All right, my friends, welcome back to Antiwar Radio, Chaos 92.7 FM in Austin, Texas, streaming live worldwide on the internet, ChaosRadioAustin.org and Antiwar.com slash radio.
And it's my honor to introduce Robert Higgs, Senior Fellow at the Independent Institute and one of the most serious scholars that the entire libertarian movement has going for it, probably has ever had.
His works include Crisis and Leviathan, Against Leviathan, Depression War and Cold War, Resurgence of the Warfare State, and Neither Liberty Nor Safety.
The website is independent.org.
Welcome to the show, Bob.
Thank you very much, Scott.
I meant to say in my introduction, too, that I had the pleasure of meeting you and actually getting having a little time to hang out at the Future Freedom Foundation conference in Virginia there a couple of months back and really meant a lot to me.
So thanks for that.
Yes, indeed.
It was my pleasure.
All right.
Now, I was so happy to see that you wrote this article about Colonel Edward Mandel House and his role in American history.
It ran at independent.org and at LewRockwell.com.
Who was Edward M. House?
For those in the local listening audience, you may be familiar with House Park down at Lamar and 15th Street.
There's a baseball field there and House Park BBQ.
I think I might go and get some lunch after the show today.
Why don't you help explain to the people, give us sort of a brief sketch.
We'll get into some more details, but sort of give us a brief sketch of who was this Colonel Edward Mandel House and why should his legacy matter to anyone in America today?
The most important thing about House that makes him worthy of our consideration today relates to his association with Woodrow Wilson.
House was a native Texan.
He was born in Texas.
His father was an immigrant from England who came there before the war between the states and made a lot of money during the war as a blockade runner.
But House grew up in Texas and later he went to prep school in New England and attended Cornell, although he left before graduating.
He then came back to Texas when his father died in 1880 and managed his properties that he inherited from his father there.
He owned a lot of land and grew cotton and was involved in other business ventures.
He got involved in politics, local politics, in Texas very early and was very good at it.
He was very successful at helping people get elected, particularly elected governor.
You mentioned in your article that it was Governor Hogg who's famous around here because he named his daughter Ima.
What a jerk he was, that guy.
And you mentioned in your article he's the guy that gave the honorary title Colonel to House.
That's right.
Hogg was the first of four men that House basically engineered election for.
House was a very astute, practical politician.
He knew where to look for support, how to organize campaigns, who to make deals with, and who not to make deals with.
And he got Hogg elected.
In those days, of course, the colonels were pretty thick in Texas.
Real ones left over from the war, but a lot of fake ones, too, because it was kind of honorific.
In the case of Edward House, the governor just gave him the title as an act of gratitude for having helped with the election.
Anyhow, House continued to play this kind of kingmaker role in Texas in the 1880s and 90s.
And after the turn of the century, he was both losing influence in Texas to some other interests, and his own interests were becoming wider.
He was looking around for somebody on the national stage that he could hook up with, and that's how he became involved with Woodrow Wilson.
After Wilson was elected governor of New Jersey in 1910, a number of Democrats seized on him.
You need to remember that the Democrats had had almost nil luck in getting anyone elected president since the war between the states.
Grover Cleveland, who was elected in two non-consecutive terms, was the only Democratic president from 1861 on until Wilson.
So the Democrats were always looking around for somebody they could get elected president, and people seized on this guy, Wilson, who was a political non-entity.
He's a lifelong academic.
Nobody knew much about him, and he had been president of Princeton University before his election as governor of New Jersey.
But immediately, I think because Wilson was a well-spoken man, he was articulate, he gave kind of grandiloquent public addresses, people decided they might be able to sell him as the next president.
And House became aware of this activity in 1911 and decided to throw his own efforts into it.
And he played a significant role in bringing Texas along to get the electoral votes for Wilson in 1912, and he also helped with the national campaign to some extent as an advisor.
And also, one of the things about House we need to remember is that he had an enormous number of contacts and friends and acquaintances, and in politics, that's tremendously valuable because the political campaign needs to bring a lot of wealthy people on board.
If you don't get rich people to bankroll the campaign's expenses, you have no hope of success at all.
So if you want somebody to organize a political campaign, you need somebody who knows a lot of rich people who can be tapped to support the campaign, and that's one of the things that House brought to his political advising was this tremendous knowledge and number of connections, acquaintances, and friends.
Well, you mentioned in the article, I think quite importantly, that he knew J.P.
Morgan, Jr. well enough to call him Jack.
Yeah, that's right.
