(This policy bulletin is an extract from the book Liberal Tide by Jim Peron, published in 2003 by the Institute for Liberal Values.) Section 4: Liberalism vs. socialism
The dogma of our times
The present disposition is to liquidate any distinction between state and society, conceptually or institutionally. The state is society; the social order is indeed an appendage of the political establishment, depending on it for sustenance, health, education, communications, and all things coming under the head of “the pursuit of happiness”. In theory, taking college textbooks on economics and political science for authority, the integration is about as complete as words can make it. In the operation of human affairs, despite the fact that lip service is rendered to the concept of inherent personal rights, the tendency to call upon the state for the solution of all the problems of life shows how far we have abandoned the doctrine of rights, with its correlative of self-reliance, and have accepted the state as the reality of society. It is this actual integration, rather than the theory, that marks the twentieth century off from its predecessors.
One indication of how far the integration has gone is the disappearance of any discussion of the state as state – a discussion that engaged the best minds of the eighteenth and nineteenth centuries. The inadequacies of a particular regime, or its personnel, are under constant attack, but there is no faultfinding with the institution itself. The state is all right, by common agreement, and it would work perfectly if the “right” people were at the helm. It does not occur to most critics of the New Deal that all its deficiencies are inherent in any state, under anybody’s guidance, or that when the political establishment garners enough power a demagogue will sprout. The idea that this power apparatus is indeed the enemy of society, that the interests of these institutions are in opposition, is simply unthinkable. If it is brought up, it is dismissed as “old-fashioned”, which it is: until the modern era, it was an axiom that the state bears constant watching, that pernicious proclivities are built into it.
A few illustrations of the temper of our times come to mind.
The oft-used statement that “we owe it to ourselves”, in relation to the debts incurred in the name of the state, is indicative of the tendency to obliterate from our consciousness the line of demarcation between governed and governors. It not only is a stock phrase in economic textbooks, but is tacitly accepted in many financial circles as sound in principle. To many modern bankers a government bond is at least as sound as an obligation of a private citizen, since the bond is in fact an obligation of the citizen to pay taxes. Those bankers make no distinction between a debt backed by production or productive ability and a debt secured by political power; in the final analysis a government bond is a lien on production, so what’s the difference? By such reasoning, the interests of the public, which are always centered in the production of goods, are equated with the predatory interests of the state.
In many economics textbooks, government borrowing from citizens, whether done openly or by pressure brought upon the banks to lend their depositors’ savings, is explained as a transaction equivalent to the transfer of money from one pocket to another, of the same pants; the citizen lends to himself what he lends to the government. The rationale of this absurdity is that the effect on the nation’s economy is the same whether the citizen spends his money or the government does it for him. He has simply given up his negligible right of choice. The fact that he has no desire for what the government spends his money on, that he would not of his own free will contribute to the buying of it, is blithely overlooked. The “same pants” notion rests on the identification of the amorphous “national economy” with the well-being of the individual; he is thus merged into the mass and loses his personality.
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