Strauss-Kahn, Exemplar of Socialism


The libertarian critique of socialism, or “social democracy,” has usually gone something like this:

The socialist program demands a planned economy. A planned economy can result only from plans. Plans must be made by a group of experts who are not subject to the vagaries of the electoral process. To form and implement their plans, the planner-kings must know everything crucial to the economy. They must know everything significant to their own plans, and be able to predict everything significant that may result from them.

But that is impossible.

This being true, the people who become planners will be those who are either stupid enough to believe that Plans can succeed or cynical enough to care only about the personal power that can be acquired by Planning.

The libertarian critique has a logic that no socialist program ever possessed.

Now we witness the reductio ad absurdum of the socialist idea: Dominique Strauss-Kahn, head of the International Monetary Fund, chief honcho of the French Socialist Party, and prospective president of France, who was arrested Saturday on charges of trying to force a maid in his $3,000 a night hotel suite to have sex with him.

Suppose that the charges turn out not to be true. Suppose that Strauss-Kahn’s nickname, “the great seducer,” means nothing. Suppose that consensual sex is nobody’s business but one’s own. Suppose all these things — the last of which is certainly true. The $3,000 a night hotel remains a problem.

As a self-chosen representative of socialism, and an anointed planner of the world's economy, Strauss-Kahn has supposedly devoted his life to the good of the people. How, then, $3,000 a night? On what premise must the people of the world pay for that?

I’ll tell you. The premise is that Strauss-Kahn, a product of those inner-circle French schools whose graduates automatically get high government jobs, deserves his perquisites of office, because he is somehow qualified to plan the world's economy.

Is he?

No. And anyone who thinks that he himself is so qualified, and uses that idea to justify his perquisites of office, is likely to present a strange moral profile.

World economic planning is allegedly justified on humanitarian and charitable grounds. Planners, allegedly, exist to help people, especially the deserving poor. Planners are supposed to be performing an altruistic work, the modern form of a religious mission. Yet among these managers of the world economy there is a strange absence of people who live in modest circumstances, practice some kind of religious or ethical discipline, or have anything to do with normal human beings, except when the maid arrives a few minutes early in their $3,000 a night hotel suite.

There are plenty of smart people in this world. Many modest people, skeptical of their own conclusions because they are actually in touch with their fellow citizens and knowledgeable about their lives, are also smart people. Strangely, many of these smart people are socialists, but their ambition is not to become world socialist leaders.


Because the idea that a small group of people is smart enough and knowledgeable enough to plan the financial lives — in fact, the lives — of six billion people is an idea that no one with any ethical understanding would apply to himself. An ordinary moralist would ask, “Who am I to do that? I don’t know enough. I could never know enough.”

Strauss-Kahn presents little evidence of any such moral or practical reflection. But what he did with his life was predictable, under the modern socialist system. A beneficiary of unmerited advancement, he did his best to “stabilize” the world’s economy by using political means to get the productive countries to support the spendthrift countries. He who wasn't producing anything himself.

I don’t presume that an alcoholic is incapable of becoming a good author. Faulkner did. Hemingway did. And I don’t presume that a “great seducer” is incapable of becoming a great thinker. Plenty of examples argue otherwise. But I do not presume that a drunk will be good at running an airline. I do not presume that a person who lacks discretion even about consensual sex affairs will have enough discretion to plan the future of six billion humble families.

To put this in another way: how did someone as stupid as Dominique Strauss-Kahn become one of the small group of people appointed to oversee the fiscal life of planet earth?

The answer is: the logical necessities of the socialist idea. If you want socialism, you are voting for fools like Dominique Strauss-Kahn. You may not know it, but you are. Otherwise — I’m sorry, you can’t have socialism on any other terms. The fact that Strauss-Kahn rose to the top is only a sign that the rest of the candidates were actually less competent than he.

To conclude: if you want someone running your life, and the life of the world, you can be assured that it will be someone like Dominique Strauss-Kahn — and if not him, then worse.

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The Significance of Ron Paul


Rep. Ron Paul, Republican of Texas, is once again running for president.

No member of the House of Representatives has run for president and won since James A. Garfield in 1880 (and Garfield had been elected to the Senate just before his election as president). No one as old as Paul has been elected president. He would be 77 when he took the oath of office. Ronald Reagan was 69.

Most of all, no one as radical as Paul has been elected president during the modern era.

There are hopes that this time around, Paul will break through to mainstream America because his argument against foreign war, for a sound currency, and for large cuts in spending will catch fire. It will with some voters, but political ideas acceptable to the American public don’t change that fast.

I said this two weeks ago in a talk to my state’s conservative activists — an audience that included Paul supporters. I said I agreed with Paul on some important things, but that he could not win. One came up to me afterward and said, “You know, every time you say that, you hurt his movement. He got as far as he did last time because thousands of people thought he could win.”

And they were mistaken. But he changed some minds. He made arguments that nobody else would have made — and some of those arguments look better four years later.

In 2007, no Republican candidates were arguing against the wars in Iraq and Afghanistan except Paul. Now the Politico website reports a rise of war weariness and even “isolationism” among the Republicans in Congress. They are far from a majority, but they are a faction. And there is another libertarian candidate in the race, former governor Gary Johnson of New Mexico, who also calls for getting out of the foreign wars immediately.

Four years ago, no Republican candidates other than Paul were talking about protecting the value of the dollar. I still haven’t heard them doing it — but gold is above $1,500 an ounce, and the US dollar is below the Canadian and Australian dollars. The topic ripens.

Four years ago, there was no quasi-libertarian Tea Party movement, and Ron Paul’s quasi-libertarian son Rand Paul was not in the US Senate.

The ground has changed.

Still, it has not changed enough to elect Ron Paul as president. There is no point collecting dandelion seeds, such as the CNN/Opinion Research poll last week, which showed Paul running stronger against President Obama than any other Republican candidate. I have heard that poll cited several times, never mentioning that the split was Obama, 52%, Paul, 45%. Anyway, it was a poll taken 15 months before the election, which means it was a poll of a public not paying attention. Paul, in particular, had not been seriously attacked.

A few days later, he was. Conservative columnist Michael Gerson of the Washington Post ripped into him for his answer to a reporter’s question. The question was whether Paul favored the legalization of heroin.

There is a purpose in questions like that. It is to see whether the reporter can catch the candidate saying something crazy — not crazy, maybe, to a social scientist or a philosopher, but crazy to a political operative, or Joe Sixpack.

The role of the radical candidate is to take the taboo stands, fight valiantly, lose, and change the political ground.

In his answer, Paul compared freedom to use drugs to freedom of religion. Here is how Gerson paraphrased it: “If you tolerate Zoroastrianism, you must be able to buy heroin at the quickie mart.” This, Gerson sneered, is the essence of libertarianism.

