07/01/10 – Robert Higgs – The Scott Horton Show

Alright y'all, welcome back to the show, it's Anti-War Radio, I'm Scott Horton and I'm joined on the line by the great Robert Higgs from the Independent Institute, let me click on the right thing here so I can read you some of the books he wrote, Crisis and Leviathan, Depression War and Cold War, Against Leviathan, Resurgence of the Warfare State, Opposing the Crusader State, Neither Liberty Nor Safety, The Challenge to Liberty, Arms, Politics and the Economy, on and on like that it goes, he is the editor of the Independent Review, you can check out the Independent Institute at independent.org and boy this guy is more libertarian than all of y'all, he doesn't even like it when the government does bad things to other government people, which makes him more libertarian than me even.
Welcome back to the show, Bob, how are you doing?
I'm doing fine, Scott.
Yeah, I think you're the only libertarian I've ever heard say, I'm absolutely opposed to Dick Cheney being tried for war crimes.
There shouldn't be any federal trials at all, ever again, for anyone.
Well I don't remember saying that, but I'd actually prefer that he were struck by lightning, and that could save us some expense perhaps.
Well I have a witness, it was Anthony Gregory, your colleague at the Independent Institute, he can verify this.
I trust him more than I trust my own memory.
Yeah, well and if you're smart more than you trust me too, so we'll double check with him.
Alright, and I know you're smart because I read your stuff.
Let's talk about which end, if any, is near.
Which end, if any, is near, Bob?
I wish I knew, Scott.
I assume you're referring to a little piece I wrote recently, which was a kind of lament, I think, about the proliferation of doomsday forecasts or expectations or hustles or whatever they are, that have appeared particularly in the last year or so.
They're all over the web now, and on certain websites you get hardly anything else.
And some sites have more or less switched over from doing libertarian analysis to doing gloom and doom and survivalism and talking about which guns and ammo are better and so forth.
So there's been a lot of this stuff going on, and at some point I found it more than I could take, and so I had to express the opinion that I think most of it is extremely overwrought.
Well, you know, I guess I hate to say this, but I'm sort of hopeful about an economic collapse.
What Ron Paul always says is that these horrible policies, meaning the complete and total destruction of any semblance of the rule of law, especially at the national level, but really across the society in terms of at least the way it binds the power of the government, obviously it still applies to us.
The endless warfare around the world, that this is only going to end not because people listen to him, but because the dollar is going to break, because our empire is going to fall apart like the Soviet Union.
And I always figured that's better than going out like the Germans or the Japanese.
A lot of unfortunate things may happen.
I'm not at all arguing against that.
In fact, I think some unfortunate things are virtually certain to happen.
From one point of view, they may not be unfortunate at all.
For example, the government's promises to pay benefits under Social Security, and particularly Medicare part of Social Security, cannot be kept.
So if you know arithmetic, you already know that at some point these programs are going to collapse in the sense that they will be unable to pay what they've promised people, and therefore, in one way or another, they will not make those payments.
So yes, that sort of thing is easy to not only imagine, but actually to expect, and people would be well advised to plan for it.
But there are a lot of other aspects of gloom and doom being discussed that are by no means sure things, although I think the dollar conceivably might collapse at some point.
I think the odds are strongly against it, and in history there have been many worse managed currencies that managed to hang on for a very long time, and I won't be surprised if the dollar turns out to be that way, too.
That doesn't mean the dollar's going to hold its value, it almost certainly will continue to depreciate quicker or slower over time, and again, that's something that people should expect and plan for.
But that's a different matter from pale male abandonment of the dollar.
I think, too, Scott, that it's worth recalling that when people long for a kind of overall collapse of the economy, they should think twice about that, because historically, collapses like that are virtually never the occasions in which liberty comes out ahead at the end.
In my work and in other people's work that I've read about, but not really participated in doing the research for, it seems to me that social collapses, and particularly government collapses, generally portend even greater totalitarianism.
Well, sure, and your book, Depression War and Cold War, is the mark of all of that.
The Czarist regime was horrible, but the Bolsheviks were worse.
The Weimar German regime was horrible, but the Nazis were worse.
People should think twice when they hope for collapse.
