Frankly, the Bush administration’s policy evades any notion of procedural due process of law. Administration assurances that harsh treatment is reserved only for terrorists is meaningless when the threshold process for determining who is and who is not a terrorist depends on executive discretion that is not subject to review. Substantive rights are useless without the procedural rights to enforce them.

Terrorist legislation and executive assertions created a basis upon which federal authorities claimed they were free to suspend suspects’ civil liberties in order to defend Americans from terrorism. Only after civil liberties groups and federal courts challenged some of the unconstitutional laws and procedures did realization spread that the Bush administration’s assault on the Bill of Rights is a greater threat to Americans than are terrorists.

The alacrity with which Congress accepted the initial assault from the administration is frightening. In 2001, the USA PATRIOT Act passed by a vote of 98 to 1 in the Senate and by 357 to 66 in the House. The act was already written and waiting on the shelf before the 9/11 attack. Indeed, the FBI and Department of Justice have tried for years to introduce PATRIOT Act provisions into the law. That act was introduced immediately after the attacks, and few members of Congress read its contents prior to passing it.

Federal courts declared some provisions of the legislation to be unconstitutional. Vague language criminalizing “expert advice or assistance” as material support for terrorism was thrown out, as were gag orders and “National Security Letters” used to obtain private information without judicial oversight. Despite challenges from the American Civil Liberties Union and resolutions passed in 8 states and 396 cities and counties condemning the act for its attack on civil liberties, Congress reauthorized the act in March 2006, making most of it permanent and sending a clear signal that the “war on terror” takes precedence over civil liberty.

The PATRIOT Act’s infringements of civil liberty are serious, but they pale by comparison to the Bush administration’s assertion of executive power to set aside habeas corpus protection for both citizens and noncitizens declared by the executive branch to be “enemy combatants.” The Bush administration claimed and exercised the power to hold indefinitely anyone so designated without access to legal representation. In other words, the Bush administration claimed the discretionary and unaccountable power to imprison whomever it wished.

In keeping with its self-declared powers, the Bush administration quickly rounded up hundreds of detainees whom it claimed – without evidence – to be “enemy combatants.” Four detainees, Rasul, Hamdi, Padilla, and Hamdan, consisting of a British citizen, two American citizens, and an Afghan, respectively, challenged the administration in federal court cases that reached the Supreme Court.

In Rasul v. Bush the Supreme Court ruled in June 2004 that, contrary to Bush administration assertions, the courts have jurisdiction over Guantánamo and that detainees must be allowed to challenge their detention.

Also in June 2004, the Supreme Court ruled in Hamdi v. Rumsfeld that Hamdi, an American citizen, was deprived of due process and had the right to challenge his detention. However, the ruling was far from a clean sweep for civil liberty. Both noted civil libertarian Harvey Silverglate (Reason, January 2005) and John Yoo, a Department of Justice apologist for the new tyranny, agree that the Supreme Court decision left flexibility and room for the government to maneuver and prevail in the end.

In December 2003, an appellate court ruled that U.S. citizen José Padilla could not be denied habeas corpus protection. To forestall another Supreme Court ruling against the Bush administration, the administration withdrew Padilla’s status as “enemy combatant” and filed criminal charges that bore no relationship to the administration’s original assertions that Padilla was plotting to explode a “dirty bomb” in an American city. As Harvey Silverglate has documented (Boston Phoenix, September 16, 2005), the Padilla case is also an extraordinary story of “forum shopping” (picking a court where judges are friendly to its case) by the Department of Justice.

Forced by the federal judiciary to release José Padilla from years of illegal detention or to put him on trial, the Bush administration had to scramble to put together some kind of charges. The best that the Bush administration could do was to charge Padilla not with any terrorist acts, but with wanting to be a terrorist – a “terrorist-wannabe” to use the words of Andrew Cohen (WashingtonPost.com, August 16, 2007).

By the time Padilla went to trial, he had been demonized for years in the media as an “enemy combatant” who intended to set off a radioactive bomb. Peter Whoriskey (Washington Post, August 17, 2007) described the Padilla Jury as a patriotic jury that appeared in court with one row of jurors dressed in red, one in white, and one in blue. It was a jury primed to be psychologically and emotionally manipulated by federal prosecutors. No member of this jury was going to return home to accusations of letting off the “dirty bomber.”

Evidence, of which there was little, if any, played no role in the case. The chief FBI agent, James T. Kavanaugh, testified in court that the intercepted telephone conversations were innocuous and contained no references to terrorism or Islamic extremism, but the jury wasn’t listening. The judge allowed prosecutors to show the jury a ten-year-old video of Osama bin Laden that had no relevance to the case, but which served to arouse in jurors fear, anger, and disturbing memories of September 11, 2001. The jury convicted Padilla on all counts, despite the total absence of any evidence that he had ever committed a terrorist act or had agreed to commit such an act.

