:58

The Royal Commission of Inquiry into Abuse in Care in New Zealand has asked the Anglican Church of Aotearoa, New Zealand and Polynesia and the Roman Catholic Church to waive confidentiality agreements signed by victims of child abuse while under church-supervised care.

Organized in 2018 with a brief akin to royal commissions in Australia, Canada and the UK investigating child abuse in church and secular institutions is expected to examine cases of abuse from 1950 to 1999. Approximately 100,000 children were in care during this period.

On 14 August the Commission welcomed the decision by Crown agencies to lift confidentiality obligations on survivors of abuse in State care arising from settlement agreements with the Crown.

This means survivors who want to participate in the Inquiry can choose to share their settlement details with Commissioners if they wish, despite any confidentiality agreements with Crown agencies.

The Inquiry’s Counsel Assisting Simon Mount QC said the waiver is intended to enable survivors to engage with the Commission freely, even if they have entered into confidential settlements with the Crown in the past.

“We requested the confidentiality waiver earlier this year to ensure survivors can share their experiences and effectively take part in the Inquiry, despite any settlement agreements with the Crown” Mr. Simon said.

At a hearing held on 20 Aug 2019, attorneys for the Catholic and Anglican Churches said they would consider lifting legal agreements that banned victims’ testimony.

Sally McKenchie, representing the Catholic church, told the commission: “The Catholic Church will come before you, in the spirit of cooperation and transparency.” Sonja Cooper, speaking for the Anglican church, said it would do likewise.

Public hearings begin at the end of October.

The post Anglican Church to consider request from Royal Commission to waive victim confidentiality agreements appeared first on Anglican Ink © 2019.

Archbishop urges govt to come clean on the murder of Bishop Muge

Anglican Ink - Mon, 16/09/2019 - 23:28

The former Archbishop of Kenya has asked the government to come clean over the death of the former bishop of Eldoret, the Rt. Rev. Alexander Kipsang Muge.

Bishop Muge was murdered 29 years ago on orders of the government of President Daniel Arap Moi, a former member of Kenya’s Directorate of State Intelligence – the Special Branch – told the country’s Truth Justice & Reconciliation Commission in March 2011.

On 5 March 2012, Former Special Branch Inspector James Lando Khwatenge testified that the road accident in Busia that killed the outspoken bishop had been engineered by Special Branch to silence him, and to provide an example to political dissidents.

The murder was planned by the security services as “Operation Shika Msumari”, Inspector Khwatenge said. However, the acted on their own initiative to plan the murder he told the commission.

In the late 1980’s, Kenya’s Christian churches were in the vanguard of the campaign to end one party rule by the Kenya African National Union (KANU). The Church of the Province of Kenya in 1990 pressed the KANU government to amend the constitution and allow a multi-party political system, an independent judiciary, protection of tenure for the Attorney General and Auditor-General, a secret ballot for elections, and a limit on the tenure of office for the president to two five year terms.

The country’s churches backed the Anglican call for reform and in June 1990 urged President Moi to dissolve parliament, convene a national constitutional conference and hold free and fair elections. Large-scale political demonstrations erupted in July, which prompted a government crackdown, with the government detaining its most vocal critics, charging them with sedition.

In response, Bishop Alexander Muge of Eldoret and his colleague, Bishop John Okullu of Maseno South called for the president to step down and for fresh elections. On 12 Aug 1990, Labour Minister Peter Okondo warned Bishop Muge that if he and Bishop Okullu entered the Busia district “they will see fire and may not leave alive.”

Bishop Muge told the press the next day: “Let [Okondo] know that my innocent blood will haunt him forever and he will not be at peace for God does not approve murder.”

On 14 Aug 1990, Bishop Muge and his staff set out for Busia in the Diocese of Eldoret, when the car in which the bishop was travelling collided with a lorry. Bishop Muge was killed on impact.

Speaking earlier this month at a memorial service held at the Bishop Muge Chapel at St Matthews Cathedral in Eldoret, the Most Rev. Benjamin Nzimbi said 

It was time the truth was told.  “We remember Bishop Muge in a special way for mostly initiating many development projects within the Eldoret Diocese and the country as large,” the archbishop said, adding he was a “brave person” who was fearless in his pursuit of justice.

Alexander Muge “ would go ahead and tell the government on its face that it did wrong and that he would tell them to mend the broken ends it failed to achieve.”

“He gave suggestions on how we could overcome the prophecies he predicted, he was a God-given person to whom we referred to as the John Baptist,” the archbishop said.

The post Archbishop urges govt to come clean on the murder of Bishop Muge appeared first on Anglican Ink © 2019.

Thoughts on the Jerusalem Declaration Pt 3: Should Clause 13 Be Excised?

Anglican Ink - Mon, 16/09/2019 - 20:50

In my first essay, I looked at the portions of the Jerusalem Declaration that expound Gafcon’s understanding of the nature of the church. In this essay, I focus on clause 13, which calls for church discipline, and how that fits into Gafcon’s understanding of unity and diversity within Anglicanism.

The Jerusalem Declaration contains fourteen clauses. Thirteen of them are affirmations of basic Christian doctrines: the Gospel, the Bible, the Creeds and Councils, the Articles, Prayer Book and Ordinal, marriage, stewardship, mission, church unity, and Jesus coming in glory. One of them, clause 13, is a downer. It reads:

13. We reject the authority of those churches and leaders who have denied the orthodox faith in word or deed. We pray for them and call on them to repent and return to the Lord.

I was talking recently with a friend from the Church of England about why more Evangelicals there had not openly supported the Gafcon movement. He began by saying how positive he and his colleagues were about the Assemblies in 2008, 2013 and 2018 and also about the Jerusalem Declaration as a fine confession of biblical faith.

I paused and then asked: “Does that positivity include clause 13?” Well, no, he admitted, clause 13 is something of a stumbling block for many Evangelicals. Indeed it was the main reason several Evangelical bishops decided not to attend Gafcon in Jerusalem last year (attendees were asked to affirm the Jerusalem Declaration).

So this question arose from our discussion: Should Gafcon excise clause 13, or is there a way of interpreting it which is not a stumbling block to conflicted Evangelicals? I promised my English friend that I would think about this question.

I have already argued that in principle the Jerusalem Declaration can be amended by adding a clause, so it necessarily follows that it can be amended by excising a clause. I shall be arguing below why clause 13 is not a lapse into negativity but is the salt of discipline that makes the affirmations of doctrine “edible,” i.e., credible and effective in a catholic and apostolic church and the Anglican Communion in particular.

The Ecumenical Framework of Clause 13

Clause 13 concludes a cluster of three clauses on the unity of the church. It is preceded by clauses 11 and 12, which read:

11. We are committed to the unity of all those who know and love Christ and to building authentic ecumenical relationships. We recognise the orders and jurisdiction of those Anglicans who uphold orthodox faith and practice, and we encourage them to join us in this declaration.

12. We celebrate the God-given diversity among us which enriches our global fellowship, and we acknowledge freedom in secondary matters. We pledge to work together to seek the mind of Christ on issues that divide us.

Clause 11 reflects Jesus’ “ecumenical” prayer for His flock “that they may all be one, just as you, Father, are in me, and I in you, that they also may be in us, so that the world may believe that you have sent me” (John 17:21). Gafcon is claiming here not to be sectarian; indeed all its statements and actions have been addressed to the wider church and in particular to the Instruments of Unity, represented by the Archbishop of Canterbury. (This “open statement of the truth” [2 Corinthians 4:2] is, in fact, in stark contrast with the Canterbury’s studied refusal to engage with Gafcon’s contentions.)

The reference to recognizing the orders and jurisdiction of orthodox Anglicans is the positive side of the coin of which clause 13 is the flip side. In the Jerusalem Statement, Gafcon is clearly wishing to promote unity among orthodox Anglicans when it says:

We urge the Primates’ Council to authenticate and recognise confessing Anglican jurisdictions, clergy and congregations and to encourage all Anglicans to promote the gospel and defend the faith.

There is, however, a tension built into the Statement, as it goes on to state:

We recognise the desirability of territorial jurisdiction for provinces and dioceses of the Anglican Communion, except in those areas where churches and leaders are denying the orthodox faith or are preventing its spread, and in a few areas for which overlapping jurisdictions are beneficial for historical or cultural reasons.

Gafcon is envisioning a visible church with discrete geographical boundaries. But what about individual clergy or congregations that approve the principles of the Jerusalem Declaration but choose, for whatever reason, to remain in heterodox dioceses of provinces, even if a Gafcon alternative is available? As I read it, clause 11 is offering moral support to these confessors, but there is an implicit warning that to remain attached to a diseased member of the body, to say “I  or we personally dissent from the false teaching of my diocese or province” is an unstable place to stand. This stance begs the question “What happens after you die or move on?”; or “What happens when the revisionists require you to uphold their doctrine and practice?” The current case of Bishop Love and the “Communion Partners” in the Episcopal Church USA comes to mind. Those in the Church of England who think they have a triple or quadrupal lock on orthodoxy should take note.

Clause 12 focuses on unity and diversity within the Anglican tradition. It begins by recognizing the great variety of church cultures in the far-flung regions of the Communion. The Lambeth Quadrilateral (1888) placed this variety under the aegis of the historic episcopate, “locally adapted in the methods of its administration to the varying needs of the nations and peoples called of God into the unity of His Church.”

Diversity is not only a matter of national and tribal customs but also of theological differences. In Africa, for instance, churches founded by the Society for the Propagation of the Gospel (SPG) and Church Missionary Society (CMS) have a very different churchmanship, though both have also been strongly affected by their African national setting; yet Gafcon has included churches from both traditions.

By using the terms “orthodox” and “secondary matters,” clauses 11 and 12 mark out a generous space for Anglicans to agree to disagree. The distinction between biblical essentials and “indifferent matters” (adiaphora) is characteristically Anglican (see Article XX). In The Way, the Truth and the Life (pages 34-40), Gafcon’s Theological Resource Group delineated a three-stream typology of Anglican orthodoxy: Evangelical, Catholic and Charismatic, exercised in a spirit of liberality.

True liberality has its limits, as set down in Scripture and the tradition of the Church. The Lambeth Conferences muddled through differences of churchmanship and reactions to modernity for about a century. The advent of the Sexual Revolution in the West, however, presented a new challenge to the unity of the Communion with the promotion of homosexuality and same-sex marriage. At the Lambeth Conference in 1998, a vast majority of bishops, led by those from the Global South, stated that homosexual practice was “incompatible with Scripture” and could not be advised (Resolution I.10).

Doctrinal decisions of church councils from the early church to the present have been accompanied by disciplinary measures (canons), ranging from local admonitions to church-wide inhibitions to ultimate excommunication. When the Episcopal Church refused to conform to Lambeth Resolution I.10, the Instruments of Unity faced the challenge of disciplining a member province. In response two Anglican Primates in 2001 offered a proposal of careful but necessary steps of Communion discipline  titled To Mend the Net. The failure of Canterbury to act on this proposal led ineluctably to GAFCON 2008 (see Essay 4 of my book) .