House, as I say, he attended prep school in New England, and he also went to Cornell, not quite for four years, but he had just spent a lot of time in the Northeast with rich people, and he knew a lot of people.
Some of them he had known since he was a boy.
And, of course, when you know some people, then you get to know their friends and their friends' friends, and House was a guy that everybody seemed to take to.
It's very hard to grasp exactly why this was.
I read recently Godfrey Hodgson's biography of House, which is a pretty good book, but nonetheless, even from reading a whole book about House, I came away still kind of wondering exactly what it was about House's personality that allowed him to ingratiate himself so successfully with so many different people and so many different kinds of people as well.
Yeah, that's a good question.
It's really been a while since I studied this history, but I remember one quote where he talked about how he had the confidence of, and then he goes on to list the last names of every prominent banking family in America and Europe, and basically seemed to imply that he was their political fixer in the U.S. government.
Well, he certainly had a way of leading people to believe that he was important, that he could influence things.
In his case, it wasn't all just hot air, because he really could influence a lot of things, as he did during Wilson's term as President, both of his terms, and on a wider scale as well in world affairs.
Wilson called him, my independent self.
His thoughts and mine are one.
Gave him room and board in the White House, but no official position.
He was just an advisor.
That's right.
House never had an elective or appointive office in the government in his entire life, and for that reason, I consider him one of the leading specimens of gray eminence.
He was a tremendous power behind the throne, and a lot of times, these gray eminence sorts of people have that importance because they are very wealthy.
There are people like Bernard Baruch, who had a whole stable of Democratic politicos beholden to him, basically because of his money.
It's funny how, if you have a lot of money, people begin to regard you as wise, but that certainly was the case for Baruch.
But House was an affluent man.
He had an income that would be the equivalent nowadays of about half a million dollars a year that he could rely on, mostly from his farming properties in Texas.
But that wasn't filthy rich, even by the standards of his day.
There were plenty of wealthier people around who had much less influence, or none at all, in politics.
So it wasn't just his wealth that allowed him to play this role.
He was simply a very smooth operator.
And now, before we get into World War I, what was his role in the passage of the Federal Reserve Act and the creation of America's central bank?
Well, it's not clear exactly what it was, except that the passage of the Federal Reserve Act was a long, complicated political maneuvering.
It started, well, in some ways, it started back in the 1890s.
It continued for a long time, and it became more active after the Depression of 1908.
A number of bankers, in particular, were interested in creating some new banker's bank, we call it nowadays, the central bank, a lender of last resort, because during every financial panic, many commercial banks would find themselves illiquid.
They couldn't pay out deposits when depositors demanded cash.
And so banks needed someplace that they could get emergency cash during financial crises.
And they knew, of course, about the central banks of England and other European countries and how they operated to play that role.
So they were hoping to create something like that in this country.
But this was anything but a straightforward conspiracy of big New York banks, because a lot of other people were involved in it besides people in what Murray Rothbard always calls the Morgan ambit.
And House would be a guy who, although he certainly circulated in that ambit, he was acquainted with many of the members, including, as you noted, Jack Morgan himself.
He knew a lot of other people, too.
And in fact, the Democratic Party movers and shakers were, in many instances, enemies of the Morgan ambit.
The Bryan forces still had a lot of strength in the Democratic Party, and these guys hated New York bankers with a white-hot passion.
And so you had to somehow accommodate a lot of diverse interests, not only populists and New York bankers, but also people like the bankers of the interior of the country, that they weren't so hot to have the New York bankers control everything.
And so there was a tremendous amount of pulling and tugging to arrive at what became the Federal Reserve Act passed in 1914.
But House was not so much involved in pushing a particular proposal as he was in sort of oiling the gears for the negotiations and seeing that something went forward.
And ultimately, whatever was enacted was something that the president could live with.
Now, again, before we get into the World War I thing, I want to rewind a little bit.
This is something that you don't mention in your article, but I'm sure you're familiar with the book Philip Drew Administrator, A Story of Tomorrow.
And this is something that I always thought was very important, that this book was written, I think, in 1910, 1911, and published anonymously.
It didn't come out that it was House who had written it for 20 years or something like that.
And in this book, it's basically a fantasy of him installing himself as the benevolent fascist dictator of America and creating so much of what we know today as, I believe, the Democratic Party platform.
Central banking, League of Nations, a whole new deal-type structure where bureaucrats sit on boards of directors and all these kinds of things.
And in fact, I think he bragged, I anticipated Mussolini by several years with my plans.
