The Daily Reckoning PRESENTS: In this essay, originally published by The Western Standard on July 4th of this year, Pierre Lemieux explores the idea of America as a so-called “beacon of liberty” – what that means, and how it is represented in the current socioeconomic climate of America. Read on...
THE IDEA OF AMERICA, PART I
by Pierre Lemieux
As Lord Acton reminded us, the American Revolution exerted much influence in France and in the world. America was seen as a beacon of liberty. The Statue of Liberty proclaims: “From her beacon-hand / Glows world-wide welcome”. Liberty – individual liberty – was the essence of the idea of America. In his Civil Disobedience , Henry David Thoreau conveys the spirit when he reports that, in half an hour, he was “in a huckleberry field, on one of our highest hills, two miles off, and then the State was nowhere to be seen.”
The idea of America as the beacon of liberty has survived until quite recently. For example, in a reflection on the growth of government surveillance, law professor Peter P. Swire writes, “the beacon of liberty argument suggests that U.S. adoption of surveillance tools can have significant negative effects elsewhere in the world.” “Instead of applying its weight on the side of liberty,” he explains, “the United States is becoming a leader in requiring surveillance technologies... The moral authority of the United States will be on the side of government rather than on the side of individual liberty.” Swire is not talking about the obvious growth of government surveillance that has followed 9/11: he was writing in 1999, and focussing mainly on the monitoring of financial transactions with tools like money-laundering controls.
When Was America?
Remember America? In the 1950s, there was no political correctness, and Americans were proud of their culture. Despite the grip of religion, one could privately indulge in pornography without much risk. More generally, one could quite safely entertain one’s vices on one’s private property. There were no laws against sexual harassment. There was already much economic regulation, often inherited from the 1930s, but it did not directly affect the average American, and men of business were not scared of the state. There was no public health insurance – no Medicare, no Medicaid. The owner of a restaurant or a bar could run it as he wished, and admit whomever he wanted, including smokers. The rule of law was still more a means for citizens to defend themselves against the state than a way for the state to control them. Except for the driver’s license, there were no ID papers, and even drivers’ licenses often did not bear photographs. Cops were humble, at least if you looked like a sovereign individual and knew how to talk. For a Western European immigrant, America was still a paradise of freedom and the easy life.
Better, consider the first decade of the 20th century. In general, anybody could start a business, find investors, and sell his product without any government license and oversight. There was no SEC, no IRS, no FCC, no FDA, no OSHA, no USCIS (formerly INS), no EPA. The absence of regulation did not prevent the development of vibrant capital markets, and New York City was on its way to becoming the top financial place in the world. The right to keep and bear arms, so typically American in the 20th century, had survived relatively unscathed. There was no witch-hunt and, in a legal fight between an individual and the government, it is the latter that felt handicapped. Writing in 1910, Lord Acton could confidently say that the American people are “more free than any other the world has seen.” In her celebration of American liberty in the early 20th century, Rose Wilder Lane could exclaim: “That is what Europeans meant when, after a few days in this country, they exclaimed, ‘You are so free here!’.”
And there was even more liberty before the Civil War – at least if one was a white man. “[W]e have gone downhill from the Revolution until now,” writes Voltairine de Cleyre.
Once, it seems, there was America.
When was America? It would be overly ambitious to try to answer this question. It is easier, even if less satisfying, to point out the opposition between the libertarian foundations of America, and how these ideas were implemented by American governments. Was it only St. John Crevecoeur’s French naïveté that made him fall in love with America’s “mild government,” and marvel at the colonists “all respecting the laws, without dreading their power, because they were equitable”? Lord Acton, a more serious analyst, notes that “the temper of the Constitutional Convention was as conservative as the Declaration of Independence was revolutionary.” The Founders were establishing a government, not an anarchistic society. When one starts thinking about America, one is immediately confronted by the puzzle of a powerful state trusted to protect the right of individuals to distrust it. The Revolution, argues Voltairine de Cleyre, aimed at “a change in the political institutions which should make of government not a thing apart, a superior power to stand over the people with a whip, but a serviceable agent, responsible, economical, and trustworthy,” and she adds parenthetically, “but not so much trusted as not to be continually watched.”
I will come back later to this paradox of a state to be simultaneously trusted and mistrusted. For the moment, let me underline a misleading aspect in the terminology of America’s founding. Using the term “States” to describe the former colonies had the unfortunate effect of abolishing the distance between the state and the subjects who, then, don’t live under a state but in a state. The danger is to disarm mistrust towards the state. Not only does this usage create much noise in international contexts, where “the government” usually means “the administration” (as opposed to the legislative and the judiciary), but it also confuses “the government” and “government,” as if criticizing “government” (i.e., “the state”) could only mean criticizing a specific administration. The reader will thus forgive me for disregarding the American terminology and reverting to the European usage. I will distinguish “the state” as an institution, from “States” as geographical jurisdictions (using a capital “S” for the latter) in America, and by “the American state,” I will mean the global apparatus of government in America.
