Sunday, August 30, 2009

The God's Proxy Principle

States throughout history have covered their criminal acts with a veneer of false legitimacy by claiming to be divine agents.

The earliest recorded incident of this is in perhaps the "war of nerves" conducted by Enmerkar, ruler of the Sumerian city-state of Erech (Uruk), against Aratta, an Elamite city-state in what is now Iran.  Enmerkar demanded that the people of Aratta use its own mineral wealth and labor to construct shrines and temples at Erech, and proclaimed that this was commandment from Innana, an important goddess.

This post is to be extended...

Saturday, August 29, 2009

The Magistrate/Mandarin Principle

This is the first of a series of posts called "Principles of Man".

I will continually return to each post in this series adding more evidence for its importance from history.

The state is a maleficent symbiosis of enslaving brigands (magistrates) and corrupt intellectuals (mandarins).  Throughout history magistrates have used mandarins to manufacture consent (through propaganda and indoctrination) and administer resources (technocracy).  In exchange the mandarins get to share with the magistrates the power, prestige, and pelf of statecraft.

Types of Mandarins

The Scribe

Especially before the advent of widespread literacy, the professional scribe was a highly important agent of the state.  Ancient scribes were perhaps the first technocrats.  Their chief role was to keep accurate records of resources, subjects, and the resources of subjects.

The first professional scribes arose in the place where writing itself first arose: ancient Sumer.  Moreover, the first Sumerian scribes worked for the state: that is, either in the palace or the temple.

To be continued...

On Private Education

Education is a good.  Like any good, demand for it stimulates supply.


In ancient Sumer, where writing was first invented, being a scribe was a high-paying and prestigious job.  This was largely because


  1. demand for scribes was high, since their services (especially record-keeping) were of such benefit to the sate, and
  2. the engorged super-states of Sumer had tremendous purchasing power.  


So in Sumer, a demand arose among parents for scribe-training services for their children.  The first private schools in the world arose in Sumer (tuition-supported "tablet-houses") to meet this demand.

To be continued...

Wednesday, August 26, 2009

How Ends Contend

I claim that the ultimate goals of humans are products of feeling and not reason.  However, Roderick Long, as a eudaimonist, claims that what the teleological philosopher usually thinks of as ultimate goals are really penultimate goals (although he doesn't use that term) which serve as means to the one ultimate end of "eudaimonia".  These penultimate goals, he contends, are chosen according to reason.  In his lecture Economics and Its Ethical Assumptions, Long writes...
Now according to this tradition, why do they say that we have just one ultimate end? Why not say that we have lots, that there are lots of things we want: ice cream, fame, not being killed? We've got all these different things, but why suppose that they're all constituents of some big super-end? Well, I think part of the reason they think this is: what happens when you make trade-offs? Suppose there are two ultimate ends you have: ice cream and fame. Those are two ultimate ends you have, and they come in degrees. (That's why I didn't use not being killed, because that's less a matter of degree.) So you want more ice cream, and you want more fame. And sometimes those go together, like winning an ice-cream-eating contest. But still there are lots of cases where these goals might conflict, and so you have to do trade-offs, and decide between them.
If you're deciding between them, that's an action. Actions have to have a means-end structure, right? So if you're trying to decide how to trade off between ice cream and fame, then doing that must be a means to some end. Well, what is the end? It can't be the end of maximizing the ice cream, because you haven't decided whether that's what you're going to do. It can't be the end of maximizing fame, because you haven't decided that. It can't be the end of getting the maximization of both, because it's a trade-off — that's impossible. Instead, you're trying to maximize something of which these two are parts, some general, overall satisfaction — that's what you're trying to maximize. You might wonder whether "maximize" is even the right word, but anyway you're trying to promote some good that includes both of these intrinsic good; these are intrinsic parts of your overall good. And it's that sort of thing that leads the eudaimonists to think that whenever you're acting, you're always promoting some ultimate good of yours, some ultimate end or aim.
Let's consider a fleshed-out hypothetical case of Long's ice cream/fame example.  Let's say a man is at a karaoke bar-and-grill with some friends and the place is packed.  He takes a number for a turn at singing.  Then, just as his number comes up, the waiter brings a giant banana split to his table.  His friends are bunch of pigs, so he knows that if he goes up and sings, the banana split will be gone by the time he gets back.  But if he doesn't take his turn now, he will miss his chance to sing.  Now, he loves banana splits, but he also loves performing (he's quite a good singer).  So he is torn between his desire for ice cream and his desire for performing.  Ice cream and fame are, strictly speaking, not his ends but means.  The physical ice cream is a means to the goal of the delicious taste sensation that occurs when he is eating it.  And the act of performing is a means to the goal of the exhilarating sensation he gets while performing.
Now the eudaimonist would say the goals of taste sensation and "stage exhilaration" are not ultimate ends, but intermediary means to a single end.  A Tolkien geek would say their ethical doctrine is, "one end to rule them all, and one end to bind them" (which is not to say that I myself am a Tolkien geek, just that that is what one would say. [*-)]  The eudaemonist would argue this must be true, because the man chose between the two goals, choosing implies a criterion, and a criterion implies a "higher" goal.  The eudaemonist calls this higher goal "overall well-being" or (of course) eudaemonia.

