"A Call for Freedom in Vienna"

Sydney M. Williams

swtotd.blogspot.com

Thought of the Day

“A Call for Freedom in Vienna”

April 13, 2019

“The streets of Vienna are paved with culture,

the streets of other cities with asphalt.”

                                                                                    Karl Kraus (1874-1936)

                                                                                    The Kraus Project: Essays by Karl Kraus

                                                                                    Edited by Jonathan Franzen, 2014

We were sixteen. We came from eight countries – Austria, Belgium, the Czech Republic, Guatemala, Poland, Spain, Switzerland and the United States. Our ages spanned forty-five years. We were men and women. What drew us to Vienna was a belief that free societies and free markets are inextricably entwined, and that the key to their success is the individual. The colloquium we were asked to participate in was at the invitation of the Austrian Economics Center in Vienna and the Liberty Fund of Indianapolis, Indiana.

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The Austrian Economic Center, a privately funded, politically independent research institute, is committed to disseminating the ideas of the Austrian School of Economics, which emphasizes the role of the individual and competition in the success of a free, prosperous and responsible state. The Liberty Fund is a privately funded educational foundation dedicated to the study of the ideal of a society of free and responsible individuals. Those sitting around the table at the Hayek Institute had spent their careers as entrepreneurs, foundation heads, academics and journalists. As a retired stock broker, who later in life took up an interest in politics, history and economics, I was an amateur in a sea of professionals.

In preparation for two days of round-table sessions, we read dozens of papers and books written by economists, politicians and historians, including Margaret Thatcher, Edward Gibbon, Adam Smith, Ludwig von Mises, Friedrich Hayek, Luca Einaudi and Alan Milward. We discussed the wealth of nations and questioned the material prosperity of the welfare state. We reviewed the economic origins of the European Community and the challenges it faces as it looks to its future. We talked about the difficulty the right has in disseminating their message, at a time when government has grown ever bigger, more intrusive and less accepting of new ideas – when dependency threatens the freedom that has allowed individuals, markets and societies to thrive.

While some at the table consider themselves libertarians, I dislike labels. Such words purport to be defining, but are, in fact, confining. Better to work with ideas and not feel that because one is a member of an organization, a tribe, or this political party or that, one must conform to what that group’s message may be. (One of us suggested that elections might turn out differently, if people voted on principles, on ideas, rather than for or against a specific party or individual.)

Speaking for myself (and using my definition of terms), I am conservative in my desire to preserve the government we have, one based on three separate, co-equal branches – a limited government that operates under the rule of law and that protects private property, our natural rights and those rights enumerated in our Bill of Rights. I am conservative in that I want to preserve those social institutions that underlie our values and are reflected in our culture and traditions, principles of universal truths that are critical to people living harmoniously, especially family and community civic organizations. I am conservative in that I believe in civility and respect. I believe in the Golden Rule. But I am progressive in that I would like to see us regain the liberty we have lost, to free ourselves from a dependency on government, to take more responsibility and to be accountable for our successes and failures. I am progressive in that I believe in competition, whether it be for goods and services or education, that the consumer benefits when many seek his or her commerce. I am progressive in that I believe innovation and progress stem from an individual’s willingness to take risk, and that he or she does so because of the potential for profit. I am liberal in that I believe individual freedom is the ultimate goal of men and women, especially to anyone who has felt the yoke of oppression. I believe that power concentrated in centralized government, no matter its claims to do good, risks rendering people dependent and, thus, less able to fend for themselves. I am liberal in that I believe colleges and universities, in denying a podium to those with whom they disagree, violate a right guaranteed by our Constitution.

I am realistic in that I recognize that politics is a blood sport, that elections are about power. To gain power, politicians on the left promise gifts of material goods and services, while those on the right promise abstractions, like liberty and freedom, and I know that the latter is a more difficult message in an age of entitlement. I am realistic in that I understand the difference between promises of equality of opportunity and promises of equality of outcomes – that the former is critical to fairness, while the latter is a dream that can never be. And I am realistic in that I know that democracy is under siege by those at home who believe that democratic socialism is a better system than democratic capitalism – that the physical well-being of the people is worth the price of freedoms lost. Also, I am realistic (and concerned) about Russia’s aggression, but I am especially worried about a rising, all-powerful China. In a battle for global dominance, the difference to the world between a democratic United States and an authoritarian China is stark and has real consequences for smaller (and larger) nations around the world. And, I am saddened by the fact that too few of our young study history. We cannot learn from a past with which we are unacquainted.  