Yeah, no, I'm with you, and especially when the American people are so detached from reality in so many ways now, and you can see somebody like Glenn Beck take a perfectly Ron Paul-ian argument that all we've got to do is not be afraid and just start doing the right thing, and then he turns the right thing into, let's persecute the poor and the brown and the powerless, instead of, let's end the war and shore up the dollar and reinstate the Bill of Rights, which is how Ron finishes the sentence, you know?
But you take a Glenn Beck, if economic times got much worse, that whole side of the Tea Party movement could be a real kind of fascist thing, I think, a scary one.
Oh, I share your view in that regard.
I think we need to remember that when there is some kind of revolution or thoroughgoing collapse of the political order, what happens next really depends heavily on the kind of ideological stance that people have, and what kinds of preparation and schemes have been made by activists as well.
There are sometimes little groups like the Bolsheviks in old Russia.
They didn't amount to much, you know, their numbers were trivial, but they were more or less prepared to do something and take action when an opportunity arose, and so they managed to leverage that crisis into their domination of a huge society.
So if we've got people out there who are laying their plans and are well-prepared to be unscrupulous, then they have a much stronger chance of coming out on top of the heap at the end.
But most of all, what will happen depends on what people will be willing to tolerate.
In general, when there's some kind of collapse of society or economy, almost everybody becomes tremendously fearful, and they look for salvation.
And where they look for salvation and how they expect to find it hinges entirely on the dominant ideology those people hold at the time.
And right now I'm afraid to say that the dominant ideology of the United States is anything but propitious for the cause of liberty.
So you know, I can easily see that if things fell apart, we'd come out of it in a few years even worse off than we are now.
I don't know what propitious means, but it sounds right.
I'll tell you, well, you know, the Soviet Union, that was certainly a benefit when the Soviet Union fell apart, and yet millions starved, and the collapse of their system was absolutely devastating for the people of Russia, and continues to be.
And hell, in America we got FDR last time we went through a real depression, so...
Alright y'all, welcome back to the show, it's Anti-War Radio.
I'm Scott Wharton, and I'm so selfish, I'm sitting here pining for economic collapse just because I'm sick and tired of talking about war all day, every day.
And yet, Robert Higgs is saying that, be careful what you wish for, young man, something along those lines.
And then, I guess your real point, Bob, is that the American empire is not going to collapse any time soon.
It's going to be just like when Harry Brown died, when I die, 50, 60 years from now or whatever, everything is still the permanent crisis.
Well, I don't think the empire is on the verge of collapse, Scott, but I do think, again, that it's likely that financial constraints will bring about some changes, and in this case, probably some retrenchment.
The U.S. government in the last few years has been mismanaged so badly that it's put itself in a position that it cannot maintain indefinitely.
Now, the people who run the system, I think at least some of them understand this, and that's why they're busily getting together in Toronto and having active discussions all the time of how to disengage from some of these measures they've taken in the past two years to stimulate, as they imagine, the economy in this financial debacle and recession.
But even though some of them appreciate the need for them to retrench, particularly to stop adding so much debt every year until they reach the point where the capital markets rebel against them, that will be the real constraint on them, because at some point, the people that buy these bonds will simply lose interest in buying any more of them, and in fact will want to hold fewer of them.
And when that turnaround comes, and I think we may be in the neighborhood of such a turnaround right now, these governments will not be able any longer to continue spending at the same rate that they've been spending without financing their expenditures in even more troublesome ways, such as outright inflation of the money stock.
So if they reach the point where the financial constraint really begins to bite, they're going to have to reduce expenditures, and that will almost certainly have to include the enormous expenditures on maintenance of the U.S. empire.
So I think there is some hope, or reason for hope, that the empire will be diminished in future years.
I don't see, with my understanding of the political realities of the world, that it's going to be given up all at once, or easily, because a great many people are going to fight to keep it.
But I think the fundamental forces that hold up these governments, the U.S. government and the other advanced ones in the world, are now running against them, and so those forces ultimately will probably produce some results in the direction of retrenchment.
I think it'll be easier, ultimately, for the U.S. government to reduce the size of the empire than it will be for the U.S. government to cut down on old people's pensions and medical care and so forth, because that's going to generate just tremendous opposition politically.
Well now, ironically speaking and so forth, what role does the empire of bases play in propping up the dollar, in the sense of impressing upon foreign leaders how they probably ought to still want to buy American securities, huh?
I don't think it plays much of a role, Scott.