This would seem to run counter to the Humean contention that goals such as taste sensation and stage exhilaration are truly ends, and are therefore creatures of the passions.  And it might follow from the following propositions:
  1. Such goals are means, and we choose between them.  Choice implies deliberation.  Therefore we deliberate over such goals.
  2. Deliberation is entirely a process of reason.
  3. Such goals, therefore, are products of reason.
First of all, I insist that such goals are not products of reason.  The veracity of #3 would not follow from the veracity of #1 and #2.  To say that we choose between the goals of flavor and exhilaration is not to say we choose to have those goals in the first place.  The statement, "I choose to desire X" makes no sense.  One chooses to act upon desire, but not to feel the desire in the first place.  Let us grant for a moment that goals like flavor and exhilaration are not ends, but penultimate goals which are but means to the ultimate goal of eudaemonia.  Even if that were so, such penultimate goals, along with eudeamonia itself, must be creatures of feeling, because the notion of choosing to desire something makes no sense.
For example, the man in the karaoke bar does choose between the banana split and singing.  But he can't be said to choose to desire the banana split in the first place.  When he sees the dish, his eyes widen; he begins to salivate; the image of himself eating the thing involuntarily manifests before his mind's eye.  Neither can he be said to choose to want to sing in the first place.  That too is simply a manifest urge that arises in response to the opportunity to sing.

So #3 above is certainly not true.  Now how about #1 and #2?  #1 is true; choice does imply deliberation.  But I contend that #2 is false;  deliberation is not entirely a process of reason.  Reason is the power of the mind to form judgments by process of logic.  But what kind of logic decides the matter when a man in the bar chooses between ice cream and fame?  It is not calculation; he doesn't count "utils" in his head.  It is not by deduction nor is it by induction that he finally decides.
This is not to say he doesn't think about it.  To work toward a decision, he may reflect upon eating ice cream and singing in order to get a more full picture of exactly what each will entail.  He thereby comes to a greater grasp upon exactly what it will be like to eat the ice cream and to perform on the stage.
To achieve this fuller picture and greater grasp, it is true that he may use reason.  For example, he might think, "That big party over there is leaving.  Therefore, if I sang, I would have a smaller audience than I thought."  Each of the contending urges he feels might then either increase or diminish in intensity in response to the new, fuller notions in his head regarding the two potential experiences.  

But ultimately, the only product of such a thinking process, after all the facts have been gathered in his head, can still only be two contending urges: one for ice cream and the other for fame.  And these urges are unanalyzable givens; they are not susceptible to ratiocination.  For a time, the man suspends both urges in his psyche.  At the point of action, he will either be impelled by one urge or the other.  We say then that the action-impelling urge is, by definition, the stronger of the two.

The use of reason can be impelled by feeling.  And the conclusions reached by reason can have impacts upon feeling.  But final decisions between contending goals are always directly impelled by feeling, and it is not a matter of ratiocination regarding the maximization of some mysterious single ultimate end.

A Mini-Manifesto of Liberty

In the following I outline, as succinctly as possible, my principles of libertarianism.

1. Natural Morality

I feel assault, plunder, and enslavement are wrong.  Implicit in this feeling is a belief in property rights.  I don't derive this feeling from some philosophical doctrine.  It's just part of me.  It arises from my heart, not my reason.  I believe most of humanity feels the way I do.  I believe most of humanity, in spite of widespread evidence to the contrary in today's society (which I will deal with below), deep down has an intrinsic respect for property rights.  Academics often talk about the importance of the tradition of property as a factor in "how the West got rich".  But I believe property is more than just a tradition; it's an instinct.

There is a burgeoning school of thought in evolutionary biology and the cognitive sciences (led by Marc Hauser and Steven Pinker) which contends that morality is not just cultural artifice, but that it is an intrinsic feature of the human mind which evolved over the countless millennia of humans living together.  There are some needs which are common to all man.  There is an overwhelming general need in the human species for self-restraint and fellow-feeling if it is to flourish.  It only makes sense that this overwhelming general need would mean that familial groups who tend to have certain highly-functional moral feelings would end up prospering and propagating their genes, while familial groups made up of individuals who were constantly killing and plundering each other would have died out.

Economic science teaches us that the most highly-functional moral feelings are those concerning ownership (both of one's bodily self and of external objects).  I believe it is no coincidence that we find in experience and in history that these same moral feelings concerning property are, of all moral feelings, the most timeless and universal.

I believe that this is why when we take up some unused thing and begin to use it, we automatically think of it as our "ours". We take reflexive affront when our person or our property is aggressed against by others. We feel involuntary outrage when we see the person or property of others aggressed against. And we spontaneously feel guilt when, or at least after, we aggress against the person or property of others.  Of course there are exceptions (as with those suffering from neurological disorders), but these facts are true for the overwhelming preponderance of humanity.