By convicting Padilla, the jury opened Pandora’s box and created a Benthamite precedent for imprisoning U.S. citizens on the suspicion that they might commit a terrorist act.

In July 2006, in Hamdan v. Rumsfeld, the Supreme Court ruled that Bush’s military tribunals violate U.S. military law and the Geneva Conventions.

Republicans, who tend to regard civil liberties as devices that coddle criminals and terrorists, turned to legislation in attempts to subvert the Supreme Court’s defense of the U.S. Constitution. In November 2005, the Senate Republicans passed an amendment to the Defense Authorization Act offered by Lindsay Graham of South Carolina authorizing the president to deny habeas corpus protection to Guantánamo detainees. The fact that it was known by this time that the vast majority of the detainees were hapless individuals who were captured by Afghan warlords and sold to the Americans, who were paying a bounty for “terrorists,” carried no weight with the Republican senators.

The Republicans replied to Hamdan v. Rumsfeld with the Military Commissions Act passed in September 2006 and signed by Bush in October. The act strips detainees of protections provided by the Geneva Conventions: “No alien unlawful enemy combatant subject to trial by military commission under this chapter may invoke the Geneva Conventions as a source of rights.” Other provisions of the act strip detainees of speedy trials and of protection against torture and self-incrimination. This heinous law has a breathtaking provision that retroactively protects torturers against prosecution for war crimes.

The act explicitly denies habeas corpus protection and access to federal courts to any alien detained by the U.S. government as an “enemy combatant” and any alien awaiting determination of his status. The act reads: “No court, justice, or judge shall have jurisdiction to hear or consider an application for a writ of habeas corpus filed by or on behalf of an alien detained by the US who has been determined by the US to have been properly detained as an enemy combatant or is awaiting such determination.”

This act is as atrocious a piece of legislation as the world has ever seen. It permits people to be sentenced to death on the basis of hearsay, secret evidence, and on a confession extracted by torture. Indeed, detainees could be shot in the back of the head without undergoing the kangaroo tribunal and no one would ever know or be held legally responsible.

A number of legal experts have concluded that there is no assurance that the act cannot be applied to U.S. citizens. Although language in the act refers to “alien unlawful enemy combatant,” other language in the document does not limit the act’s applicability only to aliens. Legal scholars have warned that the legislation defines enemy combatant in such broad language that the act applies to any person whom the executive branch declares has purposefully and materially supported hostilities against the United States. No evidence for the charge is necessary. By seizing the power to decide who is and who is not an “enemy combatant,” the executive branch has seized the power to decide who shall and who shall not be permitted the protections guaranteed by the U.S. Constitution. The Bush administration has resurrected the dungeons and torture chambers that Blackstone’s Rights of Englishmen banished from the English-speaking world.

It is too early to know how the act will be interpreted and applied to American citizens or whether it can be challenged and overturned on constitutional grounds, but forebodings are severe. What we can say is that the act is draconian and dangerous legislation that is completely unnecessary. If the U.S. government has enough correct information to designate a person truthfully to be an enemy combatant, the U.S. government has enough information to put the person on trial in open court with all the rights guaranteed by the Constitution to defendants. The U.S. government only needs indefinite detention, torture, and secret evidence when it has no evidence. Every American should be concerned that John Yoo, one of the Justice Department authors of this totalitarian legislation, is now a law professor at the University of California. Liberty has no future in America if law schools provide legitimacy to those who would subvert the U.S. Constitution.

The Assault on the Constitution

We concluded the first edition of this book with a call for “an intellectual rebirth, a revival of constitutionalism.” Alas, far from a rebirth of constitutionalism, we are witnessing a rending that we would not have imagined. On January 17, 2007, the attorney general of the United States, Alberto Gonzales, declared in testimony before the Senate Judiciary Committee that “the Constitution doesn’t say every individual in the United States or every citizen is hereby granted or assured the right of habeas.” The chairman of the committee, Arlen Specter (R-Pennsylvania) was incredulous when Gonzales insisted that “there is no express grant of habeas in the Constitution.”

In June 2007, Dick Cheney astonished Americans with his claim that the Office of Vice President is independent of both the executive branch and Congress and is accountable to neither.

Americans should pay attention to the power that the Bush administration is claiming over them. If Americans are not protected by habeas corpus, the government can pick us up at its will and cast us into dungeons for the rest of our lives without ever giving any accountability of its action. If the Constitution does not grant habeas corpus protection, the administration is under no compulsion to provide indictments, evidence, and trial. The government can simply imprison at will.