But Paul had said more than that. Wrote Gerson: “Paul concluded his answer by doing a jeering rendition of an addict’s voice: ‘Oh yeah, I need the government to take care of me. I don’t want to use heroin, so I need these laws.’ Paul is not content to condemn a portion of his fellow citizens to self-destruction; he must mock them in their decline.”

Gerson concluded that any candidate who supports “the legalization of heroin while mocking addicts” is marginal and unserious. His column was a way of looking at the Republican list and scratching out the name of Ron Paul.

Libertarians can rail against Gerson as biased, which of course he is. He is an opinion columnist. Bias is part of his job description. But if your candidate is taken seriously, which Paul was not in 2008, this is the kind of attention he is going to get — and here it is attention from a conservative. If Paul became the Republican frontrunner, the pundits of the Left would go after him with machetes and crowbars.

They haven’t, because they delight in schism on the Right. But if he becomes the frontrunner, they will. And Paul has said plenty of things they can use to make a bogeyman out of him. Legalize heroin. Imagine what they could do with that.

Here is the reality. Certain political stands are safe, others are daring, and some are taboo. The role of the radical candidate is to take the taboo stands, fight valiantly, lose, and change the political ground. It is a valuable role to play: it is changing the field so that other good candidates, later on, can win.

What other candidate? Maybe Rand Paul in 2016 or 2020. Maybe Gary Johnson. One can imagine a Mitch Daniels-Gary Johnson ticket in 2012, with Johnson running in the top position later. Once a libertarian faction has been established in the Republican Party and is built into a substantial faction, room is made for other candidates, ones aiming more directly at winning, to have a go.

On the day that Paul announced, I had lunch with his 2008 campaign manager, Lew Moore. The timing was accidental; I had met Moore among the conservative activists two weeks before, and I hadn’t seen him in years. I asked him: when Paul ran in 2008, did the congressman seriously think he could win, or was it mostly to change the debate?

Without denying that Paul had had some chance of winning, Moore said the campaign was mostly about changing the debate. He said, “That is what his whole life has been about.”

And, at 75, Paul is not done. You have to admire the man. A lone congressman from Texas, never enjoying the support of his party’s establishment, has changed the political ground within the Republican Party.

And maybe he will change it some more.

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Wind Power Wannabe


Two recent stories about wind power went unremarked in the mainstream media, presumably because the stories don’t fit the dominant Green narrative, aka the Green Dream.

The first is the report out of the UK that wind farms produce far less energy and cause far more problems with the grid than proponents have predicted or acknowledged.

The John Muir Trust — a “conservation charity,” please note — commissioned an engineering study of wind power in the UK. The report is out, and it is revealing. While wind power farms are pitched to investors — really, lawmakers, since wind power only exists because of lavish subsidies from government — as generating, on average, 30% of their maximum output over time, in reality they average only 25%. So wind power delivers about one-sixth less electricity than promised. This is a very significant shortfall. Yet wind power averages less than 20% of capacity most of the time, and a risible 10% about a third of the time.

But there is a more severe problem. Because wind power is so erratic, it needs backup from fossil fuel power plants, and that backup has to be able to shut down quickly when the wind blows hard, or come online quickly when wind farms won’t deliver even their measly 25% power. So wind power farms must be tied very tightly to fossil fuel plants, or the grid will face a shortfall.

Even worse: the times (such as the middle of the night) when power demands on the grid are slight are often the periods when the wind blows hardest. At such times, owners of wind generators — who have to sell power whenever it shows up, even at a low price — push power onto the grid, thereby forcing other providers off.

This is because the grid is just a distribution network of power lines and transformers with little capacity for storing power when it isn’t being consumed. Yes, there is “pumped storage,” which uses excess electricity to get water up hill, then during periods of high demand lets it flow back down, turning turbines as it goes, thus generating power. But pumped storage is inefficient and limited. Currently, the United States, the world leader in pumped storage, can store only about 2.5% of the average electric power sent across the grid at any given time.

A second damaging piece of news for wind power is the report that it may have lost its enchantment even for the Dutch.

Perhaps because of its historic use of windmills, the Netherlands has invested heavily in modern wind power. It is now third in the world in offshore wind power generation — of course heavily subsidized by the government. But the new center-right government has decided that continuing the massive subsidies, which include the transfer of 4.5 billion Euros of Dutch tax dollars to a German engineering company to build and run new wind farms, is not, shall we say, defensible.

The new Dutch Prime Minister, Mark Rutte, may have come up with the perfect epitaph for wind power. He reputedly said, “Windmills turn on subsidies.” Soon fewer will be turning.

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Rising Star


Liberty is always delighted to acclaim the artistic success of libertarians. Our delight is increased when they are Liberty’s own authors.

Today it is my pleasure to introduce a book by one of my own favorites, Garin Hovannisian. The book is Family of Shadows, it’s published by HarperCollins, and it’s causing a stir on several continents.

Family of Shadows is the story of Garin’s family — who were by no means vague or ghostly people. They were vivid presences, taking their part in some of the most interesting events of the 20th century, from the massacres in Armenia during the time of “the breaking of nations” to the destruction of the Soviet Union. The book is a story of survival, and of the individual freedom that makes survival worth the effort.

It’s also a story told with great style and insight. All historians deal with “shadows,” but a good historian makes them more substantial than the ostensibly real people who surround us daily. And a good historian, like a good novelist, makes us wiser as we read. While reading Family of Shadows, I kept thinking, “This is a very good novel.” But it’s not fiction, nor is it fictionalized. It’s an exhaustively researched history, free of the shallow assumptions, inane theorizing, and formulaic prose of normal historical writing.

Read it for yourself. You’ll find that you won’t be able to put it down. In the meantime, I thought you’d be interested in knowing more about the author. So I asked Alec Mouhibian, himself a writer for Liberty, to interview his friend Garin.

Here’s a look into the writer’s workshop.

 — Stephen Cox


AM: Stories ask to be told. But some stories prefer to be left alone. Why, and how, did this story call to you?

GH: It's strange; I can remember exactly when and where it happened. It was in the fall of 2007. I was all alone in a computer lab on the eighth floor of the Columbia University Graduate School of Journalism in New York. I was a student there, writing my master's thesis about a group of magicians who had been meeting in secret for generations. . . . I'm not sure that's important. But what happened to me that afternoon is, I think, what writers waste their lives waiting for, one of those cosmic events — when stars seem to align into a constellation. . . .

What I mean to say is that I discovered, suddenly and for the first time, that all the details and metaphors and meanings of my family history somehow belonged to a great narrative.

