Trump and Brexit – Some Thoughts for Liberty

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Following the British referendum to leave the European Union on June 23rd and the election of Donald Trump as the next President of the United States on November 8th it is possible that 2016 will come to be regarded as a turning point in the direction of world history, a turning point that is favourable towards the progression of liberty and the diminishing of the size and scope of the state. This analysis will remain relatively brief as there have been, to be frank, so many libertarian analyses of both Brexit and the Trump phenomenon that another one is probably not needed. This essay will focus on the meaning of precisely what has happened so far and what libertarians now need to do in order to capitalise upon these events.

The first thing to note is that people across the world are rebelling against the forces of globalisation under the aegis of increasingly centralised and consolidated state power. What might be called “the establishment” and its plans for increasing hegemony through open borders, managed global trade and military interventionism have been dealt a severe blow by both the Brexit vote and the Presidential election. For the first time in generations the false choices presented by broadly and blandly similar political candidates who happen to come from different parties have been shattered and now it the fundamentals that are at stake. Indeed, few votes in recent times could have signified a real choice between one path and another. A vote for Britain to remain in the EU would have bolstered the European project, while Democrat candidate Hillary Clinton – who spoke of her “dream” for a unified hemispheric common market with open trade and open borderswas practically the personification of the status quo. Voting for Brexit and for Donald Trump, however, signified a widespread desire to depart from this status quo, a rejection of the current path and the destination to where it was heading. These are momentous events and we cannot help feeling a sense of optimism for the future, a chance that we might finally emerge from the dark clouds of the twentieth century socialist experiment – an emergence which received its last victory with the relatively peaceful collapse of Soviet communism, and the dissolution of the Soviet vassal states in Eastern Europe into independent territories.

As significant as these events have been, however, we must now turn to making some cautionary notes. First, while there has been a widespread desire for change we must remember that a change from the status quo is the only thing that has been signified. Precisely what people want us to change to, on the other hand, is less certain. As the present author mentioned in his earlier analysis of the Brexit vote, apart from the liberating tendencies of decentralisation which would be afforded by the breakup of the European Union, it would be a mistake to characterise that vote as a conscious battle between freedom and tyranny. People are certainly waking up to the fact that the present regime does not (and is not designed) to serve them, but this is a far cry from saying that they have embraced the cause of liberty and anti-statism as a whole. It is looking increasingly likely, for example, that Britain will replace European socialisation and enslavement with its own version, particularly following the passage this month of the Investigatory Powers Act – the so called “snoopers’ charter” which has been dubbed the most far reaching spying legislation ever enacted – and the turn towards increasingly Keynesian economic policies rather the monetary fiddling of former Chancellor George Osborne. In the US, many of Donald Trump’s proposed policies – such as increasing protectionism – are far from adequate solutions to the problems that his election indicates he has recognised, and may end up making things worse. The greatest risk, however, is that the final catastrophes and calamities resulting from the heinously unstable financial system, which is drowning in a sea of debt created by reams of increasingly worthless paper money, will be realised within the next four years. For Brexit, this might not matter too much – the precarious state of the Eurozone is not likely to weather any serious financial collapse any better than an independent Britain. It could, on the other hand, be disastrous for the Trump administration. Apart from the fact there is no telling what Trump may do in response to these calamities, the average American, having no real grasp of economics or of cause and effect, may well associate this disaster with their new President and his markedly different economic policies. We can be almost certain that the defeated left will use such an opportunity to demonstrate that capitalist businessmen, led by one of their most prominent stereotypes, have failed once again and that only the experienced, professional politicians of the ilk of Obama and Mrs Clinton should have been trusted to steer the giant ship. Indeed, it is possible to suggest that the Trumpian revolution has come too early and may have been better in 2020 after a Clinton administration had to deal with, and be rightly blamed for, a complete economic collapse. Instead, a lot may depend, between now and then, upon the continuity of the trust that Trump has built with those who voted for him, his ability to identify the future financial disaster as the product of the very forces he fought in the election, and the continuing evaporation of the integrity of the left and the mainstream media.