We don't need to be taught to feel revulsion toward murder, plunder, and enslavement; it has been stamped on our hearts by nature.  And implicit in our natural revulsion toward murder, plunder, and enslavement are property rights: imperatives from one's own conscience that says, "this is mine, that is thine".  I would go so far as to say that anyone who says they don't feel such proddings of the conscience are either impaired or lying.  And the fact that a great many people every day override that revulsion and go ahead and murder, plunder, and enslave anyway is owing to two causes.  First of all, frailty is just as much a part of human nature as morality is.  Moral urges are one kind of urge among many, and sometimes they lose the tug of war over human action.  The second cause is that institution that fosters and feeds upon human frailty: the state.

2. The Lifeboat Lie

As I said, I feel assault, plunder, and enslavement are wrong; I regard them as crimes.  I don't see any reason why an act that I would consider a crime if committed by any other man should not be considered a crime simply because it is committed by a man wearing a badge, dressed in fatigues, or bearing a license.  In other words, I make no exceptions for the state.

If morality is natural, then why do others make this exception?

As I've contended thus far, there is a moral code written in our hearts.  This inherent moral code is only shoved aside when we enter conditions of extremity (known as "lifeboat situations"), in which circumstances have forced the human community to devolve into a war of all against all. In those cases, the involuntary urge for survival overwhelms the involuntary urge for moral behavior, and we therefore cast aside our communal moral feelings for the sake of extreme short-term selfishness. In other words, we allow ourselves “necessary evils”.

The state has deceived the bulk of humanity into believing that society is inherently in constant extremity: a perpetual "lifeboat situation" in which a great many "necessary evils" must be committed by the state, else the "lifeboat" of society will keel over and everybody will drown. This is a lie. Society does not require for its survival, or even for its flowering, that certain men be above natural morality. The acts of murder, plunder, and enslavement committed by the state are not necessary evils.  They're just plain evils; just as much as if you or I committed them as private individuals.

3. The Sword and The Lie

To understand how the "Lifeboat Lie" can have become so widely accepted in spite of our natural morality, one must understand the nature of the state, and nobody understood the nature of the state more than Murray N. Rothbard.  In The Ethics of Liberty Rothbard wrote:

Ideology has always been vital to the continued existence of the State, as attested by the systematic use of ideology since the ancient Oriental empires. The specific content of the ideology has, of course, changed over time, in accordance with changing conditions and cultures. In the Oriental despotisms, the Emperor was often held by the Church to be himself divine; in our more secular age, the argument runs more to “the public good” and the “general welfare.” But the purpose is always the same: to convince the public that what the State does is not, as one might think, crime on a gigantic scale, but something necessary and vital that must be supported and obeyed. The reason that ideology is so vital to the State is that it always rests, in essence, on the support of the majority of the public. This support obtains whether the State is a “democracy,” a dictatorship, or an absolute monarchy. For the support rests in the willingness of the majority (not, to repeat, of every individual) to go along with the system: to pay the taxes, to go without much complaint to fight the State’s wars, to obey the State’s rules and decrees. This support need not be active enthusiasm to be effective; it can just as well be passive resignation. But support there must be. For if the bulk of the public were really convinced of the illegitimacy of the State, if it were convinced that the State is nothing more nor less than a bandit gang writ large, then the State would soon collapse to take on no more status or breadth of existence than another Mafia gang. Hence the necessity of the State’s employment of ideologists; and hence the necessity of the State’s age-old alliance with the Court Intellectuals who weave the apologia for State rule. [...]

Particularly important in the modern world—now that an Established Church is often no longer feasible—is for the State to assume control over education, and thereby to mould the minds of its subjects. In addition to influencing the universities through all manner of financial subventions, and through state-owned universities directly, the State controls education on the lower levels through the universal institutions of the public school, through certification requirements for private schools, and through compulsory attendance laws. Add to this a virtually total control over radio and television—either through outright State ownership, as in most countries—or, as in the United States, by the nationalization of the airwaves, and by the power of a federal commission to license the right of stations to use those frequencies and channels.

Thus, the State, by its very nature, must violate the generally accepted moral laws to which most people adhere. Most people are agreed on the injustice and criminality of murder and theft. The customs, rules, and laws of all societies condemn these actions. The State, then, is always in a vulnerable position, despite its seeming age-old might. What particularly needs to be done is to enlighten the public on the State’s true nature, so that they can see that the State habitually violates the generally accepted injunctions against robbery and murder, that the State is the necessary violator of the commonly accepted moral and criminal law.

We have seen clearly why the State needs the intellectuals; but why do the intellectuals need the State? Put simply, it is because intellectuals, whose services are often not very intensively desired by the mass of consumers, can find a more secure “market” for their abilities in the arms of the State. The State can provide them with a power, status, and wealth which they often cannot obtain in voluntary exchange. For centuries, many (though, of course, not all) intellectuals have sought the goal of Power, the realization of the Platonic ideal of the “philosopher-king.” Consider, for example, the cry from the heart by the distinguished Marxist scholar, Professor Needham, in protest against the acidulous critique by Karl Wittfogel of the alliance of State-and-intellectuals in Oriental despotisms: “The civilization which Professor Wittfogel is so bitterly attacking was one which could make poets and scholars into officials.” Needham adds that “the successive [Chinese] emperors were served in all ages by a great company of profoundly humane and disinterested scholars.” Presumably, for Professor Needham, this is enough to justify the grinding despotisms of the ancient Orient.