My great-grandfather Kaspar had survived the Armenian Genocide of 1915 and escaped to the vineyards of California's San Joaquin Valley. My grandfather Richard had left his father's farm to pioneer the field of Armenian Studies in the United States. My father Raffi had left his law firm, the American Dream itself, to repatriate to Soviet Armenia, where he went on to serve as the new republic's first foreign minister.

So I realized that the family story was about three men who left — individuals who cheated their destinies — but it was also about men who, unbeknownst to them, had been serving a pattern greater than themselves. A homeland lost, remembered, regained — it was a perfect circle!

Then I knew I would have to write Family of Shadows.

AM: You mentioned how this story hit you as you were wandering the world of magic. You're quite the magician yourself. What connection is there between your history with magic and the discovery that led to this book?

GH: My father gave me my first magic set when I was five, and I knew immediately that I would become a magician. I loved to make the impossible happen, to play at the border of reality and fantasy. Of course I also loved to watch the reactions of people — the astonishment spread upon the faces of strangers. Anyway, I long ago gave up the wand for the pen, but not, I think, the passions that run through both of them: mystery and vanity.

AM: Explain where you had to go to write this book, what you had to explore, and how this vastarray of settings get along with each other in the story and in your mind.

GH: I didn't know, when I decided to write the book, just how far I would have to travel. I couldn't imagine that I would have to spend countless hours at the National Archives in Washington or the Armenian academy called the Jemaran in Beirut or the National Library in Yerevan or the Tulare Historical Museum in the San Joaquin Valley of California. But I think it was that other kind of travel — not through space, but into lost time — that was the most exhilarating. I realized that if I were to tell my story straight, I would have to conduct some difficult interviews — to go deep into the minds and memories of my living characters, where so many details of my story had been trapped for decades.

AM: Your book is evenly divided between the histories ofthree men. Before we go further, explain your process for choosing what to include and what to leave out of their story, and the stories of the many characters surrounding them.

GH: The book, as I first wrote it, was about 450 pages long. The one you'll find in bookstores today is 300. You know very well that you were in part responsible for this. I remember the first time you read the manuscript. I was sitting across from you, minding my coffee, pretending not to notice your reactions. You were quiet, mostly, but every so often, you would emerge from silence to sing the blues, and I knew this wasn't a good sign.

AM: I never thought my rendition of "My Baby Ain't No Baby No More" could be so pregnant.

GH: Oh, it was — and actually it made me realize just how big my own book had become. The truth was that those 150 pages were important — they told so much history and gossip — but they weren't important for this book. So I began to cut. It was slow and deliberate and painful at first. But then you remember what happened to me? Suddenly, I was slashing away at my pages — reversing months of labor. I bet I lost a lot of good lines, too, but it was necessary and, ultimately, deeply liberating.

AM: Homeland. Patterns greater than self. These fall under the greater concept of "Armenia," toward which all the dream-roads in your book lead. Define Armenia — in your own terms — for those (including Armenians) who have no idea what it might mean.

GH: To begin with, Armenia is an actual land — stretching between the Black and Caspian seas — where the Armenian people have lived for thousands of years. We used to have our own empire, but for most of history we were content merely to survive the rise and fall of neighboring empires — the Roman, Persian, Byzantine, Arab. Armenia was where kings came to do battle. And so the blood, the ethos, the mythology of countless civilizations is in our soil.

Armenian history forever changed in 1915. Western Armenia was cleansed of all Armenians by the nationalist Young Turk regime of the Ottoman Empire; those who survived the genocide scattered to new diasporas across the world. Eastern Armenia, meanwhile, was absorbed into the Soviet Union as the smallest of the 15 socialist republics. That tiny sliver of land is the Armenia you'll find on modern maps.

But for much of the 20th century, Armenia existed mostly as a dream. My father and my grandfather before him spent their childhoods yearning for a "free, independent, united Armenia." Forgive me, I do have to be poetic, because the truth is that for us, the millions of Armenians living in exile and dispersion, Armenia had become something like a poem: a spiritual landscape blossoming with metaphor and mystery and apricot. It is there that Family of Shadows is set.

AM: Mmm, metaphor. That strangest and most bitter Armenian crop.

Let's talk about Liberty, and its own role in the soil. I've known you for years, but I never really wanted to know you until your byline appeared in this magazine at the tender age of 17. How does individual liberty figure in the Armenian-American dream? How does it contend with the shadows that haunt every corner of the real and imagined Armenia?

GH: You're testing me. "Let's talk about Liberty" — wasn't that the slogan of the Cato Institute conference we attended in San Diego ages ago? That's where we first met Stephen Cox — followed him into literature and then into Liberty. It was our breakthrough!

Now you know as well as I do that Family of Shadows isn't a libertarian manifesto. But it is, I've long secretly believed, a kind of allegory of individualism and rebellion. At its deepest level, it is the story of three men who were born into times and places where they did not belong, who defied the great forces of history, who defied destiny. My great-grandfather defied his destiny of death during the genocide of 1915. My grandfather rejected his destiny on his father's farm. My father abandoned his destiny in the American Dream.

Maybe that's not fair, though. For my father, I think, the American Dream was never about achieving and enjoying liberty for oneself, but about spreading liberty across countries and continents.

AM: Is there no tension between the spread of liberty and the participation in an ethnic-national heritage, which might be at odds with individualism? How can this be reconciled in Armenia?

GH: Governments don't have ethnicities. People do. So I confess not to feel the tension. I don't see why an individual, living in a free society, shouldn't feel free to seek his private solace or meaning or peace wherever he pleases — in philosophy, religion, even national heritage. You build yourself a free country, but then what? You still have private problems. You still have to deal with death and salvation.As the great poet sings, "you're still gonna have to serve somebody."

AM: Classic Milton. Always comes through. Now of course your book is a powerful human drama, and should therefore matter to anyone who ranks himself among the humans. But perhaps you can explain why Armenia should matter to America.

GH: After the genocide of 1915, an unprecedented human rights movement swept through the United States. American citizens collected more than a hundred million dollars to help the surviving refugees; kids who didn't finish their suppers were told to remember "the starving Armenians." The most important witnesses and chroniclers of the genocide had been American ambassadors and consuls, and now it was the president himself — Woodrow Wilson — who was proposing an American mandate to safeguard Armenia.

In those years, the American people invested their spirit in the Armenian struggle — and I think the mysterious logic of that investment has revealed itself slowly through time. It's been forgotten, but in February 1988, half a million Armenians gathered in Yerevan, the capital of Soviet Armenia, to launch the first successful mass movement against Communist rule. Independence followed in 1991. That's when my father, an American citizen, returned to Armenia. That's also about the time when a million Armenians left a newborn Armenia to seek more certain destinies in the United States.

The stories, the histories, the Armenian and the American Dreams, were in conversation long before I tried to capture that conversation in Family of Shadows.

