written at http://theaporetic.com/?p=1575
I like the fact that Paul wants to open the Fed to criticism. I’d criticize it too, but from the opposite position: where Paul sees it as a tool to rob the rich, I tend to see it as a tool OF the rich. He wants the gold standard, I think the gold standard is nuts.
What bothers me about Paul isn’t that his advocacy of the gold standard per se, it’s the connection between gold buggery and neo confederate racism.
The libertarian vision of freedom sees govt. intrusion of property rights as the core of tyranny. Since money is both property and a means of getting more, libertarians, especially “austrian school” libertarians like Paul, obsess on government meddling with the money supply.
They like the gold standard because they imagine it as free from government interference; a “natural” money with intrinsic value that will permanently secure the value of all property. Like Social Darwinists in the 1890s, they believe that under a gold standard, social hierarchies become “real” and natural as well.
Paul is closely connected to the Ludwig Von Mises Institute, founded by the libertarian conservative Murray Rothbard and currently run by Lew Rockwell. Rockwell was formerly Paul’s chief of staff.
A tireless proponent of Austrian economics, Rothbard studied with Von Mises himself after receiving his Ph.D. from Columbia University. His books relentlessly stress the benefits of a gold standard. Calling himself both an “anarcho-capitalist” and an exponent of the “old right,” Rothbard also co-founded Cato Institute but later split with it.
For Rothbard, freedom was best when it wore pants: he blamed the “origins of the Welfare State” on “the legion of Yankee women, in particular those of middle– or upper-class background, and especially spinsters whose busybody inclinations were not fettered by the responsibilities of home and hearth.” He regretted the Constitutional amendment that had “imposed” women’s suffrage on the nation.1
In 1963, for example, at the height of the Civil Right movement, Rothbard warned about “the negro crisis as a revolution.” “Demonstrating Negroes,” he said, “have taken to a favorite chant: ‘What do we want? Freedom! When do we want it? Now!’” One might expect a libertarian to like such a chant, but Rothbard found the idea of freedom for negroes alarming: they did not understand it properly. Freedom was a “hopelessly ambiguous word as used by the Negro movement,” and “the very fuzziness of the goal permits the Negroes to accelerate and increase their own demands without limit… it is the very sweep and vagueness of the demands that make the movement insatiable.”
An insatiable desire for freedom usually stands in libertarian accounts as the most praise-worthy of human attributes, but Rothbard found the African American freedom struggle alarming. Rothbard worried not just about “insatiable” negroes, but also about King and his non-violent protests against “private citizens as store-keepers or owners of golf courses; their rights are already invaded, in a “non-violent” manner, by the established Negro ‘Center’.” Rothbard explored ways to stop “the negro revolution:” his words are worth quoting in full.
There are two ways by which it might be crippled and defeated. First, the retaliatory creation of a white counter-revolutionary mass movement, equally determined and militant. In short, by the re-creation of the kind of Ku Klux Klan that smashed Reconstruction and the Negro movement in the late 19th century. Since whites are in the majority, they have the capacity to do this if they have the will. But the will, in my opinion, is gone; this is not the 19th century, nor even the 1920’s. White opinion, as we have seen, has drastically shifted from racism to egalitarianism; even the Southern whites, particularly the educated leadership, concede the broad merit of the Negro cause; and, finally, mob action no longer has respectability in our society. There have been attempts, to be sure, at mass counter-revolutionary white action: the Ku Klux leader in Georgia told a rally that “we must fight poison with poison,” armed conflict between white and Negro mobs has broken out in Cambridge, Maryland, and white hoodlums have repeatedly assaulted Negro pickets in the Bronx. But all this is a feeble replica of the kind of white action that would be necessary to defeat the revolution; and it seems almost impossible for action to be generated on the required scale.“”
This exponent of freedom took some comfort in the idea of a “second, and far more subtle, method by which the Negro Revolution might be tamed and eventually crippled: through a “sellout” by the Negro leadership itself.” 2Rothbard’s overall tone regarding the Civil Rights movement, like his tone regarding women’s suffrage, was contemptuous and hostile.