I recognize that man is most free when he is left alone – the “noble savage” of Jean Jacques Rousseau. Except I know he is not. He must find water to drink, food to eat, shelter for protection and security from enemies. He is at risk of being robbed or killed by someone, or some group, stronger and more devious. As well, he is ignorant, as there is no one to instruct him. To live in society, to thrive economically, man must surrender some of his freedoms. However, at the other extreme, man is least free when he submits – willingly or unwillingly – to the care and protection to some government or person – a sovereign who, in exchange for obeisance, provides security.

So, it is balance for which we search when we make political choices – how much independence are we willing to give up for a comfortable dependency? Over the past eighty-five to ninety years, we in the United States have relentlessly and insidiously drifted away from independence and personal freedom. Many are happy with the direction we have been moving, but, like the lobster that is ducked into a pot of tepid water before the heat has been turned up, we may find ourselves trapped, like H.G. Wells’ Eloi, unable to extricate ourselves before the water begins to boil. Politicians who promise free healthcare, tuition-less colleges and a guaranteed basic income may be well-intentioned, but that doesn’t make them right. We all know that nothing is free, so we are told that dollar costs will be borne by the wealthy. What is left unsaid is that costs are also measured in freedoms lost, and those costs cannot be passed onto another. Increased dependency means less independence. How valuable is your freedom and independence? No two people will answer that question the same. What is important is to understand that freedom is not free, that dependency has a cost that cannot be measured in dollars, euros, rubles or yuan. 

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In our elevation of the individual, we reject the movement, common among those on the left (especially in academia), that Western society should tilt toward “social justice.” “Social justice” is based on the Marxist precept that the world is divided into oppressors and victims. That vision of a singular moralistic world view is what the ancient Hebrew tribes practiced and what caused the Catholic Church of the Middle Ages to condemn non-believers to Hell and damnation. It was the attitude of New England Puritans who punished women as witches. It was that same divisive, intolerant view of mankind that had the Nazis see the world in terms of either pure or inferior races. And, we see it today in the Islamic view that one is either a follower of Allah or an infidel. These were some of the issues we discussed and debated, based on our readings and our life experiences. We spent a total of nine hours in formal discussions and talked informally over two lunches and three dinners that went late. We were fortunate to be in Vienna, a city that produced two of the most prominent economists of the Twentieth Century, whose works are still read by those who appreciate the connection of free markets to political liberty: Ludwig von Mises (1881-1973) and Friedrich Hayek (1899-1992).

Why do institutes like the Liberty Fund and the Austrian Economic Center take the time, make the effort and spend the money to conduct these sessions for those who are already believers? Why do participants travel so far to be with like-minded people? The answers have to do with the passion we feel for the cause of freedom – to be re-assured and to be re-invigorated. Every thinking person has moments of doubt. When one spends his days combatting a political and cultural tide that has moved inexorably toward centralization, and away from the shores of individual freedom, it is easy to become wearied. We who speak and write on these subjects need to be re-charged. For we are proselytizers for a cause that says the greatest gift man has ever been given are his natural rights of life, liberty and the pursuit of happiness.

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Vienna is ancient and beautiful, with the Danube running through it. It is filled with unique and attractive buildings; some, like St. Stephens, date back almost 1000 years. It is a city of surprises. It is claimed that one can walk underground from the banks of the Danube to the Vienna State Opera on the Ringstrasse. First known as Vindona, Vienna was where, in 180AD, the Roman Emperor Marcus Aurelius died. Seven hundred years later, in a clash with Bavaria in 881, the name Vienna first appeared. As Jim McKay would have said, it is a city that has“known the thrill of victory and the agony of defeat.”Throughout the centuries, the City has been besieged and occupied by the Hungarians, the Ottomans, the French and the Germans. It was from Vienna that the Hapsburg family controlled the Hapsburg, Austrian and Austro-Hungarian Empires for over four hundred years. Vienna is rich in culture, especially music. Mozart, Beethoven and Haydn all lived here. It is where the psychoanalyst Sigmund Freud first used dialogue to help treat mental illnesses. For over four hundred years, the Spanish Riding School has had skilled equestrians riding white Lipizzaner stallions in the Imperial Hofburg – the once winter home of the Hapsburg family. Today, Vienna is vibrant, with cafes and coffee houses lining tourist-filled sidewalks and streets restricted to pedestrians. Yet a dark cloud of anti-Semitism has periodically visited the City. Jews were expelled in 1421, and their rights were restricted in 1637. However, by late 19^thCentury many had returned, and Vienna became one of the most prominent centers of Jewish culture in Europe. But it didn’t last. In 1938, Austria was annexed by Hitler’s Nazis, in what became known as the Anschluss (a joining). The Jewish people fled, were killed or were sent to concentration camps. Their absence is still felt. In 1923, Jews represented 11% of the city’s population, today about 0.5 percent. Anti-Semitism has not died.