The Bush administration is using every strategy to push aside the remains of the legal principles that shield the people from arbitrary government power. It is a short step from denying Americans’ constitutional right to a public trial by an impartial jury to denying every other constitutional right. Clearly, on the basis of an indefinite “war” against an indefinite “terrorist enemy,” the Bush regime is attempting to claim powers that are not limited by the Constitution, Congress, or the courts. It is a life-and-death matter for Americans to understand that the Bush administration is seeking to undermine all rights by shutting off the procedural avenues for enforcing rights.

Few Americans seem alarmed. Conservative attorneys, such as members of the Federalist Society who present themselves as defenders of “original intent,” are pushing for more power to be concentrated in the executive. One of the tools used to obtain this goal is Bush’s misuse of “signing statements.” Scholars, such as Phillip J. Cooper of Portland State University writing in the September 2005 issue of Presidential Studies Quarterly, warn that Bush uses signing statements not only as illegal line-item vetoes that evade congressional override but also as “wide-ranging assertions of exclusive authority and court-like pronouncements that redefine legislative powers under the Constitution. They reveal a systematic effort to define presidential authority in terms of the broad conception of the prerogative both internationally and domestically under the unitary executive theory.”

Signing statements deserve a closer look than they are receiving. There is no provision in the Constitution for signing statements. Courts often look to congressional debates and proceedings to ascertain legislative intent when a statute’s meaning is not obvious. The Bush administration is endeavoring to establish the judicial practice of also looking to the president’s signing statements in the same way, an absurd idea as the president does not enact legislation. President Bush’s use of signing statements signals the refusal of the executive branch to abide by the rule of law, a frightening prospect.

A growing number of thoughtful Americans believe, rightly or wrongly, that the “war on terror” is a hoax that is providing cover for what former President Nixon’s White House counsel, John W. Dean, says is an assault on American liberty by “authoritarian conservatives.” Time will tell whether Americans will continue to tolerate the neoconservatives’ wars and attacks on civil liberty.

The Case of Sami Al-Arian

The demise of the Rights of Englishmen, the unaccountability of police and prosecutors, the witch-hunt atmosphere created by the “war on terror,” the government’s need to find terrorist suspects in order to maintain the public’s alarm, and the sadistic and bigoted attitudes of many prison guards and even federal prosecutors and judges toward Muslims have resulted in the use of law for persecution. The case of Sami Al-Arian, who was a professor of computer science at the University of South Florida, is a pure example of the use of law as a weapon for persecution.

Most Americans know only the Israeli side of the Israeli-Palestinian conflict. The Palestinian side is rarely heard. Even prominent Americans, such as former president Jimmy Carter, who point out that there are two sides to the story, are subjected to demonization and name-calling. Sami Al-Arian was gaining success as a voice for a more even-handed Middle East policy. He spoke to intelligence personnel and military commanders at MacDill Air Force Central Command. He gave interviews. He even invited the FBI to attend meetings where he spoke.

This was too much for the Israeli Lobby, which has enjoyed a total monopoly on the explanation of the Israeli-Palestinian conflict in the United States. The hysteria following 9/11 created the opportunity to destroy Sami Al-Arian. Alexander Cockburn (CounterPunch, March 3, 2007) reports that “at the direct instigation of Attorney General Ashcroft” trumped-up terrorism and conspiracy charges were leveled at Al-Arian.

The neoconservative media and right-wing talk radio went to work on Al-Arian. Pushed by Gov. Jeb Bush, the university fired him. He was arrested and deemed too dangerous for bail. He was held in solitary confinement for two and a half years while the federal government tried to manufacture some evidence against him. Wikipedia reports that “Amnesty International said Al-Arian’s pre-trial conditions ‘appeared to be gratuitously punitive’ and stated ‘the restrictions imposed on Dr. Al-Arian appeared to go beyond what were necessary on security grounds and were inconsistent with international standards for humane treatment.’”

The government failed to produce any evidence. The jury acquitted Al-Arian on all serious charges and voted 10–2 for acquittal on all other charges. The jury acquitted him despite U.S. District Court judge James Moody’s many biased rulings against Al-Arian.

Knowing that Al-Arian and his family could not stand the strain of solitary confinement for another two and a half years while a new case was prepared, the U.S. Department of Justice announced that it would retry him. His attorney urged him to make a plea in order to end the ordeal.

Al-Arian’s plea is innocuous and bears no relationship to the serious charges on which he was tried. According to Wikipedia, as part of the plea agreement “the government acknowledged that Al-Arian’s activities were non-violent and that there were no victims to the charge in the plea agreement.”

Under the plea agreement, Al-Arian’s sentence amounted essentially to time served, but he was double-crossed by Judge Moody, who according to Alexander Cockburn used “inflamed language about Al-Arian having blood on his hands” (a charge rejected by the jury) and handed down the maximum sentence.

