Independence Day: Hayek explains Liberty

While America celebrates its day of Independence, people around the world are embracing the dangerous arms of government and giving up freedoms. Throughout history in times of economic upheaval, government has appeared to run to the rescue of economies in verge of collapse only to make matters worse. The Great Depression saw one of the largest expansion of the US Federal Government and yet despite the huge amount of dollars spent, the US fully recovered only after world war II. To add insult to injury, many do not seem to realize that it is government that heavily contributes to economic collapse. While the media rightly exposes on the disgraceful acts of Wall Street titans, it fails to expose the primary role of government in this collapse: the folly of the Federal reserve to inflate bubbles with low interest rates, the folly of the US Govt to inflate the housing markets through subsidized loans (Fannie Mae & Freedie Mac) and the failure of regulators in over a dozen agencies to properly expose abuse. Politicians tell us now that the failure of the market requires more restrictions of economic freedom and the creation of yet more regulators in Washington. Their solution is tie up small & mid-size businesses in regulations while unemployment explodes while bailing out their friends in large corporations despite these very subsidies have already led to collapse of historic firms such as GM & Chrysler, etc. Amidst this nonsense and the rush to curtail economic freedoms, it is valuable to re-evaluate the importance of liberty, the limits of government and power in the word of masters such F.A. Hayek.

Friedman’s warning for the time

At a time when people look to governments to solve all sorts problems, the cautionary words of Milton Friedman come to mind from this 1979 interview. Even when capitalism, which is no perfect system, seems to fails let’s not fool ourselves that men in politics can save the world. We shall never forget that government contributed to creating this crisis (through bubble inducing monetary policy) and fell to enforce even the regulation on books (Madoff anyone?). Freedom depends on free markets and free-thinking people.

Privacy: Risking Extinction

 

Privacy, it seems, is a luxury that we can no longer afford in a world where terror and extremism are on the rise. At least that is what governments claim as they seek free license to spy on our lives. Although different countries impose different level of intrusion (see chart), clearly privacy in under threat everywhere. Technology has also made their task easier with the invasion of cameras, wiretapping tools and satellites that are taking snapshots of our lives continuously. Surveys show that people in general are willing to trade some privacy for security but while the world is increasingly a less private place, there is no  evidence that paying such a high price is making our lives any safer. Privacy is a vital freedom under threat and in order to safeguard it  from extinction we would do well to embrace Jefferson’s insight as it called eternal vigilance the price of liberty.

Freedom in Retreat

According to the annual report of the Freedom House the state of liberty is in serious deterioration with reversals seen in 38 countries nearly four times as many as are showing any sign of improvement. The world is still enjoying gains from the fall of communism, at least in central Europe, and the decline of militarism in Latin America. But the short-term trends seem worrying with an increasing number of countries in all regions of the world where a previously hopeful trend has gone into reverse (Bangladesh, Sri Lanka Philippines, Nigeria, Kenya, etc). This is not good news given freedom is a key  antidote to war and poverty. For all the proclaimed intelligence, we humans have a real gift at excel at complicating our existence.