There's a certain amount of intimidation that is part and parcel of the U.S. empire, and so this so-called central bank cooperation, for example, is a reflection of the clout that the U.S. brings to the table, whatever the issue happens to be, whether it's financial cooperation or military cooperation or anything else.
But most of the people who hold U.S. debt and the debt of other governments are private individuals and institutions, and I think these people are practically all living in a world of very mobile capital.
They can, with the push of a button, move tremendous sums of money anywhere in the world very quickly, and I simply don't think they're going to be intimidated by how many bases the U.S. happens to be maintaining in some where or stand.
In other words, these are simply a gross and net loss.
There's a whole theory that part of the reason that America wanted to attack Iraq is because he wanted to start buying his oil in Euros and that kind of thing, and here they wanted to spend trillions of dollars doing a regime change to, in essence, prop up the dollar.
But you think that probably doesn't hold water, then?
I've never thought there was much to that idea, frankly.
First of all, the magnitudes are trivial when you look at the amounts of money at stake.
There is the example, though, right?
There might be an example, but again, the U.S. can invade Iraq fairly readily compared to its ability to invade and wreak havoc in a lot of other parts of the world.
So I think other factors lie much more strongly behind the U.S. invasion of Iraq.
But in any event, I think the empire is and always has been, for the U.S., a net loser, but it's not maintained for its aggregative benefits and costs.
It's maintained for the benefits it brings to the people who run it, or are cozy with those who run it.
So it's a rip-off.
It's like virtually everything the government does.
It goes about under an umbrella of misrepresentation about national security and weapons of mass destruction, la la la la la.
But that's just for the bourgeoisie.
The people who actually run the system are interested in much more definite things, and I think in most of the cases where it looks like a screw-up for U.S. foreign policy or the empire in general, these people who run the system still come out smelling like roses.
Yeah, of course.
You're the one who takes the blame.
I saw you on C-SPAN.
You're the guy who got us into this mess, you mean old man.
Which, by the way, I highly recommend Bob Higgs on C-SPAN, Robert Higgs on C-SPAN, the three-hour call-in episode to anyone who feels like gut laughing all day, or crying, whichever you prefer.
But now here's the thing, though.
We run up against what you were saying about when times get bad, rather than the people who run the state retrenching, it tends to be a crisis in Leviathan situation.
We go into the Great Depression, everybody blames Bob Higgs and the libertarian free market for causing the problem, and what we need is another New Deal and another New Deal.
I'm looking at your article entitled Crisis in Leviathan at the Independent Institute, which is also the name of your book, talking about the revolution within the forum that we're undergoing right now.
While everybody's watching the oil spill, there's a revolution inside the White House and inside the Congress as we speak, Bob, and if it's okay, I'd like to keep you one more segment and ask you about that.
Okay.
Thanks.
Hang tight.
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Welcome back to the show.
Anti-war radio.
Lucky me, lucky you.
We got Robert Higgs to stay one more segment with us.
He's at the Independent Institute.
That's independent.org, the author of Crisis in Leviathan.
And Bob, I guess this is where we get back to ideology.
When a crisis comes, are we going to start rolling back some of our excesses, like, you know, all the money spent torturing people to death?
Or are we just going to have more of what it seems like we're in the midst of right now, which when Garrett Gourette talked about Franklin Roosevelt back in the 30s, he called it a revolution within the form.
He said all the revolutionaries are inside the White House and everybody else is outside the gate saying, stop, stop.
So it seems like that's where we're already at.
If there's a run on the dollar or whatever, like they say, I guess the crack-up boom is the worst-case scenario, then what do we get?
Just military dictatorship?
Well, I wouldn't rule that out.
They've certainly made preparation for that if they need it.
Of course, they would prefer not to have things get to that point, I'm sure, but I don't think the people who control the U.S. government are going to just walk away from their power, ever.
I think they'll do what they feel is necessary to retain their power, and I think they are unscrupulous people, and if they have to do horrible things, that's what they'll do.
So that's the main reason, I think, why we all ought to be hoping that we don't have any kind of a breakdown of the existing order, because we're likely to have a really fierce, terrible response to it from the government, and to make things worse, a great many Americans will back the government when it takes these actions.
