By David Tulis
Our city and county will lose less — and perhaps even prosper — in the coming great default if people who live here believe in local economy and free markets.
And live out some of these concepts in their day-to-day commerce. If we work today to divest nationally and invest locally, to shift toward liquid capital and pay off debt, we will be better off as a whole, and perhaps individually.
The past month I have given a great deal of attention to the legal battle for liberty being waged by a Christian laborer in middle Tennessee. Arthur Jay Hirsch is being hounded through the courts and his business destroyed by administrative charges dressed up in the courts as criminal charges. He claims constitutional protection for his innocent activities done as a matter of right, and denies he has offended “the peace and dignity” of the state by refusing to enter the realm of administrative law and surrender his constitutionally protected guarantees.
Because he is steadfast, the administrative organs of the State of Tennessee have charged him criminally for what are at most wrongs in equity, in commerce, under agreement or contract. In other words, he is being accused criminally for what would be essentially a contract dispute over terms between the state-merchant and one of its customers/clients.
But refusing to enter such agreement with the state in exchange for his liberties, he has no such agreement, and is in the clear, with legally clean hands.
My focus on these struggles have a larger context. That of the demise of modern nation-states, the coming collapse of the Keynesian model of economics, the Great Default (as Gary North calls it), and the rise of the decentralized digital market economy.
Dr. North looks at the larger context of liberty, decentralization and the incredible power of the market economy in an essay today called “Liberty’s Greatest Enemy Today.” Here is the whole of his lengthy treatise.
Below is largely the second half of this text. The greatest threat to liberty is administrative law. That is precisely right.
Greatest threat to liberty
[From Gary North at Garynorth.com] ***There is one more factor that is almost never talked about by conservatives or liberals. This is missing piece of the puzzle. It is best described in the 1983 book, Law and Revolution. The Introduction to that book is most important single academic article I have ever read. (In second place is Raymond Kurzweil’s “Law of Accelerating Returns.”) In his Introduction, legal historian Harold Berman described the six revolutions in the history of Western legal theory: the Papal revolution of 1076, the English Puritan Revolution of 1643-58, the Glorious Revolution of 1688/89, the American Revolution, the French Revolution, and the Russian Revolution. These six revolutions have shaped the West in ways that are barely understood by scholars or voters. They shaped the way in which the law applies to individuals.
Berman was convinced that a seventh revolution began in the early 20th century: administrative law. This revolution separates the courts from the executive and the legislative branch. It separates the idea of law as possessing a separate foundation and separate jurisdiction from the executive. This revolution centralizes power in the state, and crushes the earlier legal revolutions. I disagreed with him with respect to the Russian Revolution. I think it was an administrative law revolution. But that tradition ended in December 1991.
Here is Berman’s basic position on revolution. If there is no change in the legal order within a generation after a major political change, there has been no revolution. There has only been a coup d’état.
This is why I do not take Keynesianism seriously. This is why I do not take Social Security and Medicare seriously. This is why I do not take politics seriously. The legal revolution of administrative law is the greatest single threat to liberty in the world today, and it is firmly locked into the American social and legal order. People unthinkingly accept it. They are unaware of it. They do not understand the implications of the Federal Register, which now publishes 80,000 pages of fine print administrative law every year.
Politics is impotent to change this. Politics is unaware of it. Those few laws that get passed by Congress and signed into law by the President are then administered by the federal bureaucracy, and there is almost nothing that a President or Congress can do to stop it. Occasionally, the Supreme Court may hand down a ruling that will stop some minor aspect of the expansion of the federal bureaucracy, but this is rare.
Berman did not see anything on the horizon that would indicate a rollback of administrative law.
Cut the funding
One thing can stop it: the Great Default. As long as the money rolls in, whether taxed, borrowed, or printed, administrative law courts are going to expand their jurisdictions, and our freedom is going to be constrained. Something else is shrinking it: Moore’s law. This was described best in Kurzweil’s article. The escalating effect of Moore’s law in reducing the cost of information is changing the whole world in ways we can barely perceive today. There is no way that any federal bureaucracy can keep up with the social, economic, educational, and political transformations that are taking place as a result of Moore’s law.
Law is now moving back to the private sector. It is moving away from centralized government control. Arbitration is becoming more popular. People are finding ways to participate in the world economy that are outside the jurisdiction of the administrative state.
I do not believe that bitcoin is going to make a difference, but I would like to believe that, someday, something like bitcoin will work. In any case, Moore’s law is on the side of decentralization. Decentralization is basic to Edmund Burke’s theory of conservatism. It is consistent with Ludwig von Mises’s system of economic analysis. It is consistent with private education. It is therefore a threat to Hamiltonianism, which means central banking and Keynesianism.
