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Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay is drawn from the author’s longer monograph available here. Readers can also view a speech by the author on this very subject here.

Many volumes have been written about the Great Depression and its impact on the lives of hundreds of millions of citizens around the world. Historians, economists, and politicians have all combed the wreckage searching for the “black box” that will reveal the cause of this legendary tragedy. Sadly, all too many of them decide to abandon their search, finding it easier perhaps to circulate a host of false and harmful conclusions about the events of eight decades ago.

How bad was the Great Depression? Generally speaking, it was worse in America than in Western Europe and Canada and my focus here is on the U.S. Over the four years from 1929 to 1933, production at America’s factories, mines, and utilities fell by more than half. Real disposable incomes dropped 28 percent. Stock prices collapsed to one-tenth of their pre-crash height. The number of unemployed Americans rose from 1.6 million in 1929 to 12.8 million in 1933. One of every four workers was out of a job at the Depression’s nadir, and ugly rumors of revolt simmered for the first time since the Civil War of the 1860s.

Old myths never die; they just keep showing up in college economics and political science textbooks. Students today are frequently taught that unfettered free enterprise collapsed of its own weight in 1929, paving the way for a decade-long economic depression full of hardship and misery. President Herbert Hoover is presented as an advocate of “hands-off,” or laissez-faire, economic policy, while his successor, Franklin Roosevelt, is the economic savior whose policies brought us recovery. This popular account of the Depression belongs in a book of fairy tales and not in a serious discussion of economic history, as a review of the facts demonstrates.

The Great, Great, Great, Great Depression

To properly understand the events of the time, it is appropriate to view the Great Depression as not one, but four consecutive depressions rolled into one. Professor Hans Sennholz has labeled these four “phases” as follows: the business cycle; the disintegration of the world economy; the New Deal; and the Wagner Act.^[1]

The first phase explains why the crash of 1929 happened in the first place; the other three show how government intervention kept the economy in a stupor for over a decade.

Phase I: The Business Cycle

The Great Depression was not America’s first depression, though it proved to be the longest. The common thread woven through the several earlier debacles was disastrous manipulation of the money supply by government. For various reasons, government policies were adopted that ballooned the quantity of money and credit. A boom resulted, followed later by a painful day of reckoning. None of America’s depressions prior to 1929, however, lasted more than four years and most of them were over in two. The Great Depression lasted for a dozen years because the government compounded its monetary errors with a series of harmful interventions.

Most monetary economists, particularly those of the “Austrian school” (represented by such notable economists as Ludwig von Mises and Nobel laureate F. A. Hayek) have observed the close relationship between money supply and economic activity. When government inflates the money and credit supply, interest rates at first fall. Businesses invest this “easy money” in new production projects and a boom takes place in capital goods. As the boom matures, business costs rise, interest rates readjust upward, and profits are squeezed. The easy-money effects thus wear off and the monetary authorities, fearing price inflation, slow the growth of or even contract the money supply. In either case, the manipulation is enough to knock out the shaky supports from underneath the economic house of cards.

One of the most thorough and meticulously documented accounts of the Federal Reserve’s inflationary actions prior to 1929 is America’s Great Depression by the late Murray Rothbard. Using a broad measure that includes currency, demand and time deposits, and other ingredients, Rothbard estimated that the Federal Reserve expanded the money supply by more than 60 percent from mid-1921 to mid-1929.^[2] The flood of easy money drove interest rates down, pushed the stock market to dizzy heights, and gave birth to the “Roaring Twenties.”

By early 1929, the central bank was taking the punch away from the party. It choked off the money supply, raised interest rates, and for the next three years presided over a money supply that shrank by 30 percent. This deflation following the inflation wrenched the economy from tremendous boom to colossal bust.

The “smart” money—shrewd investors like Bernard Baruch and Joseph Kennedys who watched things like money supply—saw that the party was coming to an end before most other Americans did. Baruch actually began selling stocks and buying bonds and gold as early as 1928; Kennedy did likewise, commenting, “only a fool holds out for the top dollar.”^[3]

When the masses of investors eventually sensed the change in Fed policy, the stampede was underway. The stock market, after nearly two months of moderate decline, plunged on “Black Thursday”—October 24, 1929—as the pessimistic view of large and knowledgeable investors spread.

The stock market crash was only a symptom—not the cause—of the Great Depression: the market rose and fell in near synchronization with what the Fed was doing.

Phase II: Disintegration of the World Economy

If this crash had been like previous ones, the subsequent hard times might have ended in a year or two. But unprecedented political bungling instead prolonged the misery for twelve long years.

Unemployment in 1930 averaged a mildly recessionary 8.9 percent, up from 3.2 percent in 1929. It shot up rapidly until peaking out at more than 25 percent in 1933. Until March 1933, these were the years of President Herbert Hoover—the man that anti-capitalists depict as a champion of noninterventionist, laissez-faire economics.

Did Hoover really subscribe to a “hands off the economy,” free-market philosophy? His opponent in the 1932 election, Franklin Roosevelt, didn’t think so. During the campaign, Roosevelt blasted Hoover for spending and taxing too much, boosting the national debt, choking off trade, and putting millions of people on the dole. He accused the president of “reckless and extravagant” spending, of thinking “that we ought to center control of everything in Washington as rapidly as possible,” and of presiding over “the greatest spending administration in peacetime in all of history.”

Roosevelt’s running mate, John Nance Garner, charged that Hoover was “leading the country down the path of socialism.”^[4] Contrary to the modern myth about Hoover, Roosevelt and Garner were absolutely right.

The crowning folly of the Hoover administration was the Smoot-Hawley Tariff, passed in June 1930. It came on top of the Fordney-McCumber Tariff of 1922, which had already put American agriculture in a tailspin during the preceding decade. The most protectionist legislation in U.S. history, Smoot-Hawley virtually closed the borders to foreign goods and ignited a vicious international trade war. Professor Barry Poulson notes that not only were 887 tariffs sharply increased, but the act broadened the list of dutiable commodities to 3,218 items as well.^[5]

Officials in the administration and in Congress believed that raising trade barriers would force Americans to buy more goods made at home, which would solve the nagging unemployment problem. They ignored an important principle of international commerce: trade is ultimately a two-way street; if foreigners cannot sell their goods here, then they cannot earn the dollars they need to buy here.

Foreign companies and their workers were flattened by Smoot-Hawley’s steep tariff rates, and foreign governments all across the world soon retaliated with trade barriers of their own. With their ability to sell in the American market severely hampered, they curtailed their purchases of American goods. American agriculture was particularly hard hit. With a stroke of the presidential pen, farmers in the U.S. lost nearly a third of their markets. Farm prices plummeted and tens of thousands of farmers went bankrupt. With the collapse of agriculture, rural banks failed in record numbers, dragging down hundreds of thousands of their customers.

Hoover dramatically increased government spending for subsidy and relief schemes. In the space of one year alone, from 1930 to 1931, the federal government’s share of GNP increased by about one-third.

Hoover’s agricultural bureaucracy doled out hundreds of millions of dollars to wheat and cotton farmers even as the new tariffs wiped out their markets. His Reconstruction Finance Corporation ladled out billions more in business subsidies. Commenting decades later on Hoover’s administration, Rexford Guy Tugwell, one of the architects of Franklin Roosevelt’s policies of the 1930s, explained, “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”^[6]

To compound the folly of high tariffs and huge subsidies, Congress then passed and Hoover signed the Revenue Act of 1932. It doubled the income tax for most Americans; the top bracket more than doubled, going from 24 percent to 63 percent. Exemptions were lowered; the earned income credit was abolished; corporate and estate taxes were raised; new gift, gasoline, and auto taxes were imposed; and postal rates were sharply hiked.