AM: The Russians have a saying: “Every grandmother was once a girl.” Perhaps it can also be said that every answer was once a question. So...any questions before you go?

GH: You know, I have been wondering: who is John Galt?

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I Can’t Get a Job—I’d Lose My Benefits!


What are we learning from the recent census?

A headline in this Thursday’s Westchester County Journal News proclaims "Census: Density in Pockets." Well, duh. Just look around New York and you'll see high-rises and low-rises that house low-income families whose housing is subsidized by "Section 8" of the welfare code, which ties rents to a percentage of income. The more you earn, the more you pay. Conversely, if you don't earn anything, you'll pay almost nothing. I have a friend who pays $117 for a one-bedroom apartment on a tree-lined street in North Yonkers.

She's one of the lucky ones. I have other friends who live in a building in South Yonkers where a different drug king controls each floor. (That's how lucrative the drug trade is in these areas. After all, it's money off the books. It won't affect the rent.) Buildings are subdivided and subdivided again to provide housing for the burgeoning population of welfare recipients in these dense "pockets."

Another friend of mine teaches junior high in the Bronx. Recently she gave her students a typical assignment: what do you want to be when you grow up? One bright young seventh-grader wrote glowingly about his desire to go to college and become a lawyer. "I'll carry a briefcase to work and wear a charcoal gray suit," he wrote. "I'll drive a BMW and I'll help people with their problems." My friend cheered his enthusiasm as she read his dream. Then she reached his final paragraph: "But if I make too much money, I'll lose my benefits," he concluded. "Maybe I shouldn't go to college after all."

What a chilling message these children are learning from their parents. I hear it too, all the time. "I can't get a job. I'll lose my Medicaid." "I can't get a job. My rent will go up." So parents teach their children how to use the system — how to get on the Section 8 rolls, how to get more food stamps, how to get more welfare. Often for a girl, that means having babies outside of marriage. Children learn how to find jobs that are off the books, income that can go unreported. Their parents don't have the courage to say, "Get out of here! Go to college and fly far away!"

This is a Reflection full of storytelling, so I'm going to tell you one more story. My friend Kelly was a single welfare mom rearing two children, with another one on the way. She was living in a tiny, grungy apartment on one of the worst streets in Yonkers. When the father of the new baby left instead of marrying her, she knew she had to change her life. So she reached out for a different safety net from Section 8 or WIC (aid to Women, Infants, and Children) or Medicaid: she called her parents. Then she moved across the country to Sacramento, where her two older boys are now enrolled in better schools with better classmates. Her mother joyfully volunteered to take care of the baby while Kelly attended school herself. This month Kelly will graduate and become a dental hygienist. By the end of the summer she will be moving into her own apartment. I am so proud of her!

Government welfare always begins with good intentions. No one wants to see young mothers abandoned on the streets. No one wants to see children go hungry or uneducated. But these "pockets" of dense population are not what anyone intended. They are sad places, full of broken dreams and lost courage.

The War on Poverty was supposed to end this mess. It has only gotten worse, as any free marketeer could have predicted. Government needs to get out of the way and stop competing with free market housing, so that more people like Kelly can find the courage to leave the grungy pockets of Section 8 and move into wider, roomier pockets somewhere else — anywhere else! —  with better schools, better opportunities, and a better way of life.

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Good as Gold


James Grant is the best-spoken and most accomplished hard-money man in Wall Street. Plenty of people can inveigh against the Fed; the publisher of Grant’s Interest Rate Observer can put it in the context of today’s financial markets and also in the context of history.

Grant is also a historian. He wrote a biography of John Adams, and another of financier Bernard Baruch, and several other histories, including my favorite among his works, The Trouble with Prosperity: The Loss of Fear, the Rise of Speculation and the Risk to American Savings (1996). His new book, “Mr. Speaker! Mr. Speaker!” should be of particular interest to readers of Liberty.

That’s not because of any deep interest I have in his nominal subject, Thomas B. Reed (1839–1902). Reed was a moderately interesting figure. He was fat, he ate fish balls for breakfast, and he spoke French. He was a congressman from Maine, first elected in the centennial year, 1876. He was a man of his time, a Republican stalwart who supported the tariff and gold and opposed foreign wars. Though he was for woman suffrage, he was no progressive, at least in the sense that today’s progressives are. He had no desire to teach other people how to live. “Pure in his personal conduct,” Grant writes, “he had no interest in instructing the impure.”

During the 1890s, Reed was speaker of the House. His claim to fame is how he changed the House rules to give himself, and the majority, much more power to get things done. Whether that was good or bad depends on your point of view.

Parts of the book are about Reed’s parliamentary maneuverings and also about his wit. These parts are well-written, but I was not much interested in them. The greater part of the book, however, is about the financial events and national political battles from 1870 or so to 1899, which I found very interesting.

Now gold is the money of the distant past. In the 1870s, Grant observes, “Gold was the money of the future."

Grant covers several such things, from the collapse of the Freedmen’s Bank to the stolen election of 1876. He has a particular interest in the currency. One story he tells is of Lincoln’s printing of greenbacks during the Civil War, and the struggle afterward over restoring the link to gold. In the ideology of the day, restoration was necessary. It was part of honorable dealing. But people dragged their feet about doing it, because a national debt had been piled up during the war, and what was the need to repay investors in gold if they had bought bonds with greenbacks? And besides, there was a boom on, and shrinking the money supply would spoil it.

The boom went bust in 1873. For the rest of the decade the country was arguing about the commitment to return to gold. The way in which this argument was conducted was much different from the way it would be today. Now gold is the money of the distant past. In the 1870s, Grant observes, “Gold was the money of the future”:

“A 21st century student of monetary affairs may stare in wonder at the nature of the monetary debate in mid 1870s America. A business depression was in progress. From the south, west and parts of the east arose a demand for a cheaper and more abundant currency. Yet such appeals were met with, and finally subdued by, a countervailing demand for a constant, objective and honest standard of value.”

“Resumption day” was Jan. 1, 1879. There followed “a mighty boom.” In the 1880s, prices fell 4.2% and wages rose.

This was the era of laissez-faire. “The government delivered the mails, maintained the federal courts, battled the Indians, examined the nationally chartered banks, fielded the army, floated the navy and coined the currency.” The big social program was Civil War pensions — for the Union side, not the Confederates. By the standards of the day, the Democrats were the small-government party and the Republicans were the big-government party, but policy differences were at the margin only.

The federal government was funded by the tariff, which the Republicans, and Reed, thought was good for American labor. The Democrats quoted the free-trade arguments of Frédéric Bastiat. “The Republicans,” Grant writes, “having no ready answer for Bastiat’s arguments, were reduced to pointing out that he was, indeed, French.”

