Great and entertaining interview with Tom Woods.

“A farm includes the passion of the farmer’s heart, the interest of the farm’s customers, the biological activity in the soil, the pleasantness of the air about the farm — it’s everything touching, emanating from, and supplying that piece of landscape. A farm is virtually a living organism.” — Joel Salatin

The deepest experience and impression of nature only arises on an individual level. There are many different stages of awakening awareness in nature, the most basic being the food we eat on a daily basis. Consider the packaged, wrapped, dehydrated, heavily processed food people commonly purchase. From the very beginning, people eating a majority of food of this sort are likely to be detached from nature, not to mention unhealthy. Modern industrial farms have concentrated themselves into a centralized business model relying on packing animals into small cages, spraying fields and crops with chemical pesticides, all of which is propped up through bureaucratic regulations that destroy local farms. My belief is that the nature experience, on a most basic and individual level, begins with local farms. People will have a much greater respect and understanding of nature when they regularly eat and observe whole, natural foods that come from a local source.

“Part of our responsibility as stewards of the earth is to respect the design of creation… That’s something you can devote your life for.” — Joel Salatin

Operating the Polyface Farm on 550 acres of land in the Shenandoah Valley, Joel Salatin is defying just about everyone when it comes to producing organic food. Salatin describes himself as a “Christian-libertarian-environmentalist-capitalist farmer,” and has focused his career on sustainable, environmentally-friendly, animal-friendly organic farming. One of the many unique aspects of Salatin’s approach is that he only sells food to individuals, restaurants, and other outlets within a four-hour-drive radius of his farm, in an effort to encourage people to purchase their food from local farms in their area.

“We think there is strength in decentralization and spreading out rather than in being concentrated and centralized.” — Joel Salatin

Salatin’s “secret” is feeding livestock a rich and diverse mixture of grass, which is supported with no pesticides or chemicals whatsoever. The cattle freely roam among the fields, restrained only by a portable electrified fence that can be easily moved in less than an hour with one or two people. The farm’s chickens are housed in portable coops that are transported with tractors. Salatin maintains a rotation of sorts by first letting cattle graze a portion of the field, and then letting the chickens roam that same area the following day. This simple process provides an easily maintained and renewable source of daily fresh grass for the cattle, gives the animals freedom to move around without much restraint, and it leads to incredibly tasty meat and eggs.

“I appreciate the fact that you obviously love life and the living.” — Polyface Farm customer

“You, as a food buyer, have the distinct privilege of proactively participating in shaping the world your children will inherit.” — Joel Salatin

This is a breath of fresh air compared to the industrial meat facilities today. In these facilities cattle are heavily restrained, the farmers hardly interact with the animals, and a huge portion of the cattle is fed corn (which is often grown with questionable techniques using pesticides and GMOs). Salatin has a tremendous respect of and connection with his animals; a connection that cannot come through the detached and horrific slaughtering processes in industrial meat facilities today. Clearly there is an importance in the environment animals are raised in and its impact on the taste and vibration of the food. Salatin sees and treats animals as free creatures, not soulless drones waiting to be eaten.

“I am a caretaker of creation. I don’t own it, and what I’m supposed to do is leave it in better shape for the next generation than I found it.” — Joel Salatin

The greatest gift Joel Salatin is giving to the world, however, is not his food. He is showing people that there is an alternative. What kind of impact would Salatin have if he simply held signs and protested to a corporate or government building? What effect would he have if he simply lobbied government to mandate his farming beliefs? Probably none at all, and no one would remember him for it. Salatin is taking action. He is not waiting around for someone else to implement his vision; he is taking initiative and proving that low-tech, sustainable, organic, animal and environmentally-friendly farming is not a lost cause. He is a living example that it is actually a tremendous success.

“I see myself today as Sitting Bull trying to bring a voice of Easternism, holism, community-based thinking to a very Western culture. If we fail to appreciate the soul that Easternism gives us, then what we have is a disconnected, Greco-Roman, Western, egocentric, compartmentalized, reductionist, fragmented, linear thought process that counts on cleverness. Now, how’s that for a mouthful?” — Joel Salatin

Joel Salatin’s relentless pursuit of self-sufficiency has given us a remarkable example of how to happily and prosperously live in tune with the environment. All the buildings on his farm are constructed with lumber from the forest resting on his land. His animals are fed natural grass. The land is irrigated by its own ponds. He prospers through a local customer base who jump at the opportunity to support such a venture. Salatin’s achievements are laying the groundwork for the future of localism: respecting and appreciating the beauty and freedom of nature, working sustainably with animals on a very personal level, supporting both inner happiness and the local community, all through operating a profitable business. With individual initiative and creativity, nothing is impossible. Such is the story of Joel Salatin.

“How much evil throughout history could have been avoided had people exercised their moral acuity with convictional courage and said to the powers that be, ‘No, I will not. This is wrong, and I don’t care if you fire me, shoot me, pass me over for promotion, or call my mother, I will not participate in this unsavory activity.’ Wouldn’t world history be rewritten if just a few people had actually acted like individual free agents rather than mindless lemmings?” — Joel Salatin

The Drug War has not decreased drug use, violence, nor has it maximized peace. It is an unconstitutional assault on other countries who have done absolutely nothing to the U.S.

The “War on Drugs,” like the “War on Terror,” ends up being an undertaking with no definable victory in sight. No matter how vigorously the federal government prosecutes its “war” on drugs, people will still use drugs. No matter how vigorously the federal government pursues the “war” on terror there will still be those who want to commit terrorist acts to get their points across.