The 2008 Jerusalem Statement opens with a prophetic indictment, based on three “facts” about the state of the Communion:

  • The first fact is the acceptance and promotion within the provinces of the Anglican Communion of a different ‘gospel’ (cf. Galatians 1:6-8) which is contrary to the apostolic gospel.
  • The second fact is the declaration by provincial bodies in the Global South that they are out of communion with bishops and churches that promote this false gospel.
  • The third fact is the manifest failure of the Communion Instruments to exercise discipline in the face of overt heterodoxy.

As I see it, clauses 11 and 12 lay out the constructive framework of Anglican Communion polity, while Clause 13 addresses the necessary discipline which that polity needs to be credible. These three clauses, along with the whole Declaration, are a reforming instrument caused by the particular crisis in which the Anglican Communion has found itself over the past twenty years.

The Genesis of Clause 13

I was a member of the Gafcon Statement group in 2008. I honestly do not remember who contributed what to the final Declaration, but I was certainly a supporter, if not the proposer, of clause 13. Twice before I had seen the failure of sound doctrine without the right use of discipline in the Episcopal Church USA.

In 1996, a church court (seven bishops) had tried the case of Bishop Walter Righter, who had knowingly ordained a practicing homosexual in contradiction to the official teaching of the Episcopal Church, teaching which at that time agreed with Scripture and the universal tradition of the church. I had written two briefs (here and here) for the “Presenters,” arguing that by this act Bishop Righter had violated his vow of “holding and teaching” the church’s faith. The bishop-judges disagreed 7-1 and acquitted Righter, arguing that only a breach of “core doctrine,” which they defined in terms of the historic Creeds, could have disciplinary consequences – and of course even an open denier of the Creeds like Bishop John Spong could get around that condition by humming the Creed with his fingers crossed. This decision cleared the way for the Episcopal leadership to introduce, risk-free, same-sex blessings and then same-sex marriage, which they have proceeded to do. The refusal to uphold their own disciplinary canons led to a change of doctrine, which in turn has led to new canons. Today all dioceses in the Episcopal Church are required to offer same-sex marriage, and any bishop who defies them will be promptly inhibited and threatened with deposition.

This was my first encounter with the failure of discipline; the second followed shortly thereafter. Immediately after the Righter verdict was announced, conservatives gathered to form the American Anglican Council (AAC) to teach the faith and to warn against the drift in the Church. At our organizational board meeting, we agreed on a set of doctrinal affirmations called “A Place to Stand, A Call to Mission.” All were agreed until we got to the disciplinary clause. Some of us proposed the following language:

When teachings and practices contrary to Scripture and to this orthodox Anglican perspective are permitted within the Church – or even authorized by conventions or synods – we, in obedience to God, will disassociate ourselves from those specific teachings and practices and from those who advocate them and will resist them in every way possible.

The bishops on the AAC board demurred at this point and insisted on omitting the highlighted phrase. They realized the ecclesiological ramifications of such a statement and the likely disciplinary consequences to themselves that would follow. For the same reason, they were unwilling to come to the aid of clergy and people in “front-line” congregations in hostile dioceses seeking alternative oversight. Their timidity led non-episcopal leaders to conclude that the AAC was toothless, and these leaders organized alternative groupings that led ultimately to the birth of the Anglican Church in North America. (The episcopal bench of the AAC eventually coalesced into the “Communion Partners,” who remain in the Episcopal Church.)

I am citing this background simply to say that clause 13 did not emerge out of a vacuum but from the costly church battle in North America which was then exported into the entire Communion after Lambeth 1998.

Who Is Clause 13 Addressing?

It is important at this point to identify whom it is that clause 13 is addressing. By using the word “authority” along with “churches” and “leaders,” clause 13 is aimed not at the sheep of Christ’s flock but at the shepherds.

In Matthew chapter 18 we find a model of Jesus’ teaching on pastoral care. The chapter begins with Jesus’ commending child-like faith among His people (verses 1-4). Church leaders must welcome and care for even the weakest, errant believer in the flock as if it were Jesus Himself (verse 5; Matthew 25:40). The gentle nature of the sheep calls for vigilance among the pastors because the church is sent out among wolves, within and without. So Jesus follows this appeal with a stern warning to the same leaders in verse 6: “but whoever causes one of these little ones who believe in me to sin, it would be better for him to have a great millstone fastened around his neck and to be drowned in the depth of the sea.”

Jesus targets the same leaders in the Sermon on the Mount when He says:

Therefore whoever relaxes one of the least of these commandments and teaches others to do the same will be called least in the kingdom of heaven, but whoever does them and teaches them will be called great in the kingdom of heaven. (Matthew 5:19)

These warnings are addressed to the “key” leaders (verse 18), who will become the overseers and guardians of the apostolic church, a role that is incorporated into Anglican ordination vows.

Jesus goes on to describe a disciplinary process for a straying sheep, which begins privately and proceeds publicly to the “church” only if the sinner refuses to repent (verses 15-18). And even after declaring exclusion, Jesus makes clear, the church should receive back a penitent “seventy times seven times” (verse 22).

Clause 13 is speaking from shepherds to shepherds, which explains why it is so stern and its implications so grave. Yet even here we recognize that churches and their leaders are fallible. Churches and bishops can err and have erred in teaching and practice. The Gafcon movement is calling the Communion leadership to repent and is praying that God will grant it grace to do so for the sake of Christ’s Body the Church. Sadly but not surprisingly, the only response from Canterbury to Gafcon’s call, eleven years on, has been denial and hostility.

Word and Deed: True Walking Together

There has been a lot of empty talk about “walking together” at the 2020 Lambeth Conference. For incarnational Christianity, word and deed walk together (James 1:22). Discipline necessarily accompanies doctrine, whether in governing the family, the state, or the church. “Him we proclaim,” St. Paul says, “warning everyone and teaching everyone with all wisdom, that we may present everyone mature in Christ” (Colossians 1:28). Warning and teaching – “sound doctrine” and “the right use of ecclesiastical discipline” are marks of the true church, according to the Anglican Homily for Whitsunday (2nd part).

So the question raised by clause 13 is: are the practices that have arisen in the West of homosexual practice, same-sex partnerships, and same-sex marriage so important that they would cause a division (schism) in the church? Or could this be a secondary matter where the church could look the other away? Or could it even be that the church has misunderstood the biblical teaching about sexuality for 2000 years and that the this teaching itself was culturally conditioned or just plain wrong?

Two decades ago, I set myself a thought experiment: begin with the Bible’s teaching on marriage, its natural design, and the Prayer Book rite of matrimony, and ask whether marriage can be reconfigured to include faithful, monogamous, life-long same-sex unions. My conclusion was negative, because the “two sexes, one flesh” character of marriage is built in to its physical and spiritual DNA by God Himself. This being the case, the Church cannot bless an unreality. It also means that same-sex civil partners, however much they are affirmed as “living in love and faith,” are not married in God’s eyes and fall under the apostolic warnings to those who engage in immoral practices (1 Corinthians 6:9-10; Galatians 5:19; Ephesians 5:5).

The Church of England leadership seems to want to cut a compromise and say that same-sex marriage is not possible but same-sex partnerships can be blessed and accepted in the church. This half-way house will not stand. We know it cannot stand logically because sex and marriage go together. We also know it cannot stand experientially because secular and church bodies that have begun with that compromise have always ended up with “marriage equality.”

Anglicans like to quote lex orandi lex credendi, “the law of praying becomes the law of believing.” The theological Left has another law: call it lex agendi lex credendi, “the law of practice becomes the new orthodoxy.” Richard John Neuhaus rather famously called this the law of optional orthodoxy: “Where orthodoxy is optional, orthodoxy will sooner or later be proscribed.” Church progressives are counting on this law coming to pass in England as well. We have seen this law at work with regard to women’s ordination, which began as a matter of “open reception” in the 1990s and within twenty years has become a canonical requirement.

It is certain folly to compromise where irreconcilable principles are opposed. The compromisers stand, like Neville Chamberlain, waving a piece of paper while the “social justice warriors” complete their takeover of the church. This should not be surprising, for even wrong doctrine requires discipline.

Some Questions for the Dubious

So I come back to the question asked by my English friend about Gafcon and clause 13. I suppose it is clear that I do not think Gafcon should excise clause 13 from the Jerusalem Declaration. Indeed I believe this clause is critical to Gafcon’s prophetic vocation in the Anglican Communion.

That said, I would like to engage those conservatives, especially in the Church of England, who think clause 13 poses an obstacle to their participation in Gafcon. Does the obstacle have to do with the polity of the Established Church or with its power and prestige? Are there theological responses to the arguments I have set forth? Perhaps I have missed them, but I would like to hear a response, since Gafcon’s statements have been routinely ignored rather than answered.

There is a second set of questions I would ask. If one were to accept the premise that conservatives need to “differentiate” themselves from those who are promoting false doctrine and practice, is there a way that clause 13 could be understood in a way that did not require leaving the Church of England? Is there a way conservative leaders can publicly “reject the authority” of false teachers without expelling them or being expelled by them? Is there any reason, for instance, that conservative bishops in the Church of England must attend Lambeth 2020? Could they not make a strong witness by joining with those in the Global South who are staying away out of conscience?

My final set of questions is forward-looking. What does the future hold for orthodox Anglicans in England? Is there some way that Gafcon, with its understanding of doctrine and discipline, could play a part in that future?

Help me out. I would like to know.

The post Thoughts on the Jerusalem Declaration Pt 3: Should Clause 13 Be Excised? appeared first on Anglican Ink © 2019.

The History of Sin

Mises Institute - Mon, 16/09/2019 - 20:00

[Excerpt from "The Fall and Rise of Puritanical Policy in America," Journal of Libertarian Studies 12, no. 1 (1996): 143–60]

America was colonized by Europeans seeking economic and religious liberty, with many of the colonies founded explicitly along theocratic lines. The most notorious of these groups, the Puritans, founded the Massachusetts Bay Colony. They adopted wide-ranging sumptuary legislation including restrictions on alcohol and tobacco. Despite the natural advantages of a small homogeneous group based on voluntary association, many of the measures proved to be unworkable and ineffective and had to be modified or replaced by decrees to maintain moderation.15 It is the Puritan impulse for social reform that drives the cycle of reform, prohibition, and repeal. Over time this cycle has produced Puritanical social control that has been secularized, centralized, and has achieved a kind of permanence within government bureaucracy.

The American Revolution was an expression of political and economic independence, primarily precipitated by the British domination over trade and taxes. Americans did not want to pay British excises on the products they consumed. But equally important was the desire to eliminate British control over international trade that enriched the English at American expense. “Sinful” goods like alcohol, tea, and tobacco were targets of British colonial policy. Tobacco farmers, for example, were forced to export their tobacco to England at extremely unfavorable terms.16

The success of the radical American Revolution ushered in a multitude of reforms honoring individualism at the expense of traditional hegemony. Slavery was abolished in several Northern states and freedom to manumit slaves was established in several Southern states. After writing the Declaration of Independence, Thomas Jefferson set about abolishing entail, eliminating primogeniture, and establishing religious freedom in Virginia, the first time this had ever been done in so complete a form. Freedom of religion was established in several other states and many established churches lost their state monopoly.