The second and related issue is that, unfortunately, neither Brexit nor the election of Trump signifies any kind of unified desire for change – rather, they represent a stark and bitter division among their respective peoples. Although both results were decisive they were hardly landslides, and if one believes the official count of the Presidential election (which would include any illegal votes and other fraudulently cast ballots) then Mrs Clinton won the popular vote, losing only because of the Electoral College system. Thus, there is still a vast number of people who do not desire the change that the victorious voters desire. From this, we can expect a bitter battle, a battle that will ultimately be won by ideas. Although the “remainers” in Britain and the ideological left in the US are far from a coherent bunch, it is possible to suggest that they represent a more readily identifiable set of ideas than their opponents – and, of course, they benefit from the existing institutional structures. Their opponents, on the other hand, most likely had a myriad of different rationales for voting the way that they did and one of the problems that has been associated with Brexit in particular is that there is no particular “Brexit strategy” – some wanting a so-called “hard Brexit” of severing all ties from the so-called “single market” which would leave Britain free to pursue its own interests, with others wanting a “soft Brexit” promising continued access to the “single market” and some contribution to the EU budget, much like the relationship that Norway has with the EU. There is no problem, of course, with people having their own private reasons for voting the way that they did. However, this seeming lack of ideological unity may well make it very easy for the establishment forces to couch their worldview as the one that represents progress, inclusiveness and co-operation while writing off everyone who voted for Brexit or Trump as simply backward thinking racists, rednecks or “little Englanders” who want to retire to their little tight, white communities, shutting themselves off in isolation and having nothing whatsoever to do with the challenges that the world has thrown at us. It is true, of course, that part of the anti-establishment backlash was precisely because of this characterisation and the hubristic attitude that everyone who did not share the visions of the liberal elite could simply be slandered and ignored. However, it is also true that the anti-establishment voters for Brexit have still not yet elaborated convincingly how their side is the representation of genuine progress towards a peaceful and prosperous society – and it is this that presents the greatest threat to our ability to capitalise upon what we have experienced in this watershed year. It is here, of course, where libertarianism and libertarian ideas are perfectly suited for filling the vacuum as only libertarian ideas provide both a marked contrast to the establishment programme and a demonstrable ability to build a world of sustainable peace and prosperity. It is only libertarianism that can point out the falseness of the globalising elites’ desire for “inclusiveness”, “co-operation” and “unity”. For what they really mean is inclusiveness, co-operation and unity under the banner of globally expanding and consolidating state powers under the yoke of a single, global bureaucracy with the only possible alternative being, in the minds of the elites, to retreat into a barbaric, atomistic existence where everyone hates everyone else and we all wish to remain on our own private island. Only libertarianism can show that the elites’ vision of inclusiveness, co-operation and unity is the shell of all of these things enforced by the barrel of a gun – in other words that we would all be co-operating in an inclusive and unified manner if we were doing what the elites wanted us to do rather than what we wanted to do ourselves as private individuals who wish to make things better for ourselves and for our families. Only libertarianism can show that genuine co-operation and inclusiveness is practised not by the bloated bureaucratisation of all aspects of our lives, but by private individuals and institutions on their own terms through voluntary trade and consensual desire for association. Only libertarianism can show that, far from being against global integration and global networks, the genuine alternative to the establishment narrative is to create an expansive and integrated division of labour across the entire world, with each of us choosing to specialise in that which we do best in order serve other people. It is only libertarianism that can show that we, in rejecting the elitist approach, are embracing an outward looking and engaging manner with the rest of the world – not a closed, curmudgeonly, hateful and xenophobic society. Hence, 2016 marks the beginning, not the culmination, of the point at which libertarian education and libertarian ideas take on crucial importance because, having placed the fundamentals back onto the political table, there is now an ideological vacuum to fill. It is particularly crucial that we work to ensure that libertarianism fills this void given that so many of the young are choosing to fill it with Bernie Sanders-style socialism (which is really just a dressed up version of tax and spend Keynesianism). Needless to say, this would be a disaster.