The ideological atmosphere started changing in the 1890s. The Panic of 1893 brought on a severe depression, and another political battle over the currency. This time the supporters of gold battled it out with the supporters of silver, with bimetallists arguing for both at once.

Grant provides the best explanation of the gold-versus-silver battle I have read, especially the futility of having two metallic standards at the same time. Here he is not so proud of Thomas Reed, who was by then speaker: “One senses, reading him, that he was not quite sure what the gold standard was all about.” Reed’s position “lacked clarity, or, one might even say, courage. [President Grover] Cleveland had one unshakable conviction, which was gold. Reed had many convictions, only one of which — no free silver — was strictly nonnegotiable.”

Reed’s final battle was over war with Spain. He was against it. The new president, William McKinley, seemed to be against it, but lacked the courage really to oppose it. Ex-President Cleveland was against it, as was William Jennings Bryan, the presidential candidate whom McKinley had beaten in 1896. But the Congress was for it, and even with his self-enhanced power as speaker, Reed couldn’t block the war resolution of 1898. It passed the House 310 to 6.

A year later, Reed resigned. He wrote to a friend, “You have little idea what a swarming back to savagery has taken place in this land of liberty.” Publicly he said nothing. Three years later he was dead.

And so Grant ends his book. It is a fine book. I recommend it. Don’t be put off by any lack of interest you may have in Thomas B. Reed. I wasn’t much interested in him, either. You don’t have to be.

Editor's Note: Review of "'Mr. Speaker! Mr. Speaker!' The Life and Times of Thomas B. Reed, the Man Who Broke the Filibuster," by James Grant. Simon & Schuster, 2011, 448 pages.

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Creation vs. Diversion


When an investment opportunity seems too good to be true, prudence recommends asking: “Will I be sharing in wealth that I help to create, or will I taking some wealth from its real producers?”

A chain letter is an example of just diverting wealth. So is a Ponzi scheme; so is the familiar Nigerian email scam, which gains superficial plausibility from a whiff of dishonesty or illegality.

Similarly, someone engaged in a possibly though not obviously productive business — perhaps some complicated Wall Street transaction — may well ask about creation or diversion of wealth. If not conscience, then concerns about legality and the dependability of success prompt the question.

Someone offering a suspiciously attractive opportunity might dodge the question about wealth creation by saying that the success of his method, though honorable — a method of choosing stocks and timing transactions, perhaps — depends on secrecy. Even so, an answer in general terms is in order; and the vaguer the answer, the more skepticism prudence recommends.

Beyond physical objects, wealth of course includes intangibles such as education, repair and other services, transportation, entertainment, travel and tourism, and comforts of various kinds. Similarly, the production of wealth includes not just growing or physically shaping things but also specialization, the division of labor, and exchange. (Each party to a voluntary and informed transaction gains what he considers more wealth than what he gives.)

Financial operations come into the story. Arbitrage of the most obvious kind moves resources or products from where they are less scarce and valuable to where they are scarcer and more valuable; and by ironing out price discrepancies, it makes the price system more accurate in equilibrating supply and demand. A well functioning market generates knowledge and uses it productively.

 Speculation — most obviously but not only in standard commodities — is a kind of arbitrage in time, moving things from a time when they are less valuable to a time when they are more valuable. If something, say wheat, is expected to become scarcer in the future, a speculatively bid-up price tends to hasten economies in consuming the thing and possibly hasten its production, thereby lessening its future scarcity.The speculators themselves bear the costs of being wrong. Speculation contributes to the depth and resiliency of futures and forward markets, where businesses can hedge against the risk of adverse price changes (and where, as a result, opposite risks can more or less neutralize one another).  Insurance is an obvious example of hedging against risk. 

Saving and investment make possible the increased productivity of well-chosen roundabout, time-consuming, capital-using kinds and methods of production. (Here “capital” means resources freed by savers from serving current consumption so they can serve longer-term-oriented production instead.) The stock markets and related activities help allocate capital to places where it promises to be most productive. Financial intermediation tailors the terms on which capital is available to the varied wants and needs of savers, borrowers, and companies issuing stock; securitization of loans is just one example.

Like capital, risk-bearing is an essential element in production, especially innovative production. Various kinds of stocks and bonds and derivatives, including even the notorious credit-default swaps, help place risk with the persons and institutions most willing and able to bear it. Specialization in risk-bearing enhances confident and productive business planning.

The great variety of financial operations and innovations allows scope, notorious scope, for ignorance, error, and downright fraud. (Some participants, such as Enron energy traders, reputedly, may see their business as a struggle in which the other side is supposed to lose.) More broadly, wealth comes in so many forms, and cooperation in producing it occurs in so many ways, even very indirect ways, that an answer to the question with which I started can seldom be precise.

Nevertheless, insisting on whether wealth is being created or merely diverted can provide healthy discipline.

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Appleby's Revolution


One thing that has always struck me about the Communist Manifesto is that Karl Marx and Friedrich Engels held capitalism in awe. “The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together,” they wrote in 1848. They listed the wondrous accomplishments one by one, from steam navigation to canal building, and “whole populations conjured out of the ground.” Of course, their praise preceded a call for workers to overthrow the great capitalist conjuror.

Joyce Appleby’s book, The Relentless Revolution: A History of Capitalism, conveys the same sense of wonder. She praises capitalism, saying that its “distinctive characteristic . . . has been its amazing wealth-generating capacities. The power of that wealth transformed traditional societies and continues to enable human societies to do remarkable things."

Appleby certainly doesn’t recommend overthrowing the system. But her appreciation of capitalism diminishes as the book goes on, just as Marx’s and Engels’ did in the manifesto. At the start, The Relentless Revolution is like an exhilarating train ride, full of insights and a historian’s gold mine of information, but it loses steam and slows to a crawl once the Rubicon of the Industrial Revolution has been crossed. At the end, Appleby is praising the US government for trying to rein in the capitalist beast.

Appleby, who taught history at UCLA, describes herself as a “left-leaning liberal with strong . . . libertarian strains.” Given today’s academic history departments and her own attitudes, she deserves admiration for looking at capitalism as objectively as she can. “In this book,“ she writes, “I would like to shake free of the presentation of the history of capitalism as a morality play, peopled with those wearing either white or black hats.” For half the book, she achieves that goal.

The Relentless Revolution fits into the recent parade of big books trying to explain the rise of the industrial West — books such as Jared Diamond’s Guns, Germs, and Steel, Kenneth Pomeranz’s The Great Divergence, and Ian Morris’ Why the West Rules — For Now. These and other authors are trying to answer a couple of giant questions: why did the West (not China, India, or another part of the world) make the transition from subsistence living to a world of constantly increasing productivity? And how exactly did it happen? As I shall explain, Appleby offers two major responses that I found valuable.