The late eighteenth century produced not only the American Revolution but also the Industrial Revolution. The new republic grew in size and population and prospered economically. Manufacturing, agriculture, and trade thrived in the northeast. The plantation economy of the South prospered and expanded, while the Northwest Territory was explored and settled.

The freedom from British dominion and the economic growth that followed the war resulted in fundamental changes in the production and consumption of alcohol. New England lost its advantage in the production of rum while western grain farmers developed an advantage in the production of whiskey. With the rise of whiskey, the long term trend of lower prices for spirits continued. Lower prices combined with the new prosperity and freedom to generate increased consumption of alcohol.

Consumption of spirits continued to increase after the Revolution, peaking during the 1820s. Despite the fact that consumption was greater than ever before or since, America was not a nation of drunkards, and public drunkenness was not common. Alcohol consumption in America was comparable to European patterns.17

Not all Americans felt the same way about the progress and freedom generated by these revolutionary spirits. Many of these grumblers had benefited from English colonial rule as administrators, tax collectors, and bureaucrats. Others benefitted from playing key roles in the system of triangular trade which saw New Englanders sell their rum and other products, while African slaves were transported on the “middle passage” to the West Indian sugar islands where the slaves were sold in order to purchase molasses, the necessary ingredient for the burgeoning New England rum industry.18

The Revolution thus posed a threat to some members of the ruling upper classes who controlled colonial society. A primary symbol of this threat to their hegemony was alcohol consumption. In colonial America, politicians controlled the issuance of licenses to sell spirits, the wealthy owned the taverns, and the clergy monitored consumption in the taverns. Spirits were expensive enough that only the wealthy could regularly afford these goods in large quantities. Public intoxication was viewed as a kind of status symbol.

The elite’s first line of defense against alcohol consumption by the lower classes had been the licensing of taverns. However, this measure had already lost much of its clout by 1764 when Benjamin Franklin’s Pennsylvania Gazette labeled the tavern a “Pest to Society.” John Adams had led a crusade in 1760 to restrict or reduce the number of licenses in Massachusetts but was ridiculed by the public and defeated in his effort. As the “seedbed of the Revolution,” the tavern was greatly strengthened (by victory over England) against the elites who sought to control alcohol consumption with policies of regulation and taxation.

The first anti-alcohol movement in the Republic turned to the British example of imposing excise taxes on spirits. After various anti-spirit measures failed at the state level, temperance advocates began calling for federal action, but no action was forthcoming until the overthrow of the Articles of Confederation. Alexander Hamilton had advocated the use of high excise taxes on spirits in the Federalist Papers and lobbied hard for such a tax as the Secretary of the Treasury.

The excise tax was eventually passed by Congress under the pressure of a budgetary shortfall, but was angrily opposed by citizens of the west and south. By 1794 hostilities erupted into open warfare known as the Whiskey Rebellion. This widespread revolt was concentrated in western Pennsylvania, but also effected parts of Maryland, Virginia, Kentucky, South Carolina and had support in parts of New York, the Northwest Territory, and in the Southwest.19 The rebels called for secession, sacked the federal tax commissioners, made advances on Fort Pitt, and threatened the federal arsenals at Pittsburgh and Frederick Maryland.

To surpress the revolt and collect the tax, George Washington and Alexander Hamilton nationalized the militia and sent a massive army into western Pennsylvania to crush the nucleus of the rebellion. Larger than most armies of the Revolutionary war, the “Watermelon Army” had more soldiers than western Pennsylvania had men of military age and was probably more than ten times the number needed to suppress the revolt. Despite this massive demonstration of federal commitment to tyranny and union, the suppression of open revolt was anything but a decisive triumph for the “friends of order” over the “friends of liberty.”

The excise tax remained difficult to collect, as western farmers continued to oppose the excise tax resulting in the costs of collection exceeding the revenue collected in the West. The Rebellion also solidified Jeffersonian opposition to the Hamiltonian nationalists. The majority of Americans now recognized that the Hamiltonians held a Tory ideology and were using the same methods and tactics as the British had used earlier. The friends of order had more in common with the enemies of the Revolution than with most Americans. Jefferson’s Republican government abolished the whiskey excise and all other internal taxes, establishing libertarianism as the dominant ideology in national government for the period 1800–1860.20

The war was not, however, a total loss to George Washington and his supporters. The cost of the army was very large and much of the money was spent in the west. The visiting soldiers and newly cash-rich residents began a buying spree in western land. George Washington personally owned large holdings in the western lands, and decided to start selling his lands just prior to the Rebellion. Of course, the buying spree meant that Washington’s own holdings dramatically increased in price. As Thomas Slaughter observed, “the coincidence was certainly a propitious one for his finances.” Even Washington, who had gobbled up the largest and choicest parcels of land while in public service, noted that “this event having happened at the time it did was fortunate.”21

The puritanical counterrevolution that would eventually undermine the libertarian structure of the Early Republica had its beginnings in the early temperance movement. One of the great contributors to the early temperance movement was Benjamin Rush, physician and signer of the Declaration of Independence. Rush published pamphlets that condemned the use of alcohol as both unhealthy for the individual and destructive to society. His views, while of questionable scientific validity, were used by temperance leaders to confirm their faith that both science and God were on their side. Rush’s position as doctor and patriot rendered his message highly effective among the intellectual classes, culminating in the conversion of Jeremy Belknap, a minister from Boston who later became President of Harvard College. Rush also promoted the anti-alcohol crusade by requiring his doctrines be taught at his medical school.

Churches, however, were the principle players in the puritanical counterrevolution.22 Traditional Christian churches held that sin was a voluntary act even when temptation was involved. In early 19th century America, reformed or “heretical” Christians began a mass movement to make a preemptive strike at sin. These Christians believed that sinful objects were the source of temptation and consequently the cause of sin and thus had to be removed from society.23 They felt that alcohol hindered their ability to reorganize and purify society in their image. Quakers and Methodists were the first churches to declare their anti-alcohol beliefs and form the early temperance movement.

This new religious perspective can be characterized as post-millennial evangelical pietistic protestantism. They were militantly zealous and emphasized preaching from the Bible. They were also pietistic in stressing Bible study, devotion, personal religious experience, and like the 17th century German religious movement, pietism, they opposed formalism and intellectualism. Most important to this counterrevolution was the doctrine of millennialism, a prophecy or belief in an ideal society that would be created by revolutionary action. Post-millennialists hold the “reformed” or “heretical” view that man himself must purge the world of sin and imperfection and establish the Kingdom of God on Earth as a prerequisite of Jesus’s second coming.24 Obviously, post-millennialist belief provides a wide latitude in terms of policy prescriptions. Rothbard considered the spread of post-millennialism to be a crucial factor in ideological change in America because it was post-millenialism ideology that would become the driving force behind the drive for prohibition and other efforts to drive out sin and imperfection using the coercive arm of the state.25

Geographically, post-millennialist evangelical pietism emanated from New England where the Puritans first settled. The Puritans (who had already experimented with theocracy, witch hunts, and prohibitionism) and the Separatists evolved into the Congregational and Unitarian churches which were the state-established churches of New England. This Yankee influence spread into western New York, the Midwest, and Great Lakes region and eventually south and west as New Englanders, their clergy, and educators migrated with the nation’s expansion.26

The first anti-alcohol organization was the Massachusetts Society for the Suppression of Intemperance, which was formed in response to the intemperance associated with the War of 1812. The American Temperance Society was organized in 1826. By 1833, the temperance movement had over one million members, largely comprised of New England evangelicals from the Baptist, Congregationalist, Methodist, and Presbyterian churches.27 This surge in prohibitionist sentiment is related to religious revivalism of the Second Great Awakening. Religious revivalism was very strong in the 1820s and 1830s throughout New England. Revivalism had always meant reform of the individual and society, but Americans saw themselves as a special case. Americans had defeated the savage Indian, nature, and the British. America was the proverbial city on the hill, an example to the world, and the most likely place for God to establish His Kingdom on Earth.

Increased alcohol consumption may have also stimulated the temperance movement. Rorabaugh estimated that the consumption of alcohol increased from 3.5 pure gallons per capita in 1770 to almost 4 gallons in 1830. This increased consumption was the result of lower production costs, lower taxes, and higher incomes. Drinking was part of virtually every aspect of life for many in the early Republic and was a symbol of the American spirit.28 While it is dubious that alcohol causes sin, “sinful” behavior is clearly associated with alcohol use. Given their superstitions, heretical religious views, and limited knowledge, it is not surprising that reformers would base their efforts on this association. Early success with private prohibitionism, such as the signing of pledges of moderation and abstinence also provided reinforcement for this association.

An added push for religious revivalism was provided by church privatization in New England. The Congregationalist Church was disestablished in 1818 in Connecticut and in 1824-1833 in Massachusetts. This period of church privatization and religious revivalism is described as follows:

During the first half of the nineteenth century, religion in New England was changing in dramatic fashion. On the one hand, the number of preachers demanded in Connecticut and Massachusetts with respect to the population increased by more than half even as real preaching salaries almost tripled. The increase in total pastors reflected a fivefold increase in dissenting preachers. From 1800 to 1840, the proportion of dissenting preachers in these two states increased from under 20 percent to over 50 percent.29

Despite the timing of privatization and religious revivalism, it is not possible to say definitively that privatization caused revivalism.30

However, this separation of church and state involved not only the disestablishment of churches but also a movement from tax-funded churches to the voluntary funding of churches. In 1800, 90 percent of churches in Massachusetts and Connecticut used taxation but only 30 percent did so by 1840 in Connecticut and by 1850 in Massachusetts.31 Economic theory can therefore provide some support for a causal connection between privatization and religious revivalism. A monopoly church with taxing power would be expected to reduce output below competitive levels and charge monopoly prices for its “services.” We would therefore expect an increase in output after the privatization-demonopolization. Theory also predicts that new firms would enter the industry and supply competing products.32

As temperance groups formed and grew, several important changes took place. Initially temperance efforts were voluntary efforts to promote moderation in alcohol consumption. Members of the temperance groups were expected to lead by example and provide education and assistance to others. Over time, however, alternative groups were established that advocated abstinence from spirits and moderation in beer, wine, and cider. Eventually, even these groups were replaced with total abstinence societies in which members were required to sign an abstinence pledge. As the work of reform became more difficult over time, reform leaders became frustrated and dissatisfied with voluntary efforts and began to advocate the use of government to enforce temperance throughout society.33

Temperance forces began to organize coalitions to pass restrictive legislation. Their first reform measure was typically to replace the license system with the more restrictive local option laws which gave communities the right to prohibit local liquor sales. Other restrictive policies included minimum-quantity purchase laws (which require the individual to buy at least 15 or 28 gallons of spirits at a time) and local prohibitions. These policies were difficult to enforce and had few if any beneficial effects. The failure of these policies to satisfy prohibitionists ultimately led to the call for state-wide prohibition.