There will always be thuggery: assault, plunder, and enslavement.  But mankind has natural safeguards to defend against thuggery: including the ability to recognize justice, and the ability to join together with other decent people to implement justice.

There will always be deceit: slander, fraud, and indoctrination.  But mankind has natural safeguards to defend against deceit as well: reason, skepticism, and the senses.

However, our defenses have been overwhelmed by a devastatingly effective partnership between thuggery and deceit.  As Rothbard explained, the state is a maleficent symbiosis of violent criminals and propagandizing intellectuals.  I call these partners in crime the Sword and the Lie. The Lie fosters the Sword through twisted sophistries which establish a false legitimacy and engineered consent to disarm our natural safeguards against thuggery. The Sword fosters the Lie through compulsory indoctrination (state religions and public schools) and through using its ill-gotten gains to corrupt the persuasive classes (state-beholden media and academia), all of which disarms our natural safeguards against deceit.

The Sword needs the Lie.  The ruled always outnumber the rulers, so a reign predicated on bald criminality (like a protection racket) would quickly be overthrown. To maintain its power, a regime must transmute murder into justice, tribute into taxation, and slavery into citizenship in the minds of its subjects. To do that, it needs intellectuals.

The Lie needs the Sword. Elaborate scams based on lies and manipulations (like cults) are difficult to maintain. Eventually some people begin to see through the lies and speak out. To keep its hold on its flock, an elite must be able to silence or coerce dissenters. To do that, it needs thugs.

The state has us in bonds, but also under a spell. The former could not hold us without the latter. In order to break our bonds, we must first break the spell.

How do we break the spell?  Libertarian intellectualism.

4. The Role of the Libertarian Intellectual

Now, if it weren’t for state propaganda, there would be no need for libertarian intellectualism, because again, morals relating to property are written on our hearts.  A man doesn’t need to understand the politics of war to know that murder is wrong; neither need he understand how markets work to know that stealing is wrong.  Again, the problem is that the state, through its false economics and false political philosophy, has convinced mankind that the world is in a constant state of extremity, such that, without some men being given the power to murder, steal, and enslave with impunity, civilization will descend into chaos. False theory can only be fought effectively with true theory. The role of a libertarian intellectual therefore is not to weave intricate theories to justify justice itself (there is no need for that); rather it is to unweave the tangled fabric of state lies. That is why we need economics and political philosophy: to show exactly how the state’s purported necessary evils aren't actually necessary, and thereby reveal to people their inner libertarian.  Were the "Lifeboat Lie" to be exposed, I strongly believe the inherent decency of man would then kick in (just as did with me once Austrian economics taught me about the natural workings of a free society).  Good men would no longer tolerate (or indulge in) "necessary evils", and evil men would have nowhere to run.


Murray Rothbard wrote the greatest libertarian manifesto ever: For a New Liberty.  Ron Paul wrote what might be the second greatest: Revolution: A Manifesto.  Not everyone has what it takes to write a great book like these two giants did.  But I think every libertarian could benefit from writing his or her own Mini-Manifesto of Liberty.  Doing so can not only inspire others, but can provide focus and clarity in helping the writer to understand what he or she is striving for and why.  I invite anyone reading this to write your own "Mini-Manifesto of Liberty" in a text file and post it here.

Saturday, August 15, 2009

Action, Goals, and Goods

(This post is an attempt to formulate praxeological fundamentals according to how they make sense to me.)

An action is an embarkation of a behavior for the achievement of a goal1 which executes a deliberate choice2 among potential behaviors.  A goal is a possible future situation that is perceived as better than what is anticipated to occur absent said behavior.3  An action always has an ultimate goal.  Its direct goal may also be its ultimate goal.  However, its direct goal may instead be a mediate goal which itself is aimed at only for the sake of the its ultimate goal.
An agent, according to my definition of the word, can only choose one behavior at a time (if a being could choose multiple behaviors simultaneously, it would be a being comprised of multiple agents).  Potential behaviors are chosen according to their value in the achievement of those ultimate goals.  This value is determined by a subjective judgment of the balance among:

I. the relative urgency of the behaviors' respective ultimate goals and
II.A. the behavior's perceived benefits (with regard to goals) of various anticipated (1) magnitudes and (2) likelihoods and its
II.B. perceived detriments, or costs, (with regard to goals) of various anticipated (1) magnitudes and (2) likelihoods.

All five variable categories above influence an agent's ascertainment of a behavior's value.4
Some mediate goals are situations in which certain resources are under one's control.  Such resources are goods.  Thus, some actions are endeavors to gain control over goods.  When the control of a good is desired for the sake of directly achieving an ultimate goal, it is a consumption good.  When the control of a good is desired for the sake of directly achieving a mediate goal, it is a production good.  The use of production goods achieve mediate goals which are situations which include the production of other production goods or of consumption goods.  Control over any good is desired solely for the sake of the ultimate goal it will hopefully lead to.