As you know, governments always identify certain scapegoats and people to blame and hold responsible, whether it's economic royalists or communists or whatever it happens to be at the time, you identify the enemy, you start smearing everybody who gets in your way, and putting people in prison right and left.
So I think our government is perfectly capable of reacting fiercely to the prospect of losing its grip on power.
Now, that doesn't mean they'll never lose their grip, I simply think that when they do, and I think ultimately they probably will, it will be by a much more gradual process of decay, in which more and more people, as it were, simply walk away from them, refuse to cooperate any longer, withdraw their support, and eventually behave in such a non-cooperative, evasive, sabotaging manner that the government can no longer accumulate resources and can no longer command enough allegiance to do its will.
Well, and that's really what happened to the Soviet Union, right?
I think so.
In that case, it was also a revolution from the top, of course, even though many people in the lower levels of Soviet society were surely unhappy, and hardly anybody at that point believed in communism any longer as an ideological object, or loyalty to communism pretty much dissolved, except among some of the very old people.
But I think what the Soviet power elite realized at some point in the 1980s was that the system was doomed, and that there was a way for them to come out on top as it went under.
And so they did that.
They snatched the state property they had controlled by various devices, and they created a lot of billionaires among themselves, and retained a lot of control over what was worth something in the society, like the natural resource deposits and means And they still pretty much run the system.
They renamed the KGB, and they called the new system capitalism, and will be.
But as you mentioned before, the mass of the people continues to be in very bad economic condition there, and I think there has been some improvement, I think, things for the masses of the Russians are a little better than they were under communism, but certainly it's been a top-down kind of regime change that has much less substance than it appears to have.
Well now, it's funny, because I'm looking back on this thing, and it seems like FDR had this massive failure of a New Deal for a decade or so, and then he got us into a war.
Because that's what you do when all else fails, is you start conscripting people, that will bring that unemployment rate down one way or another there, and just dump them en masse on machine gun nests on top of cliffs and stuff, that kind of thing.
But we never stopped warring since 1941, and that war that FDR got us in, and now it's brought us to this point.
And we see that there's sort of a pseudo-New Deal going on, with the government intervening more than ever in terms of the markets, and taking over companies, and bossing them around, and these kinds of things.
But so does that mean that we have another major full-scale World War III coming up, as, I don't know, Obama or the next guy's only way out of the mess they've got us in so far?
Or are we at the end of this cycle?
I think conditions are different this time, partly because the configuration of power in the world as a whole is different.
The wars that we may get in now are wars like attacks on Iran.
That's a very different thing from the United States and its allies going to war against Germany, Japan, and their allies in World War II.
Those were powerful nation-states that could really put up a fight.
The U.S. makes war now against people that, it would appear, it's bound to defeat, and yet it can't.
That's the kind of paradox of the U.S. empire, that it loses all of these wars of empire, because what it tries to do is impose its will on societies that don't want to be subjects of the United States.
And so they keep sabotaging U.S. control of their societies in one way or another, until finally the political will wears down among the American political establishment, and they give it up or make some kind of an arrangement like the one in Korea.
But at all events, the shooting stops and life goes on.
But these post-World War II wars have all been, even though Korea and Vietnam were not negligible in any sense, but relative to World War II, much smaller affairs, and aimed at much different objectives, I think.
This was not the same situation Roosevelt was confronting in 1939 at all, and I don't think it'll play out the same either.
If, for example, the U.S. does go ahead with or without Israel to attack Iran, what I would expect is a massive outpouring all over the world of opposition to that, just as there was, sooner or later, great opposition to the U.S. attack on Iraq.
And that will provide some constraint on what the U.S. does, and some encouragement for it to back away.
Again, I think these little palace wars that are dreamed up by neocon schemers, for the most part, who have inside connections, are quite different from the world wars in so many ways that it's hard to draw parallels.
So you think that if it really did come to, I don't know, whatever record unemployment and horrible 1930s-style situation, that at that point that's where they'll have to realize and give the empire up, rather than going crazy like FDR has been?
Not give it up, but cut back on it.
Yeah, at least.
Well, hopefully starting with Pakistan, Afghanistan, Iraq, and Somalia, for their sake.
Thanks so much for your time, Bob, and your wisdom.
Appreciate it.
You're welcome, Scott.
Everybody, that's the great Bob Higgs, author of Crisis and Leviathan, and Depression War and Cold War, independent.org.