So those are the days when Mussolini's stock was higher.
Yeah, that's a strange little book, Philip Drew Administrator, because as you say, it does look as if it's a kind of blueprint for the new world order as the House envisioned it.
And I think that's true to some extent.
The book itself was oddly put together because House, although he was involved in practical politics and knew a lot of intellectuals, as well as people in business and banking and so forth, House was not what you'd call an intellectual himself until fairly late.
And he finally decided, apparently, oh, I don't know, sometime in the early 20th century that he needed to educate himself and learn more.
So he dove into reading and he read all kinds of things about politics and economics.
And out of this, he began to form a vision of what we might call his ideal setup for managing the affairs of the world.
And he thought he would write a book about this.
And he had two ideas.
One was that he would just write a straightforward, nonfiction type book on how the world works and how it should be made to work, that sort of thing.
And alternatively, he thought he would write a novel.
And in the novel, the characters would express and bring to fruition the ideas that House had put together.
He had friends advising him both for and against this novel.
He decided that's what he would do.
It was an unfortunate choice in a lot of ways, because as a novelist, House was the best.
He really had no particular ability to write a novel.
Yeah, it's terrible.
So it's a bad novel, but nonetheless, it's a revealing work.
And in addition, it was thrown together quite hastily, because it was actually put together in 1912, while House was very actively involved in managing parts of Wilson's campaign for the presidency.
But also, House was scheduled for his annual summer months in Europe, and he almost never would give those up.
He was a sickly man, and he had malaria from boyhood, so he hated being in the South in the summer.
And that's why he started coming up and living in New York, particularly in the summertime after the turn of the century, and also in a house near Boston, to get away from the heat and humidity of the South that didn't agree with him.
But he also liked going to Europe for the same reason, and for socializing.
So he had one of these European vacations coming up, and he was working on this novel, and apparently, to satisfy the publishers, he just threw the thing together very hastily.
He apparently was actually finishing it up on the ship on the way to Europe.
So it probably could have been a better book than it turned out to be, but at all events, I think it's worth looking at as a kind of expression of House's fantasies.
He then, later, as Wilson's close advisor, found himself in a position to attempt to realize it.
I'm really interested about the impact that it had at the time when it was still published anonymously.
I one time was Googling Philip Drew, and I found the text of some old novel.
I have no idea what it was, and the scene was the mom and the daughter working in the bookstore, and she says, you know, this mysterious guy came in today.
He bought a copy of Philip Drew.
And the mom says, oh, really?
And it's kind of a big deal.
Everybody sort of knew it was a big deal back then, even.
I don't have a good sense, Scott, of how it was received at the time.
I know it certainly was not hailed for its literary qualities as a great first novel.
Certainly not.
But when something like that comes along, particularly at that time, I think a lot of us don't appreciate how much those years before World War I were full of tension, full of conflict.
People had a sense that they were living in an age of emergency.
I mean, we look back at the period from, say, 1900 to 1914, and we think, oh, that was a good period.
Economic growth was generally pretty fast, and there was no big depression.
Just the short one in 1908, and things were pretty good.
But in fact, the people who lived at that time were seized with the sense that they were living under some kind of shadow or cloud, and that some big changes were in the offing.
We know now that they were right, but probably not for the reasons they suspected.
They weren't so much looking for this great war that was going to reshape the world.
But at all events, this kind of fantasizing about new economic and political orders was something that was going on at the time.
House was certainly not the only one who was putting together this kind of fantasy.
And I think it probably would have got more attention as a result of the climate of the time than something like that would get today.
Well, you're certainly right that it's a terrible novel as far as novels go, but it's so important because it reveals not just, you know, here's at least an agenda, if not the agenda.
Here's an elite agenda to pursue here, but also how we do it is sort of laced throughout.
I'm remembering, and it's been a long time since I've read it, but there's one scene where there's a kingmaker senator who I think is sort of an analogy to Nelson Aldrich, and he calls in the governor of Colorado.
And he says, Governor, I'm going to make you president.
And he says, OK, great.
And he says, well, here's the thing, though.
You're too progressive.
I need you to moderate and move to the right.
And the governor says, well, the problem is, if I do that, then all my progressive liberal base who supported me, they'll abandon me.
And the Nelson Aldrich kingmaker senator character says, oh, don't worry.
I'll have my conservatives attack you, not enough seriously to harm you, but enough to reinforce your base, reinforce theirs, et cetera.
And so the whole thing is just a big game.
Yeah, House developed from personal experience a conviction that politics is very much the product of string pullers in high places.