An act can also be considered an exchange, because it is a renunciation of the second-best situation that would have been the anticipated result of the second-best action deliberated over in exchange for the best situation that is the anticipated result of the action chosen.  Some situations exchanged in this manner involve the control of goods.  An agent may give up an anticipated situation in which he has control over one good in exchange for an anticipated situation in which he has control over another.  When such an exchange is made, it is a demonstration that the chosen behavior's value in achieving the agent's ultimate goals is considered better than the renounced behavior's value in the achievement of ultimate goals.5

1Here I differ from the Mengerian/Misesian approach. Menger characterized goods as means to the satisfaction of needs.  Mises modified this to characterize all action as an attempt to "remove or at least to alleviate the felt uneasiness".  I choose to simply refer to goals in order to include action in which no impact upon the feelings is intended.  For example, a soldier who throws himself upon a grenade does not expect to alleviate felt uneasiness.  The goal of his action (saving his comrades) will occur after his own demise, when he will be unable to feel any satisfaction or alleviation.

2This behavior can either be "doing something" or "intentionally not doing something".  When you first consider taking a walk, then choose to, and then actually begin to, that beginning, impelled by the choosing, is the action.  Continuing to walk is only an action if at any point it even crosses your mind whether to stop or continue.  If your phone rings, and the choice of stopping or continuing your walk doesn't even cross your mind, and only whether or not to answer the call crosses your mind, then answering the phone is the only action at hand

3In Man, Economy, and State, Murray N. Rothbard wrote:
All action is an attempt to exchange a less satisfactory state of affairs for a more satisfactory one. The actor finds himself (or expects to find himself) in a nonperfect state, and, by attempting to attain his most urgently desired ends, expects to be in a better state.
This is, strictly speaking, incorrect.  A man never holds onto any state of affairs.  Time is always passing, and conditions are ever changing.  If nothing else, the man ages in time, and therefore is always moving from one state of affairs to another.  A man, when he acts, therefore does not attempt to exchange a present state for a future one.  Rather, he attempts to exchange a less satisfactory future state for a more satisfactory future state.  The more satisfactory future state might very well be less satsifactory than his present state.  For example he may be unavoidably poorer or sicker than before; he will, if nothing else, be older.  But that is of no importance to his choice of action.  What matters if will be better off than he otherwise would be.

4In Man, Economy, and State, Murray Rothbard wrote:

In order to institute action, it is not sufficient that the individual man have unachieved ends that he would like to fulfill. He must also expect that certain modes of behavior will enable him to attain his ends.
However, what about the man at the roullette table who puts all his chips on one number? Does he really expect to achieve his end of becoming dramatically more wealthy from the next spin? Not necessarily; at least not according to the common definition of "expect", which is to regard something as likely to happen. Gamblers who make such bets often know very well that it is not likely that they will win. They do it anyway, because to them, the size of the pot makes it "worth a go". Is placing such a bet not an "action" since they can't be said to regard themselves as likely to win? No. It is still purposeful behavior: it is still an action. The purpose is still to win the pot, even if the likelihood is poor.
A man who acts does not necessarily expect his behavior to enable him to attain his ends. But he does necessarily deem it a worthy venture.  The worthiness of the venture (or the value of the behavior) is determined by the five criteria I outline above.

5Again, I differ here with classic Austrianism, because I believe agents, strictly speaking, always choose among behaviors and not goods.

Friday, August 14, 2009

Ben Bernanke Was Wrong: YouTube Mashup

Somebody did a cool "mashup" (defined in Wikipedia as "a digital media file containing any or all of text, graphics, audio, video and animation drawn from pre-existing sources, to create a new derivative work") of my article on Ben Bernanke's embarrassing prognostications.

This is a neat example of "Web 2.0" (distributed, participatory media on the internet) actually doing some good.

"PaulWilliamsWorld" painstakingly found the most telling footage of Bernanke's wretched economic forecasting and spliced them together.

Then, I transcribed the video and added Austrian analysis.

And now "confederalsocialist" has redone the original video, splicing in a reading of my analysis following each relevant Bernanke clip (see below).

The three of us are complete strangers and none of us are members of the media establishment, yet we have spontaneously collaborated to progressively add value to each other's products, and have thereby spoken truth to power and have spread that truth to thousands of people.

Individuals don't have to rely on the corrupt mainstream media anymore.  With the internet, the ideas of freedom can, to some degree, get around establishment gate-keepers and spread by virtue of their truth-value.  This new possibility is a ray of hope shining through the darkness of the rising state.


Saturday, August 8, 2009

The 19th-Century Bernanke

There is something disarming about a technocrat.  While it is easy to dismiss elected officials as blustering panderers, there is something comforting in the image of the specialist civil servant toiling away with industry and equanimity.  Poring over statistics like a Hellenic priest scientifically examining entrails, and carefully allocating resources like an Egyptian vizier, the technocrat seems benign, yet crucially important, and above the fray.

