Hillsdale College Press • 1998 • 169 pages • $9.95 paperback
Philip Murray is an associate professor of economics at Webber College in Babson Park, Florida.
Between Power and Liberty: Economics and the Law, is the publication of the 1997 Ludwig von Mises lectures at Hillsdale College. The book’s title comes from James Madison’s description of the Constitution and the Bill of Rights: “every word . . . describes a question between power and liberty.”
The essays in this book brilliantly make the case for liberty over power. Three key points emerge: First, that private property is the key to individual liberty. Second, that the Constitution was intended to protect private property against government intrusions. And third, that we have reasons to be optimistic, despite the panoply of governmental restrictions on our private property and individual liberty.
Richard Ebeling, chairman of Hillsdale’s economics department, contrasts “The Free Market and the Interventionist State.” The role of government in a free society, he argues, is to protect private property, maintain order, and thus maximize the incentive to create wealth. Interventionism violates property rights so that government officials can redistribute wealth according to their own plans. Ebeling laments the conception of “public policy” as synonymous with government intervention. Discussions of public policy almost always center on “What can the government do?” instead of “What can we do as individuals?” or even “What did the government do to get us in this mess in the first place?” Ebeling explains how to defend the free market against attacks based on spurious economic theory, “social justice,” and “the public interest.” Those who wish to improve their ability to defend the market will learn much from his essay.
Several of these lectures make an excellent introduction to constitutional economics. Hillsdale President George Roche notes that the Declaration of Independence proclaims the “unalienable Rights” of individuals, as opposed to the idea that rights are grants from the state. He outlines the economic philosophy of the Constitution: that government taxation, borrowing, and spending should be kept to a minimum and that government should permit free trade to grow.
Cato Institute fiscal analyst Stephen Moore calls the Constitution “A Rulebook for Government.” He says that “No matter how long one searches, it is impossible to find in the Constitution any language that authorizes at least 90 percent of the civilian programs that Congress crams into the federal budget.” Moore relates that early in our nation’s history members of Congress and presidents used to reject even charitable acts of government spending as unconstitutional. What led to the current high levels of government spending? The Sixteenth Amendment (which permitted a federal income tax), a glaring misinterpretation of the “general welfare” clause of the Constitution, and the New Deal.
No discussion of economics and the law would be complete without recognition of the great French economist Frederic Bastiat. Harry Browne explains Bastiat’s definitions of “the law” and “the law perverted.” The law protects life, liberty, and property. The law perverted transfers property. For example, Social Security taxes the income of workers and transfers it to retirees. The law perverted plunders people rather than protecting them. What are the results of using the political process instead of the market process to achieve what we want? Roche puts it well: “The average person no longer looks to his own talents to get ahead; he looks to the state.”
Despite the reduction in our property rights and the corresponding loss of liberty, we have reasons to be optimistic about the future. In his essay, “The Grassroots Legal Reform Movement,” Clint Bolick of the Institute for Justice recounts his organization’s successes in eliminating restrictions on economic liberty through constitutional litigation. Likewise, Bernard Siegan sees promise in a revival of the “takings” clause of the Fifth Amendment, which bars government from taking property without paying for it.
Perhaps the most valuable contribution these lectures make is their emphasis on self-government. It is primarily the duty of each citizen to restore liberty through the practice of self-government. This means refusing to take assistance from government and using our own talents in conjunction with the voluntary cooperation of others to live the free, responsible life.