Appleby identifies two main factors in Britain’s rise: higher wages providing the incentive to increase productivity, and coal providing the means.

The pivotal moment in world history is normally called the Industrial Revolution (although perhaps that’s a misnomer, given its slow gestation). Many factors contributed to this revolution, and part of the “game” motivating the big books is to offer new factors. It’s generally agreed that the process flowered first in Great Britain, but the reasons may stretch back to such things as the European practice of primogeniture, the separation of powers between the Catholic Church and the state, and the system of rights spawned by feudalism under changing population pressures.

Appleby focuses on 17th and 18th-century England (why she gives short shrift to Scotland is a puzzle). She points to two reasons why the Industrial Revolution occurred there: England had higher wages than the Continent, and also cheap sources of coal. Higher wages provided the incentive to increase productivity, and coal provided the means.

The idea that England’s wages were higher is actually new to me and undoubtedly has a complex history of its own; Appleby merely says that England’s population growth had leveled off in the 17th century. As for coal accessibility, she agrees with Pomeranz, who says that China fell behind Europe partly because its coal deposits were harder to reach.

Whatever the precursors, actual inventions — especially of the steam engine — required talent and knowledge, and herein lies the first of Appleby’s distinctive insights. In a way that I haven’t seen before, Appleby integrates two related forces: the British tendency toward scientific theorizing (or “natural philosophy”), and the British tendency to tinker. “Technology met science and formed a permanent union. At the level of biography, Galileo met Bacon,” she writes.

She elaborates: “Because of the open character of English public life, knowledge moved from the esoteric investigations of natural philosophers to a broader community of the scientifically curious. The fascination with air pressure, vacuums, and pumps became part of a broadly shared scientific culture that reached out to craftsmen and manufacturers in addition to those of leisure who cultivated knowledge.”

The Royal Society illustrates this integration. Created in 1662, it was both practical and scientific. Its members studied that New World import, the potato, but it also “brought together in the same room the people who were most engaged in physical, mechanical, and mathematical problems.”

Appleby’s second valuable contribution is to take a cold-eyed look at the role of New World slavery in creating the markets that nurtured the Industrial Revolution. Indeed, like Pomeranz, she sees slavery as a major factor behind the engine of progress.

In The Great Divergence, Pomeranz says that the vast expansion of agricultural cultivation in the New World enabled Europe to avoid the “land constraint” that kept the Chinese from developing an industrial economy. And slave labor played an enormous role in the cultivation of sugar in the Caribbean and cotton in the United States. Thus, Pomeranz says, Europe overcame the limitations of land by colonizing the New World, which made agriculture possible to an extent unlikely in tiny Holland or England.

Appleby’s take is a little different. She emphasizes more the three-way trade that we learned about in middle school (slaves from Africa were taken to the New World, where sugar was purchased and taken to Great Britain, where finished clothing and other products were bought, to be sold in Africa). Pomeranz and Appleby are not arguing that slavery was profitable, or that it was “necessary,” but, rather, that it was a significant element in the system of trade that led to the Industrial Revolution. Enthusiasts for capitalism such as myself tend to focus on the “trade”; critics of capitalism — along with Appleby — stress the “slave” part of the trade.

Furthermore, Appleby considers American plantations and British inventions as two sides of the same coin. “These two phenomena — American slave-worked plantations and mechanical wizardry for pumping water, smelting metals, and powering textile factories — may seem unconnected. Certainly we have been loath to link slavery to the contributions of a free enterprise system, but they [the phenomena]must be recognized as twin responses to the capitalist genie that had escaped the lamp of tradition during the seventeenth century.”

Whether she is right about this, I don’t know, but she brings to public attention the periodic debate by economic historians over the role of slavery, a debate that Pomeranz reawakened with The Great Divergence.

Unfortunately, after these interesting observations, The Relentless Revolution begins to wind down. As the book moves on, Appleby tends to equate anything that takes industrial might — such as the imperialist armies that took possession of Africa in the late 19th century — with capitalism. “Commercial avarice, heightened by the rivalries within Europe, had changed the world,” she writes in explaining the European adventures in Africa. I dispute that. While Cecil Rhodes and Henry Morton Stanley may have been private “investors,” for the most part Africa was overcome by government power, not by individuals or corporations.

While Cecil Rhodes and Henry Morton Stanley may have been private “investors,” for the most part Africa was overcome by government power, not by individuals or corporations.

Even greater blindness sets in as Appleby’s 494-page volume moves into the recent past and she becomes influenced by modern prejudices. In Appleby’s view, the financial crash in 2008 was caused by financiers; the only contribution by public officials was to “dismantle the regulatory system that had monitored financial firms.” No word about the role of the Federal Reserve, the Community Reinvestment Act, or Fannie Mae and Freddie Mac.

Indeed, capitalism becomes the same as exploitation, in spite of her more balanced initial definition of capitalism as “a cultural system rooted in economic practices that rotate around the imperative of private investors to turn a profit.”

In her last chapter, Appleby writes, “The prospect of getting rich unleashed a rapacity rarely seen before in human society.” This extravagant statement does not jibe with archaeological (not to mention historical) evidence of the human past. In Why the West Rules — For Now, Morris reports on an archaeological excavation at Anyang village in China. In 1300 BC, this home of the Shang kings was the site of massive deaths. Morris estimates that, in a period of about 150 years, the kings may have killed 250,000 people  — an average of 4 or 5 a day, but probably concentrated in large, horrific rituals — “great orgies of hacking, screaming, and dying.” This was the world before capitalism.

To be fair to Appleby, she is saying that the productivity unleashed by capitalism extended the breadth of human rapacity, and to some degree the example of slavery supports that notion. Eighteenth-century British gentlemen could think high-minded thoughts while enjoying their tea with sugar grown by often brutally treated slave labor — which they may have invested in. “This is the ugly face of capitalism,” Appleby writes, “made uglier by the facile justifications that Europeans offered for using men until they literally dropped dead.”

True. At the same time, it was the British who abolished the slave trade, at high cost in patrolling the seas. Before that, Africans were enslaved only because other Africans captured and sold them to the Europeans. (Malaria and other diseases kept Europeans out of the interior of Africa until late into the 19th century.) There is a lot of blame to go around.

So this book is a mixed bag. Even though Appleby increasingly departs from objectivity as she proceeds into modern times, I respect her project and appreciate her insights. I hope that her “left-leaning” historian colleagues read her book and expand their understanding of the past — just as I have.

Editor's Note: Review of "The Relentless Revolution: A History of Capitalism," by Joyce Appleby. Norton, 2010, 495 pages.