State prohibitions were adopted in many northern states and territories between 1851 and 1855. These prohibitions were based on Maine’s law which was authored by the zealous prohibitionist, Neal Dow. The “Maine Laws” allowed for search and seizure, reduced the requirements for conviction, increased fines, created mandatory prison sentences, and called for the destruction of captured liquor.

The rapid success of the Maine Laws was shortlived as the rapidly growing immigrant populations opposed such laws. The Maine Laws also suffered several important setbacks in court. Enforcement was difficult because professional police forces existed in only a few large cities where the law was least popular. In the emerging Republican party, prohibition was considered a divisive issue and was not enthusiastically embraced at the national level.34

One event seemed to have sealed the fate of the Maine Laws. Neal Dow, who was mayor of Portland, Maine in 1855, was accused of personally profiting from the government-controlled sale of alcohol.

An angry mob assembled at the liquor agency on the night of June 2, 1855, after the existence of the liquor had become common knowledge. The mob demanded destruction of the liquor and threatened to break into the agency if the demands were not met and Neal Dow arrested for violation of his own law. Dow, who was always quick to look to force in defense of morality, assembled the local Rifle Guards. In the confrontation which followed with the stone-throwing mob, Dow ordered his troops to fire when several rioters broke into the liquor agency.35

Dow was labeled a murderer and a fanatic, and the prohibition movement which he was instrumental in crafting quickly diminished in political significance.36

The rise of the Republican party was the result of a long series of attempts to form a coalition strong enough to challenge the dominance of the Democratic party. Forged from the Whig and No-Nothing Parties, the Republicans naturally captured the prohibitionist-abolitionist radicals and thereby dominated “Yankeedom.” This coalition of mercantilist parties did not directly satisfy the prohibitionist faction, but they were able to institute taxes on alcohol and tobacco that appeased the reformers and helped the Republican party to dominate American politics for decades. After the Civil War, prohibitionists became increasingly political and better organized at the national level. Their progress included the formation of the Prohibition Party, the Women’s Christian Temperance Union, and the Anti-Saloon League.

During the period between the Civil War and the Progressive Era the post­-millennial crusade became increasingly secular. According to Barkun, the “slow nineteenth-century separation of a secular from a religious vision of the perfect society” accelerated after (and possibly because of) the Civil War and that by “the end of the nineteenth century, millennialism was dominated by secularizing tendencies” so that “by the very time that it succumbed in religious circles its secular version triumphed in the society at large.”37

With respect to prohibitionism, this period is best classified as one of “modified” prohibition. State prohibition waned to such an extent that by 1875 only three states remained “dry.” Although there was a brief resurgence in state prohibitions in the 1880s, only three states remained dry by 1904. Modified prohibition consisted of local option, high license fees and restrictive regulations. These coalition-building and seemingly pragmatic policies ironically helped establish the conditions under which national prohibition would be promoted and enacted.

The scientific veneer of modified prohibition was provided, in part, by political economist Richard T. Ely.38 In a report to the Maryland legislature, Ely argued for a modified prohibition that consisted of local option and an annual auction of licenses for large exclusive territories (retail monopolies) for the sale of alcoholic beverages. He argued this would greatly reduce the number of establishments selling alcohol and maximize public revenue. He argued that such businesses would be easier to tax and regulate because of the greatly reduced number of establishments and the fear of losing expensive liquor licenses for violating regulations. He further argued that concentrating the liquor business via modified prohibition “drags it before the public where all its evils must be conspicuous.”39

Modified prohibition was promoted as the pragmatic alternative to prohibition because it resulted in fewer saloons, higher government revenues, and reduced public drunkenness. According to The Nation, “the same story that has been told of every State in which high-license or tax laws have gone into effect. That is, they provide ‘corroborative evidence of the practical wisdom of this method of fighting the liquor evil.’” The Nation also opposed the policy of prohibition because it was not “a proper or practical method of liquor regulation,” and that “no amount of amendment or addition can make the Prohibitory Law a success.” They concluded that when in the majority use local option, but when in the minority use high taxation to control drinking and make drinkers pay for their sins. “The lesson which has been taught over and over again (is) that prohibition laws cannot be enforced except where public sentiment in their favor predominates.”40

Despite testimonials of its success, modified prohibition caused a plethora of problems such as black market production, smuggling, monopoly pricing, reduced quality, corrupt retail practices, graft, and political corruption. While not as evident as the problems caused by prohibition, modified prohibition did indeed drag the evils before the public. Indeed, the problems of modified prohibition were already obvious when Pennsylvania enacted its modified prohibition. The law attempted to limit corrupt practices stemming from modified prohibition by including a restriction on brewers that prevented them from financing the high license fees charged to saloon operators.41

The political success of modified prohibition would suggest that true prohibitionist sentiment had all but died out in the late nineteenth century. The federal excise tax on distilled spirits had been increased by 120 percent between 1868 and 1894, most non-prohibition states had enacted local option laws by 1900, and most states and local jurisdictions had enacted high license fees.42 However, instead of dying out, the prohibition movement was preparing to achieve the ultimate goal of national prohibition by organizing against the saloon, developing institutions and coalitions, and experimenting with new political techniques.

Women were an important source of support for prohibition. The leaders of the women’s suffrage movement were prohibitionists and encouraged their members to swell the ranks of prohibition organizations. The alliance was clear; women would support prohibition (and vote for it when and where they could) while prohibitionists would in turn support the women’s suffrage movement. Women would get the vote and sober husbands, while prohibitionists would reestablish social control and dry up society. In 1873, the Women’s Christian Temperance Union was formed to institutionalize this alliance.

In 1869, the Prohibition Party was formed. Often characterized as ineffective, it played a key although often neglected role in the ultimate success of national prohibition. Its electorial success was indeed limited, but the Prohibition party provided a valuable training ground for prohibitionists in politics. The Party also introduced ideas, such as child-labor laws, direct election of senators, the income tax, woman suffrage, and national alcohol prohibition, that were absorbed into major party platforms and enacted into law. The Prohibition Party also was a major factor in the major party realignment that occurred during the 1890s in which the Democratic party embraced prohibition.

The Anti-Saloon League was formed in 1895 as a political arm of the post-millennial evangelical protestant churches. By 1904, the League had organizations in forty-two states or territories. When Prohibition was enacted, the Anti-Saloon League could claim affiliation with over 30,000 churches and 60,000 agencies. It is important to note that the League, which was the prime mover toward national prohibition, explicitly emblemized the most prominent institution of “sin,” the government-licensed and heavily taxed saloon.43

The League completely split with the voluntary and educational efforts of past temperance movements. Coercion, propaganda, and intimidation of political candidates were the new tools. Professional reformers were paid to propagandize (often from the pulpit), in many instances making outrageous claims against blacks and Catholics. At its height, the League published over forty tons of propaganda literature each month. The League was able to shield its big contributors from public exposure by refusing to comply with the disclosure requirements of the Corrupt Practices Act.44

The League was able to refine, strengthen, and spread the prohibitionist ideology. The ideology that emerged during the Progressive Era was forged from the experience of “modified prohibition” and symbolized in the very name of its most powerful and effective political institution, the Anti-Saloon League. As Timberlake described, the saloon became the object of national opprobrium under modified prohibition:

The liquor industry became thoroughly involved in political corruption through its connection with the saloon. The root of the trouble here was that the ordinary saloonkeeper, confronted by overcompetition, was practically forced to disobey the liquor laws and to ally himself with vice and crime in order to survive. Unable to make a living honestly, he did so dishonestly.45

Modified prohibition forced many saloons to offer breweries exclusive selling rights in exchange for payment of their annual license fees. Saloons would also disobey blue laws, serve poor quality and watered-down liquor, and employ prostitutes, professional gamblers, and pickpockets in order to generate sufficient revenues under modified prohibition. Of course all of these practices often necessitated the bribery of police and public officials.

The success of Prohibition depended vitally on defining its goal as ridding America of the crime and vice-ridden saloon that was corrupting both the political leadership and the poor immigrants who relied on the saloon as a center of entertainment, politics, and much more. Indeed, destroying the saloon would achieve an underlying goal of prohibitionists — providing the old-stock protestants with a method of social control over the “drinking class” who were largely recent Catholic immigrants from countries such as Ireland, Italy, and Germany.

The only major remaining hurdle in the establishment of national alcohol prohibition was government revenue. The tax on alcohol products was the second largest source of revenue for the federal government prior to Prohibition. However, as Boudreaux and Pritchard have demonstrated:

The income tax proved a viable alternative to liquor taxation for raising revenue, thus making prohibition possible. To be sure, the ideology of voters and politicians mattered, but Congress could not afford the cost in foregone tax revenue (hence, foregone wealth redistribution) that an ideological vote for prohibition entailed until the income tax demonstrated its revenue-raising potential.46

They also argue that the shortfall of income tax revenue during the early years of the Great Depression led to the repeal of Prohibition and restoration of alcohol tax revenues.

In support of this tax substitution thesis, it should be recalled that it was the Prohibition party that first called for an income tax and that prohibitionists widely supported the income tax. It is also noteworthy that a tax revolt was gathering momentum in the early years of the Great Depression. The revolts began as a movement against property taxes in cities such as Chicago. Prior to Prohibition, local governments raised a great deal of revenue from high license fees, revenue which was lost with Prohibition. The repeal of Prohibition would not only lower alcohol prices, but would also reestablish revenue from license fees, thus relieving cities’ overreliance on property taxes. As Beito notes, “by the end of 1933, the effectiveness of the tax-resistance movement had started to wane.”47

The Progressive era also saw the prohibitionists launch their “war” against narcotics, tobacco, marijuana, gambling, prostitution and other “imperfections” in society. In each of these wars, prohibitionists and progressives sought to stamp out “vice,” establish means of social control (particularly over immigrants and inferior races), and to provide a path toward order and perfection of society.

During the Progressive Era the prohibitionist movement had become secularized, achieved the precedent of nationalized prohibition, and expanded its scope to cover marijuana and narcotics. The elitist, twentieth century Hamiltonians had established their control over American society.