The “terrorist” prosecutors had yet more in store for Al-Arian. In October 2006, federal prosecutor Gordon Kromberg, reportedly “notorious as an Islamophobe,” demanded, in violation of the plea agreement, that Al-Arian testify before a grand jury in Alexandria, Virginia, investigating an Islamic research center. According to Wikipedia, “in a verbal agreement that appears in court transcripts, federal prosecutors agreed [as part of the plea agreement] that Al-Arian would not have to testify in Virginia.”

Al-Arian’s lawyers saw Kromberg’s subpoena of their client as a setup, and Al-Arian refused to testify. On January 22, 2007, Al-Arian was brought before a federal judge on contempt charges. He described to the judge the extraordinary abuse he had suffered at the hands of federal prison officials. The guards and officers all felt free to abuse Al-Arian, because they had heard the lie on right-wing talk radio and from neoconservative media that he was a terrorist who hated Americans. The hostile judge sentenced Al-Arian to eighteen months more on a civil contempt charge for refusing to testify about a case that he knew nothing about.

Kromberg contrived to put Al-Arian in a situation in which truthful answers in court under oath could be turned into a perjury charge by offering the defendants reduced charges in exchange for their testimony that Al-Arian was involved with them in some alleged activity and lied under oath. Alternatively, Al-Arian would be cited for civil contempt for refusal to testify. The ease with which Kromberg violated the plea agreement and abused the prosecutorial power in full view of federal judges should give pause to every American.

When a university professor, who has done nothing but try to correct the one-sided story Americans are fed about the Israeli-Palestinian conflict, can be treated in this way by the U.S. Department of Justice, civil liberty in the United States is in a precarious condition.

The ease with which Al-Arian was transformed into a terrorist should be a lesson to us all. People in charge of Homeland Security are no less inclined than police and prosecutors to make expansive interpretations of their mandate and what constitutes terrorism and suspect behavior. On May 28, 2007, the Associated Press reported that the Alabama Department of Homeland Security had included among terrorist groups listed on its Web site environmentalists, antiwar protesters, abortion opponents, and gay- and animal-rights advocates. It is an ancient practice of government to hype fear in order to gain arbitrary power that can be turned against anyone. Perhaps this expansive definition of terrorist explains the eighty thousand names on the government’s no-fly list.

Another problem with arbitrary and undefined power is that it ends up being exercised by people who tend to receive low marks for good judgment and intelligence. English film director Mike Figgis was held for five hours in an interrogation cell at Los Angeles International Airport because U.S. immigration officers are unfamiliar with the professional language of television show producers and lacked the common sense to avoid a misunderstanding. When asked the reason for his visit, Figgis said: “I’m here to shoot a pilot.” “Shoot,” of course, means to film, and “pilot” is the first episode of a new TV show. The people providing our security concluded that Figgis had voluntarily confessed to a plot to come to America in order to murder an airline pilot. Figgis survived his assumption that people in Los Angeles understood movie talk, but the desire of people empowered to thwart terrorism to use their power is great. Any excuse will do.

Sliding Toward Dictatorship

The assaults of the Bush regime on civil liberty, the Constitution, and the separation of powers are more determined and more successful than its military assaults on the Middle East, which provide the “war time” justification for the attack on civil liberty in the United States. The regime and its supporters are determined to raise the president to dictatorial powers, at least in times of war, the initiation of which is being turned into a presidential prerogative.

On May 9, 2007, President Bush signed the National Security and Homeland Security Presidential Directive. If in the president’s opinion a “catastrophic emergency” occurs, the directive places all governmental power in the hands of the president, effectively abolishing the checks and balances in the Constitution. Underlying this directive is the “unitary executive” doctrine, a theory pushed by the Federalist Society, an important source of law clerks, DOJ appointees, and judicial nominees for the Republican Party. The doctrine, supported by Supreme Court justices such as Samuel Alito, claims that the executive power of the president is completely separate and independent of the legislative and judicial powers and not subject to infringement by them. The manner in which this doctrine is being institutionalized is creating the additional claim that executive power is the supreme power. In effect, unitary executive theory is elevating the president to a dictator with the power to ignore or suspend laws.

The unitary executive doctrine is a direct attack on the constitutional separation of powers established by the Founding Fathers. One of the alleged advantages of the unitary executive is that the president can act more quickly and efficiently if he is not subject to interference from Congress and the judiciary. However, as Justice Louis Brandeis explained in 1926, “the doctrine of the separation of powers was adopted by the convention of 1787 not to promote efficiency but to preclude the exercise of arbitrary power. The purpose was not to avoid friction, but, by means of the inevitable friction incident to the distribution of the governmental powers among three departments, to save the people from autocracy.”

