Learned Feudalism

On May 13, George Will delivered the keynote speech at the Cato Institute's biennial Milton Friedman Prize dinner. You can listen to the podcast, or if you prefer, I've cleaned up the voice-recognition transcript that was, to put it mildly, "not 100% accurate" below. It's a good speech, and after Tuesday, it's even more relevant:

Someone once said that the Chicago Cubs are to the World Series as the Tenth Amendment is to constitutional law: of rare and inconsequential appearance. Thank you Ed for that generous introduction that proves that not all forms of inflation are painful. It put me in mind of the Renaissance Pope who used to travel about Rome being greeted by crowds with cries of the "Deus Est, Deus Est" - "Thou art God, Thou art God." The Pope said "It's a trifle strong, but really very pleasant."

I want to thank all of the people in this room for making Cato and its work possible. And I want to thank a few million more people who in recent weeks have toiled to demonstrate in a timely manner why Cato is necessary - I refer of course to the people of Greece.

Milton Friedman, whose name we honor tonight, was honored often for his recondite and subtle scholarship. But it was complemented by a sturdy common sense much in fashion nowhere now. About forty years ago he found himself in an Asian country where the government was extremely eager to show off a public works project which was inordinately and excessively fond – it was digging a canal. They took Milton out to see this, and he was astonished because there were hordes of workers, but no heavy earth moving equipment. And he remarked upon this to his government guide, and the man said "Mr. Friedman, you don't understand this is a jobs program. That's why we only have men with shovels.” To which Friedman said, "Well, if it's a jobs program why don't they have spoons instead of shovels?"

The attempt to educate the world to the principles of rationality and liberty never ends. It began in earnest for a lot of us in 1962 with the publication of Capitalism and Freedom. In 1964, two years later, we got a demonstration of how urgent it was to have that book when Lyndon Johnson, campaigning for president said, "We're in favor of a lot of things and we're against mighty few."

Well the man running against him at that time, 1964, was of course Barry Goldwater, who, to the superficial observer, seemed to lose because he only carried 44 states. When the final votes were tabulated sixteen years later however, it was clear that he had won. However it was a contingent victory. In 2007 per capita welfare state spending - per capita welfare state spending, adjusted for inflation - was 70% higher than it had been when Ronald Reagan was inaugurated 27 years earlier.

The trend continues and the trend is ominous.

Fifty-one days ago now, the President signed into law the Health Care Reform, the great lunge to complete the new deal project, and the Great Society project. The great lunge to make us more European. At exactly the moment that this is done the European Ponzi scheme of the social welfare state is being revealed for what it is. There's a difference. We are not Europeans, we are not in Orwell's phrase "a state-broken people." We do not have a feudal background of subservience to the State. No, that is the project of the current administration. It can be boiled down to "Learned feudalism."

It is a dependency agenda that I have been talking about ad nauseam. Two recent examples. When the government took over student loans, making that the case that now the two most important financial transactions of the average family - get a housing mortgage and a loan for college tuition - will now be transactions with the government, they included a provision in the student loan legislation that says there will be special forgiveness of student loans for those who go into work for the government or for non-profits. One-third of the recent stimulus was devoted to preserving Unionized public employees' jobs in states and localities, and so it goes. The agenda is constant.

In 1965 with the Elementary and Secondary Education Act, the final dissolution in some ways of the sense of restraint on the part of the federal government, it was advertised as aid for the poorest of the poor. Ten years later, in 1975, 80% of all school districts were participating in this. It is a principle of liberal social legislation that a program for the poor is a poor program. The assumption is that middle class Americans will not support a program aimed only for the poor.

That is a theory refuted by the fact that the earned income tax credit, supported and expanded by Ronald Reagan, is extremely popular in this country. But it does reveal the fact that dependency is the agenda of the other side. It is the agenda to make more and more people dependent in more and more things on the government. We can now see today in the headlines from Europe where that leads. It leads to the streets of Athens where we had described by media as "anti-government mobs."

The "anti-government mobs" were composed almost entirely of government employees.

The Greeks - the Greeks and the Europeans have said all along as they increase the weight of the state, in danger of suffocating the economy, "So far so good." They kept saying, "So far so good."

Reminds me of - everything does sooner or later – of baseball stories. True story. In 1951 Warren Spahn, on the way to becoming the winningest left handed pitcher in the history of baseball, was pitching for the then Boston Braves against the then New York Giants in the then Polo Grounds. And the Giants sent up to the plate a rookie who is 0-for-twelve. It’s clear this kid would never hit big league pitching, some kid named Willie Mays. Spahn stood out on the mound sixty feet six inches from home plate, threw the ball to Mays. Crushed it. First hit, first home run. After the game the sports writers went up to Spahn in the clubhouse, said “Spawny, what happened?” Spahn said, “Gentlemen, for the first sixty feet that was a hell of a pitch.”