The collapse of the Soviet Union in 1991 was the great example of the defeat of centralization in modern times. The decentralization of the Chinese economy in 1979 was the other great example. Socialism is finished as an ideology. It really did get thrown onto what Leon Trotsky correctly described as the dustbin of history. It is finished.
Bernie Sanders can call himself a socialist, but he isn’t one. He is just a Keynesian on steroids. He is one more defender of welfare state redistribution. But welfare state redistribution is impotent in the face of Pareto’s law of wealth distribution. Governments can change who will prosper at the top of the Pareto pyramid, but they cannot restructure the Pareto pyramid. About 1% of the world’s population owns half of the world’s capital, and there is nothing that any national government can do about it. This has not changed since 1897, and it is unlikely to change between now and 2097.
The big change is going to come from robotics and the re-allocation of human labor by computerization. That is going to take place, no matter which economic group gains political influence, temporarily, at the head of any national government. Smartphones, 3-D printing, the Internet of things, and maybe even nanotechnologies are going to combine to decentralize economic power away from the state. These developments cannot be stopped by tariffs, taxation policies, central bank inflation, or any of the other tools of Keynesian central planning.
We are approaching the point at which the exponential curve of computerization turns upward. This means that the cost of communication will decline exponentially. Here is the #1 economic rule: “As the price of anything falls, more is demanded.” There is nothing that any central government can do to reverse this. Well, this may be an exaggeration. Biological warfare could at least restrain it. But I do not see anything else that the state can do that will slow down this process of computerization. This means decentralization.
This process is going to accelerate when low-cost smartphones and free Internet access are available to Indian villagers and villagers generally around the world. Young men and women who would otherwise have been excluded from the international division of labor are going to prosper, and they are going to prosper at the expense of central planners’ power.
The futility of national politics
That is why I do not pay much attention to national politics anywhere, other than national movements favoring secession. There are no more national politicians who speak eloquently on behalf of the nation-state. There is no Ronald Reagan. There is no Margaret Thatcher. There is not even a Mikhail Gorbachev. These people did not change much anyway. They were just good at rhetoric.
With the triumph of William Jennings Bryan at the 1896 Democrat national convention, there was no further political institution that had both clout and also a tradition of minimal national government. That one speech ended the old Democratic defense of localism, the gold standard, and low tariffs. There has been no gold standard defender to run for President since Teddy Roosevelt defeated Alton Parker in 1904. I see the defense of the gold standard as the single most important political defense of liberty, and we have not seen it anywhere since England went off the gold standard in 1931, and Roosevelt followed suit in 1933.
The gold standard was an institutional restraint on the expansion of government spending, and central banks were designed to thwart the gold standard. We live in an era of the triumph of central banking. We therefore live in an era of the comprehensive defeat of gold coins as restraining factors on the expansion of the government.
Here is the good news: we no longer need gold to do this. I favor a gold coin/digital standard established by the free market — not any government — but we no longer need it. If we did, then liberty would have been lost after 1971 or 1933. Moore’s law has replaced the gold standard as a means of restraining civil governments’ central planning.
The inevitable bankruptcy of every national Western government because of compulsory government medical insurance programs and old-age retirement programs will complete the destruction of the Hamiltonian movement in America and the Keynesian welfare state everywhere else.
This is why I think it is crucial that we focus our political concerns on what is going to exist beyond the Great Default. We need to ask this: What is going to exist in terms of employment opportunities in two decades or three decades, when the robotics revolution and the Internet of things have combined to transform the world economy? These are issues that are beyond discussion today. Nobody talks about the Great Default as being an international phenomenon, other than Peter G. Peterson. Nobody listens to him. He is a multibillionaire, and he formerly ran the Council on Foreign Relations, but his scenario is so dark for the Keynesians that they simply ignore him.
American politics is an afterthought
Americans are practical people. Most of them do nothing about politics. Only every four years do most people in the United States get even vaguely interested in politics. I was taught this by California State Sen. Bill Richardson back in the late 1960’s, and I have learned my lesson. He founded Gun Owners of America in 1975. He was a major figure in California politics for three decades. He understood direct mail as nobody else in politics did in California. But he was correct: most people just do not care about politics.
Americans are not committed to any ideology. Most people in the world are not. They pick up their political ideas through their peers. Once in a while, they may get involved in some political organization, but not often, and they never have.
