Why I Think America Is In Deep Trouble

Last week I was thinking about all of the hype surrounding the debt-ceiling when it occurred to me that I haven't check the status of the Federal Reserve's Monetary Base lately. What follows is a lengthy post where I try to recapture all of my thoughts on this and various topics that I have written about over the course of the past few years.

I started tracking the Monetary Base prior to attending the April 15, 2009 Tea Party in downtown St. Louis, after which I posted my reasons for attending the tea party event. Included in that post was a graph showing the National Debt Per Capita and the Adjusted Monetary Base.

Large Bureaucracy Leads to Democracy's Demise

"Least of all shall we preserve democracy or foster its growth if all the power and most of the important decisions rest with an organization far too big for the common man to survey or comprehend. Nowhere has democracy ever worked so well without a great measure of local self-government, providing a school of political training for the people at large as much as for their future leaders. It is only where responsibility can be learned and practiced in affairs of one's neighbor rather than some theoretical knowledge of the needs of other people which guides action, that the ordinary man can take a real part in public affairs because they concern the world he knows.Where the scope of political measures become so large that the necessary knowledge is almost exclusively possessed by the bureaucracy, the creative impulses of the private person must flag."       

- p. 257-258 The Road to Serfdom by F.A. Hayek

Large-scale Economic Planning Leads to Using Force

"To imagine that the economic life of a vast area comprising many different people can be directed or planned by democratic procedure betrays a complete lack of awareness of the problems such planning would raise...To undertake the direction of the economic life of people with widely divergent ideals and values is to assume responsibilities which commit one to the use of force; it is to assume a position where the best intentions cannot prevent one from being forced to act in a way whih to some of those affected must appear highly immoral."

- p. 244-245 The Road to Serfdom by F.A. Hayek

When Democracies Have Nothing to Offer

"If the democracies themselves abandon the supreme ideal of the freedom and happiness of the individual, if they implicitly admit that their civilization is not worth preserving, and they know nothing better than to follow the path along which the Germans have led, they have indeed nothing to offer."

- p. 238 The Road to Serfdom by F.A. Hayek

Minority Led Policy Leads to Destruction

"It is one of the saddest spectacles of our time to see a great democratic movement support a policy which must lead to the destruction of democracy and which meanwhile can benefit only a minority of the masses who support it."

- p. 218 The Road to Serfdom by F.A. Hayek

Authority Presented As "Organization"

"When authority presents itself in the guise of organization, it develops charms fascinating enough to convert communities of free people into totalitarian States."- "The Times" (London)

- p. 199 The Road to Serfdom by F.A. Hayek

Collectivists Must Be Unbound By Morals

"The principal that the end justifies the means in individual ethics is regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivitist must not be prepared to do if it serves "the good of the whole," because "the good of the whole" is to him the only criterion of what ought to be done..."

"There can be no limit to what its citizen must be prepared to do, no act which his conscience must prevent him from committing, if it is necessary for an end which the community has set iself or which his superiors order him to achieve."

- pp. 161-162 The Road to Serfdom by F.A. Hayek

One Inherent Contradition of Socialism

"But what socialists seriously contemplate the equal division of existing capital resources among the people of the world? They all regard the captial as belonging not to humanity but to the nation - though even within nation few would dare to advocate that the richer regions should be deprived of some of "their" capital equipment in order to help the poorer regions. What socialists proclaim as a duty toward the fellow-members of the existing states they are not prepared to grant to the foreigner..."

"One of the inherent contradictions of the collectivist philosophy is that, while basing itself on the humanistic morals which individualism has developed, it is practicable only within a relatively small group. That socialism so long as it remains theoretical is internationalist, while as soon as it is put into practice, whether in Russia or in Germany, it becomes violently nationalistic, is one of the reasons why "liberal socialism" as most people in the Western world imagine it is purely theoretical, while the practice of socialism everywhere if totalitarian. Collectivism has no room for the wide humanitrianism of liberalism but only for the narrow particularism of of the totalitarian."