Despite that blemish, Vienna is a beautiful city. I was honored to have been invited to attend what was a fascinating and informative round-table discussion and, in doing so, to make good friends.

"A Lesson in Government and Government Compassion"

Sydney M. Williams

30 Bokum Road – Apartment 314

Essex, CT 06426

Thought of the Day

“A Lesson in Government and Government Compassion”

August 7, 2017

“Practically all government attempts to redistribute wealth and income

tend to smother production incentives and lead toward general impoverishment.”

                                                                                    Henry Hazlitt (1894-1993)

                                                                                    American journalist of economics and business

This is a primer, written as a reminder to myself as much as for readers. With our government grown large and complex, with demands placed on it that were never envisioned by the Founders, with its purpose enshrouded in a miasma of social demands and political correctness, and with its being used by those who enrich themselves at the expense of the needy, it seemed appropriate to recall its original intent, and to acknowledge that, from a perspective of government largesse, wealth must precede compassion.

Without government, anarchy would reign, chaos would ensue and the strongest would rule. So, government is necessary for man to survive, at least civilly. The question has always been – what form of government best serves man? Winston Churchill, a sometime satirical critic of democracy (“The best argument against democracy is a five-minute conversation with the average voter”), nevertheless admitted it was the best form of government yet devised. Most would agree. Additionally (and concomitantly), we should remind ourselves that private economic growth is a necessary prelude to public compassion.

Most people are, and have been, ruled by authoritarians: royalty, military or civilian dictatorships, religious leaders, a cabal of strong men, or an oligarchy of the wealthy. Examples today would include North Korea, Syria, Iran, Uganda and Venezuela. China and Russia restrict the rights of their citizens. (Incidentally, the leaders of three of those countries – Russia, North Korea and Syria – show up on a list of the world’s richest political leaders.) The origins of these governments lie in the military like Uganda, religion like Iran, or socialism like Venezuela. China and Russia came to be despotic regimes by way of revolution against imperial powers. But, unlike ours, their revolutions devolved into even harsher regimes. The consequence for their peoples: the murder of millions of their citizens, deprivation of human rights, unequal opportunities, sustained poverty, and no desire to provide adequately for their people. While both have emerged from the worst of their self-inflicted atrocities, both have recently reverted to authoritarian ways.    

In democracies, where the fortunate among us live, the essential purpose of government is twofold: To keep its citizens safe against threats from home and abroad, and to assure that its citizens’ civil rights are not abrogated. Compassion in government, a common expectancy today, can only be achieved with sustained economic growth. President George W. Bush once said, “The major role of government is to create an environment where people take risks to expand the job rate in the United States.” A belief in, and encouragement of, free market capitalism is necessary to attain the things we today want government to do: to care for the indigent, the aged, the infirm, to provide healthcare for all, to educate our youth and to protect the environment. A nation may be rich in resources, as is ours, but without the rule of law and without a legal framework that allows people to own private property those resources may sit idle. One has only to look at nations like Venezuela, Argentina, Nigeria and Rwanda – poor countries with abundant resources. A successful nation needs a freely elected government, along with men and women who are entrepreneurial, aspirant, creative and willing to take risk, those who see opportunity and exploit it. Government should act as referee: assure fairness, protect the innocent, see that laws are upheld, and prevent the willful destruction of resources for short term gain. It should not be the arbiter of who becomes successful.

To accomplish this, a successful nation must make available a basic education, and it must strive to provide equal opportunities for all. As a country becomes powerful and wealthy, demands on its resources intensify. That is unsurprising. A free and independent nation, grown rich because of adherence to the principles of free-market capitalism, can afford to be compassionate. But it must be careful lest it slay the goose that lays the golden eggs. Without wealth created through private enterprise, compassion becomes empty promises – wind puddings with air sauce, as my mother-in-law used to say.