He knew that you could pay people off, that you could buy the press, that if you had the right rich people behind you, nobody could stop you.
And that was his vision of politics.
And who are we to say that was totally off base?
Yeah, sure seems to be how it works from here.
I was really reminded of Bill Clinton when I read it was during Clinton years.
And I thought of all the meaningless attacks about Whitewater and Paula Jones while this serious criminality was going on.
And I thought, I smell Senator Selwyn behind this somewhere.
His modern analogy, maybe not.
So, OK, let's talk about World War One.
You say in the book that House's job in the first administration wasn't keeping us out of war.
And yet you quote him saying that, oh, well, we're definitely going to be going to war against Germany the very beginning of 1916.
Is that right?
Actually, as early as 1915, he seems to have resigned himself to the United States ultimately entering the war from the probably from the time the Lusitania was torpedoed, which was in May 1915.
House, I think, was typical of a lot of Americans who circulated in the upper reaches of the Anglo-American elite.
And that includes Wilson, although he had not had nearly the travel or the range of contacts that House had had.
But Wilson was definitely an Anglophile.
These people had a tremendous number of connections.
They went back and forth between England and the United States, especially New York and Boston and Philadelphia to some extent.
And they knew a lot of people on both sides of the ocean.
They shared a lot of values.
They shared investments.
They were often engaged together in the same business or banking enterprises.
They had a worldview with a lot in common.
And one of the things they had in common was this idea that the elites knew better and ought to run the world.
But when the war broke out and Wilson announced that the United States would remain neutral in thought as well as deed, it's hard to believe he was sincere.
Wilson's idolaters always represent him as the man who's terribly conflicted about the war and who's sort of drawn very painfully into it.
I don't quite share that view of Wilson.
I think he was inclined fairly early on to certainly to sympathize with the allied side.
As for the United States entering the war, I think it took longer for him to reach that conclusion because, among other things, it was quite clear that the great majority of Americans did not want anything to do with the war except to profit from it.
The war did generate a lot of demand for American exports.
And that was great.
That pulled the economy out of a little recession in 1914.
And so business was really good in 1915 and 1916.
But as for building up a big army and sending people to die in the trenches in France, very few Americans wanted anything to do with that other than these Northeastern movers and shakers, people that Aldrich, you mentioned, and Lodge, and Roosevelt, and others in the Morgan ambit.
These guys were all hot to get into the war.
And they were, of course, Anglophiles, too.
But House was, I think, a little bit of a blend.
He was a little bit more Wilsonian in some ways.
These ideas he had about somehow taking care of the masses and the semi-populistic schemes that he identified in his novel.
He was not a strict elitist in the sense that he had no sympathy for common people.
He did.
But at the same time, his sensibilities were those of a member of the elite.
And so when the war broke out, particularly after the Germans started behaving in what the Anglophiles regarded as a beastly manner, they didn't regard starving the German children as beastly at all, of course, with their blockade, but torpedoing passenger liners was beastly.
And so they thought that was such bad form that it had to be stopped.
And House quickly took to that view and subtly and persistently pushed Wilson more and more in the direction of thinking that the United States needed to enter the war.
But the way he did that, House was a very shrewd person in managing people.
He didn't argue with people.
That's one reason everybody liked him.
He didn't just come out and argue with people.
He didn't say, you're wrong and here's a better position on a matter.
He would flatter people.
He would encourage them to think highly of themselves.
But he would subtly move them to a position that really wasn't theirs to begin with, but his.
And he seems to have done that with Wilson, to subtly move him closer and closer to the conclusion that the only sensible thing to do was to enter the war.
Now, the reason that Wilson could buy into this was that Wilson was a megalomaniac who had apparently, from very early on in life, had developed some vision of himself as a world saver.
I don't know how one comes about that kind of thinking, but Wilson seems to have arrived at it.
And of course, he displayed it amply when he was president of Princeton, because he was extremely self-righteous and indignant in the academic politics at Princeton and refused to compromise, always feeling that anyone who disagreed with him was evil.
So House managed to bring Wilson into the idea that he could, in fact, save the world if the United States entered the war, became the decisive element in the outcome of the war, and therefore put itself in a position to more or less dictate the terms of the peace settlement.
This would allow them to create this kind of League of Nations that both House and Wilson imagined would bring peace to the world and allow democratic regimes to replace militancy and militarism and the old regimes of empire, Germany and Austria-Hungary.
All of these things were tied together with Wilson being in a position to be the peace giver.