One final possibility that we should countenance is that the sharp political divide may well provide an impetus for the kindling of secessionist movements. Remain voters in the Brexit referendum were heaviest in London, Scotland and Northern Ireland, while much of the rest of Britain was decidedly in favour of leaving. After the result the possibility was mooted, perhaps half-jokingly, of London becoming an independent city that could join the EU singlehandedly. In the US, Mrs Clinton carried the Pacific states and most of the North East while Trump carried the South and most of the Midwest and mountain states. With the backlash against the election result in the blue states, revolution and secession has been introduced as a possibility – something of an irony when it comes from the side that has, for decades, pleaded for gun control. We as libertarians should not be afraid of this possibility; indeed, we should positively welcome it. It is far better for a bunch of wilful yet smaller states and territories to go off on their own and socialise themselves rather than inflict their misery on the rest of us. Even where we do not share their motivations we as libertarians should look favourably upon any secessionist and decentralising movement that weakens the power that is concentrated in large and consolidated state entities.


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Decentralisation and Liberty

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In some recent essays concerning the UK’s referendum in June to determine its membership of the European Union, and the virtues of small states as opposed to larger states, we elaborated some themes regarding how decentralisation and decentralising processes are a boon for individual liberty and a step towards harmony and economic progress. This essay will gather these thoughts together with an emphasis on how small or, rather, optimally sized institutional units pave the way towards two things that not only libertarians, but also everyone else, will claim to want to achieve – economic prosperity on the one hand, and minimal war and conflict on the other.

The mantra of statist and, indeed, mainstream political thinking is that unity, centralisation and the consolidation of states and state institutions is the way forward for peace and prosperity. Not only does this mean larger state institutions with more power but also the fusion of individual states into larger territories under a single jurisdiction. In some ways this seems plausible, even to the libertarian. Wouldn’t unified laws will aid certainty? Wouldn’t we be better off if there were no borders or tariffs to impede the trade goods and workers? And surely the possibility of war will be diminished if we all join together under one, unified banner?

The main problem with this view, however, is that it places the state, state institutions and what these institutions wish to achieve at the centre of society. All of the millions of individual people and thousands of non-state, voluntary institutions that are motivated by their own desires, values and choices are ignored or at least subsumed by the grander edifice. Most lay people who hold the centralising view probably do so naively, but it is the primary preoccupation of statists and intellectual elites that society is something to be managed, controlled or directed by them and those like them while all of the lesser beings should be made to obey quietly with the confidence that their highly educated masters are doing what is best for them. Indeed, rather than seeing any value in individual, voluntary and non-state institutions, the centralising view treats the human race as one, giant, amorphous blob, like a lump of play dough that can be shaped in any way and manner that can be chosen at will – and that the easier it is for the dough to be shaped then the better society will be. Hence, the holders of this view are likely to look favourably upon institutional centralisation and consolidation which conveniently places more power in the hands of people such as themselves to achieve their shaping of society according to their visions. This attitude was rife, at least implicitly, among the so-called “Remainers” in the UK’s “Brexit” vote on June 23rd. Not only, is it believed, that all good things flow from the top down like manna from heaven, but that anyone who was in favour of leaving the EU was, in some way, stupid, backward or a kind of provincial, country hillbilly. For instance, shortly after the referendum, Professor A C Grayling called on Parliament to block Britain’s exit from the EU on the grounds that it is Parliament’s job to determine what is best for the electorate, the latter of which lack “the expertise, patience and time” to make decisions via a direct vote. The implication of this is that the people do not know what is best for them and they have blindingly walked down the path of sheer folly by voting to leave the EU, and they should instead have placed their trust in those better educated than themselves. However, he has completely missed the lesson that should have been learned from this result. The establishment wheeled out all of the big guns in order to persuade the electorate to vote for “Remain” – including the current and the three former living Prime Ministers, most of Parliament and the Cabinet, the Bank of England’s chief and other big bank bosses, the IMF, directors from at least fifty-one FTSE 100 companies, and many heads of foreign governments including the President of the United States – and yet “Leave” still won the vote. When the advice of all of these heavyweights is rejected by the British public then, instead of stooping into a sulk over the supposed stupidity of the great unwashed and demanding that they defer to the “expertise” of their so-called representatives, Grayling and his ilk should realise that such a rejection indicates that everyone is just a bit fed up of being told what is good for them and having decisions made for them by political elites. Such decisions and endless promises of peace and prosperity have brought us, in the last twenty years, two burst financial bubbles, massive money printing that has made the rich richer while failing to provide productive jobs and increasing incomes for everyone else, and at least half a dozen disastrous wars and interventions that are producing deadly blowback in the form of terrorism. What the elitist attitude ignores is that society is not something that is there to be engineered and moulded like a lump of metal in a blacksmith’s forge. Rather, it is made up of individual people who shape it according to their individual thoughts, feelings and desires, motivated by what they believe is best for themselves and for their families. An economy is not some giant machine into which goes “input” to be processed by “jobs” into some kind of “output”, nor is it necessarily true that the higher the numbers of “input”, “jobs” and “output” the better everything is. Rather, a prosperous economy is the product of individual people trading resources voluntarily in directions that they see fit so that they can satisfy ends that they wish to see fulfilled. “Society” is not a collective that demands broad brush categories such as “food” or “houses” or “better railways” etc. Rather, it is me wanting, say, a ham sandwich at 1pm on Tuesday, or you wanting a small apartment in the Hampstead area of London to rent for three years, a business wanting to invest in a small car factory that will be completed in the five years, and everyone else wanting a myriad of highly specific ends in highly specific places at highly specific times that are the product of our own choosing. The economy is not something to be directed by central banks who squash the rate of interest down to its lowest possible point through so-called “monetary policy” or “quantitative easing” in order to “stimulate” some kind of beast into life. Rather, the rate of interest reflects the strength of everybody’s individual preferences for consumption ahead of investment so that the correct amount of resources can be sustainably channelled into roundabout methods of production. Each of us co-operates, through the division of labour, to accomplish things that we each want with the resources available in varying timescales that we are each prepared to bear. It is this co-operation of individuals to achieve their own ends through the nexus of production, trade and exchange that creates a society and not any management and direction from giant, all-encompassing institutions that achieve their ends through force.

