February 15, 2023

Distinguishing between ‘a free state’ and ‘the State’ can be tricky.  Analysts must guard against falling into mere semantic games.  This requires stipulating definitions and then maintaining consistency.  Unfortunately, the foundational documents for the United States, as well as many writings of the era, lack the precision provided by modern advances in the science of political economy.

A free state is one in which people are secure in their persons, houses, papers, and effects. This is summed up in the word ‘property’ and, ideally, it should be an inviolate sphere dictating ‘proper’ behavior among people and their possessions.  In contrast, “the State” is defined as a territorial monopolist on the use of force coupled with the power to tax, which is a claim that some people can expropriate the livelihoods and assets of other people.

You can probably see that the Constitution for the United States contains elements of both of these concepts.  Yet the two are incompatible.  There are all sorts of affirmations to the rights of property, most especially in the Fifth Amendment, yet at the same time, the general government has the power to collect taxes, ostensibly to pay the debts and provide for the common defense and general welfare of the United States.

People can never be secure in their property when another group of people hold a monopoly on confiscating property backed up by the ultimate legal authority to use of force. The power to tax is the power to commandeer other people’s property regardless of the wishes of the owner.

One could argue, then, that the general government is limited to only taxing to the extent necessary to fund the delegated authorities enumerated by the Constitution. This should circumscribe the spending authority to only those specific functions laid out in the operating charter, at least in theory.  Yet, that is not how things work in practice.

It is easy to point to how distorted the General Welfare Clause became during the so called New Deal Era under President Franklin Roosevelt, to illustrate how innovative construction of the Constitution undermined the spirit of limited government in the United States. Roosevelt’s ‘court packing’ with justices favorable to socialist intervention in the marketplace opened the door to unprecedented spending from the public treasury.

The reason it took so long in the history of, and such dramatic institutional restructuring, the republic to get the general government into the welfare game is because it thoroughly  contradicts the agreed intent of limited authorities.  James Madison summed it up  concisely: Charity is no part of the legislative duties of government.

Once unleashed from Constitutional restraint, politico-bureaucratic actors could claim just about any expenditure as being to advance the general welfare.  After decades of metastasizing these expansive spending authorities, the general government of the United States has become little different from a third world kleptocracy, a regime oriented on looting its citizens to the benefit of the ruling elite.  The only difference is that a wealth country like the United States has more capacity to absorb the corruption without it being noticed by the average citizen.

Yet, setting aside General Welfare to focus on Common Defense offers little change because anything can be, and often is, couched in security terms.

I remember after the fall of the Union of Soviet Socialist Republic in 1989 that many policy makers got busy figuring out how they were going to spend the “peace dividend”.  With the end of the Cold War, all the resources expended to guard against Soviet expansion could then be directed elsewhere, and every policy maker had pet projects to fund.

The problem with demobilizing all the security assets came from the entrenched interests within the Military Industrial Congressional Complex.  Entirely too many people were enjoying a steady paycheck and other benefits at tax-payer expense and, one could reasonably surmise, they did not want to learn new ways of creating value in the world or have to compete in a free market.

The ‘defense industry’ is unfathomably deep, especially since the expansions brought about by the vast Global War on Terror, to be sure.  Yet, those entrenched interests have been in place for decades.  Not only does the ‘defense establishment’ build the weapon systems and supplement the standing military bureaucracies with contractors but a staggering amount of tax-dollars are funneled into think-tanks, research institutes, media outlets, entertainers, and other ‘influencers’ that work in concert to create the perception that continued support for absurd levels of spending are, somehow, in the ‘national interest’.

And because the term ‘national interest’ is impossible to define, yet primarily orients around international security matters, the political caste has a relatively free hand to spend recklessly from the public treasury.  At the same time, most people are so busy attending to their lives that they lack the bandwidth to decipher the propaganda employed to convince the public that all of the “defense” spending is required for “national security”.

Marine Corps Major General Smedley Butler illustrates this point by conveying how, in 1927, he provided security for the Rockefeller family’s Standard Oil Company to prospect for resources along China’s Yangtze River.  He did the same for American oil companies in Mexico in 1914.  Public outcry may have denounced the 2003 invasion of Iraq as a “war for oil” yet subsidizing international business operations with tax-payer funded security services had largely flown under the radar for roughly a century before that.

Why was the American tax-payer subsidizing the Standard Oil Company’s security for business operations in China?

Further, by what authority do politicians and bureaucrats funnel resources from American citizens to politically connected corporations operating outside the United States?

The general government, by way of the Constitution, is authorized to provide for the common defense of the United States and is obliged to keep them free from invasion (Art 4, Sec 4).  One could argue that if an invasion was imminent the general government could issue letters of marque and reprisal or commission a preemptive campaign outside the territorial jurisdiction of the United States so as to prevent invasion, yet the burden of proof is high to meet the legitimacy threshold.

For the most part, providing for the common defense of the United States occurs within the territorial boundaries and internationally agreed exclusive zones.  The common defense of the United States is not by and large contingent upon oil in China’s Yangtze River.

