<center><object width="425" height="344"><param name="movie" value="[
www.youtube.com] name="allowFullScreen" value="true"></param><param name="allowScriptAccess" value="always"></param><embed src="[
www.youtube.com]; type="application/x-shockwave-flash" allowfullscreen="true" allowScriptAccess="always" width="425" height="344"></embed></object></center>
<blockquote>'...Keynes helped undermine what had been three of the essential institutional ingredients of a free-market economy: the gold standard, balanced government budgets, and open competitive markets. In their place Keynes’s legacy has given us paper-money inflation, government deficit spending, and more political intervention throughout the market.
It would, of course, be an exaggeration to claim that without Keynes and the Keynesian revolution inflation, deficit spending, and interventionism would not have occurred. For decades before the appearance of Keynes’s book, the political and ideological climate had been shifting toward ever-greater government involvement in social and economic affairs, due to the growing influence of collectivist ideas among intellectuals and policy-makers.
But before the appearance of The General Theory, many of the advocates of such collectivist policies had to get around the main body of economic thinking which still argued that in general the best course was for government to keep its hands off the market, maintain a stable currency backed by gold, and restrain its own taxing and spending policies.
The classical economists of the eighteenth and nineteenth centuries had persuasively demonstrated that government intervention prevented the smooth functioning of the market. They constructed a body of economic theory which clearly showed that governments have neither the knowledge nor the ability to direct economic affairs. Freedom and prosperity are best assured when government is, in general, limited to protecting people’s lives and property, with the competitive forces of supply and demand bringing about the necessary incentives and coordination of people’s activities.'
- Richard M. Ebeling,
John Maynard Keynes: The Damage Still Done by a Defunct Economist, May 2006</blockquote>
<blockquote>'In the literature of the American Revolution there is no demagogic attempt to set human rights against property rights. In the
Federalist Papers and in other publications it is recognized that the right to acquire and own property is a basic and very important human right. As John Adams wrote:
<blockquote>
The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.</blockquote>
Here, then, are the foundations of the free society of the American Republic: belief in natural law and inherent, inalienable human rights, intense distrust of any concentration of power in government, a suspicious attitude toward tyranny, whether of monarch or mob, including tyranny of the majority. Insofar as these foundations have been respected, America has prospered and grown great. It is where they have been most eroded and whittled away that some of the clearest danger signals in our national life are flying.
The Young French VisitorSome of these danger signals were clear as early as the 1830s to the most profound and clear-sighted observer of the young American Republic, Alexis de Tocqueville. His work,
Democracy in America, is a double masterpiece. It is a most penetrating study of the United States, its political institutions, its psychological traits, at the time of Andrew Jackson's presidency, and it contains some strikingly accurate predictions of the American future. It is also a most searching study of the positive and negative sides of the leveling democracy which was beginning to prevail in the Western world. And it is written in a style that is always lucid and readable and often strikingly brilliant. For understanding the main political and psychological currents in the American history, de Tocqueville's work is a worthy companion of the cogent, close-knit reasoning of the
Federalist Papers.
As an observer of American life, de Tocqueville steers a middle course between sentimental gush and the squeamish repulsion which some cultivated Europeans like Mrs. Trollope felt for the free-and-easy frontier manners, with the copious expectorations of tobacco juice and the habit of calling all and sundry colonel or captain. He notes the self-reliant individualism of the American character:
<blockquote>
The citizen of the United States is taught from his earliest infancy to rely upon his own exertions in order to resist the evils and the difficulties of life; he looks upon social authority with an eye of mistrust and anxiety, and he only claims its assistance when he is quite unable to shift without it.</blockquote>
Praised Local InitiativeAs an authentic nineteenth-century liberal, de Tocqueville approves this tendency; he notes that the sum of private undertakings far exceeds all that the government could have done. He notes that there is no such thing as an American peasant and that although education is spread thinly, there are no pools of total illiteracy and stagnation. Again and again he praises the vitality of local initiative which builds excellent schools and churches and keeps the roads in good repair without any meddling interference from a centralized bureaucracy. And he pays to America of that time two compliments which are more impressive because he does not spare criticism on other points:
<blockquote>
The European generally submits to a public officer because he represents a superior force, but to an American he represents a right. In America it may be said that no one renders obedience to man, but to justice and to law...