Thus, we have two “wars” with infinite reach that use the threats engendered by their very own existence to justify their actions.

In the meantime, numerous lives are lost like so much “collateral” damage–a phrase that should be abhorred by anyone who wants to think and speak seriously about such things. I would wager that damage doesn’t seem so collateral when it’s your brother, or mother, or cousin, etc.

We have now, on display, the cost of the ongoing war on drugs.

In Mexico, the violence is disastrous and spilling over the border, but the cost of drug war-related violence has already been a reality for a lot of Americans who are unfortunate enough to live in neighborhoods where such violence is the norm. The only difference now is that Mexican violence is encroaching on popular spring break destinations as well as the U.S. southern border; hence many American lawmakers are apt to take notice.

Under pressure from the U.S. government, Mexico’s government decided to “crack down” on drug gangs in its country. This only resulted in Mexican law enforcement cracking down on the gangs that don’t pay them, in favor of the ones that do.

Well, you say, “of course, because drugs lead to corruption” — no, it’s the drug laws that lead to corruption. We saw this with prohibition, and we have been seeing it with the illegal drug trade, yet many refuse to admit the obvious.

The criminalization of drug use and sale does not halt such activity. It simply creates a black market aptly taken over by criminal elements that operate on a level they know best–violence and corruption.

Mexico has become the epicenter of the drug war, just like Columbia before it. Columbia lost its infamous title, not due to any particular competence by Mexico’s drug gangs but because of the U.S. government’s intervention-which helped to weaken the Columbians, and U.S. authorities congratulated themselves. But ultimately, this only moved the problem even closer to our own borders.

The price we pay is a situation that is proving deadly for both Mexican and American citizens alike.

Now that the Obama administration is deploying National Guard troops to the Mexican border, some are torn between welcoming the needed border enforcement and realizing that the intervention will likely just move across the border in due time. This will simply lead to more problems than it might solve, and probably won’t do anything to actually secure the border.

Another current illustration of this is happening in Jamaica, where a bloody riot has gone on for days, pitting law enforcement against an alleged local drug gang leader and his supporters. This battle was incited by Jamaican authorities’ attempt to extradite the gang leader to the United States.

The Jamaican government initially refused the U.S. government’s request, but after further pressure by the U.S. State Department (I do not doubt it involved a threat of some kind), Jamaican leaders relented. The drug ‘don’ and his supporters reacted with force to the force by authorities he’s likely been working with for years – it is well known that no one wins political office in Jamaica without support of local dons. Once again, corruption comes into play and the people pay the price.

The U.S. government uses its strength and position in the world to force other countries to do what it wants. Regardless of the situation, the U.S. government feels entitled to behave in such a way.

http://www.campaignforliberty.com/article.php?view=894

Barack Obama has slid past the anti-war crowd despite escalating the war in Afghanistan, indefinitely remaining in Iraq, not to mention the numerous bombings in Pakistan.

What America needs most today is a peace movement, a broad-based coalition that opposes not only the American empire’s operations in Iraq, Afghanistan, and Pakistan (as well as less overt activities elsewhere), but also their attendant accretion of presidential power, which diminishes or eliminates civil liberties and the traditional protections accorded criminal suspects.

Unfortunately, there have been impediments to the development of this long-overdue movement. People on the Right typically are not inclined to oppose wars. Even if they are uneasy about a given war, they equate anti-war activity with left-wing opposition to the military, failure to support the troops, and lack of patriotism. If a Republican is running the war, they are even less likely to make a fuss. Some on the Right are authentically anti-empire and are ready to join an anti-war coalition, but they seem to be waiting for others to take the initiative.

The Left of course is much more comfortable opposing war and executive power and did so during the reign of George W. Bush. But they can alienate potential nonleft coalition members by stressing their interventionist domestic agenda.

A more recent problem with the Left is Barack Obama. With a few exceptions, Obama’s election has silenced the critics of empire, invasion, occupation, Predator bombings, and civil-liberties destruction. Maybe they feel he is one of them, so they are giving him time to get settled in before he begins to dismantle the empire. Well, Obama is into his 17th month and there has been scant progress on that front. It’s safe to say that he has no intention of scaling back, much less liquidating the empire.

Maybe that’s why a group of prominent leftist intellectuals, activists, and actors has ended the ceasefire and has finally criticized Obama’s war policies. It’s about time. In a statement placed in the New York Review of Books, headlined “Crimes Are Crimes No Matter Who Does Them,” the group said, “Crimes under Bush are crimes under Obama and must be resisted by anyone who claims a shred of conscience.”

Hear, hear!

The group specifically referred to Obama’s ordering the assassination of Anwar al-Awlaki, an American citizen and radical Muslim cleric living in Yemen, “because he is suspected of participating in plots by Al Qaeda.” The statement notes that “Al-Awlaki denies these charges. No matter. Without trial or other judicial proceeding, the administration has simply put him on the to-be-killed list.”

The Obama administration claims it has the right to kill people such as al-Awlaki, who has been linked to the shooter at Fort Hood and the would-be airplane bomber over Detroit last year. This is an extraordinary claim of unilateral executive power. Al-Awlaki, who has made inflammatory statements about killing American civilians, is not operating on a traditional battlefield but rather is suspected — having never been charged or tried — of engaging in illegal activities.

http://www.campaignforliberty.com/article.php?view=883

“He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our People, and eat out their substance.” – Declaration of Independence, 1776

The below pictures were from a presentation given at yesterday’s “Towne” Hall on May 24.  I’ve added a few comments with documentation links.  The quote above from the Declaration easily applies to the 22.5 million bureaucrats, America’s second largest job sector, who make nearly twice the average wage of the private sector.

