It appears that Ron Paul did well in the Iowa caucuses tonight. On one hand, I am rather delighted by this, but on the other, I am also very concerned that a lot of people are seeing only one side of Ron Paul's ideology. There is, however, a much darker side to Ron Paul, one which we all must have the courage and intellectual honesty to look at and not kid ourselves about its nature.
Now, before all of you Ron Paul fans get mad at me for posting this, I want to assure you of two thing:
a) I like Ron Paul's views on foreign policy and civil rights
b) I like and respect Ron Paul as a person
However, I always considered his 'Austrian' and 'Laisser Faire' economics as utter nonsense at best, or absolute lunacy at worst. But now they are gaining more and more traction with the US public and I think that it is therefore time to honestly discuss these ideas here.
As a theory, 'Austrian' economics are fantastic. But so are Marxism and Anarchism. These theories all suffer from the same problem: highly loaded assumptions. In the case of 'Austrian economics', the flaw is basic, but huge: the concept of a free market. The fact is, of course, that there never was such a thing and that it will never exist. Markets are always, by definition, regulated by somebody. In the words of the brilliant economist Michael Hudson:
Every economy is planned. This traditionally has been the function of government. Relinquishing this role under the slogan of “free markets” leaves it in the hands of banks.
One might wonder why a political and economic theory based on a so self-evidently flawed idea has so many followers. The fact is, of course, that this theory has followers in significant numbers only in the USA. Why? Because of three uniquely American circumstances:
The evil nature of the state in US history:
It is a fact that throughout the history of the USA the state as always been on the side of the rich and powerful and not of the masses. Not only that, but the US state has spent trillions of dollars in waste, mismanagement and fraud. So it is no wonder that most Americans instinctively dislike a state which has almost never done anything useful for them. Why would Americans care for a state when they never lived in a society in which the state did care for the common folks? From its very inception the US state was both multi-genocidal (extermination of numerous Indian nations), slave-owning (Black slavery), plutocratic (Robber Barons) and oligarchic (Masonic). There is a good case to be made that the US state has been one of the worst ones in mankind's history, so its no wonder that it is also distrusted and hated by so many Americans.
The insular nature of the US society:
The vast majority Americans are hopelessly insular. Not to offend anybody here, but this is an undeniable fact. Not all Americans, of course, but the vast majority. They know only one language, they have rarely, if ever, been abroad. When they are abroad they don't really interact with the locals and, last but not least, they are largely ignorant of world history. I have yet to meet a US libertarian who could even pronounce "laisser faire" correctly, nevermind understand why this idea has been universally rejected by the rest of mankind. This is why Americans have these bizarre views about Obama being a 'socialist' or why they don't realize that civilized mankind has, for example, rejected the death penalty and adopted universal health care as a right for all. No, Americans will still passionately argue about issues which have already been settled pretty much everywhere else on this planet.
Then there are those Americans who are aware of the bigger planet out there, but still fall back on some form or another of 'American exceptionalism" (let them Euroliberals have their health care, this is not the American way!). The fact that what US libertarians call "statism" has been accepted and adopted by the rest of mankind therefore has no influence inside the USA at all. As the lyrics of a song which was popular in the late eighties say: "if it's good enough for Texas it's good enough for me"...
Then there are those Americans who are aware of the bigger planet out there, but still fall back on some form or another of 'American exceptionalism" (let them Euroliberals have their health care, this is not the American way!). The fact that what US libertarians call "statism" has been accepted and adopted by the rest of mankind therefore has no influence inside the USA at all. As the lyrics of a song which was popular in the late eighties say: "if it's good enough for Texas it's good enough for me"...
The unbridled power of US corporation:
It is well established that the "Tea Party" has been largely financed by the Koch brothers. But this is just the tip of the iceberg. The roots of this corporate libertarianism go back much further, to Ronald Reagan and his famous words in his first inaugural address:
Government is not the solution to our problem; government is the problem
That statement was the slogan under which US corporations marched into a real crusade against any form of control over them. We all know what happened after that: massive deregulations crippled entire sectors of the economy and nation, worker's rights collapsed, social safeguards were wiped-off, unions all but died, and every bit of the power vacuum left by a retreating state was immediately filled by US corporations. The difference being that while the US people had at least a modicum of control over their government, they had none over the corporations. Corporate America recognized that, and ever since it has backed anything on the spectrum going from Reaganomics to Austrian libertarian theories.
Compare these factors with the situation in Europe where most Europeans did, at one time or another of their lives, get real, valuable services from their government, where corporations are carefully controlled and regulated and the consumer thereby protected, where civil and worker's rights are considered "social achievements" (acquis sociaux in French) never to be rescinded (although under US pressure politicians like Merkel, Papanderou, Sarkozy, Blair and Co. are now trying hard to dismantle them). Sure, there were plenty of incompetent, corrupt and outright evil governments in Europe, but there were always enough counter-examples sufficiently nearby (geographically or historically) to always remind Europeans that the solution to bad government is good government, not no government.
So we are really dealing with a misnomer here. Austrian Laisser Faire economics should really be called "US Turbocapitalsm" (term concocted by Ed Luttwak), or "US hypercapitalism" or even simply plutocracy.
Coming back to Ron Paul, I invite you all to listen to the interview of Webster Tarpley recorded by Bonnie Faulkner for her show Guns and Butter. Tarpley and Faulkner take a close look at Ron Paul's economic program and what it would mean if implemented.
For the direct link to the audio click here.
For the web page with the interview, click here.
The real danger:
Having said all these highly critical things about Ron Paul and his delusional and outright dangerous economic views, let me say that I understand that it is a fact that a US President has far more influence on foreign policy than in internal politics where he must contend with a Congress which can block the implementation of his economic policies and a Federal Reserve which will fight with everything it has to prevent Ron Paul from abolishing it (let me add here that this idea, to abolish the Fed, is an excellent and fundamentally sound economic idea of Ron Paul!). Finally, there is no doubt in my mind that if Ron Paul was elected President he would be simply murdered by the US "deep state".
So my concern is not that Ron Paul would instantly create millions of starving Americans by giving them a maximum of 15 dollars per week in food stamps or that he would wreck WIC, but that his ideology can be used by Corporate America to further weaken the state and strengthening the power of Wall Street. All this libertarian nonsense really serves only one practical purpose: to turn citizens of a state into corporate subjects/slaves.
So my concern is not that Ron Paul would instantly create millions of starving Americans by giving them a maximum of 15 dollars per week in food stamps or that he would wreck WIC, but that his ideology can be used by Corporate America to further weaken the state and strengthening the power of Wall Street. All this libertarian nonsense really serves only one practical purpose: to turn citizens of a state into corporate subjects/slaves.
Michael Hudson is quite correct. What we are witnessing in the USA (and, to a lesser degree, in Europe) is a return to feudalism, where the 99% serve the 1%, a society in which the people become simply a means of production for their corporate overlords. Laisser Faire indeed...
So ask yourself this question: do Ron Paul's economic ideas strengthen or weaken the power of Corporate America over the US people?
The answer is, I think, sadly obvious.
The Saker
PS: please do listen to the Tarpley interview before commenting here, as it makes no sense to discuss vague declarations of intentions. What we must do is fully fathom is what a Ron Paul Presidency would mean for the US economy.
PS: please do listen to the Tarpley interview before commenting here, as it makes no sense to discuss vague declarations of intentions. What we must do is fully fathom is what a Ron Paul Presidency would mean for the US economy.