And so this is actually how things were brought about, and of course, Wilson ultimately did ask for a declaration of war.
Had he not asked for that, by the way, very unlikely there would have been a declaration of war.
The Congress was not, left to itself, going to come forward and declare war unless the president favored it.
So we can blame Wilson, and really Wilson alone, and in turn we can blame House for bringing Wilson to the position where he imagined that by taking the United States into this war, he could make himself the savior of mankind.
And, you know, I think we've all heard the phrase, and discussing Woodrow Wilson in high school and everything, he wanted to be a player on the world stage.
That really was his big motivation, was simply his self-interested narcissism.
Yeah, I think player, that's more like what House wanted to do.
House wanted to be a player.
Wilson wanted to be an actual messiah.
He wanted to be a savior, and that's why I use the word megalomaniac, because that kind of thinking is, if I believed in mental illness, I'd say the man was mentally ill.
A little Thomas Sawes there.
All right, so I guess if he knew that he was the savior of the world, then that would mean any police state measures he enacted here in America, any government interventions in the economy that he enacted during the war would be perfectly justified, right?
Oh, yeah.
Of course, once you get on a self-righteous or just righteous mission in your own mind, every means to that end becomes justified.
So once the United States entered the war, Wilson was extremely vicious about persecuting and prosecuting people who opposed the war.
Debs was sent to prison, and Wilson, even after the war ended, pardoned him, and he was sent to prison just because he gave a speech opposing the draft.
So Wilson was vicious in his attacks on all enemies real and imagined to his war policy, and of course, during the war, the United States adopted just a whole slew of unprecedented government control measures to steer resources toward the war program.
Wow, so it's always been my understanding, really, that if America hadn't intervened in World War I in Europe, that it probably would have just ended as a stalemate.
Everybody was suing for peace.
The soldiers were done fighting, and because of Wilson and House's intervention, America's intervention in that war, their bribes to Kerensky, etc., basically directly due to their intervention, we got the Soviet Union and Nazi Germany as a result.
Well, one can certainly make a respectable argument along those lines, and the latest one to do it is Pat Buchanan in his new book, which is not a bad book, by the way, but others have made such arguments for a long time, and we never know when we do counterfactual history how things would have been.
One big thing had been different, but even if we can't know, we have to speculate about those kinds of things, because otherwise we have no way to arrive at a sense of historical causation.
So it does look as if, had the United States not intervened, certainly the likelihood of a stalemate and a kind of reversion to the status quo antebellum would have been more in the cards.
Because the United States intervened, the Germans were in such bad shape at that point.
Europe was in revolutionary upheaval.
We need to remember that it wasn't just the Bolsheviks in Russia, there were communist rebellions in many other parts of Central Europe, including Germany, and so things were in terrible shape for the German regime, any way you look at it.
But the regime probably would have survived and certainly had a better chance to avoid Hitlerism than in the situation that it found itself in after Versailles, because the war guilt raised and the reparations and the loss of territories and population and resources, all those things created tremendous resentment in the German people, and that certainly made life easier for Hitler when they came along and basically promised, above all, to overturn the Versailles Agreement.
That was their main political calling card for a long time.
Well, I think this is part of the importance of the story of Edward Mandelhaus, is the focus on the role of individuals in making history.
I think your article ends with him saying, my hand has been on things, and it certainly has, and rather than the winds of time a-blowin' and the page of history a-turnin', what we have is men who make decisions, shake hands, agree on this, agree on that, decide to kill each other over this or that, and this is how history is made, by individuals with their will.
Oh yeah, absolutely.
Historical forces, you know, historians love to talk about broad forces and so forth, well that's just kind of rhetorical ploy.
Individuals make all the decisions in history, and of course they make them in a context, they make them in the light of how they see the world and what's going on in it, and what they might do to alter the state of the world, but nonetheless, everything that happens has to be the result of some individuals having acted.
I think as we get farther and farther away from what the textbooks tell us about history and closer and closer to the real thing, we begin to learn about people like Edward Haus and how important they've been historically in altering the course of affairs.
Indeed.
Now, can I ask you to stay over a few more minutes?
Because I've got a bunch of other things I want to ask you about, but I also understand if you've got to go.
Okay, I'll stay a while.
All right, great.
Everybody, you're listening to me, Scott Horton, on Anti-War Radio.
I'm interviewing Robert Higgs, author of Crisis and Leviathan, Against Leviathan, Neither Liberty Nor Safety, Resurgence of the Warfare State, and other great books.