To achieve the goal of a representative republic and to avoid the tendency of man to accrue power, the Founders established a government in which leverage was diffused – a separation of control – a legislative branch to create laws, an executive branch to implement them, and a judicial branch to adjudicate them.

As we recall that history, we should not forget what the Founders did not promise: equality of outcomes, the promotion of gender studies, health care, the protection of our rivers and forests, etc. They had little idea of the of how big, rich and complex the United States would become. They had no inkling of labor-saving devices that would be forthcoming, from cars to washing machines to telephones. They realized that people are not all the same. They knew they were not creating Nirvana, but I like to think they would approve of the charity and humanity that are central to today’s citizens and government. However, I also like to think that they believed we should live within our means, and that we should not derail the engine of economic growth, which has brought so much good to so many.

There is a reason that immigrants seek our shores – we are a land of opportunity. We are a place where hard work and ability provide awards, where gains made legally cannot be confiscated, where the right to speak out, to protest, to practice one’s religion are not inhibited, where, if accused of a crime, a jury of one’s peers determine one’s guilt or innocence, where discrimination is not absent, but not so prevalent as in those countries where it is exercised by government. The people must ensure those principles are never reneged.

As well, as charitable people we should strive to do what we can to help those in need, regardless of what government does; though our government does and should play a role. But the promise of equal outcomes is nothing more than an empty campaign pledge – a promise that what is Sally’s will be given to Harry. Such policies do not recognize inherent differences in people: Some are stronger; others are smarter. Some have high aspirations; others are content to be followers. Some work hard; others prefer personal pursuits. Some shun the material world for that of art, music or dance. Some of the most talented are willing to forego high incomes, so that they may teach others, attend their medical needs, or do research. We are a nation of doctors, plumbers, lawyers, electricians, artists, stockbrokers, storekeepers, actors and accountants. A marvel of our communities is that society’s needs get filled without government edict.

What should government do? Simplify the tax code, eliminate prohibitive regulation, reduce dependency, encourage personal responsibility, celebrate the dignity of work and motivate entrepreneurs. Let economic growth reach its potential. Let the next generations enjoy the fruits of democracy and free-market capitalism, as have we. Keep in mind, civil rights and economic freedom are inextricably entwined.

Here endeth the lesson.

"Venezuela - Socialsm's Legacy"

Sydney M. Williams

swtotd.blogspot.com

Thought of the Day

“Venezuela – Socialism’s Legacy”

May 15, 2017

“Venezuela has changed forever.”

                                                                                                Hugo Chavez (1954-2013)

                                                                                                President of Venezuela 1999-2013

As Mr. Chavez said, Venezuela has changed – from the richest country in South America to one of the poorest, from an economy based on abundant natural resources, including the largest oil reserves in the world[1], to one where people are starving, from a free country to a dictatorship.

Unlike many tragedies, the one in Venezuela is man-made. No natural storm or Biblical plague visited Venezuela. It was men – two in particular – who, in the pursuit of personal power and under the guise of socialism, destroyed the country and rendered its people impoverished. Venezuela, with a population of 31.2 million, is in north-eastern South America, with 1700 miles of coastline on the Caribbean and the Atlantic. Just north of the equator, it has a topography that ranges from rain forests in the Amazon basin to alpine glaciers in the Andes. The lushness of its forests prompted novelist Romulo Gallegos to write poetically of “the golden spring of the araguaneyes.” Venezuela is ranked 7^th in the world, in number of plants – and now ranked near the bottom in terms of freedoms and wealth.

Besides oil, Venezuela had been an exporter of coffee, cocoa and manufactured products. Last year, the Frazier Institute’s “Economic Freedom of the world: 2016 Annual Report” ranked it dead last, as its citizens struggled to gain necessities, like food, water and even toilet paper. It has the weakest property rights in the world, according to the Heritage Foundation. How does Nicolas Maduro reward his loyalists, with oil revenues down more than 60% from their peak? Amanda Taub and Max Fisher of the New York Times recently suggested: “…the most valuable resource in Venezuela is access to favorable exchange rates. By leveraging official government rates, which value the bolivar considerably higher than the unofficial rate, someone with the proper connections can generate a small fortune out of thin air.”

There are those who blame Venezuela’s troubles on falling oil prices, or on a drought that effected hydro-electric power production, but other countries have dealt with such problems. Those industries, and many others, including agriculture and banking, were expropriated and nationalized by Chavez and his successor Mr. Maduro, which meant by-passing the inherent fairness and equality embedded in free markets.