This is certainly the image that has been cultivated by Federal Reserve Chairmen.  One remembers Alan Greenspan with his prominent brain case and thick glasses uttering technical jargon just arcane enough to assure the markets that all was well with the "Greenspan put".  And we are regularly presented with Ben Bernanke the bearded sage comfortingly citing statistics that show how government remedies are working their way through the economy (however egregiously wrong he may be).

This aura surrounding technocracy has grown especially since the civil service "reform" of the late 19th century.  But technocrats have been striving for it for much longer.

This striving can be seen distinctly in the person of Nicholas Biddle (1786-1844), one of the more interesting characters in United States history.


Nicholas Biddle

 Starting in 1822, Biddle was the president of the American central bank that preceded the Fed: the Second Bank of the United States.  Biddle was initially reluctant to take the job.  A scion of a high society Philadelphia family, Biddle had no stomach for the indecorum of politics.  He ultimately accepted the position, however, stating that the Bank was, "of vital importance to the finances of the government and an object of great interest to the community..."

His disdain for competitive democracy (in his words "the violence of party") and his esteem for the Bank merged into a fervent belief that the Bank should always be above politics.  He implemented that belief as policy in his tenure as Bank president.  He proudly declared,

"There is no one principle better understood by every officer in the Bank than that he must abstain from politics.  The course of the Bank is very clear and straight on that point.  We believe that the prosperity of the Bank and its usefulness to the country depend on its being entirely free from the control of the officers of the Government, a control fatal to every bank which it ever influenced.  In order to preserve that independence it must never connect itself with any administration- and never become a partizan of any set of politicians."

In the 20th and 21st centuries, Federal Reserve chairmen carried on this tradition of jealously guarding the Fed's independence.  Witness Ben Bernanke's recent warnings that the Federal Reserve Transparency Act would politicize the Fed.

As we shall see, in practice Biddle, like Bernanke, was not against politics per se; so long as it was conducted in an unpublicized, "gentlemanly" manner.

The political climate during the early years of Biddle's tenure seemed to perfectly suit his temperament and attitude toward governmental institutions.  In an interview with the Frenchman Alexis de Tocqueville, who was in Philadelphia conducting research for his book Democracy in America, Biddle explained how American politics had been tamed and a placid consensus had emerged in recent years.

For a long time we were divided between Federalists and Republicans.  Those two parties were very like what you have in Europe; they had political doctrines to which interests and emotions were attached.  They fought bitterly until the Federalist party, always short in numbers, was completely crushed by its adversary.  Tired of their vanquished position, the Federalists ended up by giving up their own cause.  They either merged in the successful party or rallied, under other names, about questions of detail.  But the party standard has really been knocked down for good and all.  [...]  Since then there have been people who support the administration and people who attack it; people who extol a measure and people who abuse it.  But there are no parties properly so called, opposed one to the other and adopting a contrary political faith.  The fact is that there are not two practicable ways of governing this people now, and political emotions have scope only over the details of this administration and not over its principles.

In other words, under the new consensus, there was no need for debate.  It was simply a matter of civil servants like Biddle himself dutifully implementing wise policy.

Tocqueville didn't completely buy Biddle's story.  As H.W. Brands wrote, "perhaps because his own experience of aristocracy was deeper than Biddle's, Tocqueville detected a continuing struggle between the few and the many in America."  Tocqueville believed that "aristocratic [and] democratic passions" were always present, and "though they may slip out of sight there, they are, as it were, the nerve and soul of the matter."


Alexis de Tocqueville

Tocqueville was right, and the democratic passions he spoke of found their embodiment in the person of Andrew Jackson, who became President of the United States in the 7th year of Biddle's tenure.  In many ways, Jackson was Biddle's opposite.  While Biddle was the quintessential apolitical civil servant, Jackson was a volatile populist who considered himself the champion of democracy.  Jackson hated the prevalent political atmosphere as much as Biddle loved it.  Where Biddle saw consensus and benign paternalism, Jackson saw an entrenched establishment ridden with corruption.  He had first-hand experience with the cozy, back-scratching ways of the Republican political monopoly throughout his public career, and especially during his first, failed attempt at the presidency in 1824.  Of the three chief candidates of that election, Jackson was clearly the most popular.  But there was an electoral deadlock, so the race had to be decided by the House of Representatives.  Through a backroom quid pro quo with rival candidate Henry Clay, John Quincy Adams ended up winning the House vote and, as a result, the presidency.

Andrew Jackson

So Jackson came into office, after finally defeating Adams in 1828, with a large chip on his shoulder against the Republican establishment.  He also had a distinct disliking for Biddle's Bank in particular.  Despite the contrary characterizations of later historians, Jackson, who was not only a soldier but a lawyer too, was a studious and thoughtful, if intemperate, man; and he was an ardent hard-money advocate.  His monetary opinions were informed by contemporary hard money theorists and his own readings concerning the South Sea Bubble of 1720.  He rightly blamed the Bank for the Panic of 1819 and had been a leader in the fight against inconvertible paper money in Tennessee.

Jackson displayed his disregard for the Bank moderately in his first annual message:

"Both the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow citizens, and it must be admitted by all that it has failed in the great end of establishing an uniform and sound currency."