Can any serious scholar observe the Hoover administration’s massive economic intervention and, with a straight face, pronounce the inevitably deleterious effects as the fault of free markets?

Phase III: The New Deal

Franklin Delano Roosevelt won the 1932 presidential election in a landslide, collecting 472 electoral votes to just 59 for the incumbent Herbert Hoover. The platform of the Democratic Party whose ticket Roosevelt headed declared, “We believe that a party platform is a covenant with the people to be faithfully kept by the party entrusted with power.” It called for a 25 percent reduction in federal spending, a balanced federal budget, a sound gold currency “to be preserved at all hazards,” the removal of government from areas that belonged more appropriately to private enterprise, and an end to the “extravagance” of Hoover’s farm programs. This is what candidate Roosevelt promised, but it bears no resemblance to what President Roosevelt actually delivered.

In the first year of the New Deal, Roosevelt proposed spending $10 billion while revenues were only $3 billion. Between 1933 and 1936, government expenditures rose by more than 83 percent. Federal debt skyrocketed by 73 percent.

Roosevelt secured passage of the Agricultural Adjustment Act (AAA), which levied a new tax on agricultural processors and used the revenue to supervise the wholesale destruction of valuable crops and cattle. Federal agents oversaw the ugly spectacle of perfectly good fields of cotton, wheat, and corn being plowed under. Healthy cattle, sheep, and pigs by the millions were slaughtered and buried in mass graves.

Even if the AAA had helped farmers by curtailing supplies and raising prices, it could have done so only by hurting millions of others who had to pay those prices or make do with less to eat.

Perhaps the most radical aspect of the New Deal was the National Industrial Recovery Act (NIRA), passed in June 1933, which set up the National Recovery Administration (NRA). Under the NIRA, most manufacturing industries were suddenly forced into government-mandated cartels. Codes that regulated prices and terms of sale briefly transformed much of the American economy into a fascist-style arrangement, while the NRA was financed by new taxes on the very industries it controlled. Some economists have estimated that the NRA boosted the cost of doing business by an average of 40 percent—not something a depressed economy needed for recovery.

Like Hoover before him, Roosevelt signed into law steep income tax rate increases for the high brackets and introduced a 5 percent withholding tax on corporate dividends. In fact, tax hikes became a favorite policy of the president’s for the next ten years, culminating in a top income tax rate of 94 percent during the last year of World War II. His alphabet agency commissars spent the public’s tax money like it was so much bilge.

For example, Roosevelt’s public relief programs hired actors to give free shows and librarians to catalogue archives. The New Deal even paid researchers to study the history of the safety pin, hired 100 Washington workers to patrol the streets with balloons to frighten starlings away from public buildings, and put men on the public payroll to chase tumbleweeds on windy days.

Roosevelt created the Civil Works Administration in November 1933 and ended it in March 1934, though the unfinished projects were transferred to the Federal Emergency Relief Administration. Roosevelt had assured Congress in his State of the Union message that any new such program would be abolished within a year. “The federal government,” said the President, “must and shall quit this business of relief. I am not willing that the vitality of our people be further stopped by the giving of cash, of market baskets, of a few bits of weekly work cutting grass, raking leaves, or picking up papers in the public parks.”

But in 1935 the Works Progress Administration came along. It is known today as the very government program that gave rise to the new term, “boondoggle,” because it “produced” a lot more than the 77,000 bridges and 116,000 buildings to which its advocates loved to point as evidence of its efficacy.^[7] The stupefying roster of wasteful spending generated by these jobs programs represented a diversion of valuable resources to politically motivated and economically counterproductive purposes.

The American economy was soon relieved of the burden of some of the New Deal’s excesses when the Supreme Court outlawed the NRA in 1935 and the AAA in 1936, earning Roosevelt’s eternal wrath and derision. Recognizing much of what Roosevelt did as unconstitutional, the “nine old men” of the Court also threw out other, more minor acts and programs which hindered recovery.

Freed from the worst of the New Deal, the economy showed some signs of life. Unemployment dropped to 18 percent in 1935, 14 percent in 1936, and even lower in 1937. But by 1938, it was back up to 20 percent as the economy slumped again. The stock market crashed nearly 50 percent between August 1937 and March 1938. The “economic stimulus” of Franklin Roosevelt’s New Deal had achieved a real “first”: a depression within a depression!

Phase IV: The Wagner Act

The stage was set for the 1937–38 collapse with the passage of the National Labor Relations Act in 1935—better known as the Wagner Act and organized labor’s “Magna Carta.” To quote Hans Sennholz again:

This law revolutionized American labor relations. It took labor disputes out of the courts of law and brought them under a newly created Federal agency, the National Labor Relations Board, which became prosecutor, judge, and jury, all in one. Labor union sympathizers on the Board further perverted this law, which already afforded legal immunities and privileges to labor unions. The U.S. thereby abandoned a great achievement of Western civilization, equality under the law.^[8]

Armed with these sweeping new powers, labor unions went on a militant organizing frenzy. Threats, boycotts, strikes, seizures of plants, and widespread violence pushed productivity down sharply and unemployment up dramatically. Membership in the nation’s labor unions soared; by 1941 there were two and a half times as many Americans in unions as in 1935.

From the White House on the heels of the Wagner Act came a thunderous barrage of insults against business. Businessmen, Roosevelt fumed, were obstacles on the road to recovery. New strictures on the stock market were imposed. A tax on corporate retained earnings, called the “undistributed profits tax,” was levied. “These soak-the-rich efforts,” writes economist Robert Higgs, “left little doubt that the president and his administration intended to push through Congress everything they could to extract wealth from the high-income earners responsible for making the bulk of the nation’s decisions about private investment.”^[9]

Higgs draws a close connection between the level of private investment and the course of the American economy in the 1930s. The relentless assaults of the Roosevelt administration—in both word and deed—against business, property, and free enterprise guaranteed that the capital needed to jumpstart the economy was either taxed away or forced into hiding. When Roosevelt took America to war in 1941, he eased up on his anti-business agenda, but a great deal of the nation’s capital was diverted into the war effort instead of into plant expansion or consumer goods. Not until both Roosevelt and the war were gone did investors feel confident enough to “set in motion the postwar investment boom that powered the economy’s return to sustained prosperity.”^[10]

On the eve of America’s entry into World War II and twelve years after the stock market crash of Black Thursday, ten million Americans were jobless. Roosevelt had pledged in 1932 to end the crisis, but it persisted two presidential terms and countless interventions later.

Along with the horror of World War II came a revival of trade with America’s allies. The war’s destruction of people and resources did not help the U.S. economy, but this renewed trade did. More important, the Truman administration that followed Roosevelt was decidedly less eager to berate and bludgeon private investors, and as a result, those investors came back into the economy to fuel a powerful postwar boom. The years 1945-46 brought huge reductions in government spending and much lower tax rates on business, along with smaller reductions in tax rates on individuals.