While America is not Greece – or Iceland – there are glaring similarities.

While the Republocrats are not King George… they are far worse.

For Liberty and the Constitution,

Jake Towne

USDA link here.  Note the strong rise in number of SNAP food stamp recipients during the past year.  One would expect to see this number dropping or even flat-lining – along with employment rising – if a recovery were underway.

BLS link here.  Note that while the “newspaper” unemployment rate is still 10%, the U-6 figure – which more accurately describes total unemployment is 17% – a depression statistic.  I’ve described the common sense solutions to end rampant unemployment almost overnight in the campaign’s Jobs plank.

Since the BLS drops off workers from its U-6 figure, the real unemployment rate is most likely slightly greater than 17%.  Shadowstats estimates the rate at about 22%.

The current national debt – which is closely tied to the USTreasury market is now over $13 trillion.  Current government plans include massive deficit spending through 2013, and the government’s optimistic projections of a return to “normalcy” even then should be severely doubted.  Source of budget data.  However, due to the cash-based accounting method government uses, this hides the undeniable fact that the real national debt is much larger when GAAP (Generally Acceptable Accounting Principles) are used to identify future taxation sources and future debts such as Social Security and Medicare (see below).

The above is taken from the Treasury Department’s latest report from April 2010 where government’s inlays – social security and retirement taxes, income taxes (both personal and corporate), and excise taxes can be seen.  The average monthly level is about $170 billion per month.

From the same report, the level of government spending, which averages about $300 billion per month.  (Only the government can run that type of accounting, due to its money-printing!)  While Social Security and Medicare are a major expense, the level of “National Defense” spending appears deceptively low as it is just the DoD budget.  As I wrote about in “Guns or Health Care?” plenty of “Other Non-Defense” spending are in fact related to the military – Homeland Security, the nuclear arsenal under the Dept. of Energy, Veteran’s Affairs, the Treasury’s military retirement program, etc.

As seen in the official USTreasury report on page 178/254, the total unfunded liabilities for Medicare and Social Security is a jaw-dropping $107 trillion over the future of these programs.  While I predict the Democrats may bear the brunt of the blame for the collapse of Medicare, one must not forget that it was the Republican’s massive expansion of Part D’s prescription drug plan that worsened the fiscal situation.  One interesting possible interpretation of the recent health care takeover plan is it may simply be a stop-gap solution to temporarily increase taxes over the next few years.  (On Social Security, I will be delivering a presentation in more detail next Friday.)

The above is built from the Federal Reserve H.4.1 data here.  The red line is the total (reported) balance sheet of the FED, which has more than doubled since the time of the Banker Bailout.  While the original TARP bailout (not shown) accounted for much of the initial sharp increase, most of the debt has been replaced by $1.12 trillion of mortgage-backed securities from Freddie Mac and Fannie Mae (the purple line).   This graph shows the nationalization and propping of America’s entire residential housing industry. The yellow and green lines show the cumulative totals of USTreasury and USAgency debt held by the FED.  While the Federal Reserve has admitted it will take losses on the MBS debt, the question remains as to how much and when.

The purchasing power of the dollar has lost well over 94% since FDR took America off the classical gold standard in 1933 through monetary inflation.  The monetary inflation is caused by the FED.  They debase the dollar by creating more and more irredeemable paper dollars.  Graph provided by Bloomberg Financial, 2009.

The above chart shows the “real interest rate” from 1970 to 2009, formula below.  It is an approximation for the dollar’s purchasing power versus time.  While in 1980 it reached nearly +10% (savings rate of ~19% and inflation of ~10%), in 1990 this rate went negative and continued dropping.  The chart shows the capital and savings of America being ruthlessly destroyed by the FED and the government.  Source.

Real Rate of Interest = (Interest Rate earned by a bank savings account) minus (Inflation Rate)

The rising price of gold over the past decade demonstrates the destruction of the world’s paper currencies.  In the past several weeks, gold reached all-time record highs in dollars, yen, euros, Swiss francs, and British pounds.  As described in this article, the gold price is likely suppressed by governments in order to make their own currencies look good as I wrote about in “The Summers Gold Price Suppression Scheme.”  Gold trades over $20 billion USD per trading day – or over $20 trillion annually – a figure larger than the $15 trillion GDP figure used for the United States.

To cap off the situation with the dollar, the latest quarterly banking profile from the FDIC indicates the deposit insurance fund (DIF) is bankrupt.  While consumers at failed banks still receive “insured” funds, the losses are presumably filled in with dollars from the FED, as reported last here.  The current FDIC “watch list” rose to 775 banks, or almost 10% of all FDIC-insured banks in the US per p. 3/26.

The crux of the Over-the-Counter derivatives problem is its enormous size.  However the $600 trillion figure shown is the derivatives’ contracts notional value – a true market value cannot be assessed.  The primary issue with OTC derivatives is that they trade off of exchanges, so their contents are opaque to the rest of the marketplace.  Note that exchange-traded derivatives (EXD) are much smaller.

BIS data here.  Note the sharp drop following the 2008 financial crisis.  More details on derivatives can be learned in “What the Heck are Derivatives?” and “Bring Light to Dark Derivatives!”

