Sunday, January 17, 2010 

Thomas E. Woods, Jr.

The Daily Bell is the Daily Bell is pleased to publish an interview with the distinguished libertarian scholar, Thomas E. Woods, Jr.

Introduction: Dr. Woods is a senior fellow at the Ludwig von Mises Institute. He holds a bachelor’s degree in history from Harvard and his master’s, M.Phil., and Ph.D. from Columbia University. He is the author of nine books, including two New York Times bestsellers: Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse and The Politically Incorrect Guide to American History. His other books include Who Killed the Constitution? The Fate of American Liberty from World War I to George W. Bush (with Kevin R.C. Gutzman), Sacred Then and Sacred Now: The Return of the Old Latin Mass, 33 Questions About American History You’re Not Supposed to Ask, How the Catholic Church Built Western Civilization, and The Church and the Market: A Catholic Defense of the Free Economy. His writing has appeared in dozens of popular and scholarly periodicals, including the American Historical Review, the Christian Science Monitor, Investor’s Business Daily, Catholic Historical Review, Modern Age, American Studies, Intercollegiate Review, Catholic Social Science Review, Economic Affairs (U.K.), Quarterly Journal of Austrian Economics, Inside the Vatican, Human Events and many more.

Daily Bell: Thanks for sitting down with us. It is an honor to interview you.

Thomas E. Woods, Jr.: My pleasure.

Daily Bell: Can you give us some background. How did you come to be a leading libertarian scholar – if that’s an acceptable term.

Thomas E. Woods, Jr.:  I appreciate that, though it isn’t false modesty when I say I’m uncomfortable with that kind of designation. Right now I think of my task as presenting important material to the general public and to students in a way that’s easily understandable, and in a way that minimizes the amount of reading people need to do to get up to speed on (primarily) American history and Austrian economics. I have written some things that I think constitute original contributions to my field, like my book The Church Confronts Modernity, published by Columbia University Press, and The Church and the Market, on Catholic social teaching and Austrian economics. But these days I’m looking mainly to synthesize and explain.

Having said that, I’ve been really thrown for a loop by what’s happened over the past 18 months or so. Suddenly I attend a conference and people know who I am, want their books signed, want pictures with me [!], and so on. I speak at a college campus and a good crowd shows up. I could not believe the reception I got at Ron Paul’s CPAC event last February.

A lot of it has to do with being in the right place at the right time. A lot of people bought Meltdown when it came out, and I think the combination of that book, a few high-profile speeches, and the continuing growth in readership at LewRockwell.com (where I have an article archive) led to this quite unexpected situation.

Daily Bell: Can you summarize the basic points of The Politically Incorrect Guide to American History?

Thomas E. Woods, Jr.: That book argues that the received version of American history is a laughable, ideologically driven distortion of the truth, but one that benefits the state apparatus and its hangers-on. Naturally they want us to believe (among other things) the following:

1) Political decentralization is always bad. Anyone who favors it surely has sinister intentions. Real freedom comes from ceding all powers to the central government, which will employ those powers on behalf of progressive causes.

2) Without government, we’d all be mercilessly exploited by the wicked private sector, and scraping by on subsistence wages. That’s what happened under the “robber barons” of the nineteenth century.

3) All the federal government’s wars have been glorious and just.

The Politically Incorrect Guide to American History smashes all of these, and a great deal else.

Daily Bell: Can you do the same for Meltdown?

Thomas E. Woods, Jr.: I wrote Meltdown because I could see the conventional wisdom – that the free market had caused the financial crisis, and that these blinkered laissez-faire ideologues needed to be put in their place – beginning to ossify. I wanted to make what to me was the obvious case for interventionism as the culprit in the crisis, and the market as the equally obvious solution. (Also, you’d have to be seriously deluded to consider Larry Summers, Robert Rubin, and monetary central planner Alan Greenspan to be laissez-faire ideologues.)

I was seeking to do two things: (1) get the free-market, or “Austrian,” point of view before the public, so it would be clear that a plausible (and indeed compelling) alternative to the conventional wisdom existed; and (2) give supporters of the free market the understanding and the ammunition they needed to defend themselves against the inane claims being made by advocates for the state.