The genesis of the Great Depression lay in the inflationary monetary policies of the U.S. government in the 1920s. It was prolonged and exacerbated by a litany of political missteps: trade-crushing tariffs, incentive-sapping taxes, mind-numbing controls on production and competition, senseless destruction of crops and cattle, and coercive labor laws, to recount just a few. It was not the free market that produced twelve years of agony; rather, it was political bungling on a scale as grand as there ever was.

1. Hans F. Sennholz, “The Great Depression,” The Freeman, April 1975, p. 205.

2. Murray Rothbard, America’s Great Depression (Kansas City: Sheed and Ward, Inc., 1975), p. 89.

3. Lindley H. Clark, Jr., “After the Fall,” Wall Street Journal, October 26, 1979, p. 18.

4. “FDR’s Disputed Legacy,” Time, February 1, 1982, p. 23.

5. Barry W. Poulson, Economic History of the United States (New York: Macmillan Publishing Co., Inc., 1981), p. 508.

6. Paul Johnson, A History of the American People (New York: HarperCollins Publishers, 1997), p. 741.

7. Martin Morse Wooster, “Bring Back the WPA? It Also Had A Seamy Side,” Wall Street Journal, September 3, 1986, p. A26.

8. Sennholz, pp. 212–13.

9. Robert Higgs, “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed After the War,” The Independent Review, Spring 1997, p. 573.

10. Ibid., p. 564.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from an essay he first published in the June 1994 issue of FEE’s journal, “The Freeman.”

In every election year, expect to be barraged with rhetoric about “getting the country moving again,” “creating jobs, jobs, jobs,” and “stimulating the economy.”

Politicians love to promise the future and ignore their own handiwork of the past. They typically spend much more time concocting new schemes for intervention than they spend searching for old ones that deserve to be repealed.

What really deserves our attention are those specific barriers to economic opportunity erected by government—regulations, taxes, licensure laws, unfunded mandates, building and zoning codes, special privileges for organized labor, subsidies to business, chronic budget deficits that consume needed capital, a welfare system that puts a premium on idleness and a penalty on work, and an education monopoly that fails to teach children as it vacuums their parents’ wallets, to name a few.

Dozens of studies have shown that excessively restrictive zoning laws, building codes, and property taxes constitute the greatest obstacles to affordable housing for the poor. Minimum wage laws, by making it illegal to employ people whose skills are worth less than government decrees, keep hundreds of thousands from getting a start in the job market. Endless regulations designed to curtail entry into markets from trucking to taxis freeze out many a would-be entrepreneur from creating new businesses.

I’m not talking about basic laws which prevent or punish harm to others. I’m talking about the primary social disease of our age—government beyond its proper bounds, playing Robin Hood, Santa Claus, and Mother Hen all at the same time, inflicting real damage to real people who have victimized no one. Economists, at least, are increasingly taking a critical eye to such policies.

It must be understood, however, that economic analysis will not by itself make the case for ridding ourselves of these man-made obstructions. It is powerful, but still not enough, to simply add up the numbers and show how many jobs are erased by particular actions of government. It is not enough to produce graphs and models that plot the fluctuations in Gross National Product.

What is sorely needed in the discussion is a recognition of the moral backwardness that so many of these barriers to economic opportunity represent. Dismantling the barricade requires that we who advocate freedom of enterprise seize the high ground. We must appeal to what most people instinctively know is right, not just what makes the cash register sing. We must learn to speak of the deleterious actions of government in terms of trampled rights, broken dreams, and ruined lives.

For instance, when the city of Detroit in Michigan imposes—as it does—a tax burden that is several times the average burden in Michigan municipalities, that is not simply bad economics. It is an affront to every citizen of that city who wants the best for his family, who wants simply a chance to be productive. Those high taxes should evoke visions of hungry children, of a boarded-up business that was once someone’s dream, of homes torn apart because of the breadwinner’s inability to pay the bills of irresponsible politicians.

Why is it that people who go to work for government as officeholders or bureaucrats are known as “public servants”—even when highly paid? Why isn’t “public servant” a term reserved for those entrepreneurial heroes in the private sector who create jobs, invent machines, cure illnesses, build businesses, serve customers, and pay the bills of government through their taxes? When the barriers erected by “public servants” crush the self-reliance of enterprising citizens, where is the outcry of righteous indignation from the public or the press?

What taxers and regulators do to people and their business dreams and what countless other acts of government inflict upon people every day is morally repugnant. Such deeds are throwbacks to less enlightened times when the common thief and the uncommon prince were indistinguishable but for their robes.

The campaign to restore our liberties and enhance our economic opportunities must incorporate a personal, moral dimension at its core. A law which suffocates the aspirations of enterprising men and women is more than bad economics. In a free society, it ought to be a moral outrage.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from an essay he first published in the September 1994 issue of FEE’s journal, “The Freeman.”

Economics is a subject that dominates public life and important policy discussions these days, but most people who rely on what they’ve learned of it in the schools are entering the intellectual battle unarmed.

Economics courses in high school are few and far between and often deal with little more than “consumer” issues: how to balance a checkbook, how to find the best deals in the market, or how to borrow money at the lowest interest rate. Those are all useful things to know, but the mental tools and essential principles needed to analyze and evaluate the paramount issues of the day are too often missing.

Moreover, even a cursory examination of textbooks used in high school economics courses reveals a dismal level of understanding or outright bias by the text authors themselves. Students are sometimes reading, for instance, that citizens are under-taxed, that government spending creates new wealth, and that politicians are better long-term planners than private entrepreneurs. It is not uncommon for texts to portray free market competition and private property in a suspicious light while presenting government intervention with little or no critical scrutiny. It therefore may actually be a blessing rather than a curse that so few students are exposed to what passes these days in the schools as “economics.”

Stripped of bias, the study of economics is immensely important. Indeed, without it we miss an understanding of much of what makes us the unique, thinking creatures we are. Economics is the study of human action in a world of limited resources and unlimited wants—a lively topic that cannot be reduced to lifeless graphs and mind-numbing equations that occupy the pretentious planner’s time.

What Economics Teaches

Economics teaches us that everything of value has a cost. It informs us that higher standards of living can only come about through greater production. It tells us that nations become wealthy not by printing money or spending it, but through capital accumulation and the creation of goods and services. It tells us that supply and demand are harmonized by the signals we call prices and that political attempts to manipulate them must produce harmful consequences.

Economics explains that good intentions are worse than worthless when they flout inexorable laws of human action. It reminds us to think of the long-term effects of what we do, not just the short-term or the flash-in-the-pan effects. It tells us a great deal about the critical role of incentives in shaping human behavior.

In short, economics is a blueprint for a free and sound economy, which is indispensable to satisfying human material needs and wants. When the subject is well understood, people learn that leaving other people alone is a far more likely path to well-being than shoving them around with political dictates.

When people have little or no economic understanding, they embrace the “quick fix” and support impractical “pie-in-the-sky” solutions to problems. They may think that whatever the government gives must really be “free,” and that all it has to do to foster prosperity is to command it.

Economically illiterate people are easy prey for currency cranks who argue that manufacturing more money will make us wealthier. They may even think that trade is a bad thing, that if we shut the borders to the flow of goods our living standards will rise. They will be not only unable to identify economic snake oil, but also untrained to detect its harmful consequences.