Jake Towne is running for U.S. Congress in eastern Pennsylvania’s 15th district in 2010. Prior to returning home, he had been living in Shanghai as an engineer in the semiconductor industry for over 3 years. As part of defending liberty and championing the Constitution, Towne is offering the citizens in his area a novel form of accountable government called “Our Open Office.”

Great article from Ron Paul on the deceit of deficit spending in government. Congress goes behind the backs of the American people to fund outrageous war efforts and hardly anyone even raises a peep about it. Thank goodness for the efforts of Ron Paul to expose these activities.

Congress, with its insatiable appetite for spending, is set to pass yet another “supplemental” appropriations bill in the next two weeks. So-called supplemental bills allow Congress to spend beyond even the 13 annual appropriations bills that fund the federal government. These are akin to a family that consistently outspends its budget, and therefore needs to use a credit card to make it through the end of the month.

If the American people want Congress to spend less, putting an end to supplemental appropriations bills would be a start. The 13 “regular” appropriations bills fund every branch, department, agency, and program of the federal government. Congress should place every dollar in plain view among those 13 bills. Instead, supplemental spending bills serve as a sneaky way for Congress to spend extra money that was not projected in budget forecasts. Once rare, they have become commonplace vehicles for deficit spending.

The latest supplemental bill is touted as an “emergency” war spending bill, needed to fund our ongoing conflicts in the Middle East. The emergencies never seem to end, however, and Congress passes one military supplemental bill after another as the wars in Iraq and Afghanistan drag on.

Many of my colleagues argue that Congress cannot put a price on our sacred national security, and I agree that the strong, unequivocal defense of our country is a top priority. There comes a time, however, when we must take stock of what our blank checks to the military industrial complex accomplish for us, and where the true threats to American citizens lie.

The smokescreen debate over earmarks demonstrates how we have lost perspective when it comes to military spending. Earmarks constitute about $11 billion of the latest budget. This sounds like a lot of money, and it is, but it is a drop in the bucket compared to the $708 billion spent by the Pentagon this year to expand our worldwide military presence. The total expenditures to maintain our world empire is approximately $1 trillion annually, which is roughly what the entire federal budget was in 1990!

We spend more on defense than the rest of the world combined, and far more than we spent during the Cold War. These expenditures in many cases foment resentment that does not make us safer, but instead makes us a target. We referee and arm conflicts the world over, and have troops in some 140 countries with over 700 military bases.

With this enormous amount of money and energy spent on efforts that have nothing to do with the security of the United States, when the time comes to defend American soil, we will be too involved in other adventures to do so.

There is nothing conservative about spending money we don’t have simply because that spending is for defense. No enemy can harm us in the way we are harming ourselves, namely bankrupting the nation and destroying our own currency. The former Soviet Union did not implode because it was attacked; it imploded because it was broke. We cannot improve our economy if we refuse to examine all major outlays, including so-called defense spending.

http://www.campaignforliberty.com/article.php?view=881

This video starts a tad slow – but finishes strong. Pamela Geller on Freedom in America

Strong speech!

Or so we were told.  That has probably never been true.  Now we are told that is how it once was, but a new role of government is emerging.  Yet this new role is the same role it has been for millenia.  How is that new?  It’s not.  It’s a scam.

57 years ago, this man knew what most Americans can’t figure out today.

The Republic Becomes the Empire by Garet Garrett

We have crossed the boundary that lies between Republic and Empire. If you ask when, the answer is that you cannot make a single stroke between day and night. The precise moment does not matter. There was no painted sign to say, “You now are entering Imperium.” Yet it was a very old road and the voice of history was saying: “Whether you know it or not, the act of crossing may be irreversible.” And now, not far ahead, is a sign that reads: “No U Turns.”

If you say there were no frightening omens, that is true. The political foundations did not quake; the graves of the Fathers did not fly open; the Constitution did not tear itself up. If you say people did not will it, that also is true. But if you say therefore it has not happened, then you have been so long bemused by words that your mind will not believe what the eye can see, even as in the jungle the terrified primitive, on meeting the lion, importunes magic by saying to himself, “He is not there.” That a republic may vanish is an elementary schoolbook fact.

The Roman Republic passed into the Roman Empire, and yet never could a Roman citizen have said, “That was yesterday.” Nor is the historian, with all the advantages of perspective, able to place that momentous event at any exact point on the dial of time. The Republic had a long unhappy twilight. It is agreed that the Empire began with Augustus Caesar. Several before him had played emperor and were destroyed.

The first who might have been called emperor in fact was Julius Caesar, who pretended not to want the crown and once publicly declined it. Whether he feared more the displeasure of the Roman populace or the daggers of the republicans is unknown. In his dreams he may have been seeing a bloodstained toga. His murder soon afterward was a desperate act of the dying republican tradition, and perfectly futile. His heir was Octavian, and it was a very bloody business, yet neither did Octavian call himself emperor.

On the contrary, he was most careful to observe the old legal forms. He restored the Senate. Later he made believe to restore the Republic, and caused coins to be struck in commemoration of that event. Having acquired by universal consent, as he afterward wrote, “complete dominion over everything, both by land and sea,” he made a long and artful speech to the Senate, and ended it by saying: “And now I give back the Republic into your keeping. The laws, the troops, the treasury, the provinces, are all restored to you. May you guard them worthily.”