News reports that the Bush administration has contracted with Halliburton to build detention centers in the United States at a cost of $385 million revive memories of the World War II detention of Japanese American citizens. It has not been explained who are the intended detainees for the new detention centers. Do the American people want to trust with detention centers an executive branch, which claims the power to set aside habeas corpus, statutory law, due process, and the prohibition against torture?

Polls show that 36 percent of the American public and more than half of New Yorkers lack confidence in the 9/11 Commission Report. Despite a significant percentage of the public’s disbelief in the explanation of the event that took America to war in the Middle East, Congress and the media continue to tolerate the Bush administration’s aggressive rhetoric, which seeks to widen the “war on terror” from Afghanistan and Iraq to Iran, Syria, and Lebanon. The diligence with which Vice President Cheney and the neoconservatives press for an attack on Iran, and the extreme position that the Bush administration has taken on executive power, raise the question whether the Bush administration has an agenda that takes precedence over America’s constitutional democracy.

Never in its history have the American people faced such danger to their constitutional protections as they face today from those in the government who hold the reins of power and from elements of the legal profession and the federal judiciary that support “energy in the executive.” An assertive executive backed by an aggressive U.S. Department of Justice and unobstructed by a supine Congress and an intimidated corporate media has demonstrated an ability to ignore statutory law and public opinion. The precedents that have been set during the opening years of the twenty-first century bode ill for the future of American liberty.

Excerpted from The Tyranny of Good Intentions by Paul Craig Roberts and Lawrence M. Stratton. Excerpted by permission of Three Rivers Press, a division of Random House, Inc. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.

by Ludwig von Mises 

This is the major part of a lecture delivered in Orange County, California, in October 1944. It was published by the Foundation for Economic Education in 2004.

War is a primitive human institution. From time immemorial, men were eager to fight, to kill, and to rob one another. However, the acknowledgment of this fact does not lead to the conclusion that war is an indispensable form of interpersonal relations and that the endeavors to abolish war are against nature and therefore doomed to failure.

We may, for the sake of argument, admit the militarist thesis that man is endowed with an innate instinct to fight and to destroy. However, it is not these instincts and primitive impulses that are the characteristic features of man. Man’s eminence lies in his reason and in the power to think, which distinguishes him from all other living creatures. And man’s reason teaches him that peaceful cooperation and collaboration under the division of labor is a more beneficial way to live than violent strife.

I do not want to dwell on the history of warfare. It is enough to mention that in the 18th century, on the eve of modern capitalism, the nature of war was very different from what it had been in the age of barbarism. People no longer fought one another with the aim of exterminating or enslaving the defeated. Wars were a tool of the political rulers and were fought with comparatively small armies of professional soldiers, mostly made up of mercenaries. The objective of warfare was to determine which dynasty should rule a country or a province. The greatest European wars of the 18th century were wars of royal succession, for example, the wars of the Spanish, Polish, Austrian, and finally the Bavarian successions. Ordinary people were more or less indifferent about the outcomes of these conflicts. They were not much concerned about the question of whether their ruling prince was a Habsburg or a Bourbon.

Nevertheless, these continuous struggles placed a heavy burden upon mankind. They were a serious obstacle to the attempts to bring about greater prosperity. As a result, the philosophers and economists of the time turned their attention to the study of the causes of war. The result of their investigation was the following:

Under a system of private ownership of the means of production and free enterprise, with the only function of government being to protect individuals against violent or fraudulent attacks on their lives, health, or property, it is immaterial for the citizens of any nation where the frontiers of their country are drawn. It is of no concern for anyone whether his country is big or small, and whether it conquers a province or not. The individual citizens do not derive any profit from the conquest of a territory.

It is different with the princes or ruling aristocracies. They can increase their power and their tax revenues by expanding the size of their realms. They can profit from conquest. They are bellicose, while the citizenry is peace loving.

Hence, the old liberals concluded, there would be no more wars under a system of economic laissez faire and popular government. Wars would become obsolete because the causes for war would disappear. Since these 18th- and 19th-century classical liberals were fully convinced that nothing could stop the movement toward economic freedom and political democracy, they were certain that mankind was on the eve of an age of undisturbed peace.

What was needed to make the world safe for peace, they argued, was to implement economic freedom, free trade and goodwill among the nations, and popular government. I want to stress the importance of both of these requirements: free trade at home and in international relations, and democracy. The fateful error of our age has consisted in the fact that it dropped the first of these requirements, namely free trade, and emphasized only the second one, political democracy. In doing so, people ignored the fact that democracy cannot be permanently maintained when free enterprise, free trade, and economic freedom do not exist.