Arguably, America’s great economic problems have their roots in widespread ignorance of economic principles. When the noted economist John Maynard Keynes was asked in the late 1930s if we should be concerned about rising debt and printing press money, he reportedly responded with this flippant remark: “In the long run, we’re all dead.” The truth is, as the much greater economist Henry Hazlitt once said, that “Today is the tomorrow that yesterday’s bad economists like Keynes told us we could safely—but wrongly—ignore.”

Citizens are being asked every day to form judgments and cast votes for programs and proposals that are largely economic in nature. It would behoove us to start talking about how we provide the missing tools we need to make those and other such decisions, so that we don’t dig ourselves deeper in the muck of poor thinking and bad public policy.

Mandates Are Not the Answer

So, you say, the answer is to mandate the teaching of economics! If the schools aren’t teaching the subject, well, then let’s make them do it! Oh, there’s that tempting but utterly counterproductive “quick fix” again—a symptom, in fact, of the very illness I am describing.

Passing laws to require the teaching of economics is precisely not the answer. In public education, that can only politicize the subject and guarantee that too many people who don’t understand it or don’t want to teach it are instructing bored youngsters who couldn’t care less. The vast majority of government school teachers are decent citizens of good will and great talent, but as government employees they labor in an environment naturally hostile to the critiques of government action that sound economics inevitably produces.

The idea of government-mandated economics teaching strikes me as likely to be no more effective than government-mandated teaching of anything else. Aren’t we in the midst of an education crisis as it is, with test scores and other measures of student aptitude plummeting to disgraceful levels? Is there any reason to believe that government can teach us economics any better than it teaches us mathematics?

The remedy for our economics knowledge deficit is really the same remedy for our general knowledge deficit: a combination of de-monopolizing the education system through competition, and diligent self-instruction.

If economics is as important as I’ve suggested, then a market-driven, choice-focused, performance-based, and fully accountable education system would surely do a better job of teaching it than a government monopoly that gets subsidized whether it teaches for the real world or not. Make education a product of the marketplace instead of politics and much more than just economics will be taught, and taught well.

Formal schooling, though, even in a thoroughly privatized environment, can only be part of the economics teaching equation. What we learn on our own, especially if we hope to inspire and persuade others, may be just as important. Looking back on my own economics training, I note that most of it was under the auspices of private groups like the Foundation for Economic Education and by way of publications such as The Freeman.

In any event, the relative absence of economics from classrooms is a problem that requires our attention. Many private efforts to solve it deserve our support. But no one should be fooled into thinking that putting government in charge will resolve it.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from his essay of the same title in the September 1996 issue of FEE’s journal, “The Freeman.”

“Taxes,” said Oliver Wendell Holmes, Jr., “are what we pay for civilized society.” But as economist Mark Skousen once argued, a much better case can be made that taxation is actually the price we pay for the lack of civilization. If people took better care of themselves, their families, and those in need around them, government would shrink and society would be stronger as a result.

Skousen put it well when he stated, “[E]very time we pass another law or regulation, every time we raise taxes, every time we go to war, we are admitting failure of individuals to govern themselves. When we persuade citizens to do the right thing, we can claim victory. But when we force people to do the right thing, we have failed.” The triumph of persuasion over force—people helping people because they want to and not because government tells them they must—is the sign of a civilized people and a civil society.

For all people interested in the advancement and enrichment of our culture, this is a crucial observation with far-reaching implications. Cultural progress should not be defined as taking more and more of what other people have earned and spending it on “good” things through a government bureaucracy. Genuine cultural progress occurs when individuals solve problems without resorting to politicians or the police and bureaucrats they employ.

When the French social commentator Alexis de Tocqueville visited a young, bustling America in the 1830s, he cited the vibrancy of civil society as one of this country’s greatest assets. He was amazed that Americans were constantly forming “associations” to advance the arts, build libraries and hospitals, and meet social needs of every kind. If something good needed doing, it rarely occurred to our ancestors to expect politicians and bureaucrats, who were distant in both space and spirit, to do it for them. “Amongst the laws which rule human nature,” wrote Tocqueville in Democracy in America, “there is none which seems to be more precise and clear than all others. If men are to remain civilized, or to become more so, the art of associating together must grow and improve.”

It ought to be obvious today, with government in America and most Western countries consuming 40 to 60 percent of personal income, that lots of people don’t think, act, and vote the way their forebears did in Tocqueville’s day. So how can we restore and strengthen the attitudes and institutions that form the foundations of a vibrant, free and civil society?

Certainly, we can never do so by blindly embracing government programs that crowd out private initiatives or by impugning the motives of those who raise legitimate questions about those government programs. We cannot restore civil society if we have no confidence in ourselves and believe that government has a monopoly on compassion. We’ll never get there if we tax away 40 or 60 percent of people’s earnings and then, like children who never learned their arithmetic, complain that people can’t afford to meet certain needs.

We can advance civil society only when people get serious about replacing government programs with private initiative, when discussion gets beyond such infantile reasoning as, “If you want to cut government subsidies, you must be in favor of starving the elderly.” Civil society will blossom when we understand that “hiring” the expensive middleman of government is not the best way to “do good,” that it often breaks the connection between people in need and caring people who want to help. We’ll make progress when the “government is the answer” cure is recognized for what it is—false charity, a “cop-out,” a simplistic non-answer that doesn’t get the job done well, even though it makes its advocates smug with self-righteous satisfaction.

Restoring civil society won’t be easy. Bad habits and short-term thinking die hard. It is especially difficult to get the civil society message through the major news media’s filter unscathed. A recent editorial in a major Michigan newspaper is a good case in point. In arguing against suggested cuts in the state’s budget, the editorial equated the restoration of civil society with subjecting human life “to the largesse of the highest bidder in the marketplace.” What a shame that so many newspapers will routinely lament the superficiality of political campaigns and then employ bumper-sticker slogans when it comes to serious proposals to remove the bane of Big Government from our lives.

That editorial did not feed, clothe, or house a single needy person. It probably did very little to comfort the afflicted. It did not inspire a single act of voluntarism on behalf of a troubled family. It may, however, have lulled some readers into a deeper sleep of complacency. Government, after all, is taking care of things and that, the editorial implied, is as it should be.

Meanwhile, more thoughtful writers are noticing some encouraging trends. A remarkable article in a recent issue of U.S. News & World Report trumpeted the “revival of civic life.” Among the examples it cited was that of Frankford, Pennsylvania. Frankford had become a highly taxed, depressed, and government-dependent community desperate for answers. A spark of civil society was lit, and now people are solving problems themselves. “When a record 30 inches of snow was dumped on the city, . . . Frankford didn’t stand around moaning about the inefficiency of city workers. Residents rented snowplows and split the cost,” the article noted.

Perhaps if Tocqueville were to visit this little Pennsylvania town today, he would see a glimmer of the greatness he witnessed in the 1830s. He would be impressed with the spirit of the community and might even suggest that people everywhere should take note. The citizens, Tocqueville might remark, are not sitting back, bemoaning their plight, and editorializing about how the politicians should save them. “Once you get past the resentment of the government not doing it for you, you get it done yourself,” one local resident put it.

We can learn a whole lot more from the Frankfords of the world than from those who think charity means spending someone else’s money or just pontificating about social needs from behind a word processor. Restoring civil society requires that we “Just Say No” to shirking our personal responsibilities and expecting government to do for us what we can and should do on our own, within our personal lives, our families, and our local communities. It requires us to think creatively about stimulating private initiative, and then just doing it.