The second problem with the centralising view is that the achievement of peace and prosperity in fact demands the very opposite of state and institutional centralisation and consolidation. As counter-intuitive as it might sound, harmony is achieved by division, not unity, while the growth and strength of the human race as a whole is accomplished by the weakness, relative to each other, of its component parts. Economic prosperity, for instance, is characterised by a growing complexity of the economic system – an increasing division of labour with more and more different people specialising in more and more different tasks to produce more and more different products for more and more different people. In other words, its natural tendency is to spread outwards from the centre with more diffused, decentralised knowledge and specialisation. Growth and centralisation of the institutions that support this prosperity under the banner of unity are therefore likely to stifle rather than aid its progress. Indeed the very concept of “unity” requires the same, repeated rules for everyone and the same approaches towards everything regardless of their individual, specialist needs. Hence you get the proliferation, in large, consolidated states, of “one size fits all solutions” that attempt to force everyone through a single, “unified” channel, as though all of us with all of our differences characteristics and requirements are being squeezed through a sausage maker to create a bland, blended puree. (Curiously, those who champion centralisation and state uniformity are also the ones who squeal for “diversity” and celebrating “difference” – at least when those diverse differences are demonstrated or practised by favoured minority groups). Indeed, it is usually, if not always, the case in nature that as something becomes bigger and more complex it is characterised by greater division and decentralisation, not by increased unity and consolidation. A human being is not simply a larger version of a single cell organism. Rather, he is made up of a countless number of individual cells that coalesce into different organs and tissues, each of which specialises in different life sustaining activities. We do not have one, single “unified” organ that pumps the blood, inhales and exhales air, rids the body of toxins, acts as a nervous system and also as a skeleton. In other words as nature achieved a complex human being by decentralising and delegating various functions to different organs that act independently of, but symbiotically with each other, so too will humans only achieve a complex and prosperous society by increasing the division of labour and the degree of specialisation in more and more decentralised institutions.