  • 15. Gary North, Puritan Economic Experiments (Fort Worth, TX: Institute for Christian Economics, 1988).
  • 16. John S. Bassett, A Short History of the United States: 1492-1929 (New York: The Macmillan Company, 1932), p. 143.
  • 17. W.J. Rorabaugh suggests that problem drinking was rare. The two types of drinking most prominent were dietary drinking, which involved numerous small servings throughout the day as a substitute for food and water, and communal binge drinking in which the entire town might get intoxicated in celebrations, such as Independence Day, harvest, weddings, and public events such as elections, generally less than once per month. See W.J. Rorabaugh, The Alcoholic Republic: An American Tradition (New York: Oxford University Press, 1979), pp. 5­21.
  • 18. Many of the smaller towns of New England, especially Boston and the Rhode Island ports benefitted materially from the production of rum and the slave trade, see Bassett, A Short History, pp. 140-145.
  • 19. See Mary K. Tachau, “The Whiskey Rebellion in Kentucky: A Forgotten Episode of Civil Disobedience,” Journal of the Early Republic, Vol. 2 (Fall 1982), pp. 239-259.
  • 20. On this see Thomas P. Slaughter, The Whiskey Rebellion: Frontier Epilogue to the American Revolution (New York: Oxford University Press, 1986). It has been shown that the western farmers’ economic rationale for fighting was more as consumers of whiskey than as producers. See David O. Whitten, “An Economic Inquiry into the Whiskey Rebellion of 1794,” Agricultural History 49, No. 3 (July 1975), pp. 491-504.
  • 21. Slaughter, The Whiskey Rebellion, p. 224.
  • 22. This religious ideology is not necessarily inconsistent with the economic self-interest of the churches.
  • 23. This perspective on sin is analogous to an objective theory of value in economics. From the “objective” viewpoint, value and sin are innate aspects of the good, while from the subjectivist point of view, economic value and sin are matters of individual choice.
  • 24. Orthodox Christians, such as Catholics, Calvinists, Lutherans, and mainstream Protestants, are typically a-millennialist in that they do not believe in a literal 1000-year Kingdom of God on Earth. Pre-millenialists hold that Jesus will come again, defeat the forces of evil, and establish a Kingdom of God on Earth. Pre-millennialists are notorious for their incorrect predictions about the end of the world.
  • 25. Rothbard writes about the earlier post-millennialist, Joachim of Fiore, a twelfth-century Calabrian monk who attempted to establish a heretical communist society and almost converted three popes to his beliefs. Post-millennialism continued to spring up in medieval Europe, especially in Germany and among the Anabaptists. This history is described in Norman R.C. Cohn, The Pursuit of Millennium: Revolutionary Messianism in Medieval and Reformation Europe and its Bearing on Modern Totalitarian Movements (London: Harper & Row, 1961). According to Rothbard post-millennialism is also an important component of secular movements such as Karl Marx’s communism. Adolph Hitler's Nazism and Third (1000 year) Reich could also be interpreted as a secular derivation of Joachim’s millennialism and original thesis that history would be divided into three, rather than the traditional two periods of christian doctrine. See Murray N. Rothabrd, “Karl Marx: Communist as Religious Eschatologist,” Review of Austrian Economics 4 (1990), pp. 123-79.
  • 26. Much of this migration was concentrated in areas claimed by Massachusetts and Connecticut in the Treaty of 1783. On the dispersion of the prohibitionists, see Whitney R. Cross, The Burned-over District: The Social and Intellectual History of Enthusiastic Religion in Western New York, 1800-1850 (Ithaca, NY: Cornell University Press, 1950); Peter H. Odegard, [1928] Pressure Politics: The Story of the Anti-Saloon League (New York: Octagon Books, 1966).
  • 27. Ironically, both the anti-alcohol movement and anti-slavery movement were centered in Boston which dominated the early colonial triangular trade in rum and slaves.
  • 28. Rorabaugh, The Alcoholic Republic, p. 9.
  • 29. Kelly Olds, “Privatizing the Church: Disestablishment in Connecticut and Massachusetts,” Journal of Political Economy 102, No. 2 (April 1994) p. 291.
  • 30. In fact, many social and economic factors contributed to revivalism and the Second Great Awakening. For example, natural factors and natural disasters also contributed to revivalism. See Michael Barkun, Crucible of the Millennium: The Burned-Over District of New York in the 1840s (Syracuse, NY: Syracuse University Press, 1986), esp. chapters 6 and 7.
  • 31. Olds, “Privatizing the Church,” p. 291.
  • 32. Again see Olds, “Privatizing the Church,” for his evidence that the established churches did have state authority, practice price discrimination, and increase output after disestablishment (privatization), and that alternative churches expanded faster than the established churches after privatization.
  • 33. Thornton, The Economics of Prohibition, pp. 43-45.
  • 34. Interestingly, the decrease in alcohol consumption that resulted from temperance and prohibitionist efforts created a 500+ calorie deficit in the adult diet leading to declines in demographic-health measures during a period of high economic growth. See Mark Thornton, “Alcohol Consumption and the Standard of Living in Antebellum America,” Atlantic Economic Journal 23, No. 2 (June 1995).
  • 35. Ian R. Tyrrell, Sobering Up: From Temperance to Prohibition in Antebellum America, 1800-1860 (Westport, CT: Greenwood Press, 1979), pp. 295-299
  • 36. Frank L. Byrne, Prophet of Prohibition: Neal Dow and His Crusade (Gloucester, MA: Peter Smith, 1969), pp. 60-69.
  • 37. Barkum, Crucible of the Millenium, pp. 2, 151, 29.
  • 38. See Murray N. Rothbard, “World War I as Fulfillment: Power and the Intellectuals,” Journal of Libertarian Studies (Winter 1989), pp. 81-125, for more on Ely and other progressives academics.
  • 39. Richard T. Ely, Taxation in American States and Cities (New York: Thomas Y. Crowell & Co., 1888),pp. 280-288.
  • 40. The Nation, January 12, 1888, Vol. XLVI No. 1176, pp. 24-26; February 16, 1888, No. 1181, p.127; January 31, 1889, Vol. XLVIII, No. 1231, p. 83; March 14, 1889, No. 1237, pp. 214-5; April 25, 1889, No. 1243, p. 336; June 27, 1889, No. 1252, p. 515.
  • 41. The Nation, February 16, 1888, Vol. XLVI, No. 1181, p. 127. Also with respect to high taxes the National Municipal Review (January, 1935, p. 63) noted that “High taxation thus becomes the chief foundation of the illegitimate trade.” Tun Yuan Hu found this illegitimate trade to be “deeply disturbing” but he believed it could be “driven out” by reducing taxes. See The Liquor Tax in the United States, 1791-1947: A History of the Internal Revenue Taxes Imposed on Distilled Spirits by the Federal Government (New York: Columbia University Graduate School of Business, 1950), p. 86.
  • 42. Hu, The Liquor Tax, Appendix II, p. 3, shows that the federal excise tax on distilled spirits was fifty cents per tax gallon in 1868 and one dollar and ten cents in 1894. Elsewhere, Hu notes that 37 states had local option laws by 1900 (p. 49). The Nation (January 12, 1888, Vol. 46, No. 1176, p. 25) describes the high license fees in several states. Ely, Taxation, notes that in Savannah, Georgia a liquor dealer would pay a Federal license of $25, a State license of $50, a County license of $100 dollars, and a City license of $200. The bar-keepers license in Charlotte, North Carolina was $1000 (pp. 203-205).
  • 43. Cf. Jack S. Blocker, Retreat from Reform: The Prohibition Movement in the United States, 1890-1913 (Westport, CT: Greenwood Press, 1976), p. 157; Odegard, Pressure Politics, pp. 20-21. The central forces of prohibitionism were the Congregationalist, Quaker, Methodist, Baptist, and Presbyterian churches. These churches, their ministers and their flocks had radiated out from New England into western New York, the mid-west, and by the turn of the century eventually throughout most of the western and southern states. It is this geographic and demographic dissemination that enhanced the potential for national alcohol prohibition.
  • 44. As a result, Warburton found little evidence for determining the extent of commercial rent­seeking against alcohol. Clark Warburton, The Economics of Prohibition (New York: Columbia University Press, 1932), p. 263. See also Odegard, Pressure Politics, pp. 74, 181, 210; This absence of data should not be taken to infer a lack of commercial interest in promoting prohibition.
  • 45. James H. Timberlake, Prohibition and the Progressive Movement: 1900-1920 (Cambridge, MA: Harvard University Press, 1963), p. 110.
  • 46. Donald J. Boudreaux and A.C. Pritchard, “The Price of Prohibition,” Arizona Law Review 36 No. 1 (Spring 1994), p 2.
  • 47. Beito provides an excellent history of tax revolts during the Great Depression. He finds that the tax revolts ultimately failed because of a failure to develop a coherent anti-tax ideology and an overreliance on a strategy that stressed “good government.” David T. Beito, Taxpayers in Revolt: Tax Resistance During the Great Depression (Chapel Hill: University of North Carolina Press, 1989), p. 140.
Categories: Current Affairs

More Money Pumping Won't Make Us Richer

Mises Institute - Mon, 16/09/2019 - 17:00

Whenever a central bank introduces easy monetary policy, as a rule this leads to an economic boom — or economic prosperity. At least this is what most commentators hold. If this is however the case then it means that an easy monetary policy can grow an economy.

But loose monetary policies do not generate economic growth. These policies set in motion the diversion of real savings from wealth generators to the holders of the newly pumped money. Real savings, rather than supporting individuals that specialize in the enhancement and expansion of the infrastructure are consumed by various individuals that are employed in non-wealth generating activities.

Moreover, not all consumption is a good thing. The consumption of real savings by individuals engaged in the enhancements and the expansion of the infrastructure is productive consumption. Conversely, the consumption of real savings by individuals that are employed in non-wealth generating activities is non-productive consumption.

It is non-productive consumption that sets the foundation for the weakening of the existing infrastructure thereby weakening future economic growth. In contrast, productive consumption sets the foundation for a better infrastructure, which permits stronger future economic growth. Needless to say, productive consumption leads to the increase in individuals living standards while non-productive consumption results in the lowering of living standards.

Why then is loose monetary policy seen as a major contributor towards economic growth?

Given that economic growth is assessed by means of the gross domestic product (GDP) framework — which is nothing more than a monetary turnover — obviously then when the central bank embarks on monetary pumping (i.e., loose monetary policy) it strengthens the monetary turnover in the economy and thus GDP.

After deflating the monetary turnover by a dubious price deflator one obtains the so-called real GDP. By means of real GDP, economists and various other experts are supposedly in a position to ascertain the state of economic growth, or so it is held. (Note that the increase in the monetary turnover because of the increase in the money supply is regarded as reflecting economic growth). In such a framework, it is not surprising that central bank policies are an important factor in setting in motion an economic boom.

From this, economists and various other experts conclude that the central bank by being able to grow the economy can also make sure that the economy follows the correct growth path. (The growth path as outlined by policy makers of the central bank).

Whenever the economy deviates from the path outlined by central bank policy makers and the government, this will allow them the opportunity to intervene by either raising or slowing the pace of monetary pumping.

The economy in this way of thinking is depicted as a helpless creature that must be guided by the all-knowing bureaucrats all the time. The passivity of the creature called the economy is also reflected by the fact that the output generated must be distributed by the all-knowing bureaucrats. In fact, one gets the impression that bureaucrats supervise the entire production process and individuals are just submissive entities that have hardly anything to say here.

If loose monetary policies of the central bank are able to generate through the GDP statistic so-called economic growth, then this must mean that a tighter monetary stance sets an economic bust.

"Economic bust" is here associated with the liquidation of various non wealth-generating activities. That is, the economic bust results in the curtailment of non-productive consumption.

Note that an important vehicle in setting the boom-bust cycle is the existence of the fractional reserve banking, which through the expansion of money out of thin air sets an economic boom while through the contraction of money out of thin air sets an economic bust.