The history of America does not show a linear progress of liberty. In the early colonies, Puritanism led to serious infringements of individual liberty. In the Connecticut Code of 1650, Tocqueville reports, “there was scarcely a sin which was not subject to magisterial censure.” “Sometimes,” he adds, “the zeal for regulation induces [the legislator] to descend to the most frivolous particulars; thus a law is to be found in the same code which prohibits the use of tobacco.” And this was little compared to the burning of suspected witches in Massachusetts in the late 17th century. These theocratic trends had abated by the time Tocqueville wrote his Democracy in America in the early 19th century. Rothbard argues persuasively that the libertarian influence increased during the 18th century.
A reversal to authoritarian Puritanism occurred at the end of the 19th century, which can partly be traced to the increase in state power fuelled by the Civil War. The first federal law criminalizing the mailing of obscene material was adopted in 1865, the very year the Civil War ended. With Anthony Comstock’s crusade against birth control and obscenity, and the rise of the Temperance Movement, America seemed to be heading back to theocracy. In the early 20th century, anarchist and feminist Voltairine de Cleyre thought that the spirit of America had been lost. The Prohibition, which lasted from 1919 to 1933, continued to illustrate the dark side of American religion and busybodyism. Other “Comstock laws” had a longer shelf life. Until 1971, contraception was still on the postal prohibition list, and Wendy McElroy reports that, in the late 1960s, a U.S. customs officer forced an American woman to throw her diaphragm into the harbor before allowing her to reenter the country.
During the 20th century, the authoritarian strand in American religion became less influential. The battles won by the Larry Flints during the second half of the century could have suggested that Puritanism was dead. However, other sorts of prohibitionist and puritanical causes were resurrected under a trend that can be put under the general label of “political correctness.” Social and environmental stuff is the god of the new religion, which dictates socially acceptable opinions – on discrimination, feminism, life’s pleasures, the environment, etc. – and is translated into coercive laws.
Government economic intervention during the 19th century should not be underestimated, if only because of state-protected slavery. Radicals like Lysander Spooner and Henry David Thoreau were already raising red flags. Protectionism, in the form of high tariffs, was rampant. But, by and large, at least until the Civil War, if you were a white man, America was the freest economy in the world. From the late 19th century on, economic intervention gathered momentum with the creation of the Interstate Commerce Commission in 1887 and the adoption of the Sherman Antitrust Act in 1890.
According to historian Jeffrey Hummel, the Civil War was “America’s Turning Point.” He argues that the War was basically an enterprise of aggrandizement of central power, of the American state as opposed to the Ameri-can States . The Civil War gave, if only temporarily, immense powers to the state, and “altered attitudes about government.” In 1869, George Ticknor, the well-know scholar and Harvard professor, wrote:
The civil war of ’61 has made a great gulf between what happened before it in our century and what has happened since, or what is likely to happen hereafter. It does not seem to me as if I were living in the country in which I was born, or in which I received whatever I got of political education and principles.
“In contrast to the whittling away of government that had preceded Fort Sumter,” Hummel concludes, “the United States had commenced its halting but inexorable march toward the welfare-warfare state.”
In the field of taxation, the idea of America also started to be lost in the late 19th century. A temporary federal income tax was created in 1862 to finance the Civil War. Extended twice, it died in 1872, but was re-adopted by Congress in 1894, only to be ruled unconstitutional by the Supreme Court in 1896. In 1913, the Sixteenth Amendment legalized it. Frank Chodorov later wrote: “As a result of income taxation, we now have a government with far more power than George III ever exercised.”
The 1910s and 1920s were periods of great increases in government intervention. Between 1913 (the year when the Federal Reserve System was created) and 1920, total government expenditures grew from 7.5 per cent of gross domestic product (GDP) to 12 per cent. The New Deal was another period of advancing government power, and Rose Wilder Lane, despite her earlier optimism, became very worried about the evolution of American politics. Total government expenditure reached 20 per cent of GDP before World War II, 27 per cent in 1960, and more than 30 per cent from 1980 until now.
For a long time, individual liberty was the essence of the idea of America as it was experienced through the country’s history. Whatever faults and rough edges characterized the average American, however naïve was his idea of individual independence, he was self-reliant, inventive, adventurous, and free. Mark Twain’s beautiful Old Times on the Mississippi (1875) illustrates this vividly.