Biddle responded to Jackson's remarks with patronizing nonchalance.

"They should be treated as the honest though erroneous notions of one who intends well."

In a later meeting, Jackson warned Biddle that he thought the Bank was unconstitutional.  Yet Biddle continued to not take the President seriously.  He characterized Jackson's position as a mere idiosyncrasy.

"As such it is far less dangerous because if the people know that this is not an opinion which they must necessarily adopt as a portion of their party creed-- but an opinion of the President alone, a very honest opinion though a very erroneous one-- then the question will be decided on its own merits."

Biddle's attitude continued even after Jackson's "erroneous opinion" of the Bank showed itself to be persistent.

"In respect of General Jackson and Mr. Van Buren [Jackson's Vice President]", I have not the slightest fear of either of them, or both of them. ...I think we can defend the institution from much stronger enemies than they are.

Biddle's patronizing dismissiveness toward Jackson was a gross underestimation.  Jackson was as tough as they came.  He fought in the War for Independence as an adolescent and bore a scar on his face from a sabre blow he received for refusing to clean a British officer's boots.  His body was riddled with the scars of a lifetime of duels, brawls, and battles.  He also had the people on his side.  He was considered the hero of the Battle of New Orleans who rescued the honor of the new nation toward the end of the War of 1812.  And he was swept into office in a wave of popular anger at the corrupt political establishment.  All in all, he was not a man to be taken lightly.

Jackson being struck with a sabre by a British officer

The Bank's charter was not up for renewal until after Jackson's first term.  Biddle initially liked it that way, because, in keeping with his desire to shelter the bank from politics, he did not want its renewal to be an election issue.  He figured that even if Jackson were re-elected, as a second-term president, he would likely be less popular and thus less of a threat.  The scheming Henry Clay, then a Congressman, who cared more about becoming president himself than preserving the Bank, wanted Biddle to apply for an early renewal of the charter.  Jackson was so popular that Clay needed a potentially explosive issue like the Bank's rechartering to stir the pot, or else the President would glide into an easy re-election.  Of course this would put the Bank more at risk, but he convinced his benefactor Biddle (Biddle had used his Bank position to help Clay in his chronic debt problems) that an early renewal would be a sure thing.  He wrote to Biddle from Washington,

"Have you come to any decision about an application to Congress at this session for the renewal of your charter?  The friends of the Bank here, with whom I have conversed, seem to expect the application to be made."  [...]  My own belief is that if now called upon, [President Jackson] would not negative the bill; but that if he should be re-elected the event might and probably would be different."

Henry Clay

Thus did Clay manipulate Biddle into fatefully applying for an early renewal.  Biddle wrote to Congress in 1832,

"We have determined on applying to the present Congress for a renewal of the charter"

And he couldn't help but slip in a remark insisting that this decision had nothing to do with tawdry politics...

"Neither I nor any of my associates have anything whatever to do with the President or his election.  I know nothing about it and care nothing about it."

Despite such repeated proclamations, Biddle didn't mind writing propaganda articles promoting the Bank and bribing newspaper editors to run them.  Biddle wrote to one such editor, "...if you will cause the articles I have indicated and others which I may prepare to be inserted in the newspaper in question, I will at once pay to you one thousand dollars."  Now, this was public money that he was offering.  Of course, he insisted, there is "nothing in this communication which [he] should care to conceal."  Nonetheless, he requested that the editor return the letter, "as it might be misconstrued."

This was exactly the discrete, gentlemanly corruption that Jackson abhorred.

The Bank's most vocal supporter in Congress was Daniel Webster.  Even though Webster had staunchly opposed the bank's original charter, he discovered the merits of the Bank, quite coincidentally, when he found himself on its payroll.  At the peak of the renewal controversy, in which Webster was playing a leading role, Webster wrote to Biddle,

"I believe my retainer has not been renewed or refreshed as usual.  If it be wished that my relation to the Bank should be continued, it may be well to send me the usual retainers."
Daniel Webster

Daniel Webster

The renewal bill passed both houses of Congress, but was vetoed by Jackson.  But Clay's machinations backfired.  The Bank veto proved to be a fillip for Jackson's popularity, and he went on to win a landslide re-election.

Biddle knew that a major follow-up to Jackson's victory could conceivably be to remove the Treasury's deposits from the Bank.  This would be a crippling blow, because, unlike the Fed, the Bank's money-creation power was limited by the gold standard.

But even after his first defeat, Biddle's swaggering confidence continued.

"They will not dare to remove them," Biddle told Webster, "If the deposits are withdrawn, it will be a declaration of war which cannot be recalled."

But Jackson knew that Biddle had already been conducting a surreptitious war.  His attorney general Roger Taney presented to Jackson evidence that Biddle and the bank had deliberately manipulated the money supply just before the renewal bill was to be deliberated over.  Taney asked rhetorically,

"Can any impartial and unprejudiced mind doubt the motive?  Was it not to compel  the people to continue its monopoly and privileges, not on account of the benefits conferred by it, but to escape from the suffering which the [Bank] had the power to inflict?"

Taney also provided evidence of Biddle's corruption of the press.