President Woodrow Wilson was fully convinced that what was needed to make the world safe for peace was to make it safe for democracy. During the First World War it was believed that if only the German royal house of the Hohenzollern and the privileged German landed aristocracy, the Junkers, could be removed from power, a durable peace could be achieved. What President Wilson did not see was that within a world of growing government omnipotence this would not be enough. In such a world of growing government power, there exist economic causes of war.

Does the Citizen Profit from Conquest?

The eminent British pacifist, Sir Norman Angell, repeats again and again that the individual citizen cannot derive any profit from the conquest of a province by his own nation. No German citizen, says Sir Norman, profited through his nation’s annexation of Alsace-Lorraine as a result of the Franco-Prussian War of 1870–1871. This is quite correct. But that was in the days of classical liberalism and free enterprise. It is another thing in our day of government interference with business.

Let us take an example. The governments of the rubber-producing countries have entered into a cartel arrangement in order to monopolize the market for natural rubber. They have forced the planters to restrict production in order to raise the price of rubber far above the level it would have attained on a free market. This is not an exceptional case. Many vital and essential foodstuffs and raw materials have been subject to similar policies implemented by governments around the world. They have imposed compulsory cartelization on numerous industries, as a result of which their control was shifted away from private entrepreneurs to the hands of government. Some of these schemes, it is true, have failed. But the governments concerned have not abandoned their plans. They are eager to improve the methods applied and are confident that they will be more successful after the present Second World War.

The individual citizens do not derive any profit from the conquest of a territory. … Hence, the old liberals concluded, there would be no more wars under a system of economic laissez faire and popular government.

There is a lot of talk nowadays about the necessity for international planning. However, no planning, whether it be national or international, is required to make planters grow rubber, coffee, and any other commodity. They embark upon the production of these commodities because it is the most advantageous way for them to make a living. Planning in this connection always means government actions for the restraint of output and the establishment of monopoly prices.

Under such conditions it is no longer true that a nation may not appear to derive a tangible profit from a victorious war. If the nations dependent on the importation of rubber, coffee, tin, cocoa, and other commodities could force the governments of the producing countries to abandon their monopolistic practices, they would improve the economic welfare of their citizens.

To mention this state of affairs does not imply a justification for aggression and conquest. It only demonstrates how utterly mistaken are pacifists like Sir Norman Angell, who base their arguments in favor of peace on the unstated assumption that all nations are still committed to the principles of free enterprise.

Sir Norman Angell is a member of the British Labour Party. This party stands for the outright socialization of business. But the members of the Labour Party are too dull to realize what must be the economic and political consequences of the socialization of business.

The Case of Germany

I want to explain these consequences by referring, first of all, to the situation in Germany.

Like all other European nations, Germany is poor in natural resources. It can neither feed nor clothe its population out of its own available domestic resources. Germans must import huge quantities of raw materials and foodstuffs, and must pay for these badly needed imports by exporting manufactures, most of which are produced out of those imported raw materials. Under free enterprise, Germany brilliantly adjusted itself to this circumstance. Sixty or seventy years ago, in the 1870s and 1880s, Germany was one of the world’s most prosperous nations. Its entrepreneurs succeeded extremely well in building up very efficient manufacturing plants. Germany’s industry was foremost on the European continent. Its products triumphantly swept the world market. The Germans — all classes of the German population — became more prosperous from year to year. There was no reason to alter the structure of German business.

But most of the German ideologists and political writers, the government-appointed professors and the socialist party leaders, as well as the government bureaucrats, did not like the free-market system. They disparaged it as capitalist, plutocratic, bourgeois, and as Western and Jewish. They lamented the fact that the free-enterprise system had incorporated Germany into the international division of labor.

All these groups and political parties wanted to substitute government management of business for free enterprise. They wanted to do away with the profit motive. They wanted to nationalize business and to subordinate it to the commands of the government. This is a comparatively simple thing in a country that by and large can live in economic self-sufficiency. Russia, occupying one-sixth of the earth’s surface, can do without almost any imports from abroad. But it is different with Germany. Germany cannot eschew imports and consequently must export manufactures. This is precisely what a government bureaucracy can never achieve. Bureaucrats are only able to flourish in sheltered domestic markets. They are not fit to compete on foreign markets.

Most people in Nazi Germany today want the government to control business. But the fact is that government control of business and foreign trade are incompatible. A socialist commonwealth must aim at autarky. This is where aggressive nationalism — once referred to as Pan-Germanism, and today called National Socialism — comes into the picture. We are a powerful nation, the National Socialists say; we are strong enough to crush all other nations. We must conquer all those countries whose resources are essential for our own economic well-being. We need autarky and therefore we must fight. We need Lebensraum (living space) and Nahrungs freiheit (freedom from a scarcity of food).