Division rather than unity is also necessary for creating and preserving the conditions that economic prosperity requires – strong private property rights, minimal taxation and minimal regulation. The benefits of a large number of divided states as opposed to large, unified states, is that if one tiny state of a size equivalent to Luxembourg implements, say, an onerous tax then only that state is affected and the disruption to everyone else in the world will be relatively minimal. If that state introduces ridiculously high border tariffs then only the small proportion of global trade into that territory will be burdened while freer trade will remain for everybody else. Similarly if that state introduces burdensome laws and regulations that infringe upon people’s lives only those people will be affected. The hampering effects of state action upon economic prosperity will, therefore, be localised and minimalised in a world of deconsolidated, small states. In a world of much larger states and state institutions, however, the introduction of a tax will affect everyone; the introduction of a new regulation will affect everyone, everywhere at all times regardless of their own needs and preferences; and the introduction of a border tariff will affect the trade of everybody who wishes to trade across the lines of the large, unified state. Hence the hampering effects of state taxes and regulations and infringements upon private property are magnified as the state becomes larger. This is not all, however, for the incentives to tax, regulate and otherwise infringe private property rights are much greater in a large, unified state than in smaller states. Smaller states are, by their nature, economically weaker than larger states and are more reliant upon maintaining the free flow of goods and services from abroad which simply cannot be produced with the resources at home. Each state will therefore compete with all other states to attract foreign investment and the unhindered import and export of goods and services by minimising taxes, regulation and border tariffs. Because the jurisdiction of a small state covers only a small area, if its rates of taxation, regulation and border tariffs are relatively high then investment will simply flee to a more competitive jurisdiction which may be only tens of miles away and the standard of living in the small state will plummet. A large state, however, whose jurisdiction covers a larger territory and possesses access to a larger number of domestic resources has no such incentive to keep its tax and regulatory burdens to the minimum. With more domestic wealth and resources available and with the threat of capital fleeing for foreign shores thousands of miles away minimised, large states are free to increase their tax and regulatory predations to a much higher degree than smaller states. One of the supposed benefits of the EU is the so-called common market – the notion that goods and workers may move freely under a single tax and regulatory code. Yet any benefits achieved by having to deal with a single code are likely to be outweighed by its gargantuan size whereas a myriad of small and trifling tax and regulatory codes in a world of greater state division is likely to be a better condition for promoting trade and prosperity. Indeed, former UKIP/Independent MEP Godfrey Bloom has referred to the EU as a “customs union” rather than a market union – in other words, a single bureaucracy rather than a single market, a chance for the state to stamp out the irritating competition between states which forces them to keep their tax and regulatory rates low (as demonstrated recently in the EU’s disagreement over the rate of tax Apple had agreed to pay to the Irish government) and replace it instead with a giant socialistic paradise of government control. Instead of emphasising the “unionisation” of tax rules and regulations, those who wish to encourage economic prosperity should instead concentrate on reducing them – and the only way to do this is to make the state entities which impose them smaller and weaker, not bigger and stronger.