Observe that in fractional reserve banking an expansion of money out of thin air emerges because of the ownerless lending. Consequently, when banks curtail the ownerless lending this leads to the contraction of money out of thin air.

Can Government Policies Grow the Economy?

While loose monetary policy, which results in an exchange of nothing for something, cannot cause economic growth, can the same be said about an increase in government outlays? Will this not result in a strengthening in economic growth?

Given that in the GDP framework one of the components is government outlays, obviously then once there is an increase in these outlays, all other things being equal, we will have an increase in the GDP and thus in so-called economic growth.

But if the government is not a wealth generating entity, how can an increase in government outlays grow the economy? Various individuals who are employed by the government expect compensation for their work. Note that the government can pay these individuals by taxing others who are still generating real wealth. By doing this, the government weakens the wealth-generating process and undermines prospects for economic growth. (We ignore here borrowings from foreigners).

Now, fiscal stimulus could “work” if the flow of real savings is large enough to fund government activities while still permitting a positive growth rate in the activities of the private sector. (Note that the overall increase in real economic activity is in this case erroneously attributed to the government's loose fiscal policy).

If, however, the flow of real savings is declining, then regardless of any increase in government outlays, overall real economic activity cannot be expanded. In this case the more the government spends (i.e., the more it takes from wealth generators) the more it weakens prospects for a recovery.

Thus when government by means of taxes diverts bread to its own activities the baker will have less bread at his disposal. Consequently, the baker will not be able to secure the services of the oven maker. As a result, it will not be possible to boost the production of bread, all other things being equal.

As the pace of government spending increases a situation could emerge that the baker will not have enough bread to even maintain the workability of the existing oven. (The baker will not have enough bread to pay for the services of a technician to maintain the existing oven). Consequently, his production of bread will actually decline.

Similarly, as a result of the increase in government outlays other wealth generators will have less real savings at their disposal. This in turn will hamper the production of their goods and services and in turn will retard and not promote overall real economic growth.

As one can see, the increase in government outlays will lead to the weakening in the process of wealth generation in general.

Many commentators are of the view that lowering of taxes could be an important catalyst for the strengthening of economic growth. This could be so if the government also curtails its outlays. It must be realized that as long as government outlays continue to grow no effective cut in taxes is possible. Remember that the expansion in government outlays implies an increase in the diversion of real savings from wealth generators to government. Hence, an effective cut in taxes can only emerge once the government curtails its outlays.

For instance, government announces that it will cut the income tax by 5% at the same time it outlays are planned to increase by 10%. What matters here is that the government will require to increase the diversion of real savings by 10% in order to support the increase in its activities.

It does not matter how the government is going to collect the required real savings – it can be by means of various forms of indirect taxes or by means of borrowings or by means of money pumping. The essence in all this is that once the government requires more real savings it will get it from the private wealth generating sector. Hence in this case rather than having a tax cut what we have here is an effective increase in the tax burden because of the increase in government outlays.


Neither loose monetary policy, nor big-spending fiscal policy cannot grow an economy. All that these policies can do is to redistribute a given pool of real savings from wealth generators towards non-wealth generating activities. Hence, we can conclude that both loose monetary and fiscal policies cannot set in motion an economic boom but rather an economic impoverishment.

Categories: Current Affairs

How Democracy Made Us Dumb

Mises Institute - Mon, 16/09/2019 - 16:45

Recorded at the Mises Circle in Seattle, 14 September 2019. Includes an introduction by Jeff Deist.

Categories: Current Affairs

A Hoppean View of the 2020 Election

Mises Institute - Mon, 16/09/2019 - 16:30

A Q&A and Panel featuring Laura Davidson, Noah Bonn, Bob Murphy, and Jeff Deist. Recorded at the Mises Circle in Seattle, 14 September 2019.

Categories: Current Affairs

African religious leaders urge East African governments to take action for peace for South Sudan

Anglican Ink - Mon, 16/09/2019 - 16:28

NAIROBI, KENYA – SEPTEMBER 12, 2019 – Today marks one year since warring parties in
South Sudan signed a momentous renewed agreement to work together towards lasting peace in South Sudan. On this day, we come together as the religious leaders of Africa to call for urgent action from the leaders of South Sudan’s neighboring governments to ensure there is significant progress in the implementation of the peace agreement ahead of the end of the pre-transition period on November 12.

We welcome the reduction in violence since the signing of the peace agreement. However, we are deeply concerned by the rising humanitarian crisis that has resulted in thousands of deaths, and that continues to leave millions of men, women and children in South Sudan desperate for food and shelter. We are further troubled by the increasing criminal acts, human rights violations and political intolerance in several locations in South Sudan. Incidents of violence against civilians, including abhorrent sexual violence, have continued to plague parts of the country even after the signing of the revitalized peace agreement last year. This must end.

As faith leaders, we cherish the sanctity of life and the protection of human dignity. We believe that the humanitarian crisis in South Sudan can only be resolved if South Sudanese leaders embrace true peace and love for their people and nation. South Sudanese leaders have a moral obligation to their citizens to end the violence and ensure continued progress towards peace, stability and justice. The necessary step towards lasting peace and stability in South Sudan is the full and timely implementation of the 2018 peace agreement. As the 12 November deadline set by the signatories draws closer, we are concerned by the continued delays in implementation. The failure to implement the agreement risks the country collapsing back into war and destruction, and exacerbates the misery and hopelessness of the millions of South Sudanese forced to flee their homes because of war, including the almost 3 million refugees living in neighboring countries.

The people of South Sudan want light out of this darkness; they want hope and a rebirth of their nation. To deliver this hope for their people, the leadership must rise above tribe and politics, above pride and prejudice, above the evil of alienation. Faith leaders from the African region are asking President Salva Kiir, Dr. Riek Machar and other South Sudanese leaders to deliver on their promises by November 12, to lead the people of South Sudan to re-discover the soul of the nation and breathe love and peace into it. They must embrace the virtue of sacrifice for the sake of the people and for the sake of posterity. This is the aspiration of millions of South Sudanese people whose voices are drowned in the din of war and guns.

We observe with deep appreciation the efforts by regional actors to resolve the conflict, and their generosity in welcoming refugees and bearing much of the humanitarian burden. We recognize the role of the African Union High-Level Ad-hoc Committee (C5), the Intergovernmental Authority on Development (IGAD) and Kenya in promoting dialogue among the parties to the agreement. Ahead of the November 12 deadline, we call upon our regional leaders to ensure implementation of the agreement.

Particularly, we ask President Museveni and President Kenyatta as South Sudan’s neighbors, President Ramaphosa as C5 chair, and PM Ahmed as IGAD chair, to urge President Kiir and Dr.Machar to proactively implement the peace agreement in good faith, and to urge President Kiir to urgently release the USD 100 million pledged in May this year towards the implementation of the agreement, as a demonstration of commitment to the peace process.

The regional leaders, as South Sudan’s good neighbors, must now speak the truth to the leaders of South Sudan, on behalf of the millions of voiceless South Sudanese men, women and children who bear the brunt of the conflict. It is our conviction that these regional leaders have the power to influence lasting peace in South Sudan. It is imperative that faith is restored in the peace process and the South Sudanese people regain confidence in the future of their country.

We the religious leaders of Africa, by the grace of the Almighty God and driven by the teachings of love and peace, and the African principle of Ubuntu which calls on every person to be one another’s keeper, stand in solidarity with our brothers and sisters, the people of South Sudan on this historic day – as we prayerfully look forward to a peaceful, united and just South Sudan that is founded on the values of peace and love for one another.

We once again call upon the leader of every country in the region to come together, in line with the spirit of Pan-Africanism and in accordance with the African Union’s principle on promoting greater unity and solidarity between African countries and the peoples of Africa, to honestly and zealously support efforts that will help build a peaceful South Sudan.

Almighty God Bless South Sudan God Bless Africa


Cardinal John Onaiyekan, Co-Chair, ACRL—RfP

Sheikh Shaban Ramadhan Mubaje, Co-Chair of ACRL-RfP

Canon Grace Kaiso, Gen. Secretary-CAPA

Dr. Francis Kuria, Secretary General of ACRL-RfP

The post African religious leaders urge East African governments to take action for peace for South Sudan appeared first on Anglican Ink © 2019.

Christian man dies in police custody after alleged torture

Anglican Ink - Mon, 16/09/2019 - 16:19

CSW has learned that Amir Masih, a Christian man from Lahore, Pakistan, died in hospital on 2 September after he was allegedly tortured in custody by police.

Mr Masih who was employed as a gardener in PAF Colony, a local neighbourhood in Lahore, was accused of theft after his employer, Rana Mohammad Hanif, registered a case against him. On 28 August Mr Masih was summoned to the North Cantonment police station in Lahore, by Sub-inspector Zeeshan, and was illegally detained by police. It is alleged by Mr Masih’s family that he was then taken to an undisclosed location where he was beaten and tortured by several police officers.

Mr Masih’s relatives filed a case of forced disappearance after they were informed on 31 August that he had been taken into custody by the police.  Police then contacted the family of Mr Masih on 2 September to inform them he was unwell and asked them to take him to hospital.

CCTV footage has since emerged of two police officers dressed in civilian clothing transporting Mr Masih by motorcycle to Service Hospital in Lahore, where he was pulled from the motorcycle and kicked several times by the officers before being taken inside. A post mortem has since revealed that there were torture marks all over Mr Masih’s body.

CSW’s Chief Executive Mervyn Thomas said: “We extend our heartfelt condolences to the family of Amir Masih. His treatment while in custody of the Punjab police is deplorable and the officers responsible for his death must be held accountable. This case again highlights the vulnerability and marginalisation of Christians who suffer abusive treatment and discrimination at the hands of law enforcement officials.”

Christians in Pakistan comprise a significant minority that face widespread institutional and societal discrimination within society. Police authorities have repeatedly been criticised for their mistreatment of and prejudice towards Christians.

On 19 February 2018 Patras Masih, a young Christian man from Lahore, was accused of sharing a blasphemous image on Facebook and charged under 295-C of the Pakistan Penal Code (defiling the name of the Holy Prophet). On 23 February his cousin Sajid Masih was called for questioning by the Federal Investigating Agency (FIA) where he was beaten by officials and forced to perform a sexual act with Patras. Sajid Masih suffered severe injuries when he jumped from the fourth floor of the FIA building in an attempt to escape.

There have been growing concerns about the excessive use of force, torture and use of illegal detention centres among police in Punjab province. Amir Masih is the third person to die in police custody in Pakistan’s Punjab province this month. On 30 August Salahuddin Ayubi was arrested by police in Rahmin Yar Khan District in Punjab after he broke into a cash machine. A leaked video shows Mr Ayubi being mistreated by police. He died in police custody two days later. A second man, Amjad Ali, was detained and allegedly tortured by the Gujjarpura police in Lahore at an illegal torture cell. He died in hospital on 1 September.

Under Pakistan’s National Action Plan, the government has committed to address the root causes of religious persecution and implement much needed reforms to the criminal justice system. However the recent spate of incidents is indicative of the broader issue of custodial deaths and of torture to extract evidence which is prohibited by Article 14(2) of the Pakistan constitution. On 12 September Pakistan’s Senate Functional Committee on Human Rights summoned the Punjab inspector general of police to brief the committee on the alleged custodial deaths of the three men.