Both terms mean the same thing, the conquest of a territory so large and rich in natural resources that the Germans could live without any foreign trade at a standard of living not lower than that of any other nation. The term Lebensraum is fairly well known abroad. But the term Nahrungs freiheit is not. Freiheit means freedom; Nahrungs freiheit means freedom from a state of affairs under which Germany must import foodstuffs. It is the only “freedom” that matters in the eyes of the Nazis.

Both the Communists and the Nazis agree that the essence of what they mean by democracy, liberty, and popular government lies in the establishment of full government control of business. Whether one calls this system socialism or communism or planning is immaterial. Regardless of what it is called, this system requires economic self-sufficiency. But while Russia can, by and large, live in economic self-sufficiency, Germany cannot. Therefore a socialist Germany is committed to a policy of Lebensraum or Nahrungs freiheit, that is, to a policy of aggression.

The pursuit of a program of government control of business must finally result in a rejection of the international division of labor. From the viewpoint of Nazi philosophy, the only proper mode of international relations is war. Their most eminent men take pride in referring to a dictum of Tacitus. This Roman historian, almost two thousand years ago, said that the Germans consider it shameful to acquire by hard work what could be acquired by bloodshed. It was not a slip of the tongue when Kaiser Wilhelm II, in 1900, raised the Huns as a model for his soldiers. It was the encapsulation of a conscious policy.

Dependent on Imports

Germany is not the only European country depending on foreign imports. Europe — excluding Russia — has a population of about 400 million people, more than three times the population of the continental United States. But Europe does not produce cotton, rubber, copra, coffee, tea, jute, and many essential metals. And it has a quite insufficient production of wool, fodder, cattle, meat, hides, and of many cereals.

In 1937, Europe produced only fifty-six million barrels of crude petroleum, as compared with the US production of 1,279 million barrels. Besides, almost all of Europe’s petroleum production is located in Romania and in eastern Poland. But as a result of the present war, these areas will come under the control of Russia. Manufacturing and exporting manufactures are the essentials of Europe’s economic life. However, exporting manufactures is almost impossible under government control of business.

Such is the stark reality which no socialist rhetoric can conjure away. If the Europeans want to live they must cling to the well-tried methods of free enterprise. The alternative is war and conquest. The Germans have tried it twice and failed both times.

However, the politically most influential groups in Europe are far from realizing the indispensability of economic freedom. In Great Britain and France, in Italy and in some smaller countries there is a powerful agitation for full government control of business. The case for economic freedom is almost a hopeless cause with the governments of these countries. The British Labour Party and those British politicians who wrongly still call their party the Liberal Party look upon this war not only as a fight for their nation’s independence, but no less as a revolution for the establishment of government control of business. The third British party, the Conservative Party, by and large sympathizes with these endeavors. The British want to defeat Hitler, but they are eager to adopt his economic methods for their own country. They do not suspect that state socialism in Great Britain spells the doom of the British masses. Britain must export manufactures in order to buy raw materials and foodstuffs from abroad. Any drop in British exports lowers the standard of living of the British masses.

Conditions in France and Italy and in most other European countries are similar to those in Great Britain.

In supplying the domestic consumer with various necessities a socialist government is sovereign. The citizen must take what the government gives him. But it is different with any export trade. The foreign consumer buys only if both the quality and the price of the commodity offered for sale are attractive to him. In this international arena of serving foreign consumers, capitalism has shown its greater efficiency and adaptability. The high level of prewar Europe’s economic well-being and civilization was not the outcome of the activities of government bureaus and agencies. It was an achievement of free enterprise. Those German cameras and chemicals, those British textiles, those Paris dresses, hats, and perfumes, those Swiss watches, and Vienna leather fancy goods were not the product of government-controlled factories. They were the products of entrepreneurs indefatigably intent upon improving the quality and lowering the price of their merchandise. Nobody is bold enough to assume that a government agency could successfully replace the private entrepreneurs in this function.

Privately conducted foreign trade is the private affair between private firms of various countries. If some disagreements result, they are the conflicts between private firms. They do not create conflicts in the political relations between nations. They concern a Mr. Meier and a Mr. Smith. But if foreign trade is a matter of government, such conflicts are transformed into political issues.

Suppose the Dutch government prefers to buy coal from Great Britain rather than from the German Ruhr. Then the German nationalists may think, Why tolerate such behavior on the part of a small nation? It took the Third Reich precisely four days to smash the armed forces of the Netherlands in 1940. Let us try it again! Then we will enjoy all the products of the Netherlands, but without having to pay for them.