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Dr. Jekyll and President Hide


In one of the scenes in Citizen Kane, the protagonist's former friend Jed Leland describes the character of the flamboyant politician and tycoon. "He had a generous mind," Leland says. "But he never gave himself away. He never gave anything away. He just . . . left you a tip."

He might have been describing President Obama.

Like Kane, Obama is a colossal self-advertiser. He first made his reputation, indeed, by writing a book of quasi-autobiography. Like Kane, he can hardly get through a sentence without using the word "I." He constantly refers to government entities as "my secretary of state," "my secretary of the treasury," "my department of defense," and so on. Yet when it comes to revealing himself . . . no. He'd rather be tortured than give up any pieces of the sacred substance, or anything even associated with it.

One assumes that Obama bogarted all specifics about his supposedly close and inspiring relationship with Reverend Wright because Wright had become a political embarrassment. And one assumes that Obama wants to keep his college records secret because he wasn't a very good student. These are assumptions, however, because Obama keeps his stuff to himself even when it would do him good to give it away.

The classic example of this compulsion is his logically pointless war against the people who wanted to see his birth certificate. He conceded the struggle only when he started to fear that it was costing him support for reelection, thus torturing him beyond the limits of even his endurance. For years he had made a public fool of himself by not releasing an innocuous scrap of paper.

Why, after that performance, I expected him to surrender the Osama death photos, I don't know. Maybe I thought he had reformed, and some nice, generous, "transparent" Dr. Jekyll had replaced the clutching, anal, emotionally threatened President Hide. But whatever I thought, I was wrong. The preposterous decision not to release the pictures, ostensibly to chasten radical Islamicists with the evidence of our moral superiority, will merely convince the world that Barry Obama, like Charlie Kane, has more than a small screw loose.

But what about the "tip" — "he just left you a tip"? In Citizen Kane, the protagonist paid other people for "services rendered." He demanded their love, but "he had no love to give." So he offered them money or power or other crass "tips." And that, in his way, is what Obama does. Of all the politicians I can think of, he is the greediest for love but the least interested in other people. His speech is without stories or anecdotes. He seldom alludes to any actual historical event, anything that people actually did in the past. He appears to retain no vivid memories of the people in his own past, or any real interest in the people he meets today. He speaks always as if he were reminding his audience of things they should already have been taught, never as if he wanted to learn from their responses what they themselves would like to know. In lieu of real human concern, he professes a vast interest in abstractions — progress, equality, fairness, proving to our enemies that we are better than they are in some vague, general way.

These are not the kind of tips you can take home and spend. The real stuff — he keeps that to himself. You're not getting any of that.

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Enforcers of Health


Libertarians have uneasy thoughts about the enforcers of public health. In my state, the public health authorities banned tobacco billboards — an act that some thought a violation of the First Amendment. This year, they pushed in the legislature to ban the sale of flavored cigars and pipe tobacco. In both cases, they have said that their aim is to make tobacco less attractive to children.

A century ago the fight was much more immediately vital. Then people of libertarian mind were fighting with the public health enforcers over the control of smallpox.

That disease was eradicated in the 20th century by campaigns of vaccination, many of them not entirely voluntary. In the United States, a turning point came in the epidemic of 1899 to 1902, when outbreaks of the disease prompted a political battle over compulsory vaccination. The story is told in legal writer Michael Willrich’s new book, Pox.

The push for compulsory vaccination grew out of the facts of the disease itself. It was a killer. Of people infected by the main strain of the disease, between 20 and 30% died. Smallpox was highly contagious, so that an infected person was a threat to everyone around him who was unvaccinated. First symptoms appeared more than a week after exposure, so fighting the epidemic by treating sick people was a strategy of being perpetually behind. The disease could, however, be stamped out by vaccinating the healthy.

For the progressives, the model was the Kaiser’s Germany. As Willrich says, “German law required that every child be vaccinated in the first year of life, again during school, and yet again (for the men) upon entering military service.” Germany had “the world’s most vaccinated population and the one most free from smallpox.”

In the constitutionalist America of the 1890s, vaccination was a state, local, and individual responsibility. Americans, writes Willrich, were “the least vaccinated” people of any leading country. The federal government had a bureau, the Marine-Hospital Service, to tend to illnesses of sailors; it had been started in the 1790s under President John Adams. The Service had experts in smallpox control, but they were advisory only and expected local authorities to pay for local work.

The antivaccinationists argued that compulsory vaccination would lead to other bad things. And four years later, in 1906, Indiana enacted America’s first compulsory sterilization law.

In a smallpox outbreak, the public health enforcers would set up a “pesthouse,” usually at the edge of town. They would scour the community for the sick, paying particular attention to the shacks and tenements of blacks, immigrants, and the rest of the lower classes, where the disease tended to appear first. People in these groups were subjected, Willrich says, to “a level of intrusion and coercion that American governments did not dare ask of their better-off citizens.”

Public-health doctors, accompanied by police, would surround tenement blocks and search people’s rooms. The sick would be taken to the pesthouse under force of law, and everyone else in the building would be vaccinated.

Often a community would have a vaccination ordinance that on its face was not 100% compulsory. It would declare that no child could be admitted to public school without a vaccination mark. For adults, the choice might be vaccination or jail — and all prisoners were, of course, vaccinated.

The procedure involved jabbing the patient with a needle or an ivory point and inserting matter from an infected animal under the skin. Typically it was done on the upper arm; often that arm was sore for a week or two, so that people in manual trades couldn’t work. Sometimes, vaccination made people so sick it killed them — though not nearly as often as the disease did.

Such was the background for the outbreaks of 1899–1902. At that time, two new factors emerged. First, America had just had a war with Spain, and had conquered the Philippines, Cuba, and Puerto Rico. All these places were rife with disease — and their status as conquered possessions, Willrich writes, provided “unparalleled opportunities for the exercise of American health authority.”

There the authorities had no worries about people’s rights: “The army’s sanitary campaigns far exceeded the normal bounds of the police power, which by a long American constitutional tradition had always been assumed to originate in sovereign communities of free people.” And coercive methods worked. They worked dramatically.

The second new thing in 1899 was that most of the disease spreading in the United States was a less-virulent form that killed only 0.5 to 2% of those infected. That meant that many Americans denied the disease was smallpox, and didn’t cooperate. The public health people recognized what the disease for what it was, and they went after it with the usual disregard of personal rights — maybe even more disregard, because of “the efficiency of compulsion” overseas. And they stirred up, Willrich writes, “one of the most important civil liberties struggles of the 20th century.”

Their fight was with the antivaccinationists, whom Willrich calls “personal liberty fundamentalists” who “challenged the expansion of the American state at the very point at which state power penetrated the skin.”