Now, one could argue, “we need oil to meet our energy needs, heat our homes, and fuel both factories and vehicles”.  While this is certainly true, the production of energy is not an authority delegated to government, or the general government of the United States in particular.

Government interference in the production of energy only serves politicians, bureaucrats, and crony corporations.  Meanwhile, tax-payers and energy consumers are subjected to higher prices, lower quality products and services, and fewer choices.

The key here is to remember that everyone’s preference scales are heterogeneous.  Not everyone wants the same things, in the same time frames, with the same sense of urgency.

Blanket policies in the production of energy gloss over the fact that not everyone wants what the politicians and bureaucrats offer with the same level of demand.  Only a free-market, guided by the price mechanism, can direct entrepreneurs to produce the type and quantity of goods and services that people actually want.

This remains the case even with the production of energy and applies to international oil conglomerations as well.  Let them sell their products on a free market, unaided by the state and see if they can sustain their operations with a profit and loss test.  If the product is so highly prized and the risks are worth the efforts, then the market price will reflect it as consumer demand.  The free market price mechanism is what a government oriented on establishing justice should protect, not get in bed with and provide subsidized security services to crony corporations.  That is a policy of injustice.

If companies cannot sell their products at a price that consumers are willing to voluntarily pay, they are, by definition, wasting resources.  They need to know the “market clearing price” so they can evaluate their efficiency or shift strategies.  When the political-caste shields corporations from the crucial information only available through the profit and loss test of a free market they dampen efficiency signals and encourage waste.

When Smedley Butler and the US Marine Corps were providing security to the Standard Oil Company on China’s Yangtze River in 1927, the tax-payers were being forced to subsidize the international operating costs of a crony corporation.  Rather than John D. Rockefeller and Standard Oil’s shareholders bearing the risk of doing business in China the security costs were “socialized” across the unwitting citizenry.

Yet there are strong incentives for cronyism: Concentrated benefits enjoyed by the few and dispersed costs foisted upon the many.  The benefits of the arrangement were enjoyed by the Rockefellers, Standard Oil shareholders, and the politico-bureaucratic caste that put the scheme in place by way of government policy.

Whether the American tax-payer would rather have purchased something else with the money funneled into that military deployment were never considered.  Tax-payers were never compensated for their sacrifice either.  They received no shares in the company nor acknowledged as benefactors.  This is what Yale professor William Graham Sumner described as The Forgotten Man: The ordinary person who pays the taxes, endures government regulations of all kinds, and who is “the victim of the reformer, social speculator, and philanthropist.”

This is why the production of security cannot be left in the hands of the political-caste.  The “defense establishment” cannot set the agenda, let alone actual policy, and, most of all,  funding security operations must remain subject to market tests.

Failing to do so means there will be no end to gun control.  The political-caste is incentivized to disarm the population so that they may subject the tax-payer to unbridled cronyism.  This is another example of how liberty is a holistic system based upon the property integrity principle.

The paradox of national power is that a relatively wealthy country can afford these inefficiencies. Most people do not even notice the costs imposed upon them through cronyism and have little incentive to learn the intricacies of political-economy and Public Choice theory.

Yet the costs of cronyism do add up and deviating from principle enables the errors to compound until the effects of a distorted market and political system ultimately lead to tyranny and immiseration.  It culminates in a lack of personal wealth and freedom.  This is why a strict adherence to principle, and active engagement in self-government, must prevent constitutional misconstruction.

Leaving the door open to corporate cronyism begins a metastasizing process wherein the political-caste will continually consume more resources (through taxation), and control more choices (through regulation), until every part of a person’s life is subject to the monopoly state, especially the right to keep and bear arms in the exercise of self-government.

The common defense of the United States must be operationally restrained to the actual jurisdiction of the United States.  This may sound flippant, yet that is likely due to the way in which “national security” or “national interest” has supplanted “common defense” in so many minds today.

What I really mean is, the American tax-payer should not be compelled to subsidize the security requirements of international businesses operating outside the geographical jurisdiction of the United States.  One would, in a sane world, take this as elementary, because it is.  Yet, somehow, the political caste has been diverting resources from the tax-payers to politically connected cronies under the guise of “protectionism” or “economic nationalism” for a very long time.

Economic protectionism, through guilds, licensing, and other inhibiting regulations is exactly the kind of political interference with private property that drove many in Europe to seek freedom and opportunity in the new world of North America.  The belief in such opportunities continues to motivate freedom seekers around the globe to immigrate to the United States today.

Since one cannot be secure in their person, houses, papers, or effects (i.e. property) under such conditions, the general government cannot “establish justice” while also engaging in economic protectionism.

Justice is maintaining the integrity of private property and allowing for the conflict free exchange thereof.  A free state is a geographic political organization in which citizens cooperate to enjoy private property and relatively harmonious social relations.  Citizenship has both benefits and obligations.  The foremost obligation of each citizen in the polity of a free state is to actively contribute to social harmony by upholding the legal order.

There is no greater source of disharmony and conflict than encroachment upon private property.