He's the senior fellow at the Independent Institute, editor of the Independent Review.
He's the author of the book Crisis and Leviathan, and the principal thesis of that book is something that we just touched on, the ability of government to go to extraordinary lengths domestically while involved in foreign wars or really any other kind of crisis.
Bob, you call it the ratchet effect.
Please explain.
Well, what we see, certainly over the past hundred years in the United States, but also in many other times and places, is that national emergencies, especially great wars, always lead to abrupt increases in the size and scope of government.
And by ratchet, I refer to the fact that after these crises have passed or ended, the great growth in government is never reversed completely.
There's incomplete retrenchment after these emergencies, so that we do not return to the status quo antebellum.
There's some net gain in the size, scope, and power of government as a result of these episodes.
So after, say, I don't know, 22, 23 wars, this is how we end up going from a constitutional republic to an unlimited empire?
It's a big part of the story.
There's a tremendous debate, I think it's fair to say, among scholars who study the growth of government about the importance of what they call long-term effects or forces as opposed to these episodic or national emergency effects.
And what I've tried to argue in my work is that it's a mistake to imagine that we can separate these two out because they're interrelated, both going and coming.
When we have a national emergency, it has a ratchet effect, and it leaves the long-term normal situation of the economy different than it would have been in the absence of that emergency episode.
So that means that these long-term forces, they don't have a life of their own, so-called politics and economics of a system hinge on what its past path has been.
So it determines the predisposition of that system the next time a national emergency arises.
Will it be more or less predisposed to big, spurting growth of government than it was before?
So I believe that many economists in particular who like to fit trends econometrically, they like to imagine that any big deviation from trend is some kind of a stochastic anomaly.
It's a random thing.
I believe this is complete hogwash when we're studying history.
The things that happened in these episodes were anything but random.
They were certainly the product of human decisions in the same way that the decisions during normal times are.
So we have to take them into account.
We have to integrate them one with the other, and that's what I've been trying to do for 30 years or so in my own writing about the growth of government.
Well, I wonder if Dick Cheney's read your book and takes it as a playbook.
You know, I think actually the people who are actively engaged in political shenanigans don't need a book.
They know how to do what they are trying to do.
They can't always do everything they want because there are opposing forces and because they make mistakes about the means they select to achieve their end.
But I think it's not so much that they learn from philosophers as that philosophers need to learn more from the actual movers and shakers.
There's a tendency to talk about failed policies, for example.
A lot of people look around the world, they say, oh, we've got a drug war, we've got terrible education in the public schools, and blah, blah, blah.
These are all failed policies.
Well, I maintain these are not failed policies at all.
If you understand who made these policies and what they hope to achieve by making them and keeping them in force, you'll understand that these are tremendously successful policies.
You've simply been misled if you think they were put there to promote the public interest.
And just like war, any domestic policy like, say, drug wars or setting the interest rate at this place or that always creates more circumstances for more intervention further down that line.
Oh, exactly.
Because every one of these kinds of policies, whether it's a war or anything else, has an ostensible objective.
For example, World War I was the war to end war, okay?
That was supposed to be the last one, Scott.
Right.
That was the war to end wars.
Now, what we see when we look at this thing is that not only did it not end wars, but in fact, the peace treaty after World War I was precisely and was understood by many people at the time to be setting the conditions for resumption of the war, to making it, as many people said, inevitable that the fighting would break out again eventually.
And you didn't have to be a genius to see this.
So if you ask yourself, well, if that was so clear to so many people, why did they go ahead and do what they did?
But then back up and say, well, was the resumption of fighting such a bad deal for the people who were making policy in World War I?
Didn't they get more power, more notoriety, more historical acclaim by having war after war than they would ever have got if there had been a long-term peace?
I think the answer is quite obvious.
We just assume that governments and the people who operate them have a concert of interest with the mass of the people.
And that's a fundamental error, that these people's interest is almost entirely in conflict with the mass of the people.
You know, you mentioned Pat Buchanan's new book.
He talks about how after Neville Chamberlain's humiliation when Hitler marched into the rest of Czechoslovakia and destroyed the Munich Agreement, that he would either have to resign or give a war guarantee to Poland.
So he chose to give the war guarantee to Poland.
Perfectly self-interested maneuver on his part.
Well, you know, I think any day in the life of any politician will display that kind of trade-off.
They always are explaining their abandonment of principle, if you want to describe it that way, in terms of, well, I had to do it in order to stay in office, and I had to stay in office in order to achieve my big end that I'm trying to achieve.