He continues:

“Many antivaccinationists had close intellectual and personal ties to a largely forgotten American tradition and subculture of libertarian radicalism. . . . The same men and women who joined antivaccination leagues tended to throw themselves into other maligned causes of their era, including anti-imperialism, women’s rights, antivivisection, vegetarianism, Henry George’s single tax, the fight against government censorship of ‘obscene’ materials and opposition to state eugenics.”

Often, antivaccinationists denied that vaccination worked. Many were followers of chiropractic or other non-standard medicine; this was also the time of “a battle over state medical licensing and the increasing dominance of ‘regular,’ allopathic medicine.” Of course, the antivaccinationists were wrong about vaccination not working, but they were not wrong when they said it was dangerous. In 1902, the city of Camden NJ required all children in the public schools to be vaccinated. Suddenly children started coming down with lockjaw. They were a small fraction of those who had been vaccinated, but all of them fell ill about 21 days after vaccination. Several died, and the press made a scandal of it.

Our newly conquered possessions provided “unparalleled opportunities for the exercise of American health authority.”

Under the common law of the day, the vaccine maker — the H.K. Mulford Co. — was not liable to the parents, because it had no contract with them. Nor was the government liable, though the government had required the treatment. Thus, writes Willrich, “The arm of the state was protected; the arm of the citizen was not.”

The medical and public health establishment initially denied that the lockjaw had been caused by the vaccines. This was admitted only after a consultant to a rival vaccine maker, Parke-Davis, made an epidemiological case for it. Congress responded by quickly passing the Biologics Control Act of 1902, which ordered the inspection and licensing of vaccine producers, and required them to put an expiration date on their products. It was one of the first steps in the creation of the regulatory state.

The act calmed the public and drove some smaller companies out of business. The first two licensees were Parke-Davis (later absorbed by Pfizer) and Mulford (absorbed by Merck). And the purity of vaccines, which had been improving already, improved dramatically in the following decade.

The antivaccinationists turned to the courts in a fight about constitutional principles. The argument on the state’s side was that it had a duty to protect citizens from deadly invasion, which might be launched by either an alien army or an alien army of microbes. The argument on the other side was the individual’s right to control what pathogens were poked into his body, and, as the antivaccinationists’ lawsuit contended, his right to “take his chance” by going bare in a time of contagion.

They brought their case to the Supreme Judicial Court of Massachusetts, and lost. Citing the power of government to quarantine the sick and conscript soldiers in war, the court said, “The rights of individuals must yield, if necessary, when the welfare of the whole community is at stake.” Then they appealed to the US Supreme Court. In the same year in which the libertarian side won a landmark economic-liberty ruling in Lochner v.New York (1905), it lost, 7–2, in the vaccination case, Jacobson v.Massachusetts. Writing for the court, Justice John Harlan compared the case to defense against foreign invasion, and wrote, “There are manifold restraints to which every person is necessarily subject for the common good.”

It is an unlibertarian answer. The author of Pox thinks it was the right answer — and so do I, in this case. Smallpox was indeed a kind of invasion. In the 20th century it killed 300 million of Earth's people, and disfigured millions more. And though public health people can make similar arguments, and they do, about tobacco as a mass killer, I do not support their efforts to stamp out its use by ever more state intrusion. The difference is that with smallpox the individual’s refusal to be vaccinated put others in imminent danger of death. Collective action — compelled collective action — was the only way to defeat the invader. None of this is the case with tobacco.

Naturally, the progressives wanted to apply their wonderfully practical idea to all sorts of things. Referring to epidemics and the germ theory of disease, Willrich writes, “Progressives took up the germ theory as a powerful political metaphor. From the cities to the statehouses to Washington, the reformers decried prostitution, sweatshops, and poverty as ‘social ills.’ A stronger state, they said, held the ‘cure.’ ”

The antivaccinationists argued that compulsory vaccination would lead to other bad things. They made some fanciful statements; one wrote, “Why not chase people and circumcise them? Why not catch the people and give them a compulsory bath?” But they were right. Four years later, in 1906, Indiana enacted America’s first compulsory sterilization law. This was done in pursuit of another scientific, society-improving cause that excited progressives: eugenics. In 1927, in Buck v.Bell, the Supreme Court approved Virginia’s law of compulsory sterilization of the “feeble-minded.” That was the case in which Justice Oliver Wendell Holmes — supposedly the great champion of individual rights — pontificated: “The principle that sustains compulsory vaccination is broad enough to cover cutting the Fallopian tubes. Jacobson v.Massachusetts, 197 U.S. 11. Three generations of imbeciles are enough.”

Jacobson has been cited in many Supreme Court decisions, usually to approve state power. And the applications have not been confined to medicine. In 2004, Justice Clarence Thomas cited Jacobson in his dissent in Hamdi v.Rumsfeld, which was about a US citizen captured in Afghanistan. Thomas, often regarded as the most libertarian of the current justices, was arguing that Yaser Esam Hamdi had no right of habeas corpus and could be held on US soil indefinitely without charge.

Collective action — compelled collective action — was the only way to defeat the invader. None of this is the case with tobacco.

The smallpox epidemic of 1899–1902 was a pivotal event institutionally as well as legally. The Biologics Act created more work for the Marine-Hospital Service, which a few years later became the US Public Health Service. The service’s Hygienic Laboratory, which was empowered to check the purity of commercial vaccines, later grew into the National Institutes of Health.

From the story told in Pox, you can construct rival political narratives. The progressives’ “we’re all in it together” formula about the need for science, federal authority, officials, regulation, and compulsion is there. And in the case of smallpox, progressivism put its strongest foot forward: it was warding off imminent mass death. Smallpox is one of the least promising subjects for the libertarian formula of individual rights and personal responsibility. Yet here you can also find the bad things that libertarian theory predicts: state power used arbitrarily and unevenly, collateral deaths, official denial of obvious truths, a precedent for worse things later on, and even the favoring of large companies over small ones.

I don’t like the progressive formula. But in the case of smallpox it fits, and I accept it, looking immediately for the limits on it.

Fortunately for liberty as well as health, few other diseases are as contagious and deadly as smallpox. Even Ebola and SARS — two contagious and deadly diseases of recent decades — were mostly fought by quickly isolating the sick. State power was necessary — some people were forcibly quarantined — but there were no mass vaccinations of the healthy.

Still, vaccination surfaces as an issue from time to time. It is, on its face, a violation of the rights of the person. So is quarantine. And yet it is prudent to allow both of them in some situations.

That is an admission that the libertarian formula doesn’t work all the time. Liberty is for rational adults in a minimally normal world. That is a limitation, but not such a big one. Surely it is better to design a society for people who can think, make decisions, and take responsibility, while in a few cases having to break those rules, than to live in a world designed for people defined as children of the state.

Editor's Note: Review of "Pox: An American History," by Michael Willrich. Penguin, 2011, 400 pages.

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