America Today
What is left of the idea of America? It looks as if what Tocqueville had forecasted has arrived to America. “I had remarked during my stay in the United States,” wrote Tocqueville, “that a democratic state of society, similar to that of the Americans, might offer singular facilities for the establishment of despotism.” Ancient tyrants like Roman emperors “possessed an immense and unchecked power” which they frequently used “to deprive their subjects of property or of life; their tyranny was extremely onerous to the few, but it did not reach the many; it was confined to some few main objects and neglected the rest; it was violent, but its range was limited.” The future democratic tyrannies will extend “over the whole community,” and maintain men “in perpetual childhood”: the state “provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry...” The state, as Tocqueville envisioned its future, “covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd...it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.”
Americans are now caught in the “network of small complicated rules, minute and uniform” that Tocqueville forecasted. Virtually all activities – even those protected by the Bill of Rights – are regulated in some way, and most often in many ways. Just at the federal level, there are probably 4,000 statutes, although it’s hard to tell the exact number, notes a Wall Street Journal reporter, “because the statutes aren’t listed in one place.” And this does not include the regulations. “We continue to claim that nobody is supposed to ignore the law,” wrote French legal theorist Georges Ripert in 1949, “but those who know it are certainly to be commended.” In 2001, federal prosecutors brought more than 80,000 cases. To this must be added the laws, regulations and prosecutions at the State and local levels. It is estimated that 15 per cent of all Americans have an arrest record. France has come to America.
James Bovard provides a vivid description of how today’s American state is powerful compared to the English state at the time of the Revolution:
The Massachusetts colonists rebelled after the British agents revived “writs of assistance” that allowed them to search any colonist’s property. Modern Americans submit passively to government sweep searches of buses, schools, and housing projects. Virginia revolted in part because King George imposed a two-pence tax on the sale of a pound of tea; Americans today are complacent while Congress imposes billions of dollars of retroactive taxes...Connecticut rebelled in part because the British were undermining the independence of judges; nowadays, federal agencies have the power to act as prosecutor, judge and jury in suits against private citizens. Maine revolted in part because the British Parliament issued a decree confiscating every white pine tree in the colony; modern Americans are largely complacent when local governments impose almost unlimited restrictions on individuals’ rights to use their own property. The initial battles of the Revolution occurred after British troops tried to seize the colonists’ private weapons; today, residents in Chicago, Washington, D.C., and other cities submit to de facto prohibitions on handgun ownership...
Note again that Bovard was writing before 9/11. Whatever happened afterwards, the American state was, before 9/11, incredibly more powerful than the Founders, or the Americans of the late 19th-century, or even those of the 1950s, could ever imagine.
Consider two paradigmatic illustrations of the demise of the idea of America: the regulation of financial transactions and ID papers.
Serious monitoring of financial transactions can probably be traced to the creation of the SEC in 1934, but the agency’s original mission of monitoring the issuing of securities was only the opening salvo. Seventy-five years later, the state exerts totalitarian financial surveillance over, and imposes minute rules and regulations on, all kinds of financial transactions. Money laundering legislation was introduced in 1970, in order to fight the organized crime generated by the creation of victimless crimes by the state itself. Gradually tightened from the 1980s on, the legislation now allows the state to monitor all cash transactions over $10,000 and virtually all non-cash money transfers. Banks and other financial intermediaries have been drafted in the service of the state against money launderers, that is, against anybody who transfers money earned in one of the innumerable crimes manufactured by galloping legislation. Even after creating costly “compliance departments,” financial intermediaries are not immune to the risk of civil or criminal prosecution by the state. William McDavid, general counsel of J.P. Morgan Chase uses an analogy: “[T]hink if you are running a railroad, and we say to you, ‘We want you to monitor everyone who takes your train and see if their trip is legitimate.’” “One unintended consequence,” continues the Wall Street Journal , “is that banks are simply dropping small money-transfer businesses as clients, a move that could hurt millions of poor immigrants who send cash to relatives overseas.”
The SEC plays a major role in the witch-hunt against corporate executives and financial wizards (the modern Salem witches), and in the governance fad. Through civil suits and administrative proceedings and orders, the SEC mandates securities registration, regulates brokerage, trading and disclosure, and helps enforce the prohibition of insider trading. It scares large companies into settling suits without trial. Royal Dutch/Shell paid a U.S.$120-million settlement. The agency also imposes fines and work bans. It regulates stock exchanges, which were historically private organizations. It files civil suits against violators of the Sarbanes-Oxley Act. The president of the SEC scolded American CEOs: “You must have an internal code of ethics that goes beyond the letter of the law to also encompass the spirit of the law.” The problem is, where is the spirit of the law explained in writing, so that one knows what is required? Where is the rule of law? By mandating certain sorts of disclosure and preventing others, the SEC is, in fact, engaged in the control of information and speech. Where is the First Amendment?