Not surprisingly, the Von Mises Institute he founded and ran is allied with the “League of the South,” which views the Civil War as a crisis over state’s rights and calls for an independent southern republic and wants, yes, “to return to a sound currency” based in gold.3 The League of the South laments the fact that “aliens” now govern the former Confederacy. It wants to return rule to the heirs of the “Anglo-Celtic tradition.” Rothbard and the Von Mises Institute similarly describe the Civil War as an unjust intervention, and claim slavery would have vanished on its own. The North, they argue, created racism in what had been a benign natural hierarchy.4
Rothbard’s version of libertarianism favored genetic accounts of racial difference and social rank. Votes for women, and equality for African Americans, upset the natural order. Regarding Charles Murray and Richard Hernsteins’s The Bell Curve (1994), which explored the connection between I.Q. fundamental intelligence, and race, Rothbard praised the book for telling “the home truths which everyone, and I mean everyone, knew in their hearts and in private… the almost self-evident fact that individuals, ethnic groups and races differ among themselves in intelligence and many other traits, and that intelligence, as well as less controversial traits of temperament, are in large part hereditary.” The book, he wrote, “would put a bullet through the heart of the egalitarian-socialist project” by restoring a natural foundation for inequality.5 In this line of libertarian thinking, naturalized, racial inequality is the sign of freedom. “Egalitarianism,” he declared, “is a revolt against nature.”6
There are of course many flavors of libertarianism, and it would be grossly unfair to simply say that libertarianism equals racism. “Classical liberals” frequently imagine a race blind society in which individual merit trumps all other factors, and libertarian thinktanks like the Cato Institute now sometimes admit the necessity of government intervention in Civil Rights in the 1960s, and that unregulated markets will not solve all problems of systemic inequality. Libertarians often genuinely detest what they see as ham-handed attempts by government—Affirmative Action comes up frequently in this context—that they argue only exacerbate the racism they seek to address. They see “race” as a socially constructed tool of domination, a form of collectivism, and pose intrinsic individualism as the alternative.
Paul’s website includes a forty minute movie from the Von Mises Institute giving a capsule history of the gold standard and calling for a return to “sound money.” The film blames “fractional reserve lending” for nearly all economic woes: that is, the practice of banks lending out more money than they have in their vaults.7 In this sense, Paul’s demand for the gold standard is radical enough to amount to a critique of capitalism itself, and hearkens back to Jefferson’s objections to banking. “If our money were backed by gold and silver, people couldn’t just sit in some fancy building and push a button to create new money,” Paul writes: “They would have to engage in honest trade with another party that already has some gold in their possession,” or “get dirty and sweaty and actually dig up the gold. Not something I can imagine our ‘money elves’ at the Fed getting down to whenever they feel like playing God with the economy.”8
In the 1990s, Paul wrote, or allowed to appear under his name, with his endorsement, a series of newsletters which most Americans would find alarmingly racist. Journalist James Kirchik detailed what he found in an article in the New Republic. For example, in 1992 the Ron Paul Political Report commented on the Rodney King riots in Los Angeles by saying that “order was only restored in L.A. when it came time for the blacks to pick up their welfare checks three days after rioting began.” read one typical passage. According to the newsletter, the looting stemmed from government promotion of “‘civil rights,’ quotas, mandated hiring preferences, set-asides for government contracts, gerrymandered voting districts, black bureaucracies, black mayors, black curricula in schools, black tv shows, black tv anchors, hate crime laws, and public humiliation for anyone who dares question the black agenda.” “Our rotten liberal culture,” the newsletter concluded, “admonishes whites faced by raging blacks to lie back and think of England.”