The response of the Senate was to crown him with oak leaves, plant laurel trees at his gate and name him Augustus. After that he reigned for more than forty years and when he died the bones of the Republic were buried with him. “The personality of a monarch,” says Stobart,

“had been thrust almost surreptitiously into the frame of a republican constitution…. The establishment of the Empire was such a delicate and equivocal act that it has been open to various interpretations ever since. Probably in the clever mind of Augustus it was intended to be equivocal from the first.”

What Augustus Caesar did was to demonstrate a proposition found in Aristotle’s “Politics,” one that he must have known by heart, namely this:

“People do not easily change, but love their own ancient customs; and it is by small degrees only that one thing takes the place of another; so that the ancient laws will remain, while the power will be in the hands of those who have brought about a revolution in the state.”

Revolution within the form.

There is no comfort in history for those who put their faith in forms; who think there is safeguard in words inscribed on parchment, preserved in a glass case, reproduced in facsimile and hauled to and fro on a Freedom Train.

Let it be current history. How much does the younger half of this generation reflect upon the fact that in its own time a complete revolution has taken place in the relations between government and people? It may be doubted that one college student in a thousand could even state it clearly. The first article of our inherited tradition, implicit in American thought from the beginning until a few years ago, was this: Government is the responsibility of a self-governing people. That doctrine has been swept away; only the elders remember it.

Now, in the name of democracy, it is accepted as a political fact that people are the responsibility of government. The forms of republican government survive; the character of the state has changed. Formerly the people supported government and set limits to it and minded their own lives.

Now they pay for unlimited government, whether they want it or not, and the government minds their lives — looking to how they are fed and clothed and housed; how they provide for their old age; how the national income, which is the product of their own labor, shall be divided among them; how they shall buy and sell; how long and how hard and under what conditions they shall work, and how equity shall be maintained between the buyers of food who dwell in the cities and the producers of food who live on the soil. For the last named purpose it resorts to a system of subsidies, penalties and compulsions, and assumes with medieval wisdom to fix the just price.

This is the Welfare State. It rose suddenly within the form. It is legal because the Supreme Court says it is. The Supreme Court once said no and then changed its mind and said yes, because meanwhile the President who was the architect of the Welfare State had appointed to the Supreme Court bench men who believed in it.

The founders who wrote the Constitution could no more have imagined a Welfare State rising by sanction of its words than they could have imagined a monarchy; and yet the Constitution did not have to be changed. It had only to be reinterpreted in one clause — the clause that reads: “The Congress shall have power to lay and collect taxes, imposts and excises to pay its debts and provide for common defense and welfare of the United States.”

“We are under a Constitution,” said Chief Justice Hughes, “but the Constitution is what the judges say it is.”

The president names the members of the Supreme Court, with the advice and consent of the Senate. It follows that if the president and a majority of the Senate happen to want a Welfare State, or any other innovation, and if, happily for their design, death and old age create several vacancies on the bench so that they may pack the Court with like-minded men, the Constitution becomes, indeed, a rubberoid instrument.

The extent to which the original precepts and intentions of constitutional, representative, limited government, in the republican form, have been eroded away by argument and dialectic is a separate subject, long and ominous, and belongs to a treatise on political science.

The one fact now to be emphasized is that when the process of erosion has gone on until there is no saying what the supreme law of the land is at a given time, then the Constitution begins to be flouted by Executive will, with something like impunity. The instances may not be crucial at first and all the more dangerous for that reason. As one is condoned, another follows, and they become progressive.

To outsmart the Constitution and to circumvent its restraints became a popular exercise of the art of government in the Roosevelt regime. In defense of his attempt to pack the Supreme Court with social-minded judges after several of his New Deal laws had been declared unconstitutional, President Roosevelt wrote: “The reactionary members of the Court had apparently determined to remain on the bench for as long as life continued-for the sole purpose of blocking any program of reform.”

Among the millions who at the time applauded that statement of contempt there were very few, if there was indeed one, who would not have been frightened by a revelation of the logical sequel. They believed, as everyone else did, that there was one thing a President could never do. There was one sentence of the Constitution that could not fall, so long as the Republic lived.

The Constitution says: “The Congress shall have power to declare war.” That, therefore, was the one thing no president could do. By his own will he could not declare war. Only Congress could declare war, and Congress could be trusted never to do it but by will of the people — or so they believed. No man could make it for them. Even if you think that President Roosevelt got the country into World War II, that was not the same thing. For a declaration of war he went to Congress — after the Japanese had attacked Pearl Harbor. He may have wanted it, he may have planned it; and yet the Constitution forbade him to declare war and he dared not do it. Nine years later a much weaker president did.

President Truman, alone and without either the consent or knowledge of Congress, had declared war on the Korean aggressor, 7000 miles away, Congress condoned his usurpation of its exclusive constitutional power. More than that, his political supporters in Congress argued that in the modern case that sentence in the Constitution conferring upon Congress the sole power to declare war was obsolete.

Mark you, the words had not been erased; they still existed in form. Only they had become obsolete. And why obsolete? Because now war may begin suddenly, with bombs falling out of the sky, and we might perish while waiting for Congress to declare war.

The reasoning is puerile. The Korean war, which made the precedent, did not begin that way; secondly, Congress was in session at the time, so that the delay could not have been more than a few hours, provided Congress had been willing to declare war; and, thirdly, the president as commander-in-chief of the armed forces of the Republic may in a legal manner act defensively before a declaration of war has been made. It is bound to be made if the nation has been attacked.