All commodities and ideas circulate throughout the Union as freely as in a country inhabited by one people. Nothing checks the spirit of enterprise... The Union is as happy and free as a small people, and as glorious and strong as a great nation.</blockquote>
De Tocqueville is not blind to the fact that Americans possess the defects of their virtues. He notes a considerable downgrading of intelligence in high places since the formative years of the Republic. There is a memorable picture of the restless materialism which causes Americans to pursue illusions to the end of their days:
<blockquote>
A native of the United States clings to this world's goods as if he were certain never to die; and he is so hasty in grasping at all within his reach that one would suppose he was constantly afraid of not living long enough to enjoy them. He clutches everything, he holds nothing fast, but soon loosens his grasp to pursue fresh gratifications... Death at length overtakes him, but it is before he is weary of his bootless chase of that complete felicity which is forever on the wing.</blockquote>
A source of fascination in de Tocqueville is his rare gift of accurate prediction. Some of his observations fit America, and the world, in the middle of the twentieth century even better than the conditions of his own time. There was no income tax in the America which de Tocqueville visited; but he foresaw the shape of things to come:
<blockquote>
Universal suffrage invests the poor with the government of society... Wherever the poor direct public affairs and dispose of the natural resources it appears certain that, as they profit by the expenditure of the State, they are apt to augment that expenditure…. I have no hesitation in predicting that, if the people of the United States is ever involved in serious difficulties, its taxation will speedily be increased to the rate of that which prevails in the greater part of the aristocracies and monarchies of Europe.</blockquote>
There is the famous and remarkable forecast of the era of the American-Russian Cold War:
<blockquote>
There are, at the present time, two great nations in the world which seem to tend toward the same end, although they started from different points: I allude to the Russians and the Americans…. All other nations seem to have nearly reached their natural limits…but these are still in the act of growth…. The Anglo-American relies upon personal interest to accomplish his ends, and gives free scope to the unguided exertions and common sense of the citizens; the Russian centers all the authority of society in the single arm; the principal instrument o£ the former is freedom; of the latter servitude. Their starting point is different and their courses are not the same; yet each of them seems marked out by the will of heaven to sway the destinies of half the globe.</blockquote>
De Tocqueville was alarmed not by "excessive liberty" in the United States, but by inadequate securities against tyranny. For, like other nineteenth-century libertarians who were democrats only with reservations — like Burckhardt, Acton, Mill — he realized that there was danger in the tyranny of the majority and sensed that the dykes which the framers of the Constitution had erected against this kind of tyranny were being weakened by the upsurge of democracy in the raw.
He realized that the day of the absolute hereditary monarch and of the privileged aristocrat was gone; but he saw new perils to liberty on the horizon of the future. With remarkable perspicacity he foresaw two developments which became realities in the twentieth century: the totalitarian society of communism and fascism and the paternalistic Welfare State. Regarding the former, he noted the likelihood that
<blockquote>
those hideous eras of Roman oppression, when the manners of the people were corrupted, their traditions obliterated, their habits destroyed, their opinions shaken and freedom, expelled from the laws, could find no refuge in the land</blockquote>
might recur. Certainly the crimes of a Stalin, a Hitler, a Mao Tse-tung, far exceed anything that could be laid to the charge of a legitimate ruler in the era of royal absolutism.
Still more vivid and eloquent is de Tocqueville's imaginary sketch of a paternalistic state which would not practice the bloody oppression of dictators, but would reduce each nation "to nothing better than a flock of timid and industrious animals, of which the government is the shepherd," that would undertake "to spare its subjects all the care of thinking and all the trouble of living." The American Republic was, in the winged phrase of Lincoln, conceived in liberty.
But liberty is one of the most complex, as it is one of the most precious, of human conceptions. It flourishes best in the kind of equilibrium between government and citizen, individual and society, majority and minority which the Founding Fathers wrote into the Constitution. The dangers to true liberty vary from generation to generation; but it can never be maintained without constant struggle. There is no surer guide to the principles of political liberty than the Federalist Papers; no more penetrating and imaginative study of the forces that may wreck or sap liberty than de Tocqueville's great classic.'
- William Henry Chamberlin,
Conceived in Liberty, July 1955</blockquote>