To secure the legal order of a free state, We The People must repel all invasions of private property. We do this by executing the law as militia, without reliance upon politicians or bureaucrats, and toward this purpose, the Constitution prohibits any infringements upon the right to keep and bear arms.

The real reason to put an end to gun control is to maintain this social and legal order, in which everyone is secure in their property, and the political contract for services is upheld without undermining the ‘equality under the law’ principle by granting exceptional legal privileges to any class or caste of persons.

The general government of the United States can orchestrate the common defense of the member states, in order to keep them free from invasion, by organizing, arming, and disciplining the militia of the several states to execute the law, repel invasions, and suppress insurrections.

The general government can further provide and maintain a navy for patrolling the coastal waters of the United States and its internationally agreed exclusive economic zone.

In the event of international hostilities, the general government can issue letters of marque and reprisal so that privateers can pursue profits while punishing foreign adversaries.

There is no justification for the United States Navy (or any other service for that matter) to depart the territorial waters of the United States.  In the event of an impending attack, issuing letters of marque and reprisal, along with reward bounties to achieve specified political objectives, will rightly incentivize professionals to efficiently interdict adversaries and deter them from further invasion.

All of which is achievable without a permanent “defense establishment”.  The framers of the constitution were extremely leery of a standing Army.  This is why the general government was granted the authority to raise an army, not maintain one, with the funding limited to no more than two years.

This criticism is not unique to right-wing conservatives, constitutionalists, or libertarians either. Even a socialist thinker like Vladimir Lenin described the “bureaucracy and the standing army” as “a parasite on the body of bourgeois society”.  Even communists sought to eliminate the standing army and substitute it with “the armed people”.

While both theory and history teach that socialism, defined as institutional hostility to private property, cannot function due to an inability to conduct rational economic calculation, the sentiment of eliminating the monopoly state’s oppressive capacity is shared by anyone seeking greater political equality.  The essential details between various political philosophies are distinguished by the means of achieving these worthy goals.

Socialists undermine private property rights and centralize economic planning, decision making authority, over tangible assets.  Without private property, and the free exchange thereof, decisions on how to allocate resources are unmoored from the price mechanism, profit and loss tests, and the signals of authentic consumer demand.  This inevitably leads to wasted resources, conflict over control, and the rise of oligarchy.

As much as socialists may talk about wanting to ‘wither away the state’, the means cannot achieve their stated ends.  Central economic planning requires centralizing power into the hands of the few. Communes still need decision makers and not everyone can, equally, decide on courses of action over every resource, particularly in the absence of market prices.  This means panels must be formed and managers emplaced to act on behalf of ‘the people’.  These special people will then have unique privileges that others do not.  They become a separate class and all notions of equality vanish when considering access to, and control over, resources.

Unfortunately, this sad state of affairs is pervasive in the so-called ‘defense establishment’.  The permanent military and law enforcement bureaucracies are bastions of socialism, epitomizing the abuse of other people’s property they are ostensibly funded to protect.  They illustrate Professor Hans-Hermann Hoppe’s point of a tax-funded property protection agency being a contradiction of terms because the control over resources directed by a privileged class of oligarchs invites corruption.

The impossibility of rational economic calculation under socialist management means even the best-intended bureaucratic managers would still be prone to wasting resources.  Yet, knowing that human beings are inherently self-interested, having a common pool of  resources makes them available for the benefit of the special class of security managers.

The very nature of political control and bureaucratic management means security resources will be, at best, wasted, and more than likely used to advance special interest groups at the expense of everyone else.

This is why Smedley Butler and the Marines were providing security to the Standard Oil Company in China rather than providing for the common defense of the United States.  The politico-bureaucratic caste had access to a common pool of security resources (namely, the US Marine Corps and Navy) that they could direct as they saw fit, for their benefit, at tax-payer expense.

The paradox of being a wealthy country means that the average tax-paying citizen does not notice the drain of resources from the relatively fat public treasury.  Security subsidies like this go to politically connected firms at tax-payer expense below the conscious awareness of the average citizen. In this way, oligarchs are given free rein to distribute resources toward their own ends regardless of the common good.  It may appear like an insignificant amount yet, compounded over time and with each iteration, the deleterious effects amplify until what was intended to be a prudent and frugal government of limited authority becomes an all-consuming tyranny.

Take note that this arrangement cannot be reformed.  The moral hazard involved will  continue to metastasize, compounding unintended consequences, errors, mal-investment, and dead weight loss until the polity collapses, the common pool depletes, or the arrangement is fundamentally altered into an omnipotent tyrannical state.

The signers of the Declaration of Independence understood this.  When political institutions evidence a design to ‘eat out the people’s substance’ or subject the people to absolute tyranny it is their right and duty to alter or abolish those institutions.  Reason and remonstration will always fail when change involves asking those holding the political reins to give up their livelihood, power, and prestige.

Again, political power grows out of the barrel of a gun and this power was specifically intended under the US Constitution to remain in the hands of We The People, and decidedly not the political caste.