Mr. Truman’s supporters argued that in the Korean instance his act was defensive and therefore within his powers as commander-in-chief. In that case, to make it constitutional, he was legally obliged to ask Congress for a declaration of war afterward. This he never did. For a week Congress relied upon the papers for news of the country’s entry into war; then the president called a few of its leaders to the White House and told them what he had done.

A year later Congress was still debating whether or not the country was at war, in a legal, constitutional sense. A few months later Mr. Truman sent American troops to Europe to join an international army, and did it not only without a law, without even consulting Congress, but challenged the power of Congress to stop him. Congress made all of the necessary sounds of anger and then poulticed its dignity with a resolution saying the president’s action was all right for that one time, since anyhow it had been taken, but that hereafter Congress would expect to be consulted.

At that time the Foreign Relations Committee of the Senate asked the State Department to set forth in writing what might be called the position of executive government. The State Department obligingly responded with a document entitled, “Powers of the President to Send Troops Outside of the United States — Prepared for the use of the joint committee made up of the Committee on Foreign Relations and the Committee on the Armed Forces of the Senate, February 28, 1951.”

This document, in the year circa 2950, will be a precious find for any historian who may be trying then to trace the departing footprints of the vanished American Republic. For the information of the United States Senate it said (Congressional Record, March 20, 1951, p. 2745):

“As this discussion of the respective powers of the President and Congress has made clear, constitutional doctrine has been largely moulded by practical necessities. Use of the Congressional power to declare war, for example, has fallen into abeyance because wars are no longer declared in advance.”

Caesar might have said it to the Roman Senate. If constitutional doctrine is moulded by necessity, what is a written Constitution for?

Thus an argument that seemed at first to rest upon puerile reasoning turned out to be deep and cunning. The immediate use of it was to defend the unconstitutional Korean precedent, namely, the resort to war as an act of the president’s own will. Yet it was not invented for that purpose alone. It stands as a forecast of executive intentions, a manifestation of the executive mind, mortal challenge to the parliamentary principle. The simple question is: Whose hand shall control the instrument of war? It is late to ask. It may be too late, for when the hand of the Republic begins to relax another hand is already putting itself forth.

Notes

Garet Garrett (1878–1954) was an American journalist and author who was noted for his critiques of the New Deal and US involvement in the Second World War. See his books in the Mises Store. See his article archives. Comment on the blog.

This article was originally published as “The Decline of the American Republic” in The Freeman, February 25, 1952.

First, I want to present the argument developed by Professor Walter Block, one of Rothbard’s many outstanding students, thirty two years ago.  It’s as true today as it was then.  Minimum wage laws are most harmful to the very group of people that its supporters most wish to help.  Then I look forward to engaging any arguments in the comments section.

THE FAT CAPITALIST-PIG EMPLOYER by Walter Block, 1976

“If not for the minimum wage law and other progressive legislation, the employers, the fat-capitalist-pig exploiting employers, to be precise, would lower wages to whatever level they wanted. At best, we would be pushed back to the days of the sweatshop; at worst, to the days of the industrial revolution and before, when mankind waged an often losing battle with starvation.”

So goes the conventional wisdom on the merits of minimum wage legislation. It will be shown, however, that this conventional wisdom is wrong, tragically wrong. It assumes a villain where none exists. What does the law actually accomplish and what are its consequences? The minimum wage law is, on the face of it, not an employment law but an unemployment law. It does not force an employer to hire an employee at the minimum wage level, or at any other level. It compels the employer not to hire the employee at certain wage levels, namely, those below the minimum set by law. It coerces the worker, no matter how anxious he may be to accept a job at a wage level below the minimum, not to accept the job. It obligates the worker who is faced with a choice between a low-wage job and unemployment to choose unemployment. Nor does the law even push any wage up; it only lops off jobs which do not meet the standard.

How would wages be determined in the absence of minimum wage legislation? If the labor market consists of many suppliers of labor (employees) and many demanders of labor (employers), then the wage rate will tend to be set in accordance with what the economist calls the “marginal productivity of labor.” The marginal productivity of labor is the extra amount of receipts an employer would have if he employs a given worker. In other words, if by adding a given worker to the payroll, the employer’s total receipts rise by $60 per week, then the marginal productivity of that worker is $60 per week. The wage rate paid to the worker tends to equal the worker’s marginal productivity.  Why is this so, in view of the fact that the employer would prefer to pay the worker virtually nothing, no matter what his productivity? The answer is competition between employers.For example, assume the worker’s marginal productivity is equal to $1.00 per hour. If he were hired at 5¢ per hour, the employer would make 95¢ per hour profit. Other employers would bid for that worker. Even if they paid him 6¢, 7¢, or 10¢ an hour, their profit would still make the bidding worthwhile. The bidding would end at the wage level of $1.00 per hour. For only when the wages paid equal the worker’s marginal productivity will the incentive to bid for the worker stop.