Mr Thomas continued: “The government must fulfil its constitutional commitments to prohibit the use of torture, and to uphold the rule of law and respect for human rights. We urge the provincial government in Punjab to take immediate steps to prevent further custodial deaths and provide training to eliminate bias and sensitise police towards religious minorities.”

The post Christian man dies in police custody after alleged torture appeared first on Anglican Ink © 2019.

Democracy as Retribution in the 2020 Election

Mises Institute - Mon, 16/09/2019 - 16:15

Recorded at the Mises Circle in Seattle, 14 September 2019.

Categories: Current Affairs

How Democracy Destroys Political Economy

Mises Institute - Mon, 16/09/2019 - 16:00

Recorded at the Mises Circle in Seattle, 14 September 2019. Includes an introduction by Jeff Deist.

Categories: Current Affairs

Democracy Down Under: The Good, The Bad, and The Ugly

Mises Institute - Mon, 16/09/2019 - 15:45

Recorded at the Mises Circle in Seattle, 14 September 2019. Includes an introduction by Jeff Deist.

Categories: Current Affairs

Welcoming Remarks

Mises Institute - Mon, 16/09/2019 - 15:30

Recorded at the Mises Circle in Seattle, 14 September 2019.

Elites in America spent the twentieth century lecturing us about the unquestioned virtue of democracy and voting. But they change their tune when the wrong guy wins. Donald Trump, Brexit, and the rise of right-populist movements in Europe all challenge the West's great sacred cow.

Hans Hoppe famously reconsidered the cult of democracy in his 2001 book Democracy: The God that Failed. Democratic politicians and voters, with high time preference and no skin in the game, give us endless spending, debt, entitlements, and war — not liberty.

Our speakers will apply Hoppe's critique to the upcoming 2020 presidential election, which promises to be brutal. What are the limits of democracy in a country of 320 million people? Have we reached the end of the myth of democratic consensus? What if democratic voting, so called, doesn’t yield any compromise between Left and Right — but only creates endless division and an entrenched political class? And what might the future of democracy look like? Hint: decentralized, smaller, local.

Categories: Current Affairs

Fleeing communism in a balloon

Adam Smith Institute - Mon, 16/09/2019 - 12:01

Forty years ago, on September 16th, 1979, one of the most thrilling escapes of the Cold War took place from Communist East Germany, when two families, eight people in all, fled to freedom in West Germany in a homemade hot air balloon. It took them one-and-a-half years, one failed attempt, and three balloons to complete it.

Peter Strelzyk, a 37-year-old electrician, and Günter Wetzel, a 24-year-old bricklayer became friends at a local plastics factory, and began to plan their escape. Like other Communist dictatorships, East Germany was a prison, with its population prevented from leaving. A wall barred their way in Berlin, and a barbed wire border with watchtowers, machine-gun nests and minefields sealed the larger border with West Germany. Hundreds had been killed as they attempted to leave.

They decided to fly over the border fortifications in a hot air balloon, having seen about ballooning on television. They measured the weight of themselves, their wives, and their four children, and calculated the balloon would have to hold 2,000 cubic metres of hot air. They reckoned it would take 800 square metres of cloth to make a balloon that could hold it.

It took 2 weeks on a hand sewing machine to stitch the fabric into a bag 20 metres long by 15 metres wide. The gondola was constructed from an iron frame, a sheet metal floor, and clothesline running around it every 15 centimetres. The burner was made of 2 propane cannisters to feed the gas through water pipe to a stove pipe nozzle.

At their first attempt in a forest clearing, they could not get the balloon to inflate, despite using an improvised blower to fill it first with cold air. They found the material was too porous, and resolved to try a different second attempt. They went to a distant city to buy 800 metres of 1-metre wide synthetic taffeta, telling the store it was to make sails for their sailing club. Having sewn a second balloon, they found the burner would inflate it, but could not generate enough heat to lift it. They doubled the number of cannisters and inverted them to make a bigger flame, and attempted a second try.

This time the balloon ascended, but when it entered a cloud, water vapour condensed on it, increasing its weight and making it come down. They landed next to a mined area 180 metres from the border, and realized they were still in East Germany. They walked 8 miles back to their car, leaving the balloon gear behind for the Stasi (secret police) to discover. They decided on a speedy 3rd attempt in case the gear was traced back to them, and they bought taffeta in assorted colours from a variety of stores to avoid suspicion. They sewed a third balloon.

Wind and weather were good on September 16th, so they took off at 2.00 am. The balloon malfunctioned several times and caught fire several times, but it held them aloft. They had to keep relighting the burners by hand because air rushing out through tears in the fabric kept putting them out. They were detected on West German radar, and had searchlights in the East turned on to search for the "unidentified flying object."

They came down near the town of Naila in Bavaria, and knew they were in the West when they saw the Western traffic lights and the Audi police car that came to inspect what had happened. Wetzel broke his leg in the landing, but otherwise they and their families were safe. More than that, they were free. Stern Magazine paid for the exclusive rights to their story, and their heroism and ingenuity was immortalized in the movie, "Night Crossing." After the collapse of Communism and following German reunification, the Strelzyks returned home, while the Wetzels remained in Bavaria.

It was an epic story that illustrates the determination people have shown to free themselves from the shackles and daily oppression of Communist regimes. The ideology has always failed. It has always produced poverty and squalor, and it has always had to be supported by brutality, concentration camps and executions. And always it has needed to keep its people prisoner and stop them seeking a better life beyond its grip. This is the ideology praised by modern-day Socialists such as Jeremy Corbyn and John MacDonnell, and it is regimes like that of East Germany that they bestowed praise upon. The night-time balloonists of 1979 knew better.

Categories: Current Affairs

The Nationalist Case for Free Trade, in the Words of Classical Economists

Mises Institute - Mon, 16/09/2019 - 12:00

The founders of classical economics, namely David Hume (1711-1776), Adam Smith (1723-17790), and David Ricardo (1772-1823) and their British followers were fervent advocates of the principle of free trade between nations. Even more so were J.-B. Say (1767-1832), Frederic Bastiat (1801-1850) and their Continental disciples of the liberal school (who for simplicity I will broadly classify as classical economists because of their link to Adam Smith). Despite their devotion to free trade, the classical economists were nationalists. They viewed free trade as one of the most important means for advancing the security, prosperity, and cultural achievements of their own nations. In this sense, they tended to be what Ludwig von Mises described as “peaceful” or “liberal” nationalists,1 who recognized the existence of profound differences among nations and nationalities and loved their own nations above all others, yet discerned that the economic and cultural flourishing of each nation was inextricably linked with the flourishing of all other nations. In recognizing this international harmony of interests, the classical economists were naturally thoroughly cosmopolitan and anti-war.

The cosmopolitanism and pacifism of the classical economists has in the past been misconstrued — often deliberately — by their protectionist opponents as a lack of affection and concern for their nation and its interests. This erroneous interpretation of the classical case for free trade has once again gained currency in the writings of some contemporary libertarians and free-market economists who have embraced the anti-nationalist, globalist agenda. Fortunately, eminent historians of economic thought have previously demolished this gross caricature of the classical position and clarified the rationale of the classical economists in promoting free trade. Let us take two examples.

Lionel Robbins was a British economist who was heavily influenced by Mises, Hayek, and the founders of the Austrian school early in his career. He was also one of the foremost historians of the classical school of economics, having written several articles and books on the subject. Robbins was emphatic in defending the view that the British classical economists promoted free trade because it improved the economic conditions for Great Britain:

To the extent to which [classical economists] repudiated former maxims of economic warfare and assumed mutual advantage in international exchange, it is true that the outlook of Classical Economists seems, and indeed is, more spacious and pacific than that of their antagonists. But there is little evidence that they often went beyond the test of national advantage as a criterion of policy, still less that they were prepared to contemplate the dissolution of national bonds. If you examine the ground on which they recommend free trade, you will find that it is always in terms of a more productive use of national resources. . . . I find no trace anywhere in their writings of the vague cosmopolitanism with which they are often credited by continental writers [such as the protectionist, Friedrich List]. . . . All that I contend is that we get our picture wrong if we suppose that the English Classical Economists would have recommended, because it was good for the world at large, a measure which they thought would be harmful to their own community. It was the consumption of the national economy which they regarded as the end of economic activity.2

In a classic work, published just after World War II, Edmund Silberner surveyed the thought of the leading economists of the nineteenth century, including the British classical and French liberal economists, on the problem of war, its causes and solution.3 Silberner pointed out that the classical economists, whom he called “liberals,” viewed war as “economically and socially harmful” and “not only immoral but stupid” because “it is in effect the natural state of men ignorant of the laws of political economy.”4 Silberner summarized the classical-liberal position on the connection between free trade, prosperity, war, and the science of political economy as follows:

By favoring international accord . . . [free trade] contributes not only to the material prosperity of nations but also to the intellectual and moral progress of mankind as a whole. Of all known economic systems it is therefore . . . the most favorable to each nation as well as to the human race in its entirety. . . . [T]he establishment of commercial freedom will bring about one of the most profound revolutions in history. Free trade will assure to all men the maximum possible of material well-being, which in fact will know no other limits than the natural resources of the globe and the creative work of men. What is more, the influence of free trade will not be restricted to the economic field: freedom of international commerce will also considerably increase the external security of nations. . . . The role assigned by the liberals, in this matter, to political economy is most significant. This science must deal with war because peace is an essential element of public prosperity. Political economy . . . is regarded by the liberals as the science par excellence of peace. The diffusion of economic knowledge thus tends, in their eyes, to prevent wars.5

Having demonstrated the profoundly cosmopolitan and pacific attitudes of the classical economists, Silberner, like Robbins, emphasized that they were first and foremost nationalists. Thus he wrote: “Though hostile to militarism, they make it clear that their attitude is opposed neither to an enlightened patriotism nor to the principle of nationalities.”6 In addition, the classical economists not only saw free trade as the most effective policy for avoiding war but also as the best means of preparing for a war that was impending. According to Silberner, “whatever their differences of view [on the relative effectiveness of free trade as a deterrent to war] they all take it for granted that, if war is truly inevitable, free trade, by enriching the nations, prepares them better for it than does the protective system, which impoverishes them all.”7 Finally, despite their abhorrence of war, the classical economists, “with a few exceptions,” were “opposed or hostile” to surrendering national sovereignty to a “supernational peace organization.”8

We need not, however, depend only on the interpretation of modern historians of thought on this matter for we have the words of the classical economists themselves. There is no better place to start than a famous statement by one of the first classical economists, David Hume. Hume’s dictum poignantly illustrates how, in the eyes of classical economists, free trade perfectly harmonized nationalism and cosmopolitanism.