In fact, the more I think about it, the more I realize that doing it, not just talking about it or expecting others to do it for you, is one of the primary differences between adults and children. Maybe we all need to just grow up—and thereby grow out of the stultifying environment of the welfare state.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from his essay of the same title in the May 2009 issue of FEE’s journal, “The Freeman.”)

For a society that has fed, clothed, housed, cared for, informed, entertained, and otherwise enriched more people at higher levels than any in the history of the planet, there sure is a lot of groundless guilt in America (and even more in most other Western countries).

Manifestations of that guilt abound. The example that disgusts me the most is the one we often hear from well-meaning philanthropists who adorn their charitable giving with this little chestnut: “I want to give something back.” It always sounds as though they’re apologizing for having been successful.

Translated, that statement means something like this: “I’ve accumulated some wealth over the years. Never mind how I did it, I just feel guilty for having done it. There’s something wrong with my having more than somebody else, but don’t ask me to explain how or why because it’s just a fuzzy, uneasy feeling on my part. Because I have something, I feel obligated to have less of it. It makes me feel good to give it away because doing so expunges me of the sin of having it in the first place. Now I’m a good guy, am I not?”

It was apparent to me how deeply ingrained this mindset has become when I visited the gravesite of John D. Rockefeller at Lakeview Cemetery in Cleveland a couple years ago. The wording on a nearby plaque commemorating the life of this remarkable entrepreneur implied that giving much of his fortune away was as worthy an achievement as building the great international enterprise, Standard Oil, that produced it in the first place. The history books most kids learn from these days go a step further. They routinely criticize people like Rockefeller for the wealth they created and for the profit motive, or self-interest, that played a part in their creating it, while lauding them for relieving themselves of the money.

More than once, philanthropists have bestowed contributions on my organization and explained they were “giving something back.” They meant that by giving to us, they were paying some debt to society at large. It turns out that, with few exceptions, these philanthropists really had not done anything wrong. They made money in their lives, to be sure, but they didn’t steal it. They took risks they didn’t have to. They invested their own funds, or what they first borrowed and later paid back with interest. They created jobs, paid market wages to willing workers, and thereby generated livelihoods for thousands of families. They invented things that didn’t exist before, some of which saved lives and made us healthier. They manufactured products and provided services, for which they asked and received market prices. They had willing and eager customers who came back for more again and again. They had stockholders to whom they had to offer favorable returns. They also had competitors, and had to stay on top of things or lose out to them. They didn’t use force to get where they got; they relied on free exchange and voluntary contract. They paid their bills and debts in full. And every year they donated some of their profits to lots of community charities no law required them to support. Not a one of them that I know ever did any jail time for anything.

So how is it that anybody can add all that up and still feel guilty? I suspect that if they are genuinely guilty of anything, it’s allowing themselves to be intimidated by the losers and the envious of the world–the people who are in the redistribution business either because they don’t know how to create anything or they simply choose the easy way out. They just take what they want, or hire politicians to take it for them.

Or like a few in the clergy who think that wealth is not made but simply “collected,” the redistributionists lay a guilt trip on people until they disgorge their lucre-notwithstanding the Tenth Commandment against coveting. Certainly, people of faith have an obligation to support their church, mosque, or synagogue, but that’s another matter and not at issue here.

Real Giving Back

A person who breaches a contract owes something, but it’s to the specific party on the other side of the deal. Steal someone else’s property and you owe it to the person you stole it from, not society, to give it back. Those obligations are real and they stem from a voluntary agreement in the first instance or from an immoral act of theft in the second. This business of “giving something back” simply because you earned it amounts to manufacturing mystical obligations where none exist in reality. It turns the whole concept of “debt” on its head. To give it “back” means it wasn’t yours in the first place, but the creation of wealth through private initiative and voluntary exchange does not involve the expropriation of anyone’s rightful property.

How can it possibly be otherwise? By what rational measure does a successful person in a free market, who has made good on all his debts and obligations in the traditional sense, owe something further to a nebulous entity called society? If Entrepreneur X earns a billion dollars and Entrepreneur Y earns two billion, would it make sense to say that Y should “give back” twice as much as X? And if so, who should decide to whom he owes it? Clearly, the whole notion of “giving something back” just because you have it is built on intellectual quicksand.

Successful people who earn their wealth through free and peaceful exchange may choose to give some of it away, but they’d be no less moral and no less debt-free if they gave away nothing. It cheapens the powerful charitable impulse that all but a few people possess to suggest that charity is equivalent to debt service or that it should be motivated by any degree of guilt or self-flagellation.

A partial list of those who honestly do have an obligation to give something back would include bank robbers, shoplifters, scam artists, deadbeats, and politicians who “bring home the bacon.” They have good reason to feel guilt, because they’re guilty.

But if you are an exemplar of the free and entrepreneurial society, one who has truly earned and husbanded what you have and have done nothing to injure the lives, property, or rights of others, you are a different breed altogether. When you give, you should do so because of the personal satisfaction you derive from supporting worthy causes, not because you need to salve a guilty conscience.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from his essay of the same title in the December 1999 issue of FEE’s journal, “The Freeman.”

Perhaps the most important principle one can ever learn about the nature of government is this: It is different from all other institutions in society because it is the only one that can legally employ force. Unfortunately, it is a principle that has been largely erased from the Western memory bank. More than a hundred years of compulsory public education in most Western countries may be largely to blame.

Let’s get something straight before we go any further. To note that government rests on the use of force is not some radical anarchist idea. It is the very definition of the institution and its ultimate distinguishing feature. For much of the last half millennium, political scientists of virtually every stripe accepted the notion as fact. No respectable scholar tried to paper it over and pass government off as some kind of voluntary, benevolent society.

America’s founders understood this principle well and crafted a regime that never purported to eliminate force; they only sought to restrict it to a narrow sphere of life and thereby preserve a large measure of individual liberty. George Washington is often credited with saying (I’ve not been able to verify it), “Government is not reason. It is not eloquence—it is force! Like fire it is a dangerous servant and a fearful master.” In other words, even when government does no more than what Washington wanted it to do, and when it does those few things very well as a “servant” of the people, it’s still dangerous because behind it all is the employment of legalized force.

The Yellow Light

A deeply rooted understanding of this inherent character of government is a pillar of the free society. It’s the yellow caution light that prompts wise and peaceful citizens to deliberate long and hard before accepting an expansion of government duties. It creates a healthy skepticism about seductive schemes to supplant private initiative with public action. It discourages attempts to impose a collective conformity at the expense of the individual.

If you are an advocate of the free society today, you surely have noticed an erosion in the understanding of this principle. It may not be an exaggeration to assert that the erosion has been massive and far more deleterious to our liberty and well-being than all but a few ever imagined.

This point struck me hard recently when I read a letter to the editor of a local newspaper. The letter writer was responding to a previously published commentary by a man who had argued that novelist Ernest Hemingway opposed government funding of the arts because he felt that artists should be independent of political influence. She took issue with the commentator on the grounds that Hemingway “did accept money from benefactors.” Accepting money freely given by patrons, in the mind of the letter writer, was indistinguishable from accepting money from the government.

Similarly, I have witnessed countless occasions when individuals argued that if government does something and is well intentioned, it couldn’t possibly be coercive; or, that if it’s “democratic,” it’s somehow voluntary. The mere fact that politicians are elected validates almost whatever they do as nothing more than consensual acts between altruistic adults. A much more sober and rational view of the limitations of a democratic republic, preferable though it is to any other form of government, is the one that describes it as two wolves and a lamb voting on what to have for lunch.

