No major institution in the US has so poor a record of performance over so long a period as the Federal Reserve, yet so high a public reputation.
Here, too, we tend to be schizophrenic. We would all like to see government spending go down, provided it is not spending that benefits us. We would all like to see deficits reduced, provided it is through taxes imposed on others.
It is extremely convenient to have a label for the political and economic viewpoint elaborated in this book. The rightful and proper label is liberalism. Unfortunately, “As a supreme, if unintended compliment, the enemies of the system of private enterprise have thought it wise to appropriate its label”,′ so that liberalism has, in the United States, come to have a very different meaning than it did in the nineteenth century or does today over much of the Continent of Europe.
Abraham Lincoln talked about a government of the people, by the people, for the people. What we now have is a government of the people, by the bureaucrats, including the legislators who have become bureaucrats, for the bureaucrats.
The most harm of all is done when power is in the hands of people who are absolutely persuaded of the purity of their instincts – and the purity of their intentions.
The nineteenth-century liberal regarded an extension of freedom as the most effective way to promote welfare and equality; the twentieth-century liberal regards welfare and equality as either prerequisites of or alternatives to freedom.
It is ironic that the Great Depression was produced by government but was blamed on the private enterprise system. The Federal Reserve System explained in its 1933 annual report how much worse things would have been if the Federal Reserve had not behaved so well, yet the Federal Reserve was the chief culprit in making the depression as deep as it was. So the government produced the depression, the private enterprise system got blamed for it, and there was a tremendous change in attitudes.
There seems little correlation between poverty and honesty. One would rather expect the opposite; dishonesty may not always pay but surely it sometimes does.
A very different meaning of equality has emerged in the United States in recent decades – equality of outcome. Everyone should have the same level of living or of income, should finish the race at the same time. Equality of outcome is in clear conflict with liberty. The attempt to promote it has been a major source of bigger and bigger government, and of government-imposed restrictions on our liberty.
The major way that society has come to agree on the rules of property is through the growth of common law, though more recently legislation has played an increasing role.
Another social problem is the high cost of housing and the destruction of housing. The North Bronx looks like the pictures recently coming from Yugoslavia of areas that have been shelled. There is no doubt what the cause is: rent control in the city of New York, both directly and via the government taking over many dwelling units because rent control prevented owners from keeping them up.
Highway Congestion We all complain about highway congestion. That is interesting for a different reason. The private automobile industry is able to produce all the automobiles anybody wants to drive, but the government is apparently not able to produce a comparably adequate highway system, a clear contrast.
Inflation is caused by too much money chasing after too few goods.
The government has no more right to tell me what goes into my mouth, including illegal drugs, than it has to tell me what comes out of my mouth.
The “something” that connects the two transactions is called money, and it has taken innumerable physical forms – from stones to feathers to tobacco to shells to copper, silver, and gold to pieces of paper and entries in ledger books. Who knows what will be the future incarnations of money? Computer bytes?
Government actions often provide substantial benefits to a few while imposing small costs on many.
Unfortunately, the hardest thing for people to understand is that maybe if you leave things alone, it’ll be better than stepping in and trying to do something.
It is a mark of the political freedom of a capitalist society that men can openly advocate and work for socialism.
We want to avoid competition; and yet its the competition that protects us in various forms.
It’s always so attractive to be able to do good at somebody else’s expense.
The great tragedy of the drive to centralization, as of the drive to extend the scope of government in general, is that it is mostly led by men of goodwill who will be the first to rue its consequences.