In the summer of 1969, my wife and I were visiting her sister’s family in Utica, New York. One day we took a ride to Syracuse and stopped in a bookstore where I bought a copy of Ayn Rand’s Capitalism: The Unknown Ideal. Having been a history major and interested in economic issues, I eagerly read the collection of essays by Rand, Alan Greenspan and others. I especially was intrigued with Alan Greenspan’s “Gold and Economic Freedom,” where he makes the case that the Federal Reserve’s easy money policies of the 1920s caused the boom that led to the stock market crash.
Ayn Rand and her fellow writers made both the moral and economic case for unfettered markets in Capitalism: The Unknown Ideal. However, my education about markets, business cycles, trade, regulation, and money and banking did not end in 1969.
In September 1971, we were flying home from Italy, when I saw a passenger reading the New York Times editorial page and an op-ed essay caught my eye, The President’s Economic Betrayal. I asked the passenger to borrow the newspaper. Murray Rothbard, who was identified as an economic professor at Brooklyn Polytechnic Institute, wrote the essay. Rothbard systematically shredded President Nixon’s decision to impose wage and price controls and close the gold window a couple of weeks earlier on August 15th. Rothbard I subsequently learned was an economist in the “Austrian School” tradition.
I began reading Rothbard’s books and articles beginning in 1973, beginning with For a New Liberty and America’s Great Depression, and discovered the works of Carl Menger, Ludwig von Mises, F.A. Hayek, Henry Hazlitt and Israel Kirzner, economists who had written insightful books and essays in the Austrian tradition.
I met Rothbard in 1974 at Brooklyn Polytechnic where was a professor and invited him to be a member of my dissertation committee at Rutgers University; I was beginning my doctoral thesis, a study of how inflation spreads through the economy in the Geography Department. Prior to meeting Rothbard, I briefly met Ayn Rand at a New York City lecture in June 1972 given by economist George Reisman, a few months before I began my doctoral program. From 1969 to the mid-1970s, I was an avid reader of Rand’s monthly newsletter and books.
The above is a backdrop to my intellectual journey. For the past four decades, I studied and embraced the view that government is indeed best that governs least. The works of Rand, Greenspan, Rothbard, Bastiat, Hazlitt and dozens of others shaped my understanding of economics, history, and philosophy. In short, I am an advocate of limited government, so limited it should not matter who occupies the Oval Office in the White House, uncompromising civil liberties, gold-based money, a noninterventionist foreign policy and a tax-free society.
I also am a passionate advocate of the nonprofit sector to address homelessness, drug abuse, the uninsured and other social issues. I have put my money where my mouth is and contribute to various nonprofits, especially organizations that provide free healthcare to the uninsured.
Fast forward to 2011. The United States is facing the greatest financial crisis since the Great Depression and possibly in its history, immediately. To put it succinctly, the federal government is broke, financially and morally. It is running a $1.5 trillion deficit, has a $14.5 trillion national debt, has unfunded liabilities of well over $100 trillion, and imposes thousands of regulations that are stifling the creation of jobs in the country. In other words, we have not been living in an unfettered capitalistic society—the so-called dog-eat-dog society, which is a caricature of a free enterprise economy where property rights are respected and the government does not redistribute income from workers and business owners to anyone else.
In fact, the welfare state is a “trickle down economy,” where the federal government “trickles down” its confiscated loot, otherwise known as tax dollars to the poor, seniors, crony capitalists, foreign governments and scores of special interests who lobby incessantly for some of the federal government’s largesse. Because of the welfare state’s growth under both Republicans and Democrats, at least half of the U.S. population receives a government check in one form or another.
The government social safety net has been in place for decades fostering a culture of dependency that stays afloat by the federal government currently borrowing hundreds of billions of dollars annually. In addition, Uncle Sam borrows several hundreds of billions more annually to pay for the unnecessary wars in the Middle East and the maintenance of hundreds of military bases and hundreds of thousands of troops overseas. This is hardly a limited government program that Rand would approve of. In fact, Rand was against the Vietnam War even though she was a fervent anti-communist. I remember her saying in a television interview the Vietnam was not in our national interest.
Now that Rep. Paul Ryan (R-WI), head of the House Budget Committee and an Ayn Rand admirer, has put proposed a multi-year budget plan that allegedly contains cuts in entitlement spending, liberals are going bonkers and want to enlist the support of the Religious Right and Catholics to oppose any cuts in social welfare spending. (For a comprehensive analysis of the Ryan budget proposal, see the article published by Reason Magazine.) The bottom line is that Ryan’s budget does not end any entitlements; it merely slows the growth in social welfare spending.
Would therefore Jesus oppose Rep. Ryan’s budget proposals because the congressman is a fan of Ayn Rand, a passionate advocate of individualism and “selfishness?” Hardly. The welfare state is modern invention of humanity; it is not a foundation of Christianity or Judaism.
Jesus asserted that helping the poor is noble. Did he mean that the state using its taxing powers to take money from one human being and giving it to another is a moral way to help the poor? On the other hand, did Jesus believe that everyone and every institution, including the State must adhere to “Thou shall not steal?”
Taxation is an involuntary exchange. Theft is an involuntary exchange. Therefore, taxes are a form of theft, even if the proceeds may be used for a “noble” purpose, helping the poor. As Frederic Bastiat observed in The Law, legal plunder—government takings—are immoral and no different from individual coercion.
So would Jesus condone legal plunder as a means to help the poor? I do not think so. Compassion must come from the heart, not out of the barrel of a gun, or the force of law. The welfare state is, as Bastiat observed, phony philanthropy. If liberals, Catholics and Evangelicals want to help the poor, they should promote heart-felt charity, and call for phasing out the welfare state as quickly as possible so real philanthropy can replace and better address our most pressing social issues. As Peter Drucker observed two decades ago, “Government has proved incompetent at solving social problems.”