Daily Bell: Can you give us the top five books that someone interested in freedom and free-markets needs to read?

Thomas E. Woods, Jr.: I recommend Henry Hazlitt’s Economics in One Lesson, Murray Rothbard’s What Has Government Done to Our Money?, Ron Paul’s The Revolution: A Manifesto, Lew Rockwell’s The Left, the Right, and the State, and Hans-Hermann Hoppe’s Democracy: The God that Failed. You will never look at things quite the same, and I’m pretty sure you’ll be hooked.

Daily Bell: We consider the regulatory malpractices you identify in Meltdown to be somewhat incidental to the main culprit, which is central bank money manipulation. Agree? Disagree?

Thomas E. Woods, Jr.: I agree, which is why I emphasize the Fed and the monetary system in my public speeches. Still, regulation can intensify the effects of the Fed’s policy, and I think that’s what happened here.

Daily Bell: What was it like going to Harvard? We consider that, in some ways, the “belly of the beast.” Is that unfair? What was your experience like?

Thomas E. Woods, Jr.: I had an absolute blast. The students were by and large on the left, as were the faculty. But there was so much to do, so many interesting people who came to speak, and so on. And yes, there were some propagandists on the faculty. You learned to avoid them. At some schools, particularly in the top tier, there is still respect for good work, solid research, and the integrity of one’s discipline. People probably expect me to say that my years at Harvard and Columbia were miserable, that all I got was left-wing propaganda. But that isn’t true – I got an excellent education at these institutions. And I had fun as a member of various student groups that forced alternative views into the campus conversation.

At the same time, there’s plenty I wasn’t taught in the classroom, and I had to learn an awful lot on my own. These days, anyone with contrary opinions has to expect, to some extent, to be an autodidact.

Daily Bell: How did you find out about the Mises Institute? How did you get involved? Can you characterize your involvement today for our readers and explain a bit more fully why the Mises Institute is so important to freedom?

Thomas E. Woods, Jr.: I saw an ad for its week-long summer program, Mises University, in a magazine. That week was the most intellectually explosive of my academic career. And now I have the privilege of teaching
at it. Right now I’m a resident scholar and senior fellow with the Institute. I write, speak, participate in the Institute’s programs, and so forth.

The significance and scope of the Institute’s work can hardly be overstated. Check out Mises.org for yourself: thousands of hours of free audio and video in the form of lectures, courses, conferences, audiobooks, debates, documentaries, all of them promoting the free-market Austrian School of economics. We have a great many books available online in their entirety, fully searchable. We have the entire print runs of major publications. We have articles on every subject under the sun. We have discussion forums, an excellent blog, an online store, you name it.

And that’s just what we’re doing online – again, available entirely for free to anyone who wants to learn. We also have programs for students, like Mises University and our Rothbard Graduate Seminar. We have the Austrian Scholars Conference, our annual scholarly conference. (My book The Church and the Market began as a paper at one of these.) We have one-day events around the country. Much more is planned. It’s an honor to be a part of it.

Daily Bell: Is the Internet making a difference?

Thomas E. Woods, Jr.: A huge one. And it disproportionately helps our side. People could have all the Keynes they wanted even before the Internet. But you had to search out the Austrians, if you even knew they existed. Now we have Mises.org, which I just mentioned, to say nothing of the huge YouTube presence of people like Peter Schiff, Ron Paul, and others. Students all over the country are challenging their professors over business cycle theory. It is a glorious thing.

Daily Bell: We think one of the main challenges facing America today is the growth of the so-called pro-military conservative movement. We believe the movement almost purposefully confuses people about Jeffersonian classical liberal thought and is far more challenging to the growing Misesian free-market ideology than the Democrats. Agree? Disagree?