So it is that we’ve arrived at the point described by Edgar Freidenberg’s 1964 classic, Coming of Age in America, where “American high school students viewed the government as a benign institution that one should obey because it was working for the benefit of all the people.”¹How is it possible for such a sad state of intellectual affairs to befall a nation founded on liberty and a rational view of the state? How did it come to be that millions of people in Western countries like America recoil at the “radical” suggestion that government and legalized force are one and the same?

I can think of no other source of the problem than a century of government (“public”) education. When nearly 90 percent of Americans are schooled for 12 formative years by government employees, most of whom earned their teaching degrees at government universities, why should we expect anything other than an obsequious citizenry that views government as the benevolent vicar of what Rousseau called “the general will”?

The history of American public education is replete with statements by professional government school advocates that reek of state-worship. Judge Archibald Douglas Murphey, founder of the public school system in North Carolina, said that government must educate because “parents know not how to instruct them. . . . The state, in the warmth of her affection and solicitude for their welfare must take charge of those children and place them in school where their minds can be enlightened.”²

A 1914 bulletin of the U. S. Bureau of Education stated, “The public schools exist primarily for the benefit of the State rather than for the benefit of the individual.” And Edward Ross, a prominent sociologist, offered the most chilling description of the role of government in education: “To collect little plastic lumps of human dough from private households and shape them on the social kneading-board.”³

This outcome was predictable from the earliest days of American public education, and it’s no different from anything else the government comes to dominate. He who pays the piper calls the tune. It just isn’t in the interests of the government or those who depend on it to sully their own nests with an honest admission that their handiwork is financed and imposed at gunpoint. As education scholar Joel Spring put it 20 years ago, “A teacher, school administrator, or elected official in charge of schools may believe that his personal values represent the general values of the community; worse, he may think that his values should be adopted by the community.”⁴The situation doesn’t appear to be any better, and arguably is worse, in most other Western countries.

Such explicit statements notwithstanding, it would be hard and perhaps politically counterproductive to argue that today’s deficient government school system derives from some grand conspiracy. To explain the appalling ignorance of the Western citizenry regarding the essential nature of government, conspiracy theories are not necessary. It’s sufficient simply to observe that few employees of the system will rise above immediate self-interest to even recognize, let alone propagate, the notion that government in general and their jobs in particular rest on legalized force.

What difference does all this make? A lot. I can think of no situation more hostile to liberty than a failure of a free people to tell the difference between government and everything else.

1.     Cited in William F. Rickenbacker, ed., The Twelve-Year Sentence (San Francisco: Fox & Wilkes, 1999 [1974]), p. 140.

2.     Quoted in Murray Rothbard, “Historical Origins,” in ibid., p. 11.

3.     Quoted in Joel Spring, The American School, 1642-1985 (New York: Longman, 1986), p. 155.

4.     Quoted in Joel Spring, Educating the Worker-Citizen (New York: Longman, 1980), p. 14.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from an essay he published in December 2006 issue of FEE’s journal, “The Freeman.”

In 25 years of traveling to 70 countries I’ve come across some pretty nasty governments and some darn good people. To be fair I should acknowledge that I’ve also encountered some rotten people and a half-decent government or two. The ghastliest of all worlds is when you have rotten people running nasty governments, a combination that is not by any means in short supply.

Indeed, as Nobel laureate and Austrian economist F. A. Hayek famously explained in The Road to Serfdom, the worst tend to rise to the top of all regimes—yet another reason to keep government small in the first place. “The unscrupulous and uninhibited,” wrote Hayek, “are likely to be more successful” in any society in which government dominates life and the economy. That’s precisely the kind of circumstance that elevates power over persuasion, force over cooperation, arrogance over humility.

So I take special note when I encounter instances of good people working around, in spite of, in opposition to, or simply without a helping hand from, government of any kind. Some might say this betrays an unwarranted bias. But in today’s dominant culture as represented by media elites, university bon vivants, and public-school mandarins, it is not government that gets shortchanged. By their thinking, the capacity of government to meet our needs is virtually limitless. It’s private initiative that gets the shaft. It’s the nonpolitician that is deemed unreliably compassionate, incorrigibly greedy, or hopelessly unorganized.

I offer here two stories of very good people I’ve met on opposite corners of the earth. If either story kindles anyone’s faith in what private initiative can accomplish, it’ll make my day as well as my point.

A man named Nicholas Winton is the centerpiece of the first story. He was a young London stockbroker as war clouds gathered across Europe in 1938-39. A friend convinced him to forgo a Christmas vacation in Switzerland and come to Czechoslovakia instead. Near Prague in December 1938 he was shocked to see Jewish refugees freezing in makeshift camps. Most had been driven from their homes by Nazi occupation of the Sudetenland , the part of Czechoslovakia handed over to Hitler at Munich the previous September.

Winton could have resumed his Swiss vacation, stepping back into the comfortable life he left behind. What could a lone foreigner do to assist so many trapped families? Despite the talk of “peace in our time,” Winton knew that Europe was sliding toward war and time was running out for these desperate people. The next steps he took ultimately saved 669 children from death in Nazi camps.

Victims of a socialist government’s persecution being helped by a stockbroker. Sort of makes mincemeat of Marx’s “class consciousness,” doesn’t it?

The parents were anxious to get their children to safety, even though it would mean sending them off alone. Getting the children to a country that would accept them seemed an impossible challenge. Nicholas Winton didn’t waste a minute. He wrote to governments around the world, pleading for an open door, only to be rejected by every one but two: Sweden and Great Britain . He assembled a small group of volunteers to assist with the effort. Even his mother pitched in.

With 5,000 children on his list, Winton searched for foster homes across Britain. British newspapers published his advertisements to highlight the urgent need for foster parents. When enough homes could be found for a group of children, he submitted the necessary paperwork to the Home Office and assisted his team of volunteers in organizing the rail and ship transportation needed to get the children to Britain . He took the lead in raising the funds to pay for the operation.

The first 20 of “Winton’s children” left Prague on March 14, 1939. Hitler’s troops devoured all of Czechoslovakia the very next day, but Winton’s team kept working, sometimes forging documents to slip the children past the Germans. By the time World War II broke out on September 1 the rescue effort had taken 669 children out of the country in eight separate groups by rail. The last batch of 250 would have been the largest of all, but war prompted the Nazis to stop all departures. Sadly, none of those children lived to see the Allied victory less than six years later. Pitifully few of the parents did either.

Why did Nicholas Winton take on a challenge ignored by almost everyone else? My colleague Ben Stafford and I asked him that very question at his home in Maidenhead, England in July 2006. He was then 97, but looked and spoke with the vigor of someone years younger. “Because it was the thing to do and I thought I could help,” he told us. Today, the “Winton children” plus their children and grandchildren number about 5,000 people. You can learn more about Winton at www.mackinac.org/7872. (Sir Nicholas turned 100 years of age last May.)

I do not have a name for the person who figures at the center of my second story. I met him in war-ravaged Cambodia in August 1989.