The argument for the “unity” and the consolidation of states becomes even more absurd when we consider the desire to preserve peace and prevent war. Murders are committed by murderers; rapes are committed by rapists; thefts are committed by thieves. If we want to minimise the effects of murders, rapes and thefts then it is obvious that the last thing we want is for all of the murderers, rapists and thieves to join together under the banner of “unity” so they are free to combine their powers to murder, rape and steal to a greater degree with increasing ingenuity. Similarly, wars are started by states and are fought between states. Therefore, if we wish to minimise wars and their effects then it follows that we need to make states smaller and weaker; it makes no sense whatsoever to make them bigger and stronger. The argument that unifying states is likely to prevent wars seems to rest on the assumption that government is the glue that holds society together and it is in fact all of the people whom they govern who are the cause of endless conflict. Thus a bigger and powerful government is able to “unite” all of these people and stop them from fighting each other. Nothing could be further from the truth. Apart from the fact that, as libertarians, we know that the state’s dependence upon force and violence for its wellbeing renders it an institution that is bound to inflict rather than prevent conflict, bigger and more powerful states are the enablers of bigger and more destructive conflicts rather than our salvagers from them. Private actors and institutions are necessarily splintered, decentralised and reliant upon voluntary trade for their sustenance. Tiny states have equally tiny tax bases from which they can command a very limited number of resources. The ability of such persons and institutions to start and sustain wars is extremely limited. Large states, on the other hand, are vast concentrations of wealth and power which not only have enormous tax bases from which to draw the means to fund eminently more destructive firepower but the advent of central banking – another creature of centralisation and “unity” – has allowed large states to fund their conflicts through monetary inflation rather than through demanding their citizens to cough up directly. So does anyone sensibly argue that private actors and small states would achieve the level of carnage and destruction that the large and powerful belligerents managed to reach in the two world wars? Does anyone believe that a decentralised world of small states and private institutions would have had the ability to force us to endure a generation and a half of potential nuclear terror during the cold war as the vast territories of the US and the Soviet Union managed to do? The most spectacular terrorist atrocity (i.e. an attack by non-state actors) of the past generation – the destruction of the World Trade Center in 2001 – killed just fewer than 3000 people, a figure which, while undoubtedly tragic, stands in the shadow of the more than 1 million Iraqis who have died as a result of the US invasion of their country. There would, of course, be fewer states left to fight each other in a world of consolidated, centralised states. However, this completely ignores the fact that the states that remain are armed with a destructive ability far superior to any minor state or territory – and especially compared to any private criminal. Any conflicts in a decentralised world would be localised to small pinpoints on the world map, affecting, at most, a few thousand people and, with the participants lacking the resources to continue fighting and disrupting trade for too long, would probably be over in weeks if not days. Contrast this to the situation in which we languish today where the ridiculous cult of interventionism and “collective security” – another banner of “unity” – forces all such local conflicts to be escalated into drawn out, global catastrophes, as the forays into Korea, Vietnam, Iraq, Afghanistan, Libya and Syria have demonstrated. It is clear that if we wish to preserve peace and prevent war then we need to prevent the institutions that start and fight wars – states – from becoming too big and powerful.

On a related note, there is a distinct air of utopianism in the minds of the centralisers and consolidators when it comes to the issue of preserving peace. War and conflict are doubtless terrible things and we would have a much better world if they did not exist. However, it is also true that, for as long as humans have walked the earth, individuals and institutions have run into conflicts with each other and that these conflicts have been escalated into violence. This is just human nature. Unwittingly, in trying to prevent all war everywhere and at any time by “unifying us” under the yoke of bigger and larger states, the advocates of such an approach have, instead, served to escalate the size and duration of wars and vastly magnify their destructive capabilities. The more sensible approach, we would suggest, is to acknowledge that war and conflict will always exist and to recognise that a superior social system will never eliminate these aspects of humanity entirely, just as in the same way libertarians do not expect a free market in private defence and security to ever completely eradicate murder, rape and theft. Our task instead is to find ways to reduce the frequency, duration and potency of these awful things as much as possible. When it comes to war only cutting the potential belligerents down to size and reducing their ability to wage destructive wars in the first place is likely to achieve this.