“Fair” Distribution of Resources

Let us analyze the frequently expressed demand of the Nazi and Fascist aggressors for a new and fair distribution of the natural resources around the globe. In a world of free enterprise, a man who wants to drink coffee and is not himself a coffee planter must pay for it. Whether it is a German or an Italian or a citizen of the Republic of Colombia, he must render some services to his fellow men, earn a money income and spend part of it on the coffee he desires. In the case of a country that does not produce coffee within its own borders, this means exporting goods or resources to pay for the coffee that is imported. But Messrs. Hitler and Mussolini do not imagine such a solution to the problem. What they would want is to annex a coffee-producing country. But since the citizens of Colombia or Brazil are not enthusiastic about becoming the slaves of either the German Nazis or the Italian Fascists, this means war.

Another striking example is provided by the case of the cotton industry. For more than a hundred years, one of the main industries of all European countries was the spinning of cotton and the manufacture of cotton goods. Europe does not grow any cotton. Its climate is unfavorable. But the supply was always sufficient, with the only exception being the years during the American Civil War in the 1860s, when the conflict interrupted the supply of cotton from the Southern states. The European industrial countries acquired enough cotton not only for the needs of their own domestic consumption, but no less for undertaking a considerable export trade in cotton goods.

“The high level of prewar Europe’s economic well-being and civilization was not the outcome of the activities of government bureaus and agencies. It was an achievement of free enterprise.”

But in the years just preceding the start of the Second World War, conditions changed. There was still an ample supply of raw cotton on the world market. But the system of foreign exchange controls that was adopted by most European countries prevented private businessmen from buying all the cotton they needed for their production processes. Hitler’s contribution to the decline of the German cotton-goods industry consisted in restricting their production and making them discharge a large part of their workforce. Hitler did not worry much about the fate of these discharged workers. He sent them to work, instead, in the munitions factories.

As I already point out, there are no economic causes for armed aggression within a world of free trade and free enterprise. In such a world, no individual citizen can possibly derive any advantage from the conquest of a province or a colony. But in a world of totalitarian states, many citizens may come to believe in an improvement of their material well-being from the annexation of a territory rich in resources. The wars of the 20th century have been, to be sure, economic wars. But they have not been caused by capitalism, as the socialists would have us believe. They are wars caused by governments aiming at complete political and economic omnipotence, and have been supported by the misguided masses of these countries.

The three main aggressor nations in this war — Nazi Germany, Fascist Italy, and Imperial Japan — will not attain their ends. They have been defeated, and they know it already. But they may try it again at a later date, because their counterfeit philosophy — their totalitarian creed — does not know of any other method of trying to improve the material conditions of the people other than war. For the totalitarian, conquest is the only viable political means to attain their economic ends.

Economic Mentality

I do not say that all wars of all nations and in all ages were motivated by economic considerations, that is, by the desire to make the aggressors rich at the expense of the defeated. There is no need for us to investigate the root causes of the crusades or the religious wars of the 16th and 17th centuries. What I want to say is that, in our age, the great wars have been the outcome of a specific economic mentality.

The Second World War is certainly not a war between the white and the colored races. No racial differences separate the British, Dutch, and the Norwegians from the Germans, or the French from the Italians, or the Chinese from the Japanese. It is not a war between Catholics and Protestants. After all, there are Catholics and Protestants in both belligerent camps. It is not a war between democracy and dictatorship. The claim of several of the United Nations (Soviet Russia in particular) to the appellation “democratic” is rather questionable. On the other hand, Finland (which is allied with Nazi Germany) is a country with a democratically elected government.

My argument that recent wars have been motivated by economic considerations is not meant to be a justification of the aggressor’s policies. Viewed as an economic means for the attainment of certain economic benefits, the policy of aggression and conquest is self-defeating. Even if technically successful in the short run, it would never attain in the long run the ends at which the aggressors are aiming. Under the conditions of modern industrialism, there cannot be any question of a social system such as the Nazis plan under the name of a “New Order.” Slavery is not a method for industrial societies. If the Nazis had conquered their adversaries, they would have destroyed civilization and brought back barbarism. They would certainly not have erected a thousand-year New Order, as Hitler promised.

Thus, the main problem is how to avoid new wars. The answer is not to be found in setting up a better League of Nations; neither is it a question of the establishment of a better World Court, nor even in the implementation of a World Police Force. The real issue is to make all nations — or at least the most populous nations of the world — peace loving. This can be achieved only by going back to free enterprise.

If we want to abolish war, we must remove the causes of war.

The great idol of our time is the State. The State is a necessary social institution, but it should not be deified. It is not a god; it is a device of mortal men. If we make it an idol, we must sacrifice to it the flower of our youth in coming wars.

What is needed to make a lasting peace is much more than new offices and a new court for the League of Nations in Geneva, or even a new international police force. What is needed is a change in political ideologies and a return to a sound free-market economic system.

[VIEW THIS ARTICLE ONLINE]

This is the major part of a lecture delivered in Orange County, California, in October 1944. It was published by the Foundation for Economic Education in 2004.

http://mises.org/story/2949

Permalink Comments