Archive for November, 2008

Our Culture is Better

Sunday, November 30th, 2008

Geert Wilders:
Champion of Freedom, or Anti-Islamic Provocateur? Both.

Weekend Interview by James Taranto, Wall Street Journal, November 28, 2008

By his own description, Geert Wilders is not a typical Dutch politician. “We are a country of consensus,” he tells me on a recent Saturday morning at his midtown Manhattan hotel. “I hate consensus. I like confrontation. I am not a consensus politician. … This is something that is really very un-Dutch.”

Yet the 45-year-old Mr. Wilders says he is the most famous politician in the Netherlands: “Everybody knows me. … There is no other politician — not even the prime minister — who is as well-known. … People hate me, or they love me. There’s nothing in between. There is no gray area.”

To his admirers, Mr. Wilders is a champion of Western values on a continent that has lost confidence in them. To his detractors, he is an anti-Islamic provocateur. Both sides have a point.

In March, Mr. Wilders released a short film called “Fitna,” a harsh treatment of Islam that begins by interspersing inflammatory Quran passages with newspaper and TV clips depicting threats and acts of violent jihad. The second half of the film, titled “The Netherlands Under the Spell of Islam,” warns that Holland’s growing Muslim population — which more than doubled between 1990 and 2004, to 944,000, some 5.8% of the populace — poses a threat to the country’s traditional liberal values. Under the heading, “The Netherlands in the future?!” it shows brutal images from Muslim countries: men being hanged for homosexuality, a beheaded woman, another woman apparently undergoing genital mutilation.

Making such a film, Mr. Wilders knew, was a dangerous act. In November 2004, Theo van Gogh was assassinated on an Amsterdam street in retaliation for directing a film called “Submission” about Islam’s treatment of women. The killer, Mohammed Bouyeri, left a letter on van Gogh’s body threatening Ayaan Hirsi Ali, the film’s writer and narrator.

Ms. Hirsi Ali, born in Somalia, had renounced Islam and been elected to the Dutch Parliament, where she was an ally of Mr. Wilders. Both belonged to the center-right People’s Party for Freedom and Democracy, known by the Dutch acronym VVD. Both took a hard line on what they saw as an overly accommodationist policy toward the Netherlands’ Muslim minority. They argued that radical imams “should be stripped of their nationality,” that their mosques should be closed, and that “we should be strong in defending the rights of women,” Mr. Wilders tells me.

This made them dissenters within the VVD. “We got into trouble every week,” Mr. Wilders recalls. “We were like children going to their parents if they did something wrong, because every week they hassled us. … We really didn’t care what anybody said. If the factional leadership said, ‘Well, you cannot go to this TV program,’ for us it was an incentive to go, not not to go. So we were a little bit of two mavericks, rebels if you like.”

Mr. Wilders finally quit the party over its support for opening negotiations to admit Turkey into the European Union. That was in September 2004. “Two months later, Theo van Gogh was killed, and the whole world changed,” says Mr. Wilders. He and Ms. Hirsi Ali both went into hiding; he still travels with bodyguards. After a VVD rival threatened to strip Ms. Hirsi Ali’s citizenship over misstatements on her 1992 asylum application, she left Parliament and took a fellowship at the American Enterprise Institute in Washington. Mr. Wilders stayed on and formed the Party for Freedom, or PVV. In 2006 it became Parliament’s fifth-largest party, with nine seats in the 150-member lower chamber.

Having his own party liberates Mr. Wilders to speak his mind. As he sees it, the West suffers from an excess of toleration for those who do not share its tradition of tolerance. “We believe that — ‘we’ means the political elite — that all cultures are equal,” he says. “I believe this is the biggest disease today facing Europe. … We should wake up and tell ourselves: You’re not a xenophobe, you’re not a racist, you’re not a crazy guy if you say, ‘My culture is better than yours.’ A culture based on Christianity, Judaism, humanism is better. Look at how we treat women, look at how we treat apostates, look at how we go with the separation of church and state. I can give you 500 examples why our culture is better.”

He acknowledges that “the majority of Muslims in Europe and America are not terrorists or violent people.” But he says “it really doesn’t matter that much, because if you don’t define your own culture as the best, dominant one, and you allow through immigration people from those countries to come in, at the end of the day you will lose your own identity and your own culture, and your society will change. And our freedom will change — all the freedoms we have will change.”

Controversial Film

The murder of van Gogh lends credence to this warning, as does the Muhammad cartoon controversy of 2005 in Denmark. As for “Fitna,” it has not occasioned a violent response, but its foes have made efforts to suppress it. A Dutch Muslim organization went to court seeking to enjoin its release on the ground that, in Mr. Wilders’s words, “it’s not in the interest of Dutch security.” The plaintiffs also charged Mr. Wilders with blasphemy and inciting hatred. Mr. Wilders thought the argument frivolous, but decided to pre-empt it: “The day before the verdict, I broadcasted ['Fitna'] … not because I was not confident in the outcome, but I thought: I’m not taking any chance, I’m doing it. And it was legal, because there was not a verdict yet.” The judge held that the national-security claim was moot and ruled in Mr. Wilders’s favor on the issues of blasphemy and incitement.

Dutch television stations had balked at broadcasting the film, and satellite companies refused to carry it even for a fee. So Mr. Wilders released it online. The British video site LiveLeak.com soon pulled the film, citing “threats to our staff of a very serious nature,” but put it back online a few days later. (“Fitna” is still available on LiveLeak, as well as on other sites such as YouTube and Google Video.)

An organization called The Netherlands Shows Its Colors filed a criminal complaint against Mr. Wilders for “inciting hatred.” In June, Dutch prosecutors declined to pursue the charge, saying in a statement: “That comments are hurtful and offensive for a large number of Muslims does not mean that they are punishable.” The group is appealing the prosecutors’ decision.

In July, a Jordanian prosecutor, acting on a complaint from a pressure group there, charged Mr. Wilders with blasphemy and other crimes. The Netherlands has no extradition treaty with Jordan, but Mr. Wilders worries — and the head of the group that filed the complaint has boasted — that the indictment could restrict his ability to travel. Mr. Wilders says he does not visit a foreign country without receiving an assurance that he will not be arrested and extradited.

“The principle is not me — it’s not about Geert Wilders,” he says. “If you look at the press and the rest of the political elite in the Netherlands, nobody cares. Nobody gives a damn. This is the worst thing, maybe. … A nondemocratic country cannot use the international or domestic legal system to silence you. … If this starts, we can get rid of all parliaments, and we should close down every newspaper, and we should shut up and all pray to Mecca five times a day.”

It is difficult to fault Mr. Wilders’s impassioned defense of free speech. And although the efforts to silence him via legal harassment have proved far from successful, he rightly points out that they could have a chilling effect, deterring others from speaking out.

Mr. Wilders’s views on Islam, though, are problematic. Since 9/11, American political leaders have struggled with the question of how to describe the ideology of the enemy without making enemies of the world’s billion or so Muslims. The various terms they have tried — “Islamic extremism,” “Islamism,” “Islamofascism” — have fallen short of both clarity and melioration. Melioration is not Mr. Wilders’s highest priority, and to him the truth couldn’t be clearer: The problem is Islam itself. “I see Islam more as an ideology than as a religion,” he explains.

Give Up That Book

His own view of Islam is a fundamentalist one: “According to the Quran, there are no moderate Muslims. It’s not Geert Wilders who’s saying that, it’s the Quran … saying that. It’s many imams in the world who decide that. It’s the people themselves who speak about it and talk about the terrible things — the genital mutilation, the honor killings. This is all not Geert Wilders, but those imams themselves who say this is the best way of Islam.”

Yet he insists that his antagonism toward Islam reflects no antipathy toward Muslims: “I make a distinction between the ideology … and the people. … There are people who call themselves Muslims and don’t subscribe to the full part of the Quran. And those people, of course, we should invest [in], we should talk to.” He says he would end Muslim immigration to the Netherlands but work to assimilate those already there.

His idea of how to do so, however, seems unlikely to win many converts: “You have to give up this stupid, fascist book” — the Quran. “This is what you have to do. You have to give up that book.”

Mr. Wilders is right to call for a vigilant defense of liberal principles. A society has a right, indeed a duty, to require that religious minorities comply with secular rules of civilized behavior. But to demand that they renounce their religious identity and holy books is itself an affront to liberal principles. [see Joe Cobb's comment below]

Mr. Taranto, a member of The Wall Street Journal’s editorial board, writes the Best of the Web Today column for OpinionJournal.com.

Taxes and Justice

Tuesday, November 25th, 2008

by Tibor Machan

Let me begin by raising some questions about taxation. First, let us compare a system of pure extortion, ungoverned by any rules or laws. The mobster who extorts you says “your money or your life” and doesn’t bargain. But then why would extortionists ever give you a break? Once a system is unjust, dickering about bits and pieces of it is virtually pointless and makes little sense anyway. There is no way to deal justly with stolen goods.

Taxes

And there is that other matter, one of the triumphs of the American revolution, that has gone south big time. It is the idea of “No taxation without representation.” Arguably the revolution began because this idea was violated by the Brits. Never mind. Our current extortionists - for never forget that something like the income tax amounts to flat out extortion, a major source of revenue for organized criminals - borrow against the expected wealth of members of future generations, committing those people to pay back what the current regime borrowed. Yet, of course, those members haven’t even been born yet, or are so young that they may not vote. So these folks are being taxed with no one representing their voice in the so called democratic process.

Of course, this policy of taxing the unrepresented is widespread. Airport and hotel taxes are typical cases in point - one is taxed in the locale of the airport or hotel but of course hasn’t any voice there at all concerning the disposition of the “revenues” thus collected. Clearly this again violates the idea of no taxation without representation. Another triumph of the American revolution that’s routinely betrayed.

Feudal Rent

But of course the policy of taxation is never a just one, be the taxpayer represented or not. For taxes are nothing but a phantom rent collected by the government for permitting the citizenry to live and work within the realm. That is how taxation made sense in feudal times, where it amounted to rent paid to the owner of the realm for the privilege of living and working there. In effect, everything was owned by the monarch and one who lived in the area had to pay for that privilege. Only the monarch had rights - sometimes dubbed “the divine rights of kings” - and he or she had the authority to issue permits to the subjects who lived within the realm.

It is just this arrangement that was supposed to have been overthrown by means of the American revolution. Sovereignty was supposed to have been taken from the monarch and assigned to individual citizens in accordance with their natural rights to their lives, liberty and property. But today there is little sign of this in America, the so called leader of the free world! So it isn’t just that governments tax earnings and capital gains at their nominal value though they have effectively been made worth less over time by inflation.

The very idea of taxation is a fraud, despite such noble designations of it as “the price we pay for civilization.” Because taxation was kept in place after the regime change, from a feudal to a free society - unlike serfdom, for example, as well as in time slavery - today it is the major instrument of tyranny. All these bailouts that amount to committing members of future generations to pay for the widespread irresponsibility of present ones could not be perpetrated without this vicious instrument of coercion. Yet in the mainstream hardly any mention is made of just how inconsistent is the financial foundation of the policy of bailouts and just how predatory is the policy of taxation.

Betrayal by the Intellectuals

What is even worse is that throughout the academic community, where radical ideas are supposed to be proposed and considered, the notion that taxation is unjust, with or without representation, doesn’t even get discussed. Instead, famous academics write prominently published tracks defending taxation and the corresponding reactionary notion that all wealth really belongs to, you guessed it, the government!


Tibor Machan holds the R. C. Hoiles Chair in Business Ethics & Free Enterprise at Chapman University’s Argyros School of B&E and is a research fellow at the Hoover Institution (Stanford University, CA). (www.Tibormachan.com)

The Great Recession

Sunday, November 9th, 2008

Nobody uses the term “depression” any more to describe periods of economic slowdown, although it has become temporarily a fad to describe the current economic situation by reference to the 1930s. The current recession is very mild so far, although the recent election hype added trash-talk about the failure of free markets and analogies to F.D.R. Fear of yet-unknown 2009 economic news has put “depression” on the op-ed pages.

In the 1930s, the prolonged nature of the economic downturn was new and unexpected. The stock market crashes in 1929 and 1930, the wave of bank failures in the United States, and the extent of unemployment - particularly in urban areas, where it was highly visible - were not understood. Nobody believed it was natural or normal to have such an economic downturn. The Soviet revolution only 15 years earlier raised the fear that Marx had been correct about the collapse of capitalism.

Along came John Maynard Keynes and the creation of modern macroeconomic theory: the idea that economic science had to have a different theory for the economy as-a-whole, apart from a theory of “micro” business and consumer choices. “Macro” economics wants to look down on the earth from space and examine why booms and busts, inflations and recessions, and unemployment, happen. Like any scientist, the economist also wants to have some suggestions for curing the ailments.

The one detail about macroeconomics, which is special, is how it engages in politics. One feature of the economy as-a-whole stands out from “micro” economic theory: government policy can be changed, and this can affect the entire economic system. Microeconomics relies on government too, but in a relatively unchanging way. Individual markets rely on property rights and contract law, which are things courts and cops enforce.

Macroeconomics puts “economic policy” on the agenda of presidents and lawmakers as “leadership” - just as generals and admirals command armies and fleets.

“The Free Market Has Failed”

At a time like today, many people around the world are concerned about their jobs or their retirement funds invested in the stock market, or about losing their homes. Our political leaders are all too eager to step forward “to save us.” The lessons of elections since 1932 are very clear. No political leader can survive unless he or she is very visible “doing something.”

The very idea of a free market is that businessmen and consumers do their own things. Prosperity and economic growth just happen, without government doing more than enforcing long-established property rights and holding court when individuals want to quarrel over them. In the Great Depression of the 1930s, the idea was born that government had to “do something” because nobody wanted just to wait for things to get better.

Perhaps the first question should be, “Why Did the Free Market Fail?” The Marxists and other critics of free markets in general do not ask this question because they assume markets don’t work in the first place. Or they assume markets work temporarily, but do not serve humanity with social justice or equality and therefore breakdowns - causing poverty, suffering, and injustice - are just normal problems that require fixing.

Earlier recessions and depressions had been severe, but short. The market always recovered. By 1933, people had begun to ask
(1) why has this problem lasted longer than normal?
and (2) why hasn’t President Hoover “done something?”

Four excellent books look at the question of what Hoover and Roosevelt, and Congress did both to cause and to prolong the Great Depression:

  • Jim Powell, “FDR’s Folly; How Roosevent and His New Deal Prolonged the Great Depression” (2003)
  • Jude Wanniski, “The Way the World Works” (1978)
  • Murray N. Rothbard, “America’s Great
    Depression” (1963)
  • Milton Friedman, “The Great Contraction” (1963)
  • Friedman highlights the mistakes of Federal Reserve policy, Rothbard concentrates on Hoover’s mistakes, Wanniski identifies the impact of the Smoot-Hawley tariff, and Powell examines the consequences of F.D.R.’s taxes and regulations in preventing recovery.

    Rigging or Regulating Markets?

    Economists study markets and how they work. It is not our scientific, scholarly view that markets fail. Markets do not fail, because people keep on trading with each other. Economic life goes on. And we all agree that “rigging” a market will not make it work better, although many economists believe that “regulating” a market can help.

    The difference between “rigging” and “regulating” is subtle: the former is deemed greedy and criminal whereas the latter is benevolent and prevents crime. Yet, of course, all regulations help some businesses and impose costs on others, just as “rigging” a market will do. Lobbyists make a living fuzzing up the fine details for the benefit of their clients.

    The idea of centralized economic planning, Soviet style, has been discredited. Economic science did make a lot of progress after World War I - the war introduced centralized economic planning. Germany set the example for Lenin to inflict it on Russia. Economists Ludwig von Mises, in “Socialism” (1922), and Nobel Laureate F.A. Hayek in “The Use of Knowledge in Society” (1945), demonstrated why, in principle, centralized planning cannot succeed. The collapse of the Soviet Union in 1991 settled any controversy. So, the free market does work, spectacularly well, most of the time. What needs explanation is why it seems to fail.

    Failure from External Shocks, or Internal Contradictions?

    External shocks to society, like Hurricane Katrina in 2005 or Pearl Harbor in 1941, can clearly throw normal economic activity out the window. Extraordinary actions are required. External shocks can take two forms, however, and the best response depends on what has actually happened. Natural disasters that are localized, such as earthquakes and hurricanes, can be resolved by thousands or millions of people pitching in to help; relief organizations, and governments, can mobilize resources to rescue victims and rebuild. Man-made disasters are different.

    UCLA Prof. Jack Hirshleifer in “Disaster and Recovery: A Historical Survey” (1963), observed that using free markets (free prices; free trade) to coordinate recovery speeds up effects. Restricting markets, e.g. by price controls and resource allocations, slows down recovery.

    This is due to the decentralized nature of information: when the state of our world changes, the problem is how to adapt to new conditions and move forward. If only central planners are allowed to make decisions, and others must wait for orders and directions, the amount of information about the problems and solutions must be smaller than if everyone were encouraged to use localized information and to take personal action immediately.

    Hirshleifer published his research project for the RAND Corporation and the Air Force, which was researching a nuclear war disaster.

    Is an economic slowdown or collapse more like a natural disaster, or more like a man-made disaster? Social science demonstrates that not all human-caused events are human-intended events. Not every good result is a product of good intentions, and not every bad result is a conspiracy. If economic slowdowns are more like natural disasters, we must look for systemic conditions that gradually build up during times of prosperity; then burst, or break out. Alan Greenspan called it “irrational exhuberance” during the boom times. Were the boom times themselves artificially stimulated?

    Man Made Disasters

    If an economic slowdown is more like a man-made disaster, we need to look at the specific events or policies that triggered it. The Great Depression was a man-made disaster; government caused it by wrong-headed policies.

    Jude Wanniski points to the Smoot-Hawley tariff of 1930 as an external shock to the economic system, which was definitely man made. It caused (1) the bank failures in the farm (exporting) economy, which spread to the money centers; and (2) the stock market collapses, which were closely timed to the votes in Congress. The stock market collapse of October 1929 is a famous event at the beginning of the Great Depression. It is often cited; but the stock market recovered, and the stock market’s long decline began in April 1930, when the Smoot-Hawley tariff became law. The bank failures of 1930-33 were not caused by the stock market collapses. They were caused by Congress voting to hike the tariff tax, which raised costs at a time of tightening credit. Similar to today.

    Milton Friedman points to the blunders of the Federal Reserve in 1930-33. The Fed presided over bank failures - and the disappearance of one-third of the American money supply during those three years. This caused the economic slowdown: higher costs, reduced sales, tighter credit, bank failures, appreciating monetary value. Friedman proves inflation is caused by too much money, and depressions are caused by too little money - and credit - in the economy.

    Since the money supply shrank by one-third, all of the prices in the United States in 1930-33 should have also moved down by one-third. Nobody, of course, ever cuts his price (except tactically, to increase sales). Unemployment was the result of holding up prices, which was Herbert Hoover’s unique contribution to “doing something” about the depression. Rothbard points out that Hoover was very active in promoting higher prices and wages as a solution to the depression, as also did F.D.R. after 1933. Hoover did exactly the wrong thing, as the money supply was collapsing, when he tried to keep wages and prices higher. More unemployment was the result.

    The conclusion has to be that the Great Depression of the 1930s was a man-made disaster, and it lasted for a decade because of man-made efforts to “do something” about it. This is not to say, of course, that nothing could have been done. Unfortunately the wrong things were done. F.D.R. might have declared, at the same time he closed all the banks, that all prices in America would immediately be cut by one-third. Since bank failures were an important cause of the monetary deflation, and one dollar in 1933 was more scarce and more valuable than one dollar in 1929, such a decree from the White House would have been just like what they did in France, Brazil, Argentina, et al. when they struck the extra zeroes off the money, to change a million-peso bill into a hundred-peso bill.

    Man-made disasters can be fixed by man-made changes in policy or corrective actions in the opposite direction. But this also requires understanding of the economic causes of the problem. A direct reversal of course is not always a solution, just as the damage caused by a car running over a man would not be fixed by reversing gears and running backwards over him again. But cute examples aside, if we can see and understand what has caused an economic slowdown, we can also see what might make things speed up to normal again.

    What Should Obama and Congress Do Now?

    Perhaps the most important question is what should they avoid? Jim Powell’s masterly book, “F.D.R.’s Folly,” documents the events of 1933-41 and we can clearly see how the programs of the New Deal failed to make the Great Depression go away. Powell quotes the writings of F.D.R.’s cabinet members and White House advisors. It is clear that social reform was more on their minds than economic recovery - similar to Obama. Roosevelt’s talent as a political leader was clearly of the same magnitude as Hitler, Mussolini, Peron, and Churchill. They all aroused emotions and evoked love and loyalty to their leadership. But it is quite another thing to look back and ask about their accomplishments for the public good.

    Barack Obama may preside over a short and perhaps not-severe recession, or he may choose to step on the stage of history and flex his ego. The 2008 election campaign theme of “Change” does not tell us very much, but it can signify the beginning of a long dark period in American history - like 1933-41.

    As a University of Chicago man, I am hopeful Obama’s Chicago connections will keep him from repeating F.D.R.’s folly.