Thomas E. Woods, Jr.: I think they’re both pretty awful. I used to be one of these “the Pentagon can do no wrong” conservatives until I realized a few things: (1) the contradiction at work in my holding up this one government institution as beyond reproach; (2) the fact that government lies surrounding foreign policy are especially egregious and embarrassing, if we’re going to be honest about it; (3) I would have had a field day if the Soviet Union had tried to pull off some of these lies, but when it’s “my” government I instead searched around for supporting evidence to back up the lies; (4) no supporter of the free market can look at military procurement and the military-industrial complex in any detail (and I am confident most conservatives haven’t) without recoiling in utter disgust. And that’s not to mention the unspeakable and completely avoidable devastation and loss of life wrought by this wing of the government in adventures that had more to do with fueling imperial ambition than with actually defending the country. No conservative, especially those who lecture the world about moral relativism, can support Bill Clinton’s sanctions on Iraq, for example. Sanctions always hurt only the subject population. Everyone knows that. A century ago the policy would have been condemned as an act of barbarism.

One of the nice things about Ron Paul’s book The Revolution: A Manifesto is that he holds up what historian George Nash calls the three most significant traditionalist thinkers of the postwar conservative revival – Russell Kirk, Richard Weaver, and Robert Nisbet – and notes that all three were anti-militarist to one extent or another. This is totally unknown to American conservatives today, who think it’s “liberal” to be antiwar or to consider it overkill to spend more on so-called “defense” than the next several dozen countries put together. Among other things, those people ought to read Bill Kauffman’s book Ain’t My America: The Long, Noble History of Antiwar Conservatism and Middle American Anti-Imperialism, which I reviewed last year.

If I may continue with my Kauffman boosting for a moment, I insist people watch his speech (Ron Paul Rally For The Republic, Bill Kauffman) from the great Rally for the Republic Ron Paul held during the week of the Republican Convention. (The first 10 or so seconds of Kauffman are a bit garbled, but it’s worth the wait.)

But the Democrats are a train wreck as well; it’s as if their goal is to wreck the economy with the greatest possible dispatch. And they’re not even sound on war, the issue we’re supposed to believe touches their deepest principles.

Daily Bell: What do you think of Sarah Palin? On the one hand, it seems to us, she espouses firm free-market beliefs. On the other, she speaks a great deal about patriotism and her support of the military, generally Homeland Security and the various wars on terrors. Isn’t this somehow a contradiction?

Thomas E. Woods, Jr.: People like her, I think, because they see in her a normal, plain-speaking American who doesn’t gratuitously ridicule what they believe, and because she is packaged as a maverick of some sort. If only she were. At the slightest prompting she immediately adopted the neoconservative line on foreign policy (and in fact she canceled a meeting with representatives of her pro-life constituency during the GOP convention so she could attend a meeting with AIPAC officials). During the campaign she supported the financial bailouts. Oh, but she had to, someone could reply. All right, then what kind of maverick is she?

What has struck me most about her is how intellectually insubstantial she is. When (for example) she was asked about why she objected to Roe v. Wade, and whether she could name other Supreme Court cases of which she disapproved, she just sputtered. That should be the easiest thing in the world for a reasonably educated conservative. In other words, she’s yet another politician who can read a speech well, but who just isn’t that bright. Unfortunately, as we’ve seen, that’s no obstacle for the party loyalists.

As for the military, well, this is where conservatives suddenly become deeply reverential toward government and government employees, and where they believe every word of the Ministry of Propaganda they’d just condemned as liars and scoundrels not ten seconds before.

Daily Bell: Do you think the Fed will be properly and fully audited in your lifetime?

Thomas E. Woods, Jr.: I honestly don’t know. What I do know is that whether or not the audit ever happens, the composition of public opinion has already undergone a significant change. There has never been a visible anti-Fed presence in American life. No question it’s still very tiny as a percentage of the population, but it now not only exists but is growing all the time. And it’s persistent. It won’t go away. It’s a permanent feature of American life. There will be an anti-Fed voice in the conversation more and more. You can’t put a price tag on that.

Daily Bell: What are you working on now?

Thomas E. Woods, Jr.: I’m working on a book for fall 2010 release. I’m keeping the subject matter under wraps for now, but let’s just say it goes for the jugular.

Daily Bell: Thank you for the fascinating interview. We consider you one of the finer minds of freedom working today — as do many others — and eagerly await your next work.

Thomas E. Woods, Jr.: Thanks for having me.