But suppose the employers mutually agree not to hire workers at more than 5¢ per hour? This occurred in the Middle Ages when cartels of employers got together, with the aid of the state,to pass laws which prohibited wage levels above a certain maximum. Such agreements can only succeed with state aid and there are good reasons why this is so. In the noncartel situation, the employer hires a certain number of workers—the number which he believes will yield the maximum profit. If an employer hires only ten workers, it is because he thinks the productivity of the tenth will be greater than the wage he must pay and that the productivity of an eleventh would be less than this amount. If, then, a cartel succeeds in lowering the wage of workers with a marginal productivity of $1.00 to 5¢ per hour, each employer will want to hire many more workers. This is known as the “law of downward sloping demand” (the lower the price, the more buyers will want to purchase). The worker whose productivity was, in the eyes of the employer, just below $1.00, and therefore not worth hiring at $1.00 per hour, will be eagerly sought at 5¢ per hour. This leads to the first flaw in the cartel: each employer who is a party to the cartel has a great financial incentive to cheat. Each employer will try to bid workers away from the others. Theonly way he can do this is by offering higher wages. How much higher? All the way up to $1.00, as we have seen before, and for the same reason. The second flaw is that nonmembers of the cartel arrangement would want to hire these workers at 5¢ per hour, even assuming no “cheating” by members. This also tends to drive up the wage from 5¢ to $1.00 per hour. Others, such as would-be employers in noncartel geographical areas, self-employed artisans who could not before afford employees, and employers who had previously hired only part-time workers, would all contribute to an upward trend in the wage level. Even if the workers themselves are ignorant of wage levels paid elsewhere, or are located in isolated areas where there is no alternative employment, these forces will apply. It is not necessary that both parties to a trade have knowledge of all relevant conditions.

It has been said that unless both parties are equally well-informed, “imperfect competition” results, and economic laws somehow do not apply. But this is mistaken. Workers usually have little overall knowledge of the labor market, but employers are supposedly much better informed. And this is all that is necessary. While the worker may not be well-informed about alternative job opportunities, he knows well enough to take the highest paying job. All that is necessary is that the employer present himself to the  employee who is earning less than his marginal productivity, and offer him a higher wage. And this is exactly what naturally happens.

The self-interest of employers leads them “as if by an invisible hand” to ferret out low-wage workers, offer them higher wages, and spirit them away.  The whole process tends to raise wages to the level of marginal productivity. This applies not only to urban workers, but to workers in isolated areas who are ignorant of alternative job opportunities and would not have the money to get there even if aware of them. It is true that the differential between the wage level and the productivity of the unsophisticated worker will have to be great enough to compensate the employer for the costs of coming to the worker, informing him of job alternatives, and paying the costs of sending him there. But this is almost always the case, and employers have long been cognizant of it.

The Mexican “wetbacks” are a case in point. Few groups have less knowledge of the labor market in the United States, and less money for traveling to more lucrative jobs. Not only do employers from southern California travel hundreds of miles to find them, but they also furnish trucks or travel money to transport them northward. In fact, employers from as far away as Wisconsin travel to Mexico for “cheap labor” (workers receiving less than their marginal product). This is eloquent testimony to the workings of an obscure economic law they have never heard of. (There are complaints about the poor working conditions of these migrant workers. But these complaints are mainly from either well-intentioned people who are unaware of the economic realities, or from those not in sympathy with these hapless workers receiving full value for their labors. The Mexican workers themselves view the package of wages and working conditions as favorable compared to alternatives at home. This is seen in their willingness, year after year, to come to the United States during the harvesting season.) It is not the minimum wage law, therefore, that stands between Western civilization and a return to the stone age. There are market forces and profit maximizing behavior on the part of entrepreneurs, which ensure that wages do not fall below the level of productivity. And the level of productivity is itself determined by technology, education, and the amount of capital equipment in a society, not by the amount of “socially progressive” legislation enacted. Minimum wage legislation does not do what its press claims. What does it do? What are its actual effects?

What will be the reaction of the typical worker to a legislated increase in wages from $1.00 to $2.00? If he is already fully employed, he may want to work more hours. If he is partially employed or unemployed, it is virtually certain that he will want to work more. The typical employer, on the other hand, will react in the opposite way. He will want to fire virtually all of the workers he is forced to give raises to. (Otherwise he would have granted raises before he was compelled to.) Now, he has to keep production up, so he might not be able to adjust this situation immediately. But as time passes he will replace his unexpectedly expensive unskilled workers with fewer but more skilled workers and with more sophisticated machinery, so that his total productivity remains constant. Students of an introductory economics course learn that when a price level above equilibrium is set, the result is a surplus.

In the example, when a minimum wage level above $1.00 per hour is set, the result is a surplus of labor—otherwise called unemployment. Iconoclastic as it may sound, it is, therefore, true that the minimum wage law causes unemployment. At the higher wage level it creates more people willing to work and fewer jobs available. The only debatable question is: how much unemployment does the minimum wage law create? This depends on how quickly the unskilled workers are replaced by equivalently productive skilled workers in conjunction with machines. In our own recent history, for example, when the minimum wage law increased from 40¢ to 75¢ per hour, elevator operators began to be replaced. It has taken some time, but most elevators are now automatic.

The same thing happened to unskilled dishwashers. They have been and are still being replaced by automatic dishwashing machinery, operated and repaired by semi-skilled and skilled workers. The process continues. As the minimum wage law is applied to greater and greater segments of the unskilled population, and as its level rises, more and more unskilled people will become unemployed. Finally, it is important to note that a minimum wage law only directly affects those earning less than the minimum wage level. A law requiring that everyone be paid at least $2.00 per hour has no effect on an individual earning $10.00 per hour. But before assuming that the minimum wage law simply results in pay raises for low-wage earners, consider what would happen if a $100.00 per hour minimum wage law went into effect. How many of us have such great productivity that an employer would be willing to pay $100.00 for an hour of our services? Only those thought to be worth that much money would retain their jobs. The rest would be unemployed. The example is extreme, of course, but the principle which would operate if such a law were passed does operate now.