So every day is an abandonment of the village that they're trying to save.
You know, I don't know whether this is even really accurate or not, but I watched the HBO miniseries on John Adams, which is based on McAuliffe's book, and there's a scene there where the Hamiltonians in the cabinet are telling John Adams that, listen, if you get us into a war with France, we'll be sure to win re-election.
And John Adams says, win re-election?
What the hell do I care about winning re-election?
My job is staying out of a war.
And they say you would sacrifice our Federalist position in power?
Well, you know, that might have happened that way.
That would be the exception that proves the rule, for sure.
Adams was an odd man in many ways, and I think he may have actually been a better man than a lot of his lieutenants among the Federalists.
Oh, well, yeah, yeah, there's no doubt about that.
Among that crew, he must have been the best.
When you talk about how, you know, the politicians all intuitively know this, even if they've never read Crisis and Leviathan, I'm reminded of an interview with Gary Hart for the New York Times Magazine a few years back, where he was lamenting, well, frankly, Bob, your lack of faith in the state.
And he said, you know, sometimes I just think it takes a great depression in order to get the people back on board and make the national government the center of our self-identity.
Well, you can probably recall a number of people who were writing and saying right after 9-11 how this would have a positive effect because it would lead people to embrace once again faith in government and confidence that government could and should achieve great things.
I even interviewed one guy on the show who wrote an essay saying, you know, we could use another 9-11 so we could get some more of that.
Yeah, well, you know, the Cheney crowd loves 9-11.
That's their bread and butter.
Now, let me ask you this.
Did you see Andrew Bacevich and his interview on Bill Moyers the other day?
I did not see that interview.
Okay, well, you'll be pretty familiar with the argument anyway, and I'd like to ask you your view on it.
I hope I can characterize him correctly.
He's basically saying that the American people demand empire, even if we don't really call it that or understand that.
What we demand is artificially low prices on manufactured goods from China, artificially low prices on the fuel that we use to drive to and fro where we want to go, and the rest of these things.
And so our government obliges us by waging this worldwide empire in order to secure all these things at a lower cost than the market would tend to provide.
And yet I thought it was Garrett Garrett who said that in our empire, everything goes out and nothing comes back.
And that, you know, my libertarian understanding of economics as thin as it honestly is, would seem to indicate that we're doing nothing but waste money here.
Are we each half right?
Or what's going on with that?
What is the purpose of this American empire?
Is it for the people at large in any sense or just for the politically connected interests?
My view is that it's overwhelmingly for the elite, the military industrial complex, the big investment houses, the big banks, the top politicians, the armed forces themselves.
They're the ones that have a direct and true interest in an empire.
The interest that all the rest of us, which is, you know, at least 95% of the people have an empire is bogus.
It's in a way, it's an entertainment interest because the American people are, for the most part, bloodthirsty.
And so they love the idea of the American armed forces going around the world and killing people.
So there's entertainment for them there.
But a lot of people who are slightly more decent than average have just been conned by the barrage of disinformation that falls on them from the time they start the public school till they die.
The media, the schools, the establishment in every aspect is giving people the idea, for example, that if the United States doesn't go out with its armed forces and intimidate the world, we can't have oil, can't have imported goods and services, we can't have a high standard of living, and so forth.
This is all economic nonsense, completely backwards.
In fact, a peaceful, free-trading world would be enormously beneficial to the great mass of Americans.
Now, if you'll notice, we're talking about a lot of people in the elite that support American empire who rely not so much on true free markets as on manipulated markets, markets in which government policy or government control plays some critical role.
And if they can have their own hands on those levers, then they're in a position to enrich themselves.
Now, when I describe these things, it doesn't mean they don't believe in their own disinformation, as it were.
I think a number of people live their whole lives in this fog and actually absorb it and honestly believe in it.
Still nonsense, but there's a big variation, I think, in the range from people who are pure cynics who do see reality as it is and yet go along because it's good for them personally, and people who are just misled by ideology and by misinformation and by the fact that they've never in their lives run into anyone who can give them an alternative worldview or an alternative explanation of how the world works.
So the widespread belief that our dependence, quote-unquote, our dependence on foreign oil is a threat to our national security and requires all this intervention, that kind of thing.
John McCain said, well, we need to break our dependence on foreign oil.
That way, we won't have to have any more of these oil wars like we're having right now.
That's just a fallacy?
That's a foolish idea, totally foolish.
I have great respect for Andrew Bacevich, by the way.
I think he's done a lot of good with his writing in recent years, and I wish him well.