MM Comment:
We could also call Crony Capitalism ‘Privilege-ism‘ since it uses the force and influence of Government for a privileged few. Those who must merely compete in the Marketplace have to rely ALONE on Product Quality, Persuasion and PAID-FOR Advertising. This entire show is worth watching.

[youtube http://www.youtube.com/watch?v=QI4MC304yUU&hl=en_US&fs=1&]

Commentary by Michael McKay:

This is a significant event that all users of money, which all of us, should be made aware of.

The Federal Reserve is being sued to disclose how it has manipulated the Gold Markets.

It is encouraging that this lawsuit has traction.

The Fed is also currently being sued by Bloomberg for the Fed’s refusal to disclose $2Trillion (yes, Trillion) that it has (created out of thin air and) allocated to various favored banks, businesses, or other entities. In August 2009 the Fed lost that case and it is currently being appealed.

It is valuable to see how the Fed is being pulled out from behind the curtain into the light of greater transparency.

Now all we need is for the Public to understand – better – what all these machinations mean.

Please read this article by William Murphy of the the Gold Anti-Trust Action Committee (GATA). Following his article I have made a few comments that you may find useful.

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1/2/2010 – by William Murphy, published on www.thedailybell.com

The Gold Anti-Trust Action Committee Inc. today (Dec. 30th, 2009) brought suit against the U.S. Federal Reserve Board, seeking a court order for disclosure of the central bank’s records of its surreptitious market intervention to suppress the monetary metal’s price.

The suit was filed in U.S. District Court for the District of Columbia and targets Fed records involving gold swaps, exchanges of gold with foreign financial institutions. In a letter dated September 17 this year to GATA’s law firm, William J. Olson P.C. of Vienna, Virginia, (http://www.lawandfreedom.com) Fed Board of Governors member Kevin M. Warsh acknowledged that the Fed has gold swap agreements with foreign banks but insisted that such documents remain secret. To read the Fed response, click here.

The lawsuit follows two years of GATA’s efforts to obtain from the Federal Reserve and the U.S. Treasury Department a candid accounting of the U.S. government’s involvement in the gold market. These efforts parallel those of U.S. Rep. Ron Paul, R-Texas, who long has been proposing legislation to audit the Fed. The Fed has been criticized for secrecy in its massive intervention in the markets over the last year, and Paul’s legislation recently was approved by the U.S. House of Representatives.

In correspondence with GATA’s lawyers, the Fed has claimed that its gold swap records involve “trade secrets” exempt from disclosure under the U.S. Freedom of Information Act.

GATA Secretary/Treasurer Chris Powell said:

“While GATA has produced many U.S. government records showing both open and surreptitious intervention in the gold market in recent decades (for more information, click here), Fed Governor Warsh’s letter is confirmation that the government is surreptitiously operating in the gold market in the present as well. That intervention constitutes a huge deception of financial markets as well as expropriation of precious metals miners and investors particularly. This deception and expropriation are what GATA was established in 1999 to expose and oppose.”

Of course GATA’s lawsuit against the Fed will take months if not years to resolve. We think we have a good chance of winning it in court. But we can win it outside court, and much sooner, if the suit can gain enough publicity from the financial news media and market analysts and prompt enough inquiry from them and from the public, the mining industry, and members of Congress.

So GATA urges its friends to publicize the suit and to urge journalists, market analysts, mining companies, and members of Congress to join us in seeking disclosure of the Fed’s gold market intervention records. If enough clamor is directed at the Fed about these records, the gold price suppression scheme will lose its surreptitiousness and fail.

These interventions powerfully influence not only gold’s price but the prices of government bonds and currencies, as well as interest rates generally and the value of all capital and labor in the world. There is no more important issue in the world economy than gold price suppression.

GATA’s lawsuit against the Fed is listed in federal court records as civil case No. 09-2436 ESH, the letters being the initials of the district court judge assigned to it, Ellen S. Huvelle.

For more details about the lawsuit, click here
William Murphy is the chairman of the Gold Anti-Trust Action Committee (GATA, http://www.gata.org/ ), which he founded in 1999 to expose what he judged to be the active manipulation of the gold market.