It's not good enough in baseball and it's not good enough in governance either. Let me give you a sense, a framework to understand this extraordinarily interesting moment in which we live. I believe that today, as has been the case for 100 years and as will be the case for the foreseeable future, the American political argument is an argument between two Princetonians: James Madison of the class of 1771, and Thomas Woodrow Wilson of the class of 1879.

I firmly believe the most important decision taken anywhere in the twentieth century was the decision taken as to where to locate the Princeton graduate college.

President of Princeton Woodrow Wilson wanted it located down on the campus. Other people wanted to located where it in fact is, up on the golf course away from the campus. When Wilson lost that, he had one of his characteristic tantrums, went into politics and ruined the twentieth century.

I'm - I'm simplifying a bit.

Madison asserted that politics should take its bearings from nature, from human nature and the natural rights with which we are endowed that pre-exist government. Woodrow Wilson, like all people steeped in the nineteenth century discovery (or so they thought) that History is a proper noun with a capital "H," that history has a mind and life of its own, he argued that human nature is as malleable and changeable as history itself, and that it is the job of the state to regulate and guide the evolution of human nature, and the changeable nature of the rights we are owed by the government that in his view dispensed rights.

Heraclitus famously said "You cannot step into the same river twice," meaning that the river would change. The modern progressive believes that you can't step into the same river twice because you change constantly. Well those of us of the Madisonian persuasion believe that we take our bearings from a certain constancy. Not from, well to coin a phrase "the evolving standards of decency that mark the progress of a maturing society."

That has become, that phrase from Justice Brennan, has become the standard by which the constitution is turned into a "living document." A constitution that no longer can constitute. A constitution has, as Justice Scalia said, an anti-evolution purpose. The very virtue of a constitution is that it is not changeable. It exists to prevent change, to embed certain rights so that they cannot easily be taken away.

Madison said rights pre-exist government. Wilson said government exists to dispense whatever agenda of rights suits its fancy, and to annihilate, regulate or attenuate or dilute those others. Madison said the rights we are owed are those that are necessary for the individual pursuit of happiness. Wilson and the progressives said the rights you deserve are those that will deliver material happiness to you and spare you the strain and terror of striving.

The result of this is now clear. We see in the rampant indebtedness of our country and the European countries what someone has called "a gluttonous feast on the flesh of the future." We see the infantilization of publics that become inert and passive, waiting for the state to take care of them. One statistic: 50% of all Americans 55 years old or older have less than $50,000 in savings and investment.

The feast on the flesh of the future is what debt is. To get a sense of the size of our debt, in 1916, midway in Woodrow Wilson's first term, the richest man in America John D. Rockefeller could have written a personal check and retired the National Debt. Today the richest man in America, Bill Gates, could write a personal check for all his worth and not pay two months interest on the National Debt. Five years from now interest debt service will consume half of all income taxes. Ten years from now the three main entitlements, Medicare, Medicaid and Social Security plus interest will consume 93% of all federal revenues. Twenty years from now debt service interest will be the largest item in the federal budget.

Calvin Coolidge, the last president with whom I fully agreed, once said that when you see a problem coming down the road at you, relax. Nine times out of ten it will go into the ditch before it gets to you. He was wrong about the one we now face. We are facing the most predictable financial crisis, most predictable social and political crisis of our time. And all the political class can do is practice what I call "the politics of assuming a ladder." That's an old famous story of two people walking down the road, one's an economist the other's a normal American, and they fall into a pit with very steep sides. The normal American at the bottom says "Good lord we can't get out!" The economists said, "Not to worry, we'll just assume a ladder."

This seems to me what is the only approach they have to the Ponzi nature of our own welfare state. I think what it is time for us to understand, that the model that we share in a somewhat attenuated form so far with Europe simply cannot work. It is that on the one hand we should tax the rich, AKA the investing and job creating class, yet count on spending the revenues of investment and job creation. No one has explained to the political class that it is very dangerous to try to leap a chasm in two bounds.

We are now being told that a value-added tax is going to be required. Well, the value-added tax would help the political class to shower benefits on those who can vote for them while taxing people who can't vote for them. The beauty of the value-added tax is that it taxes everybody but nobody quite notices it.

We are going to come now to a time when America's going to have to revisit Madison's Federalist Paper 45, and his statement "the powers delegated by the proposed Constitution to the federal government are few and defined."

Few and defined.