In 1992 Paul advised his supporters to take refuge from “the coming race war” in rural strongholds, because “the animals are coming.” Of the Martin Luther King Holiday, one Paul newsletter declared: “What an infamy Ronald Reagan approved it!” and concluded “We can thank him for our annual Hate Whitey Day.” The newsletter also demonstrated open sympathy for “patriot” militia groups and, Kirchik concluded, classical examples of ant government political paranoia, frequently involving the Federal Reserve.9
Paul has distanced himself from both the newsletters and “paleolibertarianism,” but he keeps the hard money focus. When Ron Paul called his first hearing on Fed Monetary Policy, he invited Thomas DiLorenzo, a proud member of the League of the South, to testify on behalf of the gold standard.
The connection between gold and neoconfederate ideology and Rothbard’s social darwinist racism isn’t coincidental. It’s rooted in the same fantasy, a fantasy of natural and “real” distinctions and values, social hierarchies that reflect natural law rather than politics and culture. The media will probably choose to treat Ron Paul as a charming eccentric, and thereby legitimate his point of view. The roots of that point of view are worth examining closely.
Update: recently Ron Paul appeared on Hardball with Chris Mathews, and announced that he would vote against the 1964 Civil Rights Act, because the Act, by making it illegal to serve people because of race, violated property rights. Paul’s argument was claimed that racism was caused “by laws” and that laws were the problem, not racism. He suggested that segregation was “ancient history” and since it had itself been “created by laws” it would not happen any more.
I can’t really begin to comment on the absurdity of this position. Maybe later
- Murray N. Rothbard, “Origins of the Welfare State in America” Mises Daily, Friday, August 11, 2006; online at http://mises.org/daily/2225. Accessed 8/7/2010 ↩
- This quite extraordinary essay appeared originally in The New Individualist Review 3 (Summer 1963): 32–33; it appears online, with no apparent sense of irony, at “the Online Library of Liberty, a Project of Liberty Fund Inc. (http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=2136&chapter=195367&layout=html&Itemid=27)↩
- http://dixienet.org/rights/corebeliefs.shtml ↩
- It’s only fair to note that the “League of the South” website includes a statement formally repudiating racism (http://dixienet.org/rights/statementonracism.shtml). But most people perusing the site, with its endless evocations of heritage and its insistence that southern equals white European, or that racism is simply a charge invented to discredit the South, will be skeptical. Just take a look. The Southern Poverty Law Center offers a detailed account of the League at its website: http://www.splcenter.org/get-informed/intelligence-files/groups/league-of-the-south. In this view, slavery was not a manifestation of racism, but a reflection of natural facts: ending slavery introduced racism ↩
- Murray Rothbard, “Race! That Murray Book,” in The Irrepressible Rothbard: the Rothbard-Rockwell Essays of Murray N. Rothbard (Burlingame, CA, Center for Libertarian Studies 2000) p. 390–391. ↩
- Murray N. Rothbard, Egalitarianism as a Revolt against Nature and other Essays, (1974: reprint ed. Auburn, AL 2000) ch. 1 ↩
- Ludwig Von Mises Institute, “Money Banking and the Federal Reserve,” accessed at http://www.ronpaul.com/on-the-issues/fiat-money-inflation-federal-reserve/ Aug. 4 2010. ↩
- http://www.ronpaul.com/on-the-issues/fiat-money-inflation-federal-reserve/. Accessed August 8 2010. ↩
- James Kirchick, “Angry White Man,” in The New Republic, January 30 2008 p. 21. Paul claimed not to have written these passages, and not to have known who wrote them: suspicion fell on Lew Rockwell, currently head of the Von Mises Institute and formerly Paul’s chief of staff, but he denied it and also claimed not to know. Rockwell and Rothbard seem the most likely suspects. See Julian Sanchez and David Weigel, “Who Wrote Ron Paul’s Newsletters,” in Reason Jan. 16 2008; online at http://reason.com/archives/2008/01/16/who-wrote-ron-pauls-newsletter. See also CNN’s Politics.com at this link: http://www.cnn.com/2008/POLITICS/01/10/paul.newsletters/#cnnSTCOther1↩