The 2002 Sarbanes-Oxley Act imposes such wide-ranging requirements to corporations that they now compel their employees to change their computer passwords frequently. The risk of forgetting passwords (of course) increases, with the consequence that corporate employees resort to insecure tricks, like writing passwords on sticky notes affixed to their computers.
“Americans today,” wrote Rose Wilder Lane in her famous 1936 celebration of the idea of America, “are the most reckless and lawless of peoples.” Tightly controlling and punishing financial entrepreneurs has been an important step in the taming of the reckless and the lawless – the Michael Milkens, the Martha Stewarts, the Conrad Blacks – that is, in the taming of America.
ID papers are another way of controlling the reckless and the lawless. “We were not obliged, as Continental Europeans have been,” wrote Rose Wilder, “to carry at all times a police card, renewed and paid for at intervals, bearing our pictures properly stamped and stating our names, ages, addresses, parentage, religion and occupation.” Parentage, religion and occupation are not important pieces of information on ID cards, as long as the state has related databases. Indeed, modern European ID cards don’t include all such details. What is dangerous with ID cards, or official ID papers in general, is that they help the state follow an individual from the cradle to the grave, and from one residence to another. Without ID papers, it is very costly for the state to enforce laws requiring that the whereabouts of the subjects be known; consequently, fewer such laws are enacted, and the ones that are cannot be efficiently enforced. It used to be that Americans could escape the state by disappearing where the state is nowhere to be seen, as Thoreau said. Jeffrey Hummel reports that, during the Civil War, about 13 per cent of soldiers, from both the North and the South, deserted, and that over half the deserters were never apprehended. This would be inconceivable with the surveillance apparatus of today’s American state, which relies heavily on the ubiquitous Social Security Number (SSN) and on ID papers – like drivers’ licenses or passports – that can be matched to the SSN or other identifiers.
The last half of the 20th century has seen the introduction of de facto ID papers in America. Simultaneously, the obligation to identify oneself – with official “photo ID,” of course – when agents of authority request it has appeared, and has been legalized by the recent judgment (split 5 to 4) of the Supreme Court in the Hiibel case. The intelligence reform bill adopted by Congress in December 2004 has gone further on the road to a national ID card by mandating federal standards on State driver’s licenses. Representative Ron Paul (R-Texas) declared, “Nationalizing standards for drivers’ licenses and birth certificates, and linking them together via a national database, creates a national ID system pure and simple.” This, warned Paul, points to “a Soviet-style internal passport system.” The fact that the 3,000-page bill was adopted 336 to 75 by the House, and 89 to two by the Senate, shows how far the idea of America has receded.
America has witnessed a large-scale highjacking of the law by the state. Inherited from the mother country, the rule of law was a crucial component of the idea of America. The Bill of Rights was meant to reinforce the common law guarantees against persecution through legal prosecution. These guarantees were gradually overcome by the state through its mere power to spend, the proliferation of laws, the federalization of virtually all crimes, and the use of civil courts to enforce laws (as opposed to criminal courts, where the burden of proof is much heavier). When the government cannot prove a crime without a reasonable doubt, it now has a whole panoply of legal instruments to threaten and punish virtually anybody it wants.
The events of September 11, 2001 have been used as an excuse to extend the requirement to carry official ID in long distance public transportation, as well as in many other cases. More generally, 9/11 has lowered the political cost of increasing state power. In that respect, the July 2004 Department of Justice report on the PATRIOT Act provides for interesting reading. The government argues that the new powers granted by the PATRIOT Act (wiretappings, searches, warrantless access to ISPs, etc.) have stopped a few terrorist conspiracies. But the report also confirms that the new powers have been used to hunt fraudsters, computer hackers, “individuals operating unlicensed money transmitting businesses that sent money to...India,” child pornographers, drug dealers, etc. The introduction of the report had already prepared the reader: “Some of the examples in this report do not involve terrorism but instead detail how the Department has used certain provisions in the USA PATRIOT Act to combat serious criminal conduct... Congress chose not to limit certain authorities contained in the USA PATRIOT Act only to the context of terrorism, and the examples contained in this report demonstrate the wisdom of that decision.” Recall that “USA PATRIOT” stands for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism.”
Regards,
for The Daily Reckoning
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