It has been socialism that has brought this country to its knees – the arrogant belief that government can assume the means of production, dictate distribution methods and affix prices better than markets. The consequence of its failure can be seen in the starving faces of children and in the desperate countenances of demonstrators. Last year, CNBC reported that the economy shrank by 18.6 percent, with inflation at 800 percent. Official unemployment rates are around 7%, but unofficially rates are between 18 and 25 percent. Real numbers are certainly higher, probably much higher, with no relief on the horizon.

Margaret Thatcher warned: “The problem with socialism is that eventually you run out of other people’s money.” Keep in mind, politics is about power. Governments control enormous budgets. According to the 2017 Index of Economic Freedom, Venezuela’s government accounted for 40.2% of GDP over the past three years, with deficits averaging 16.1% of GDP. Public debt is equivalent of 48.8% of GDP.

What should be worrisome to those of us in the U.S. (and the West), besides the human tragedy unfolding before our eyes, is that we risk treading the same path, with its inevitable destination. We are not Venezuela, however. Our Dollar is the world’s reserve currency, which masks profligate spenders in Washington and the nation’s state capitals, and we remain the world’s best example of a free and democratic people. But welfare systems and statism trend towards socialism. In the U.S., federal, state and local spending represents about 35% of GDP; deficits, about 3.5% of GDP, but total government public debt (federal, state and local) is close to 95% of GDP. Politicians would rather be Santa Claus than the Grinch. Across the west, welfare states are running out of other people’s money.

Rhetoric cannot allay the effect of bad policy. It is not the words politicians use that is critical, it is the actions they take. Rosy but empty slogans entice, like the promises of Hugo Chavez and Nicolas Maduro; but they did not improve the lives of Venezuelans. It has been policies and actions that have impoverished them. Yet, that lesson has gone unlearned in the U.S. Four out of ten Americans claim they prefer socialism to capitalism. It is seen in the popularity of Bernie Sanders, an avowed socialist. We see it in students who have not been taught the dignity of work, and that it is capitalism that has done more to eradicate poverty than any other system. We need politicians who will be honest as to the costs of their promises, and who will remind us of the pitfalls of straying from free-market capitalism; else Venezuela becomes prelude to our nation or any nation, or union of nations, that believes it can freely spend more than it takes in.

The beauty of our democracy is that its freedoms and laws, along with its checks and balances, provoke confidence and provide opportunity. Our government was designed to inhibit political leaders from assuming too much power, which is their instinctive inclination. Its limited nature should restrain the formation of bureaucracies, with unelected and unaccountable bureaucrats who thrive on size and power. Free market capitalism allows the aspirant, the creative and the hardworking to create wealth and, in turn, to generate jobs, to grow the economy. Socialism has no such governors and provides no such opportunities for the innovative, the industrious and the competitive. Jorg Wuttke, president of the EU Chamber of Commerce in China, recently wrote in the Financial Times: “But when political diktats rather than market forces drive business decisions, the risks of disappointments are always high.” Nazism and communism, let us never forget, had their origins in socialism. People in socialist countries are pawns, subject to the whims of their leaders. Free and democratic societies thrive. Socialist and autocratic ones fail.

In another century and about a different country, American reporter Lincoln Steffens wrote in the early 1920s: “I have seen the future, and it works.” Steffens was writing of the Soviet Union. He was wrong then; communism didn’t work. Those who support socialism now are wrong today. Far more pertinent was Polish poet and writer Stanislaw Jerzy Lec, who lived under Nazis and communists and who died in 1966: “You cannot play the ‘Song of Freedom’ on an instrument of oppression.”

What will become of Venezuela? Power abhors a vacuum, and some group – most likely the military – will seize control of the country. Freedoms will be further curtailed. Maduro is already using military courts to try dissenters. In the meantime, we are witness to a tragedy of Shakespearian dimensions: starving children, an absence of health care and rioting in the streets. The country has become anarchical; it has devolved into chaos. So, where are the “do-gooders?” Where are the Sean Penn’s and Michael Moore’s? Where is Joseph P. Kennedy II? Where is the Clinton Global Initiative? Where is President Trump? Where is the UN? Why has no western politician brought to the attention of their people the consequence of socialism in Venezuela?

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[1] According to U.S.-based EIA (Energy Information Administration).