In advance of my trip to Southeast Asia, considerable local press attention focused on area doctors who donated medical supplies for me to take to a hospital in the Cambodian capital, Phnom Penh. A woman from a local church who saw the news stories called and explained that a few years before, her church had helped Cambodian families who had escaped from the Khmer Rouge communists and resettled in my town of Midland, Michigan. The families had moved on to other locations in the United States but stayed in touch with the woman who called me and other friends they had made in Midland.

The caller said she had told her Cambodian friends about my pending visit. Each family asked if I would take letters with cash enclosed to their desperately poor relatives in Cambodia . I said yes. Three of the families were in Phnom Penh and easy to find, but one was many miles away in Battambang. That would involve a train ride, some personal risk, and a lot of time it turned out I didn’t have. If I couldn’t locate any of the families, I was to give the cash to any needy Cambodian I could find.

When I realized I wasn’t going to make it to Battambang, I approached a man in tattered clothes in the hotel lobby. I had seen him there a few times before. He always smiled and said hello, and spoke enough English to carry on some short conversations. I told him I had an envelope with a letter and $200 in it, intended for a family in Battambang. I asked him if he could get it to them. “Keep $50 of it if you find them,” I instructed. We said goodbye. I assumed I would never hear anything of what had become of either him or the money.

Several months later I got an excited call from the woman who had originally called me about taking those letters. She said she had just received a letter from the Cambodians in Virginia whose family in Battambang that envelope was intended for. A line in the letter read, “Thank you for the two hundred dollars!”

That poor man found his way to Battambang all right. And he not only didn’t keep the $50 I offered, he somehow found a way to pay for the $10 train ride himself. I doubt that he applied for a federal grant.

The next time somebody tells me we can put our faith in politicians who spend other people’s money, I will tell them about what these two people did with their own.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org.This essay has been adapted for CEIL by the author from an essay he published in 1997.

In every election campaign, we hear the word “compassion” at least a thousand times. Big government programs are evidence of compassion; cutting back government is a sign of cold-hearted meanness. By their misuse of the term for partisan advantage, politicians have thoroughly muddied up the real meaning of the word.

As Marvin Olasky pointed out in The Tragedy of American Compassion, the original definition of compassion as noted in The Oxford English Dictionary is “suffering together with another, participation in suffering.”  The emphasis, as the word itself shows — “com,” which means with, and “passion,” from the Latin term “pati,” meaning to suffer — is on personal involvement with the needy, suffering with them, not just giving to them.

But today most people use the term to mean little more than, as Olasky put it, “the feeling, or emotion, when a person is moved by the suffering or distress of another, and by the desire to relieve it.”  There is a world of difference between those two definitions: One demands personal action, the other simply a “feeling” that usually is accompanied by a call for someone else —namely, government — to deal with the problem. One describes Mother Teresa or the Red Cross, the other describes the typical buck-passing, bleeding-heart social activist with a picket sign in his hand.

The fact is that government “compassion” is not the same as personal and private compassion.  When we expect the government to substitute for what we ourselves ought to do, we expect the impossible and end up with the intolerable.  We don’t really solve problems, we just manage them expensively into perpetuity and create a bunch of new ones along the way.

From 1965, the beginning of the so-called War on Poverty, to the mid-1990s, total welfare spending in the United States was $5.4 trillion. In 1965, total government welfare spending was just over 1 percent of gross domestic product (GDP), but 30 years later it had ballooned to 5.1 percent of GDP annually — higher than the record set during the Great Depression. Until welfare reforms that emphasized work began to kick in the late ‘90s, the poverty rate had hardly changed from where it was in 1965.  For decades, millions lived lives of demoralizing dependency, families were rewarded for breaking up, and the number of children born out of wedlock soared to the stratosphere—terrible facts brought about, in large part, by “compassionate” government programs.

A person’s willingness to spend government funds on aid programs is not evidence that the person is himself compassionate. Professor William B. Irvine of Wright State University in Dayton, Ohio, explains: “It would be absurd to take a person’s willingness to increase defense spending as evidence that the person is himself brave, or to take a person’s willingness to spend government money on athletic programs as evidence that the person is himself physically fit.”  In the same way as it is possible for a “couch potato” to favor government funding of athletic teams, it is possible for a person who lacks compassion to favor various government aid programs and, conversely, it is possible for a compassionate person to oppose these programs.

It is a mistake to use a person’s political beliefs as the litmus test of his compassion. Professor Irvine says that if you want to determine how compassionate an individual is, you are wasting your time if you ask for whom he voted; instead, you should ask what charitable contributions he has made and whether he has done any volunteer work lately. You might also inquire into how he responds to the needs of his relatives, friends, and neighbors.

True compassion is a bulwark of strong families and communities, of liberty and self-reliance, while the false compassion of the second usage is fraught with great danger and dubious results.  True compassion is people helping people out of a genuine sense of caring. It is not asking your congressman or parliamentarian to do it for you. True compassion comes from your heart, not from government treasuries. True compassion is a deeply personal thing, not a check from a distant bureaucracy.

The next time you hear someone use the word “compassion,” ask him if he really knows what he’s talking about.

Lawrence W. Reed is president of the Foundation for Economic Education in Irvington, New York—www.fee.org. This essay has been adapted by the author from the original version that appeared in FEE’s journal, The Freeman, in October 1999.

On ne saurait faire une omelette sans casser des oeufs.” Translation: “One can’t expect to make an omelet without breaking eggs.”

With those words in 1790, Maximilian Robespierre welcomed the horrific French Revolution that had begun the year before. A consummate statist who worked tirelessly to plan the lives of others, he would become the architect of the Revolution’s bloodiest phase—the Reign of Terror of 1793–94. Robespierre and his guillotine broke eggs by the thousands in a vain effort to impose a utopian society based on the seductive slogan “liberté, égalité, fraternité.”

But, alas, Robespierre never made a single omelet. Nor did any of the other thugs who held power in the decade after 1789. They left France in moral, political, and economic ruin, and ripe for the dictatorship of Napoleon Bonaparte.

As with Robespierre, no omelets came from the egg-breaking efforts of Lenin, Mao, Pol Pot, Adolf Hitler, and Benito Mussolini either.

The French experience is one example in a disturbingly familiar pattern. Call them what you will—leftists, utopian socialists, radical interventionists, collectivists, or statists—history is littered with their presumptuous plans for rearranging society to fit their vision of “the common good,” plans that always fail as they kill or impoverish other people in the process. If socialism ever earns a final epitaph, it will be this: “Here lies a contrivance engineered by know-it-alls and busybodies who broke eggs with abandon but never, ever created an omelet.”

Every collectivist experiment of the twentieth century was heralded as the Promised Land by statist philosophers. “I have seen the future and it works,” the intellectual Lincoln Steffens said after a visit to Stalin’s Soviet Union. In The New Yorker in 1984, John Kenneth Galbraith argued that the Soviet Union was making great economic progress in part because the socialist system made “full use” of its manpower, in contrast to the less efficient capitalist West. But an 846-page authoritative study published in 1997, The Black Book of Communism, estimated that the communist ideology claimed 20 million lives in the “workers’ paradise.” Similarly, The Black Book documented the death tolls in other communist lands: 45 to 72 million in China, between 1.3 million and 2.3 million in Cambodia, 2 million in North Korea, 1.7 million in Africa, 1.5 million in Afghanistan, 1 million in Vietnam, 1 million in Eastern Europe, and 150,000 in Latin America.