I shall therefore venture to acknowledge, that, not only as a man, but as a British subject, I pray for the flourishing of commerce of German, Spain, Italy, and even France itself. I am at least certain, that Great Britain and all those nations, would flourish more did their sovereigns and their ministers adopt such enlarged and benevolent sentiments towards each other.9

As Robbins pointed out,10 Adam Smith “expressly repudiates” the globalist position that places the welfare of one’s own nation on all fours with that of other nations:

France may contain, perhaps, near three times the number of inhabitants which Great Britain contains. In the great society of mankind, therefore, the prosperity of France should appear to be an object of much greater importance than that of Great Britain. The British subject, however, who upon that account should prefer upon all occasions the prosperity of the former to that of the latter country, would not be thought a good citizen of Great Britain. We do not love our country merely as part of the great society of mankind—we love it for its own sake, and independently of any such consideration.11

Ricardo’s closest disciple, J. R. McCulloch (1789-1864), argued that free trade unites all nations and peoples in common interest. “Commerce embracing different nations,” declared McCulloch,

by. . . making every people to a great extent dependent on others . . . forms a powerful principle of union and binds together the universal society of nations by the powerful ties of mutual interest and reciprocal obligation.12

Now McCulloch is not saying that free trade will dissolve peoples and nations into a homogeneous globalist mass or eradicate the desire most individuals have for the flourishing and pre-eminence of the nationality or “people” they identify with. In fact he is saying quite the opposite: that free trade and the mutual benefits it confers on all nations are the only rational means available to sustain one’s own nation and secure its desired advancement and distinction among other nations. In McCulloch’s words:

It has been shown over and over again, that nothing can be more irrational and absurd, than that dread of the progress of others in wealth and civilization that was once so prevalent; that what is for the advantage of one state is for the advantage of all; and that the true glory and real interest of every people will be more certainly advanced by endeavoring to outstrip their neighbors in this career of science and civilization, than by engaging in schemes of conquest and aggression.13

Henri Baudrillart (1821-1892) was an eminent French liberal economist and economic historian and a follower of Bastiat’s. He was an avid free trader and anti-militarist, who objected to standing armies. Baudrillart however maintained that international free trade and division of labor are not only consistent with separate nations and nationality differences but require such separateness and differences. Wrote Baudrillart:

Those who do not consider at all the differences produced among men by climate, race, and institutions, are the very theoreticians of prohibitions who want every nation to be self-sufficient and devote itself to all industries at the same time. . . . By endeavoring to maintain that division of labor which Providence itself has established among men, political economy is obviously not hostile to the spirit of nationality; it bases the alliance of peoples on the difference of characters and faculties; it wants each to excel under the conditions peculiar to it, and each to produce so as to have means of exchange. To generalize and extend trade, it localizes industry.14

It is imperative to emphasize the nationalist basis of the classical case for free trade for two reasons. First, modern libertarians and “classical” liberals who favor open borders and are indifferent to the dissolution of historical nations often invoke the names of Hume, Smith, and Bastiat in support of their position. But as we saw, the liberality, pacifism, and cosmopolitanism of these great thinkers and their nineteenth-century followers is far different from the homogenizing globalism embraced by their modern epigones. Second, without taking a position on the vexed question of immigration, it is important to bear in mind that the classical rationale for the free movement of goods cannot be simply extended to justify the “free movement of labor,” that is, open borders, especially if the result is mass immigration. As nationalists, the classical economists would hardly look on with equanimity as their nation disintegrated.

  • 1. For Mises’s description and defense of liberal nationalism, see Joseph T. Salerno, “ Mises on Nationalism, the Right of Self-Determination, and the Problem of Immigration ,” Mises Wire (March 17, 2017), and the references contained therein.
  • 2. Lionel Robbins, The Theory of Economic Policy in English Classical Political Economy (London: Macmillan & Co. Ltd., 1953), pp. 10-11.
  • 3. Edmund Silberner, The Problem of War in Nineteenth Century Economic Thought, trans. Alexander H. Krappe (Princeton, NJ: Princeton University Press, 1946).
  • 4. Ibid., p. 280.
  • 5. Ibid., pp. 281-82
  • 6. Ibid., p. 282
  • 7. Ibid.
  • 8. Ibid., p. 283.
  • 9. David Hume, “ Of the Jealousy of Trade ,” in David Hume, Writings on Economics, ed. Eugene Rotwein (Madison, WI: The University of Wisconsin Press, 1970), p. 82.
  • 10. Robbins, The Theory of Economic Policy, p. 10, fn. 5.
  • 11. Adam Smith, The Theory of Moral Sentiments (New Rochelle, NY: Arlington House, 1969), p. 337
  • 12. John R. McCulloch, The Principles of Political Economy, 5 th ed. (New York: Augustus M. Kelley, 1965), p. 92.
  • 13. Ibid., pp. 92-93.
  • 14. Henri Baudrillart quoted in Silberner, The Problem of War in Nineteenth Century Economic Thought, p. 111.
Categories: Current Affairs

The perfect is the enemy of the good

Adam Smith Institute - Mon, 16/09/2019 - 07:01

It is entirely common within economics to mention that we live in a second best world. It may well be true that x or y, or even z, would be the best policy, the best construct. But as it turns out humans and reality don’t quite allow perfection to be achieved - we’ve got to use some second best bodge to get as close as we can to our goal without ever quite reaching it.

Something that is being forgotten by the public health crowd:

England's chief medical officer has raised fears that vaping is “a ticking time bomb” which could do long-term harm, amid growing concern about the safety of e-cigarettes.

Prof Dame Sally Davies, who will stand down later this month, made the comments just before Donald Trump announced plans to ban flavoured vaping products, in a bid to discourage children from taking up the habit.

In an interview with Civil Service World, Dame Sally raised concerns about the evidence to support the safety of e-cigarettes.

Is vaping entirely safe? That’s not even the interesting, let alone important, question:

Smokers are turning back to traditional cigarettes amid health scares over vaping, US experts have warned.

Vaping has been linked to six deaths across the United States, and 380 people have been hospitalised with lung illnesses in what the US Centers for Disease Control and Prevention has called an "outbreak".

As far as reports go - so far, it’s a little murky at present - those vaping deaths are connected with a particular contaminant in a particular product, not the process itself. But imagine it wasn’t so. Imagine that it is indeed that process.

People do indeed like taking nicotine. There will be ill effects from their doing so for there are ill effects to absolutely everything that humans do. Our favourite example of this is that hundreds of Americans a year die of being tangled in their own bedsheets. We do not therefore mandate duvets.

Of course, we are extreme by current standards on these matters. If people wish to kill themselves by smoking cigarettes then it’s their lungs, their lives. This is what to be a consenting adult means.

But even if you do not share this view the idea that we’ll limit vaping because of 6 deaths as opposed to the millions from tobacco smoking is ludicrous. We really are in this second best world where harm reduction has to be the goal, not harm elimination - on the very sensible grounds that as the switch back to proper puffing shows, harm elimination isn’t possible.

Categories: Current Affairs

William Huskisson, free trader and railway’s first victim

Adam Smith Institute - Sun, 15/09/2019 - 12:01

William Huskisson, who died on September 15th, 1830, was one of the team of young free-traders who revolutionized Britain in the 1820s by continuing the work of William Pitt, ending huge swathes of regulations and tariffs, and paving the way for the free trading nation that became the dominant economy of the 19th Century.

He represented a variety of parliamentary seats, including Liverpool, where there is a statue of him in St James Cemetery. Another one stands in Pimlico Gardens in London. His political career owed much to the support of two important patrons, Home Secretary Henry Dundas and Prime Minister William Pitt the Younger. He served initially as Secretary to the Treasury, and later as President of the Board of Trade. His 1810 pamphlet on the currency system established his reputation as an expert in finance, but his reputation rests on his unwavering support for free trade.

As a member of the 1821 committee investigating the causes of agricultural distress, he was responsible for a clause in its findings that recommended relaxation of the Corn Laws, laws that kept up the price of cereal crops via tariffs, and guaranteed the incomes of the landed gentry at the expense of the poor.

While in the Department of Trade, he reformed the protectionist Navigation Acts, giving other nations access to the transport of British goods, thereby increasing competition and lowering prices. He repealed restrictive labour laws and cut duties on manufactures and foreign imports, as well as repealing quarantine duties. In all of this he was very much a disciple of Adam Smith, as Pitt had been.

To deal with low incomes, he was asked, as President of the Board of Trade, to enact a legally binding minimum wage. He ejected the request out of hand, saying that to introduce such a measure would be "a vain and hazardous attempt to impose the authority of the law between the labourer and his employer in regulating the demand for labour and the price to be paid for it".

He managed in 1828 the difficult task of having the cabinet agree to a compromise on the Corn Laws, difficult because the landed aristocrats strongly resisted measures that might compromise the incomes derived from having their estates farmed. It was not until Huskisson's friend and colleague, Sir Robert Peel, finally repealed the Corn Laws in 1845 that the issue was resolved in favour of cheap food for the newly industrialized workers, and it was not until efficient transatlantic freight came about that it achieved its practical effects. After this Huskisson resigned.

He attended the 1830 opening of the Liverpool and Manchester Railway, despite recent surgery that left him less than fully mobile. When George Stephenson's "Rocket" locomotive approached dangerously, he attempted to climb to safety aboard the Duke of Wellington's carriage, but the door swung open and he was struck by the locomotive and died from his injuries later that day. He is thus remembered as a great free trader who liberated much of Britain's economy, and as the first fatality of a railway accident. On the anniversary of his death we remember his achievements that preaged Britain's greatness, as well as the misfortune that killed him at the age of 60.

Categories: Current Affairs

The Guardian, inflation and the 50p piece

Adam Smith Institute - Sun, 15/09/2019 - 07:01

The Guardian wants to tell us how living standards have changed over the 50 years since the 50 pence piece was introduced. Fair enough - matters have improved massively by the only standard that actually counts, how many hours work do we have to put in to purchase what lifestyle?

We are however struck by one little detail:

Back then, when booze was relatively cheap, it really was possible to go for a night out and still have change from 50p. A 50p piece in 1969 could buy you three pints of mild or bitter (priced about two shillings, equal to 10p) while a tube fare on the newly opened Victoria line in London cost just 5d (2.2p). You’d still have enough left to buy a portion of chips and a copy of the Guardian, then priced at 6d (2.5p).

Few denizens of Fleet Street as was would regard three pints of mild as a night out - that was breakfast. But as we can see a copy of The Guardian used to cost the same as a quarter pint of beer. Today’s price? £2.20 on a weekday and £3.20 on Saturday:

Perhaps unsurprisingly, the most expensive pint of beer is in London at £5.19, while the cheapest is in Carlisle at a more reasonable £2.35.

That is, The Guardian has gone from costing a quarter pint of that happy produce of our isle to somewhere between a half and a full pint.

True, these days they’re more likely to spell their own masthead right - Grauniad is not just a joke - but it’s not obvious that the quality has improved otherwise over those decades, is it? We wonder, what is it that justifies the paper having an inflation rate four times that of the price of beer? Especially since they note that back then beer was relatively cheap, something by implication they’re asserting it isn’t today. Can’t all be Polly’s salary now, can it?

Categories: Current Affairs


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