Provoked by Biddle's appalling machinations, Jackson prepared to remove the federal deposits from the Bank.  Treasury Secretary William Duane balked at the idea, warning Jackson that Biddle might retaliate by creating a financial panic.  The idea that the bank could have the power to do such a thing only strengthened Jackson's resolve to end it.  He announced his final decision to withdraw the funds to his cabinet.  In his address, he remarked,

"The Bank has by degrees obtained almost entire dominion over the circulating medium, and with it, power to increase or diminish  the price of property and to levy taxes on the people in the shape of premiums and interest to an amount only limited by the quantity of paper currency it is enabled to issue."

In this speech Jackson demonstrated a recognition of how central bank money manipulation can impose and inflation tax and create housing bubbles; if only there was such awareness among the members of today's elected officials.

So the reader can know that the appalling nature of Biddle's response to Jackson's decision isn't only an Austrian take on the incident, the following four quotations are excerpts from Andrew Jackson: His Life and Times by the mainstream historian H.W. Brands.

The decision, when it came, didn't surprise Biddle.  His spies had informed him of the debates within the administration...  He considered a preemptive strike by buying off vulnerable members of the administration and Congress.  

He planned to do so by offering them Bank positions.

"In half an hour," he boasted to an intimate, "I can remove all the constitutional scruples in the District of Columbia.  Half a dozen presidencies"--of bank branches--"a dozen cashierships, fifty clerkships, a hundred directorships, to worthy friends who have no character and no money."  But he held back, not quite believing that Jackson would really go through with removal.

With such a writhing multitude of sinecures at Biddle's disposal, it is no wonder Jackson called the Bank a "hydra of corruption".

Jackson vs. the Bank Hydra

...Biddle launched a counterattack.  He called in loans, tightened credit, and otherwise reduced the bank's financial exposure.  [...]To compliment his fiscal tightening, Biddle went ahead with his bribery, offering lucrative positions to Jackson loyalists if they would abandon the president and join the bank. [...]  
The attack on the money supply had an immediate effect, starting in the nation's financial capital.  [...]  The financial panic spread from New York across the country.  Banks collapsed in Washington and Philadelphia while a Boston paper described conditions there as "absolutely frightful."  But Biddle maintained his choke hold on the money supply.  "

Biddle's Machiavellian arrogance reached a crest in his response to the crisis he generated.

My own view of the matter is simply this... The projectives of this last assault on the Bank regret and are alarmed by it.  But the ties of party allegiance can only be broken by the actual conviction of existing distress in the community.  Nothing but the evidence of suffering abroad"-- that is, in the country as a whole-- "will produce any effect in Congress... This worthy President thinks that because he has scalped Indians and imprisoned judges, he is to have his way with the Bank.  He is mistaken..."

As is well known to readers familiar with Austrian Business Cycle Theory, Biddle's contraction of  money substitutes that were pyramided on top of the specie supply was actually a good thing; it only brought on the necessary correction that, if postponed further, would have eventually been even worse.  But obviously his motivations for the action were deplorable, as well as highly telling regarding the attitude of central bankers.

Jackson was beset by petitioners suffering from the panic and legislators challenging the constitutionality of his action.

He told his Vice President, "The Bank, Mr. Van Buren, is trying to kill me.  But I will kill it."

Jackson was vindicated in standing his ground.  Within months, the correction was over, economic growth resumed, and Biddle's power was broken.


Jackson Flourishing his "Removal Notice" and bringing down Biddle's Bank

In 1836, the Bank's charter expired.  It limped on for five more years as a non-Federal bank before finally going bankrupt.  Four years after that, Biddle died at age 58.

Like Ben Bernanke today, Nicholas Biddle cultivated the veneer of a benign civil servant seated serenely above the political fray.  In reality, he, also like Bernanke, was up to his neck in the backroom game of power.  And when Biddle's bureaucratic cradle was rocked, he quickly morphed into a Machiavellian monster.  Keep that in mind as Ben Bernanke gets progressively cornered by Ron Paul and the End the Fed movement.  When you hear about the Federal Reserve Transparency Act getting stalled in committee, think of Daniel Webster, bought and paid for with central bank money.  When you read Fed apologia in the New York Times, The Economist, and the Wall Street Journal denouncing the "reckless populism" of the Act, think of the newspaper editors in Biddle's pocket .  Most of all, when you see Ben Bernanke on television, "respectfully" insisting upon the Fed's independence, and "gently" warning of the economic consequences of any restrictions upon it, think of Nicholas Biddle, an outwardly mild-mannered fellow who would wreck a whole nation's prosperity in order to cling to power.

Libertarian historian Lord Acton said, "Power tends to corrupt, and absolute power corrupts absolutely."  And the corrupt banking magnate Mayer Amschel Rothschild said, "Give me control of a nation's money and I care not who makes the laws."  Those two dictums, taken as dual premises, lead inexorably to the conclusion that men like Biddle and Bernanke should always be challenged with eternal vigilance by all people who would be free.

Note: All quotations regarding Biddle and his times are from the secondary source Andrew Jackson: His Life and Times by H.W. Brands (2005)