Additionally, all of those murderous regimes were economic basket cases; they squandered resources on the police and military, built vast and incompetent bureaucracies, and produced almost nothing for which there was a market beyond their borders. They didn’t make “full use” of anything except police power. In every single communist country the world over, the story has been the same: lots of broken eggs, no omelets. No exceptions.

Nobel laureate economist F. A. Hayek explained this inevitable outcome in his seminal work, The Road to Serfdom, in 1944. All efforts to displace individual plans with central planning, he warned us, must end in disaster and dictatorship. No lofty vision can vindicate the use of the brute force necessary to attain it. “The principle that the end justifies the means,” wrote Hayek, “is in individualist ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule.”

The worst crimes of the worst statists are often minimized or dismissed by their less radical intellectual brethren as the “excesses” of men and women who otherwise had good intentions. These apologists reject the iron fist and claim that the State can achieve their egalitarian and collectivist goals with a velvet glove.

But whether it is the Swedish “middle way,” Yugoslavian “worker socialism,” or British Fabianism, the result has been the same: broken eggs, but no omelets.

Have you ever noticed how statists are constantly “reforming” their own handiwork? Education reform. Health-care reform. Welfare reform. Tax reform. The very fact that they’re always busy “reforming” is an implicit admission that they didn’t get it right the first 500 times.

The list is endless: Canadian health care, European welfarism, Argentine Peronism, African postcolonial socialism, Cuban communism, on and on ad infinitum. Nowhere in the world has the statist impulse produced an omelet. Everywhere it yields the same: eggs beaten, fried, and scrambled. People worse off than before, impoverished and looking elsewhere for answers and escape. Economies ruined. Freedoms extinguished.

It is a telling conclusion that statists have no successful model to point to, no omelet they can hold up as the pièce de résistance of their cuisine. Not so for those of us who believe in freedom. Indeed, economists James Gwartney, Robert Lawson, and Walter Block in their survey, Economic Freedom of the World: 1975–1995, conclude that “No country with a persistently high economic freedom rating during the two decades failed to achieve a high level of income. In contrast, no country with a persistently low rating was able to achieve even middle income status. . . . The countries with the largest increases in economic freedom during the period achieved impressive growth rates.”

Perhaps no one explained the lesson of all this better than the French economist and statesman Frederic Bastiat more than 150 years ago:

“And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty.”

Adapted from the October 2006 edition of The Freeman, published by the Foundation for Economic Education (FEE)—www.fee.org. The author is president of FEE.

A few months ago, I walked into a restaurant in Naples, Florida, and said, “A nonsmoking table for two, please.” The greeter replied, “No problem. All restaurants in Florida are nonsmoking by law. Follow me.”

For a brief moment as we walked to our table, I thought to myself: “Good. No chance of even a whiff of a cigarette. I like that!”

And then I felt shame. I had fallen victim to the statist impulse. For 40 years, I thought I was a passionate, uncompromising believer in the free society. Yet for a few seconds, I took pleasure in government trampling on the liberties of consenting adults in a private setting.

This incident troubled me enough to think about it a long while. I wanted to know why my first instinct was to abandon principles for a little convenience. And if a committed freedom-lover like me can be so easily tugged in the wrong direction, what does that say for ever getting nonbelievers to eschew similar or more egregious temptations?

At first, I thought about the harm that many doctors believe secondhand smoke can do. Perhaps it wasn’t wrong for government to protect nonsmokers if what we have here is a case of one person imposing a harmful externality on an unwilling other. Then I quickly realized two things: no one compelled me to enter the place, and the restaurant belonged to neither the government nor me. The plain fact is that in a genuinely free society, a private owner who wants to allow some people in his establishment to smoke has as much right to permit it as you or I have to go elsewhere. It’s not as though people aren’t aware of the risks involved. Moreover, no one has a right to compel another citizen to provide him with a smoke-free restaurant.

Besides, I can think of a lot of risky behaviors in which many adults freely engage but which I would never call upon government to ban: sky diving and bungee jumping being just two of them. Statistics show that merely attending or teaching in certain inner city government schools is pretty risky too — and maybe more so than occasionally inhaling somebody’s smoke.

The statist impulse is a preference for deploying the force of the state to achieve some benefit — real or imagined, for one’s self or others — over voluntary alternatives such as persuasion, education or free choice. If people saw the options in such stark terms, or if they realized the slippery slope they’re on when they endorse government intervention, support for resolving matters through force would likely diminish. The problem is, they frequently fail to equate intervention with force. But that is precisely what’s involved, is it not? The state government in Florida did not request that restaurants forbid smoking; it ordered them to under threat of fines and imprisonment.

I tried this reasoning on some of my friends. Except for the diehard libertarians, here were some typical attitudes and how they were expressed:

Delusion: “It’s not really ‘force’ if a majority of citizens support it.”

Paternalism: “In this instance, force was a positive thing because it was for your own good.”

Dependency: “If government won’t do it, who will?”

Myopia: “You’re making a mountain out of a molehill. How can banning smoking in restaurants possibly be a threat to liberty? If it is, it’s so minor that it doesn’t matter.”

Impatience: “I don’t want to wait until my favorite restaurant gets around to banning it on its own.”

Power lust: “Restaurants that won’t keep smoke out have to be told to do it.”

Self-absorption: “I just don’t care. I hate smoke and I don’t want to chance smelling it even if a restaurant owner puts the smokers in their own section.”

On a larger scale, every one of these arguments can be employed — indeed, they are invariably employed — to justify shackling a people with intolerable limitations on their liberties. If there’s one thing we must learn from the history of regimes, it is that you give them an inch and sooner or later, by appealing to popular weaknesses, they will take a mile. The trick is getting people to understand that liberty is more often eaten away one small bite at a time than in one big gulp, and that it’s wiser to resist liberty’s erosion in small things than it is to concede and hope that bigger battles won’t have to be fought later.

Delusion, paternalism, dependency, myopia, impatience, power lust and self-absorption: All are reasons people succumb to the statist impulse. As I pondered this, it occurred to me that they are also vestiges of infantile thinking. As children or adolescents, our understanding of how the world works is half-baked at best. We expect others to provide for us and don’t much care how they get what they give us. And we want it immediately.

We consider ourselves “adults” when we learn there are boundaries beyond which our behavior should not tread; when we think of the long run and all people instead of just ourselves and the here and now; when we make every effort to be as independent as our physical and mental abilities allow; when we leave others alone unless they threaten us; and when we patiently satisfy our desires through peaceful means rather than with a club. We consider ourselves “adults” when we embrace personal responsibility; we revert to infantile behavior when we shun it.

Yet survey the landscape of political debate in the West these days and you find no end to the demands to utilize the force of the state to “do something.” Tax the other guy because he has more than me. Give me a tariff so I can be relieved of my foreign competition. Subsidize my college education. Take that property so I can put a hotel on it. Fix this or that problem for me, and fix it now! Make my life easier by making somebody else pay. Tell that guy who owns a restaurant that he can’t serve people who want to smoke.

I wonder if Western countries have become a giant nursery, full of screaming babies who see the state as their loving nanny. It makes me want to say, “Grow up!”

Societies rise or fall depending on how civil its citizens are. The more they respect each other and associate freely, the safer and more prosperous they are. The more they rely on force — legal or not — the more pliant they are in the hands of demagogues and tyrants. So resisting the statist impulse is no trivial issue.

In my mind, resisting that impulse is nothing less than the adult thing to do.