The cost of not facing this fact of not enforcing the doctrine in some sense of enumerated powers, is that big government inevitably breeds bigger government. James Q. Wilson, one of the great social scientists in American history, put it this way: "Once politics was about only a few things. Today it is about nearly everything. Once the legitimacy barrier has fallen, political conflict takes a very different form. New programs need not await the advent of a crisis of extraordinary majority, because no program is any longer new. It is seen rather as an extension, a modification or an enlargement of something the government is already doing. Since there is virtually nothing the government has not tried to do, there is little that it cannot be asked to do."

And so we have today's death spiral of the welfare state: an ever larger government resting on an ever smaller tax base. Government impeding the creation of wealth in order to enforce the redistribution of it. We're not fooling, however, the American people. The Wall Street Journal this morning announced with a sort of breathless surprise that about 80% of the American people disapprove of congress. Raising a fascinating question: who are the 20%?

It is a sign of national health that Americans still think about Washington the way they used to talk about the old Washington Senators baseball team, when the saying was "Washington: first in war, first in peace and last in the American League." Back then they were run, the Senators were, by a man named Clark Griffith who said, "The fans like home runs, and we have assembled a pitching staff to please our fans."

That is why the American people do not mind what they are instructed by their supposed betters to mind, that is the so-called problem of gridlock. Ladies and gentlemen gridlock is not an American problem, it is an American achievement. When James Madison and fifty-four other geniuses went to Philadelphia in the sweltering summer of 1787, they did not go there to design an efficient government, the idea would have horrified them. They wanted a safe government to which end they filled it with blocking mechanisms. Three branches of government. Two branches of the legislative branch. Veto. Veto override. Supermajorities. Judicial review. And yet I can think of nothing the American people have wanted intensely and protractedly that they did not eventually get.

The world understands. A world most of whose people live under governments they wish were capable of gridlock, that we always have more to fear from government speed than government tardiness. We are told that one must not be a party of "NO." To "NO" I say an emphatic "YES!" For two reasons. The reason that almost all "improvements" make matters worse is that most new ideas are false. Second: the most beautiful five words in the English language are the first five words of the First Amendment: "Congress shall make no law."

No law abridging freedom of speech, no law establishing religion, no law interfering with the right to assemble to petition for redress of grievance, and the bill of rights goes on in a litany, a tissue of "noes." No unreasonable searches and seizures. No cruel and unusual punishments, and so it goes. The American people are, I think, healthier than they are given credit for. They have only one defect: We have nothing to fear right now but an insufficiency of fear itself. It is time for a wholesome fear of what people are trying to do.

We have few allies. We don't have Hollywood. We don't have academia. We don't have the mainstream media. But we have two things: First we've arithmetic on our side. The numbers do not add up and cannot be made to do so. Second, we have the Cato Institute. People in this room are what the Keynesians call a multiplier. And for once they are right.

In Athens, the so called cradle of democracy, the Demos - a Greek word, "the people" - have been demonstrating in recent days the degradation that attends a people who become state-broken to a fault. Who become crippled by dependency and the infantilization that comes with it. Well, we shall see. I think America is organized around the very principle of individualism, which I can best illustrate with what I promise you is the last baseball story.

True story. Rogers Hornsby was at the plate, the greatest right-handed hitter in the history of baseball, and a rookie was on the mound who was quite reasonably petrified. The rookie threw three pitches that he thought were on the edge of the plate but the umpire said "Ball one, ball two, ball three."

The rookie got flustered and shouted in at the umpire, "Those were strikes!" The umpire took off his mask, looked out at the rookie, and said "Young man, when you throw a strike, Mr. Hornsby will let you know." Hornsby had become the standard of excellence. If he didn't swing, it wasn't a strike. We want a country in which everyone is encouraged to strive to be his own standard of excellence and have the freedom to pursue it. Now there are reasons for being downcast at the moment. Certain recent elections have not gone so well. Let me remind you something again going back to 1964. In 1964 the liberal candidate got 90% of the electoral votes. Eight years later the liberal candidate got 3% of the electoral votes.

This is a very changeable country.

I would recall the words to you of the first Republican president, who two years before he became president spoke at the Wisconsin state fair with terrible clouds of civil strife lowering over the country. Lincoln told his audience the story of the oriental despot who summoned his wise men, and assigned them to go away and come back when they had devised a statement to be carved in stone to be forever in view and forever true. They came back 'ere long and the statement they had carved in stone was "This too shall pass away."

"How consoling in times of grief," said Lincoln. "How chastening in times of pride. And yet," said Lincoln, "if we cultivate the moral world within us as prodigiously as we Americans cultivate the physical world around us, it need not be true." Lincoln understood that freedom is the basis of values. It’s not the alternative to a values approach to politics. Freedom is the prerequisite for the moral dimension to flower.

Given freedom the American people will flower. Given the Cato Institute, the American people will have in time secured freedom. Thank you very much and thank you for your help to Cato.