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Michael McKay again:

Please note in particular the section that I have highlighted from the article:

These interventions powerfully influence not only gold’s price but the prices of government bonds and currencies, as well as interest rates generally and the value of all capital and labor in the world. There is no more important issue in the world economy than gold price suppression.

This is a key comment.

Please note:

a) All World Currencies are currently Fiat Money backed by nothing, and

b) All Interest Rates (which are the Price which is paid for the use of Money) are set and manipulated by Central Banks around the world and NOT the Market of Buyers and Sellers,

Those who control the issuing of non-backed fiat money and the setting of interest rates (ie the Central Bankers) fear Gold and a free market in currencies, as it could put them out of business.

Gold is Money. Silver is Money as well.

We have all grown up being taught that Gold & Silver are a Commodity – only.

When folks, en masse, start realizing that Money, in order to be a really useful money, must retain its Value over time and be a Real Store of Value, they will turn to Gold & Silver as Money.

News Flash: This has started to happen already.

The Chicago Mercantile Exchange on October 19, 2009 changed their rules such that those who trade in futures may now hold Physical Gold, as well as Cash and US Treasuries as MONEY for trading collateral.

As of today, January 4, 2010, the significance of this action is just starting to be appreciated by the many managers of Commodity Funds, Mutual Funds, Banks, Pension Funds, etc.

This will grow and expand.

When the public finally understands that Gold and Silver are Money then we will see Gold & Silver really take off in dollar ‘Price’. Right now only about 1% of the USA population holds ANY physical Gold or Silver.

When the population wakes up and Demand kicks in it will be like Niagara Falls is trying to flow into a garden hose.

The Fed and Government do not want Gold & Silver to be understood as Money because:

1. Gold & Silver, commodity based money, imposes spending discipline on governments which means they cannot deficitly-spend. This greatly impairs their ability to wage war or to finance their Welfare State agendas, and,

2. They want a monopoly over what can be used as money because that Centralizes their Control and reduces the real power of the electorate. Do you ever wonder why you feel so powerless in the face of all the insanity happening in Washington? Now you know.

This is why Hayek and now Ron Paul advocate Competitive Monies in the Market.  This puts control back into the hands of all market participants.

They do not advocate Gold & Silver being the ONLY money. They simply know that if the Market can decide and DISCOVER what money works best, that eventually a Free and Unencumbered Market will discover that Gold & Silver will be the best monies to use…..
AND they will then be used most widely.

The Fed and Government have tried, successfully so far, to take Gold & Silver Money ‘off the table of choices’ in the minds of most of the population.

But the world is waking up that their Fiat Money is no longer working very well.

It is not retaining its value and our Savings are being eroded. Our Purchasing Power is constantly being reduced.

WE and our children are left holding the bag.

So what can we do?

The answer is get educated and help others get educated.

How?

There are two excellent options.

1. If you can please attend one, or both, of the coming conferences held by the Mises Institute in the coming months (follow the links to read more about each event).

The first is

The Birth and Death of the Fed with Ron Paul

February 26-27, 2010
Jekyll Island, Georgia

and the second is

Austrian Scholars Conference 2010

March 11-13, 2010
Mises Institute · Auburn, Alabama

If you cannot attend either then you can educate yourself for free by reading the excellent resources available at www.mises.org . This will only cost you your time.

There are three books that will give you a deep education on this issue that I highly recommend. The first two are ‘The Mystery of Banking’ and ‘What Has Government Done to Our Money‘ by Murray Rothbard. The third is ‘The Ethics of Money Production‘ by Jorg Guido Hulsmann. Follow the links to read them for free or you can purchase them at www.mises.org.

Even if you do not read these books Gold & Silver are going to continue to be understood AND USED as Money. The good news I am reporting today is that the process has started in earnest and is, in my opinion, likely to continue. 

What will insure it’s expansion is an ever growing number of people become aware of this.

The advantage you will gain from reading these books, or attending these conferences, is to give yourself a deeper Systemic Understanding of WHY and HOW this all works, which will be to your enormous personal advantage.

Education and Awareness will serve you.