As we have seen, the liberating effects of decentralisation owe themselves to the relative weakness of deconsolidated and splintered states and state institutions. However, these liberating effects do not arise out of the smallness of the states and state institutions per se. Rather it is because the individual person becomes stronger relative to an institution the more decentralised and localised that institution is. Within his own immediate family, which may consist of only half a dozen people, an individual person’s needs and views are likely to be highly influential upon the other members of the family. They will attempt to provide for and accommodate these views and needs as an active part of their lives simply because the individual is close to them both physically and emotionally. An individual will have a little less influence in his immediate community or on a civil or parish council, where there are more people involved and few of them will be as familiar with him as his immediate family. However he would clearly have more influence in such a circle than in an entire town or city. And once, of course, we get to the level of an entire country such as Great Britain, a diverse nation of various economic, social and ethnic backgrounds, a single person’s lonely vote in, say, a general election becomes a drop in the ocean along with all of the other c. 45 million votes that are eligible to be cast. And if a country such as Britain was to be absorbed into a superstate such as the EU an individual may be drowned out by a chorus of 500 million other voices. The larger an institution becomes then the more its ability to focus on the “micro” issues that really affect people’s lives is progressively diminished and is replaced by a concentration on “macro” or global issues, the successful tackling of which is determined not by the wellbeing of individual people but, rather, by the measurement of aggregated statistics. So whereas, say, a family will care about whether Dad has a job that he enjoys and pays enough to feed and house the family or whether Grandma can get her hip operation in a hospital local enough for her to travel to, large state governments will instead care about GDP and the size of hospital waiting lists. Whereas a local council might focus on whether there is a sufficient bus service to a small community or whether a particular street is clear of litter, large governments, instead, have transport and environmental policies. Who in the bureaucracy is likely to care whether these policies might overlook the specific needs of one community or street some hundreds or even thousands of miles away from the capital? More local institutions are also likely to be populated more homogenously, with each person experiencing relatively similar priorities and holding a relatively similar worldview. Thus the ability to induce empathy between those who lead and those who are led is much more likely and, indeed, may produce more of a situation of symbiosis, or a sense of “working together” to further common goals as opposed to the “command and follow” routine of large states. In other words, even though a particular institution may still function officially through the methods of power and force, the smaller and more localised it is then the more likely such an institution will approach the individual and his needs in a voluntary and peaceful manner – or at least relatively so compared to much larger, faceless state institutions. Even the socialisation of property – considered to be the antithesis of libertarians, or at least right-leaning libertarians – is less likely to be a problem in, say, a small, voluntary commune where all of the commune’s members can air their views as to how their collective resources should be put to use and where all the members are likely to share a common motivation and purpose. Yet a similar exercise on a nationwide scale has always proven to be a disaster – not to mention, of course, that is easier for someone to leave a small commune than it was to leave, say, the Soviet Union.

It is important to realise that decentralisation is not necessarily about breaking every institution down into its smallest possible parts just for the sake of it. There is nothing wrong with large entities or institutions if such sizes generate advantages that could not otherwise be attained. Rather, the primary purpose of decentralisation is to devolve decision making authority (or what might be called “sovereignty”) to its the lowest possible level and that the closer this is to the individual then the more liberating the decentralising effect will be. So there is nothing wrong with lots of individuals or small institutions deciding to form a large institution to achieve a common purpose. This is precisely what individuals do when they form companies and joint enterprises. Whatever criticism we might hurl at the inadequacy of corporate governance and executive dominance, it is still basically the case that the individual shareholder of such an entity can liquidate his position if he wishes to disassociate himself from the institution. Thus the ultimate fate of the institution is dependent upon the willingness of individuals to continue its existence rather than upon its own volition. When, however, such an institution, which may originally have been organised voluntarily, becomes the ultimate decision making authority – like the modern state has become – and is able to prevent its component parts from exercising any significant autonomous power that would seal its fate, then the anti-liberating effects of consolidation and centralisation will be felt. This has been the case with the United States which, having started off as an association of small, independent, sovereign states has become, at least since the American Civil War, a compulsory union with the power concentrated in Washington DC rather than in the state capitals.

Decentralisation cannot depend solely upon formal, constitutional arrangements or treaties and it is naïve to argue that such set ups are adequate. What matters is where the de facto ability to enforce decision making power lies. An individual shareholder has de facto power over a company, for instance, because a court will enforce the sale of his shares and whatever other rights he may have. Technically, the individual member states of the EU remain wholly sovereign nations and, indeed, are so at this present time – the perceived loss of sovereignty of which its citizens complain has come in part from the fact that the politicians of the individual state governments have been happy to haemorrhage more and more powers to Brussels that override the individual, local needs of each country. However, if all of the military, policing and judicial might of the combined EU member states was to be consolidated in Brussels – which is, of course, the eventual aim of the super-statists – then it would be the case that no individual member state would retain the ability to enforce its sovereignty over the larger entity. Hence, it was a good thing for the UK to vote to leave the EU before such a consolidation occurred. What matters for the process of decentralisation and its liberating effects, therefore, is that any legal or enforcement system must be able to give effect to the decision making authority of smaller and smaller institutions. Therefore, large, standing armies, and consolidated police forces and judicial systems run from vast buildings in the capitals of large states, such as the Pentagon in Washington DC, are the biggest fears for those of us who wish to achieve a world of liberty – and with it, a world of peace and prosperity.