But I do think that his understanding of how markets work and specifically how the world oil market works is wrong.
Well, you know, I interviewed Greg Pallast on the show yesterday, and he says that the whole agenda of the oil companies is to use the power of the national governments to keep oil off the markets.
The last thing they want is an open market in oil.
It's all cartels, all run by national governments, and they would just as soon sell less oil at an artificially high price.
Well, it's true, of course, that if it were possible for these people to cartelize the world's oil supply, they would be delighted to do it if they were members of the cartel.
But one of the things we know from repeated observation is that all cartels tend to break down.
They contain the seeds of their own destruction, because each member has a standing temptation to cheat on the cartel's restriction of supply.
So they all tend to break down.
OPEC is not in control of the world's oil supply.
There are many places in the world that produce oil.
There's a lot of competition in the world oil market.
But even whether a cartel is supplying the oil or whether 100 independent competitors are supplying the oil, it's still the case that in the world oil market, once the oil is put into play, once it's put on a ship, no one can be denied oil anymore.
The United States cannot be deprived of access to imported oil, even if, for example, the Arab countries all decided to boycott direct shipments of their oil to the United States.
They'd ship it somewhere else, and the oil that was originally going somewhere else would go to the United States.
So there's a pool of oil created by everybody who supplies oil into the world market, and everybody who demands oil draws from that pool if he's willing to pay the going world price.
This idea that somehow the United States can be selectively deprived of access to oil is simple nonsense.
I sometimes actually think that the guys who make policy, these neocons, for example, sometimes talk as if they actually believe this hogwash about the world oil market.
And I hope they're not that stupid.
I'd like to believe they're just cynical and evil rather than total idiots.
But this is pretty common knowledge among anybody who's dipped into studying the economics of the world oil supply.
And so it's hard to believe that the people at the upper reaches haven't absorbed this understanding.
Now, you can absorb this and still, as I said, understand that there are big companies, there are big financial interests, and so forth that stand to gain by American empire, even if this empire purports to be protecting U.S. access to oil.
So this may simply be something they dandy about to make the American public think that it has a stake in empire.
But if the public is taken in, and I think to a large extent it is taken in, it simply swallowed a fallacy.
And now this really goes to the root of all of this, the fear of terrorism, the fear of any more wars in Europe, the fear that we won't be able to drive our truck between here and there.
You write in your book, Neither Liberty Nor Safety, that fear is the basis of the state and all statist ideologies.
That's what it all comes down to, is that someone will kill you if we're not here to protect you.
Yeah, I think so.
Ultimately, it's the fear of death.
But short of death, people can be brought to fear for their economic well-being, for the security of their health, for any number of misfortunes that might befall someone.
The government has played upon every imaginable fear and even invented some new ones that people didn't know they should be afraid of, and is constantly engaged in propagandizing for some new menace du jour that we didn't know until headline news announced today, that there's this thing that could destroy us all that the government needs to deal with.
And that really is the basis of all state power, you think, from the welfare and regulatory states to every aspect of the national security state?
That's why we have a constitution.
Fundamental element of political economy is fear.
Without fear, it's hard to understand why people would, for very long, submit to control by their rulers.
Because it's an outrageous thing to be controlled by someone else.
Why would anybody tolerate that?
Everybody has a sense of preferring to control his own actions.
Rather than being controlled or being at the mercy of someone else.
And yet, all over the world, we see people submitting to control by their rulers.
And I don't think that makes a lot of sense unless we keep cutting through the layers until we find that people actually are Hobbesians in their understanding.
They think that absent the government, life would be chaotic, violent, disorganized, poor.
And for that reason, we have to have government.
And you think that if we didn't have government, things would actually be much less like that?
Much less the Hobbesian world that we seem to live in now?
Absolutely.
We live in Hobbesian world because we have all these enormous states.
The violence of these states, the routine robbery and bullying that every one of them engages in, even the best of them, is a testimony that should be clear to everybody.
And yet, people look this evidence in the face, and they don't see it for what it is.
They're so imprisoned by the chains of their ideology, by their lifelong education, to imagine that without the state, everything would be horrible.
All right, folks.
That's Robert Higgs.
He's the author of Crisis and Leviathan, Against Leviathan, Depression War and Cold War, Resurgence of the Warfare State, Neither Liberty Nor Safety, and a few others as well.
He's the editor of the Independent Review, senior fellow at the Independent Institute.
Thank you very much for your time today, Bob.
You're welcome, Scott.
It's been a pleasure.