When wages are raised by law, the workers with low productivity are discharged. Who is hurt by the minimum wage law? The unskilled, whose productivity level is below the wage level legislated. The unemployment rate of black male teenagers is usually (under-) estimated at 50 percent, three times the unemployment level of the 1933 depression. And this percentage does not even begin to take into account the great numbers who have given up searching for a job in the face of this unemployment rate. The lost income that this represents is only the tip of the iceberg. More important is the on-the-job-training these young men could be receiving. Were they working at $1.00 per hour (or even less) instead of being unemployed at $2.00 per hour, they would be learning skills that would enable them to raise their productivity and wage rates above $2.00 in the future. Instead they are condemned to street corners, idleness, learning only those skills which will earn them jail sentences at some early future time.

One of the greatest hurdles facing a black teenager is looking for his first job. Every employer demands work experience, but how can the young black get it if no one will hire him? This is not because of some “employer conspiracy” to denigrate minority teenagers. It is because of the minimum wage law. If an employer is forced to pay for an experienced-level worker, is it any wonder that he demands this kind of labor? A paradox is that many black teenagers are worth more than the minimum wage but are unemployed because of it. In order to be employed with a $2.00 an hour minimum wage law, it is not enough just to be worth $2.00. You have to be thought to be worth $2.00 per hour by an employer who stands to lose money if he guesses wrong and may go broke if he guesses wrong too often. With a minimum wage law, an employer cannot afford to take a chance. And, unfortunately, black teenagers are frequently viewed as “risky,” as a class.

When confronted with a reluctant employer, a Horatio Alger hero could stride over manfully and offer to work for a token salary, or even for nothing, for a term of two weeks. During this time our hero would prove to the employer that his productivity deserved a higher wage rate. More important, he would bear with the employer part of the risk of hiring an untried worker. The employer would go along with this arrangement because he would be risking little. But the Horatio Alger hero did not have to do battle with a minimum wage law which made such an arrangement illegal. The law thus insures that there is less chance for the black teenager to prove his worth in an honest way. The minimum wage law hurts not only the black teenager, but the black ghetto merchant and industrialist as well. Without this law, he would have access, in a way which his white counterpart would not, to a cheap labor pool of black teenager labor. The young black worker would be more accessible to him since he tends to live in the ghetto and would have easier access to the job site. He would undoubtedly have less resentment toward, and a smoother work relationship with, a black entrepreneur. Since this is one of the most important determinants of productivity for jobs of this type, the black employer could pay his workers more than the white one could—and still make a profit.

Unfortunate as the effects on young black workers are, a greater tragedy of the minimum wage law concerns the  handicapped worker (the lame, the blind, the deaf, the amputee, the paralyzed, and the mentally handicapped). The minimum wage law effectively makes it illegal for a profit-seeking employer to hire a handicapped person. All hopes of even a modicum of self reliance are dashed. The choice the handicapped person faces is between idleness and governmentally supported make-work schemes which consist of trivial activities and are as demoralizing as idleness. That such schemes are supported by a government which makes honest employment impossible in the first place, is an irony few handicapped people would find amusing. Recently, certain classes of handicapped people (the slightly handicapped) have become exempt from the minimum wage law. It is, therefore, in the interest of employers to hire the “slightly handicapped,” and they now have jobs. But if it has been realized that the minimum wage law hurts the employment chances of “slightly handicapped” people, surely it should be realized that it hurts the chances of others. Why are seriously handicapped people not exempt? If the minimum wage law does not protect the individual it seems designed to protect, whose interests does it serve?  Why was such legislation passed?

Among the most vociferous proponents of minimum wage legislation is organized labor—and this must give us pause for thought. For the average union member earns much more than the minimum wage level of $2.00 per hour. If he is already earning $10.00 per hour, as we have seen, his wage level is in accordance with the law, and is not, therefore, affected by it.  What then accounts for his passionate commitment to it? His concern is hardly with the downtrodden worker—his black, Puerto Rican, Mexican-American and American-Indian brethren. For his union is typically 99.44 percent white, and he strenuously resists the attempts by members of minority groups to enter his union. What then stands behind organized labor’s interest in minimum wage legislation? When the minimum wage law forced up the wages of unskilled labor, the law of downward sloping demand caused employers to substitute skilled labor for unskilled labor. In the same way, when a labor union, composed mainly of skilled laborers, obtains a wage increase, the law of downward sloping demand causes employers to substitute unskilled laborers for skilled laborers! In other words, because skilled and unskilled laborers are, within certain bounds, substitutable for each other, they are actually in competition with one another. It might well be that it is 10 or 20 unskilled workers who are in competition with, and hence substitutable for two or three skilled workers, plus a more sophisticated machine. But of the substitutability itself, especially in the long run, there can be no doubt.

What better way to get rid of your competition than to force it to price itself out of the market? What better way for a union to insure that the next wage hike will not tempt employers to hire unskilled, nonunion scabs (especially minority group members)? The tactic is to get a law passed that makes the wage of the unskilled so high that they cannot be hired, no matter how outrageous the wage demands of the union are. (If minority groups could get a law passed requiring all union wages to rise ten times their present amount, they could virtually destroy the unions. Union membership would decline precipitously. Employers would fire all unionists, and in cases where they could not, or did not, they would go bankrupt.) Do the unions purposefully and knowingly advocate such a harmful law? It is not motives that concern us here. It is only acts and their effects. The effects of the minimum wage law are disastrous. It adversely affects the poor, the unskilled, and minority group members, the very people it was supposedly designed to help.