Americans care about their families, their businesses, their economic status, their churches, television, sports, and the World Wide Web. They care about Facebook, not politics. This is good. They really don’t believe in political salvation.
Politics for most Americans is simply keeping the other guys out of office. It is essentially defensive. This also is good. Most Americans don’t trust the federal government any longer. This is good. Faith in political salvation was never strong in the United States, and it has waned dramatically ever since the election of George H. W. Bush.
Out of gas
One by one, the movements unfavorable to liberty are running out of gas. They are running out of money. They are running out of ideology. They are running out of rhetoric. They are running out of believability. Meanwhile, Congress is building up massive unfunded liabilities that will eventually break the bank, meaning the central bank, in every nation. Keynesians will then lose their institutional support. This is happening already. When interest rates are at zero, or even negative, central banks can no longer goose the economy. Governments can run massive deficits, but this will simply accelerate the advent of the Great Default. They are all going bankrupt.
What is lacking is any kind of systematic political philosophy, social theory, and economic analysis which will provide guidance to decision-makers in the world beyond the Great Default. No one is articulating a philosophy or theology that will give coherence to a world of 3-D printing, when mass production will be produced through coordinating low-cost printers and people’s basements.
Here is the problem: “You can’t beat something with nothing.”
There is only one institution that we can be sure will serve as the coordinating factor: the free market economy. Any social philosophy, theology, or worldview that does not rest on the concept of the built-in sanctions of the profit-and-loss system, based on voluntary exchange, open entry, and competing producers, is going to fail.
It is our job — our calling — as defenders of liberty to integrate the findings of Austrian school economics into the worldview we proclaim as fundamental. I am not saying that Austrian economics is more fundamental. It only appeared in consistent form in 1949: Mises’ Human Action. But any worldview that fails to integrate Mises’ findings will not prevail against the competition.
This is why I wrote 31 volumes in my economic commentary on the Bible.
Vital bulwark: you the juror
The greatest institutional enemy of liberty today is administrative law. As long as this condition prevails, defenders of liberty will remain on the defensive.
In the United States, the greatest institutional enemy of liberty is the administrative law judge. You don’t read about this often, which is greatly to the advantage of administrative law judges.
The greatest institutional defense of liberty today is what it has been for 500 years: the jury system.
What we need today, more than anything else in civil government, is citizens who will vote not to convict on a jury because a specific law is corrupt. We need a hung juries and bankrupt administrative agencies. Case-by-case, jury by jury, the lone citizen who refuses to vote to convict because a law is corrupt is the crucial defender of liberty. A hung jury forces the state to start over again. This increases costs of state authority.
Here is a law we can trust: Moore’s. Moore’s law is on our side. What we need now is lone jurors.
Really. I will have to disagree, somewhat, with the statement the greatest institutional enemy of liberty today is administrative law. The use and abuse of administrative law is the results of ignorance of each and every individual who finds himself under this bureaucratic monster.
The greatest amount of freedom/liberty an individual possess is determined by one thing, SELF-RESPONSIBILITY. It is impossible to be free and ignorant at the same time. So the great enemy of liberty is ignorance.
Administrative law is used to take advantage of that ignorance. Probably the number one law in the universe we live in is: YOU REAP WHAT YOU SOW. Sow self-responsibility, reap freedom and liberty. Sow ignorance you reap being abused by those who take advantage of it.
Administrative law has been around hundreds of years. It became of age in a big way during what we call our “industrial revolution.” In 1946 the government saw a need to formalize it and came up with the first ADMINISTRATIVE PROCEDURES ACT. It consisted of seven or eight pages. It had twelve sections.
Section 12 stated: nothing in this act can be used to violate an individuals CONSTITUTIONAL RIGHTS. Come on up to 1952 the government decided this ACT needed to be codified into the US CODE It wound up in Title 5 USCA as well as the UNITED STATES STATUTES AT LARGE. Section 559 of title 5 USCA is section 12 of the original Administrative Procedures Act.
Nowhere in sec. 559 title 5 USCA can you find where it says nothing in the act can be used to violate an individual’s constitutional rights. But looking in the fine print for title 5 USCA sec. 559 and you find a note that says nothing in the act can be used to deprive the constitutional rights of any individual.
It was removed because that is so much surplusage because we cannot deprive an individual of their constitutional rights even if we wanted too. But yet the IRS does it hundred of times every day. Why? Because it takes advantage of people’s ignorance of the law. In 1985 Neil Postman wrote a book titled Amusing Ourselves to Death.
Maybe a more accurate title would be ABUSING OURSELVES to DEATH.