- pp. 155-156 The Road to Serfdom by F.A. Hayek

The Creation of a Totalitarian Regime

"We must here return for a moment to the position which precedes the suppression of democratic institutions and the creation of a totalitarian regime. In this stage it is the general demand for quick and determined government action that is the dominating element of the situation, dissatisfaction with the slow and cumbersome course of democratic procedure which takes action for action's sake the goal. It is then the man or the party who seems strong or resolute enough "to get things done" who exercises the greatest appeal. "Strong" in this sense means not merely a numerical majority - it is the ineffectiveness of parliamentary majorities with which people are dissatisfied. What they will seek is somebody with such solid support as to inspire confidence that he can carry out whatever he wants. It is here that the new party, organized on military lines, comes in."

- p. 150 The Road to Serfdom by F.A. Hayek

Unrestricted Government Leads to Democratic Destruction

"Democratic government  has worked successfully where, and so long as, the functions of the government were, by a widely accepted creed, restricted to fields where agreement among a majority could be achieved by free discussion; and it is the great merit of the liberal creed that it reduced the range of subjects on which agreement was necessary to one on which was likely to exist in a society of free men. It is now often said that democracy will not tolerate "capitalism". If "capitalism" means here a competitive system based on free disposal over private property, it is far more important to realize that only within this system is democracy possible. When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself."

- pp. 77-78 The Road to Serfdom by F.A. Hayek

Planning and Competiton

“Both competition and central direction become poor and inefficient tools if they are incomplete; they are alternative principles used to solve the same problem, and a mixture of the two means that neither will really work and that the result will be worse than if either system had been consistently relied upon. Or, to express it differently, planning and competition can be combined only by planning for competition but not by planning against competition."

- p.48 The Road to Serfdom by F.A. Hayek

Socialism Destroys Freedom

“While to many who have watched the transition from socialism to fascism at close quarters the connection between the two systems has become increasingly obvious, in the democracies the majority of the people still believe that socialism and freedom can be combined. There can be no doubt that most socialists here still believe profoundly in the liberal ideal of freedom and that they would recoil if they became convinced that the realization of their program would mean the destruction of freedom."
...
"That democratic socialism, the great utopia of the last few generations, is not only unachievable, but that to strive for it produces something so utterly different that few of those who now wish it would be prepared to accept the consequences, many will not believe until the connection has been laid bare in all its aspects."

- p.35-36 The Road to Serfdom by F.A. Hayek

Democracy Versus Socialism

"Democracy extends the sphere of individual freedom; socialism restricts it. Democracy attaches a possible value to each man; socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude." – Alexis de Tocqueville

- p.29 The Road to Serfdom by F.A. Hayek

Socialism Means Slavery

"We have progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past. Although we had been warned by some of the greatest political thinkers of the nineteenth century, by De Tocqueville and Lord Acton, that socialism means slavery, we have steadily moved in the direction of socialism."

- p.16 The Road to Serfdom by F.A. Hayek

Where Will This Movement Lead Us?

"The main question is where this movement will lead us. Is it not possible that if the people whose convictions now give it an irresistible momentum began to see what only few apprehend, they would recoil in horror and abandon the quest which for half a century has engaged so many people of good will? Where these common beliefs of our generation will lead us is a problem not for one party but for every one of us - a problem of the most momentous significance. Is there a greater tragedy imaginable than that, in our endeavor consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?"

- p.7 The Road to Serfdom by F.A. Hayek

Warning! Economics Ahead!

As stated previously, my interest in economics has been aroused and I wanted to capitalize on that interest (pun) by reading a little on the subject. After reading several articles and listening to and watching several speeches and interviews, I found that I preferred the views of Frederich Hayek over those of John Maynard Keynes. However, other than the random quote here and there by one of the two, I had never truly read anything written by either of them. So, in pursuit of learning more of what the man I was agreeing with had actually written and said, I have spent the better part of the last month slowly working my way through "The Road to Serfdom" by F.A. Hayek.

Without having read anything by Keynes, it is fairly safe for me to say that I agree with Hayek on his views of socialism, totalitarianism, collectivism and progressivism, as well as those on economics. Over the next 3 weeks, I will be presenting one quote every weekday from the book that I found interesting, intriguing or thought-provoking. I have not provided any commentary along with the quote so that the reader might digest the thought without any bias from me getting in the way. You will be able to find the entire collection here (Hayek quotes) after they have been posted.

Also, I found this video entertaining and informative and thought you might as well: