Hayek on Policies that Foster Monopolies

We were the first to assert that the more complicated the forms assumed by civilization, the more restricted the freedom of the individual must become. —Benito Mussolini

What follows is F.A. Hayek commenting on how, in most cases, governmental economic policy creates the conditions for monopolies to form.  He then goes on to explain how centralized planning cannot conceivably understand and reasonably control all the variables in a complex economy.  Only in a free market system of competition can a complex economic system function effectively.

"Of the various arguments employed to demonstrate the inevitability of planning, the one most frequently heard is that technological changes have made competition impossible in a constantly increasing number of fields and that the only choice left to us is between control of production by private monopolies and direction by the government. This belief derives mainly from the Marxist doctrine of the “concentration of industry...” 

The conclusions that the advantage of large-scale production must lead inevitably to the abolition of competition cannot be accepted. It should be noted, moreover, that monopoly is frequently the product of factors other than the lower costs of greater size. It is attained through collusive agreement and promoted by public policies. When these agreements are invalidated and when these policies are reversed, competitive conditions can be restored....” 

In [Germany] especially, which came to be regarded as the model country typifying the necessary evolution of capitalism, the growth of cartels and syndicates has since 1878 been systematically fostered by deliberate policy. Not only the instrument of protection but direct inducements and ultimately compulsion were used by the governments to further the creation of monopolies for the regulation of prices and sales.... 

That [in Germany] the suppression of competition was a matter of deliberate policy, that it was undertaken in the service of the ideal which we now call planning, there can be no doubt. In the progressive advance toward a completely planned society the Germans, and all the people who are imitating their example, are merely following the course which nineteenth-century thinkers, particularly Germans, have mapped out for them.  The intellectual history of the last sixty or eighty years is indeed a perfect illustration of the truth that in social evolution nothing is inevitable but thinking makes it so....

What they generally suggest is that the increasing difficulty of obtaining a coherent picture of the complete economic process makes it indispensable that things should be coordinated by some central agency if social life is not to dissolve in chaos....

...it is the very complexity of the division of labor under modern conditions which makes competition the only method by which such coordination can be adequately brought about. There would be no difficulty about efficient control or planning were conditions so simple that a single person or board could effectively survey all the relevant facts. It is only as the factors which have to be taken into account become so numerous that it is impossible to gain a synoptic view of them that decentralization becomes imperative. But, once decentralization is necessary, the problem of coordination arises—a coordination which leaves the separate agencies free to adjust their activities to the facts which only they can know and yet brings about a mutual adjustment of their respective plans. As decentralization has become necessary because nobody can consciously balance all the considerations bearing on the decisions of so many individuals, the coordination can clearly be effected not by “conscious control” but only by arrangements which convey to each agent the information he must possess in order effectively to adjust his decisions to those of others."

Hayek, F. A. (2010-10-22). The Road to Serfdom (p. 91-95). University of Chicago Press - A. Kindle Edition.

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Hayek on Competition

Here is F.A. Hayek's rationale for why a reliance on the forces of competition is superior to centralized control and planning, as found in a collectivist (socialist) government.  (Remember that the term "liberal" is used in the classic sense and not in the modern sense where it is synonymous with "socialist.")

"The liberal argument is in favor of making the best possible use of the forces of competition as a means of coordinating human efforts, not an argument for leaving things just as they are. It is based on the conviction that, where effective competition can be created, it is a better way of guiding individual efforts than any other. It does not deny, but even emphasizes, that, in order that competition should work beneficially, a carefully thought-out legal framework is required and that neither the existing nor the past legal rules are free from grave defects. Nor does it deny that, where it is impossible to create the conditions necessary to make competition effective, we must resort to other methods of guiding economic activity. Economic liberalism is opposed, however, to competition’s being supplanted by inferior methods of coordinating individual efforts. And it regards competition as superior not only because it is in most circumstances the most efficient method known but even more because it is the only method by which our activities can be adjusted to each other without coercive or arbitrary intervention of authority. Indeed, one of the main arguments in favor of competition is that it dispenses with the need for “conscious social control” and that it gives the individuals a chance to decide whether the prospects of a particular occupation are sufficient to compensate for the disadvantages and risks connected with it."

Hayek, F. A. (2010-10-22). The Road to Serfdom (pp. 85-86). University of Chicago Press - A. Kindle Edition.

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Disclaimer: These opinions are solely my own, and do not reflect the opinions or official positions of any United States Government agency, organization or department.

Hayek on the Meaning of Socialism

What follows is F.A. Hayek describing socialism in a bit more detail by relating it back to the common goals of collectivism and discussing the means it uses to get there.

"A confusion largely responsible for the way in which we are drifting into things which nobody wants must be cleared up. This confusion concerns nothing less than the concept of socialism itself. It may mean, and is often used to describe, merely the ideals of social justice, greater equality, and security, which are the ultimate aims of socialism. But it means also the particular method by which most socialists hope to attain these ends and which many competent people regard as the only methods by which they can be fully and quickly attained. In this sense socialism means the abolition of private enterprise, of private ownership of the means of production, and the creation of a system of “planned economy” in which the entrepreneur working for profit is replaced by a central planning body....

We must centrally direct economic activity if we want to make the distribution of income conform to current ideas of social justice. “Planning,” therefore, is wanted by all those who demand that “production for use” be substituted for production for profit.

...it must always be remembered that socialism is a species of collectivism and that therefore everything which is true of collectivism as such must apply also to socialism. Nearly all the points which are disputed between socialists and liberals concern the methods common to all forms of collectivism and not the particular ends for which socialists want to use them; and all the consequences with which we shall be concerned in this book follow from the methods of collectivism irrespective of the ends for which they are used.

...it is socialism which has persuaded liberal-minded people to submit once more to that regimentation of economic life which they had overthrown because, in the words of Adam Smith, it puts governments in a position where “to support themselves they are obliged to be oppressive and tyrannical.”"

Hayek, F. A. (2010-10-22). The Road to Serfdom (p. 83-84). University of Chicago Press - A. Kindle Edition.

--Against All Enemies

Hayek on Communism and Fascism

The following four paragraphs are parts of F.A. Hayek's discussion of fascism and communism as observed in Russia and Germany around the time of World War II.

While “progressives” in England and elsewhere were still deluding themselves that communism and fascism represented opposite poles, more and more people began to ask themselves whether these new tyrannies were not the outcome of the same tendencies. Even communists must have been somewhat shaken by such testimonies as that of Max Eastman, Lenin’s old friend, who found himself compelled to admit that “instead of being better, Stalinism is worse than fascism, more ruthless, barbarous, unjust, immoral, antidemocratic, unredeemed by any hope or scruple,” and that it is “better described as superfascist”; and when we find the same author recognizing that “Stalinism is socialism, in the sense of being an inevitable although unforeseen political accompaniment of the nationalization and collectivization which he had relied upon as part of his plan for erecting a classless society,” his conclusion clearly achieves wider significance.

...W. H. Chamberlin, who in twelve years in Russia as an American correspondent had seen all his ideals shattered, summed up the conclusions of his studies there and in Germany and Italy in the statement that “socialism is certain to prove, in the beginning at least, the road NOT to freedom, but to dictatorship and counter-dictatorships, to civil war of the fiercest kind. Socialism achieved and maintained by democratic means seems definitely to belong to the world of utopias.”

...And Walter Lippmann has arrived at the conviction that “the generation to which we belong is now learning from experience what happens when men retreat from freedom to a coercive organization of their affairs. Though they promise themselves a more abundant life, they must in practice renounce it; as the organized direction increases, the variety of ends must give way to uniformity. That is the nemesis of the planned society and the authoritarian principle in human affairs.”

...“The complete collapse of the belief in the attainability of freedom and equality through Marxism,” writes Peter Drucker, “has forced Russia to travel the same road toward a totalitarian, purely negative, non-economic society of unfreedom and inequality which Germany has been following. Not that communism and fascism are essentially the same. Fascism is the stage reached after communism has proved an illusion, and it has proved as much an illusion in Stalinist Russia as in pre-Hitler Germany.”

Hayek, F. A. (2010-10-22). The Road to Serfdom (pp. 78-80). University of Chicago Press - A. Kindle Edition.

Disclaimer: These opinions are solely my own, and do not reflect the opinions or official positions of any United States Government agency, organization or department.

Abolition of the Ninth Circuit Court?

Abolition of the Ninth Circuit Court?
A Commentary by J. D. Longstreet

Excerpt from the US Constitution:

Article III

Section 1: “The judicial power of the United States, shall be vested in one Supreme Court, and in such inferior courts as the Congress may from time to time ordain and establish. The judges, both of the supreme and inferior courts, shall hold their offices during good behaviour, and shall, at stated times, receive for their services, a compensation, which shall not be diminished during their continuance in office.

Section 2: The judicial power shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States, and treaties made, or which shall be made, under their authority;--to all cases affecting ambassadors, other public ministers and consuls;--to all cases of admiralty and maritime jurisdiction;--to controversies to which the United States shall be a party;--to controversies between two or more states;--between a state and citizens of another state;--between citizens of different states;--between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, and foreign states, citizens or subjects.”

In the event you were not aware – “the Constitution grants Congress power to create and abolish federal courts, although the United States Supreme Court is the only court that cannot be abolished. Congress also has the authority to determine the number of judges in the federal judiciary system.” (SOURCE)

Earlier this year, Newt Gingrich called for the complete abolition of the Ninth Circuit Court. Gingrich was speaking to the annual gathering of the Conservative Political Action Conference at the time. Referring to an action by President Thomas Jefferson, Gingrich said the “judicial reform act of 1802 abolished 18 out of 35 federal judges, over half…I am more cautious than Jefferson. I would only abolish the Ninth Circuit Court.” (SOURCE)

You may disagree with Mr. Gingrich but, frankly, he may be onto something here.
The Ninth Circuit Court is the biggest of all the federal courts. It is based in San Francisco and it is heavily liberal. This particular court is a pain in the posterior to all things conservative.

Back in November of 2009, Gingrich is reported to have said: “It is constitutionally permissible, for the legislature and the president to say to a court, you are intolerable, and you no longer exist. And we need that debate because I am tired of secular fanatics trying to redesign America in their image.” (SOURCE)

I could not agree more!

Just this week (Tuesday, October 27th, 2010) the Ninth Circuit Court ruled that Arizona couldn’t require proof of citizenship in the United States when registering to vote.

“A three-judge panel for the US Court of Appeals for the Ninth Circuit on Tuesday struck down a portion of an Arizona law requiring proof of citizenship for voter registration. The court held that the law, Proposition 200, was inconsistent with the National Voter Registration Act of 1993 (NVRA), which was passed with the intent of increasing voter registration and removing barriers to registration imposed by the states. The NVRA requires voters to attest to the validity of the information on their registration form, including their citizenship, but does not require them to provide additional proof of citizenship. Proposition 200 went beyond the federal statute, requiring applicants to show proof of citizenship before registering to vote.” (SOURCE)

Now, maybe I’m a little slow on the uptake here, but doesn’t that effectively mean that non-citizens will be allowed to register to vote, oh, say, in the 2012 Presidential Election – not just in Arizona -- but also in all fifty states?

I realize that I am “Old Fashioned” but I was taught, and I still believe, that voting is a privilege granted to citizens of this country. In my opinion, a non-citizen should never be allowed to vote, in any country’s elections, under any circumstances.

On the other hand, if you happen to be the Democratic Party and you need all the votes you can get to gain and/or hold onto to power in a “Socialist Republic of America,” then you do everything within your power to allow all the illegal aliens you can squeeze across our southern border into the US and then grant them the privilege to vote in order to keep you in power. See? Makes all the sense in the world!

And the dems wonder why we are mad as hell? Like it, or not, THIS is the way this latest action by the federal court is being viewed and understood by Americans.

I visited my barbershop the morning of this writing, for a haircut, and even before I arrived the conversation had begun. The disgust and anger at the Democratic Party, the disgust and anger at the Obama Regime was flowing like a river of acid! Men and women were openly venting their anger at the loss of their freedom, the loss of their country and they did not mince words.

Everyone agreed that the United States of America is now a socialist country heading, as straight as a Martin to a gourd, towards communism. There was no discussion, pro and con. It was a declarative statement. There is RAGE out here -- and it is no longer simmering.

Everyone agreed, men and women alike, there will be open rioting in the streets of the US before the next election in 2012.

In my naiveté, I had thought this election, on Tuesday, would let some steam off and the anger level in America would subside, at least a bit. But, now, I am not so sure. This white-hot anger runs deep, at least here in the southern states. I am convinced you will see that on Tuesday evening.

By the way, it is rarely noted, but Arizona is a southern state. She stood with the Confederacy during the “late unpleasantness” of 1861 through 1865. Recently, the remainder of her former Confederate sisters see her as being “put upon” by the federal government and, frankly, we do not like it – at all.

Actions, such as the ruling by the Ninth Circuit Court referenced above, which will allow people who aren’t even supposed to be in the country, and, indeed, are already criminals, to vote, is viewed as nothing more than the heavy hand of an oppressive socialist government intent upon establishing a totalitarian regime and crush any resistance to their efforts.

Southerners have been in the vanguard of every rebellion against totalitarianism and oppressive government on the shores of this country -- even before it’s founding.

Southerners are kind, gentle, soft-spoken, hospitable, God-fearing people – right up til you get us mad.

As a Southerner, myself, I can attest that we are not mad, we aren’t even angry. We are LIVID!

Thanks to the Ninth Circuit Court even more southerners will be going to the polls to vote against the Obama Regime and the Democratic Party on Tuesday. We can do no less for our sister state of Arizona nor for our sister states above the Mason-Dixon line.

May God save America – and do so quickly!

J. D. Longstreet