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Economic Myths #7 – Government means Harmony

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One of the aspects of capitalism and the free market that the typical lay person finds difficult to comprehend is the fact that the complex structure of work, production, distribution, and trade could possibly take place without some kind of centralised, directing authority in order to co-ordinate everybody’s efforts. Wouldn’t there just be chaos and mal-coordination with everyone trying to make their own, independent plans with no government tiller to steer the giant ship?

This fallacy stems from the belief – accentuated by holistic concepts such aggregate statistics and, indeed, national identities – that “the economy” is some kind of enormous machine that has “input” and requires one operator to “process” the “inputs” into “outputs”. In fact, rather than being one giant, amorphous blob “the economy” is made up of millions and millions of independent unilateral acts of production and two-way trades, many of which will never have anything to do with each other. Indeed, I may sell an apple to my neighbour for 10p in London; another person may sell an orange for 20p to his neighbour in Manchester. Neither of the two pairs of people has ever met, nor need any of them have anything to do with the exchange of the other pair; and yet both exchanges would be regarded as part of “the British economy” in mainstream discourse. Rather than being a top-down operated machine, the economy is a bottom up network of independent transactions – motivated by the ends desired by each and every one of us rather than a bureaucrat – joined only together through the communication of the price system. All of the trades together, stimulated by varying and changing desires and ends that people seek, will have a constant and unceasing influence on the prices that regulate the supply of goods relative to their demand. Ironically, it is precisely because of such complexity that the attempts of any central authority to control and direct it are nothing short of futile – as Ludwig von Mises proved as long ago as the birth of the world’s greatest collectivist experiment, the Soviet Union, in Economic Calculation in the Socialist Commonwealth.

An oft-heard complaint, particularly from the left, is that “globalisation” and expanding markets has led to a decimation of the local culture and community. All this means, however, is that the market for goods has simply expanded so that one can source one’s needs from pretty much anywhere on the globe. It is still the case that the driving force of demand is not global or holistic – it resides very locally in every individual person’s tastes and desires. Such complaints therefore fail to recognise the irony in calling for a very distant and hardly local entity – the government – to halt globalisation and expanding markets by replacing what individual, local people desire with its own ends.

This myth, of course, goes further than economics and has more than seeped into philosophy as well, stemming from a basic misunderstanding about what is required for the human race to live in peace and harmony. It does not mean that we all need to be pursuing the same ends, following the same plan or singing from the same hymn sheet and we do not need some centralising authority to prevent “discordance” between the actions of one person and another. Rather, what is required is that we can each follow our own plans while not conflicting with the plans of others. This is precisely what private property and the free exchange accomplish. Recognising that all conflicts have their origin in the contest over physical goods, an exclusive right is granted to the first user-producer (or to the recipient of the good in a voluntary exchange) so that he may fulfil his ends without molestation from other people; and other people can use the goods for which they are the first producer-user without interference from him. Any person arguing in favour of “one direction” and “harmony” at the behest of centralised control really means that everyone else’s plans should be overridden by his own – and should be forced to accept them. Indeed every forced, government transaction requires there to be at least one loser, one person who does not want his funds directed to the ends desired by government. Rather than producing harmony what results is merely bitterness and antagonism. Furthermore, aside from the economic chaos that such a system brings, rather than inspiring such qualities as productivity, self-reliance, hard work, prudence, patience and responsibility, the resulting social disorder instils, in their stead, laziness, apathy, conflict, corruption, impatience and cynicism – hardly the human qualities that one would wish to exemplify as the hallmarks of a “peaceful” and “harmonious” society.

True harmony can only be brought about by allowing each and every individual to pursue his own ends with the scarce resources over which he has lawful ownership, while allowing everyone else to do the same – permitting the human race to flourish peacefully and devoid of conflict. Not only does government fail to aid this process, it is the active cause of its destruction – and the sooner we recognise this the closer we will be to building a lasting peace and prosperity.

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