The purpose of government is for those who run it to plunder those who do not. Throughout history, governments have used violence, intimidation, coercion, and mass murder to enforce this system. But any governments’ first tactic is always a blizzard of lies – about its own alleged benevolence, altruism, heroism, and greatness, along with equally big lies about the “evils” of the civil society unregulated by government, especially the free market.

Our current economic crisis, which was caused by the government’s central bank and its boom-and-bust monetary policies, among other interventions, has predictably been blamed on “too little regulation” and too much freedom.

Lies, Lies. … Everywhere Lies

When the Pilgrims came to America, they nearly starved to death because they adopted communal agriculture. When William Bradford, leader of the Mayflower expedition, figured this out he reorganized the Massachusetts pilgrims in a regime of private ownership of land. The incentives created by private property promptly created a dramatic economic turnaround and the rest, as they say, is history. Most history books ignore this reality, however, and blame the starvation crisis of the Pilgrims on corporate greed on the part of the Mayflower company.

After the American Revolution, it was imperative to build roads and canals so that commerce could expand and the economy thrive. George Washington’s Treasury secretary, Alexander Hamilton, declared in his Report on Manufactures that private road and canal building would never succeed without government subsidies. President Thomas Jefferson’s Treasury secretary, Albert Gallatin, concurred. Meanwhile, private capital markets and the private “turnpike” industry were busy financing thousands of miles of private roads without any governmental assistance. When government did intervene in early-American road building, it was a financial catastrophe almost everywhere, so much so that by 1860 only Missouri and Massachusetts had not amended their state constitutions to prohibit the use of tax dollars for “internal improvements.”

Americans have been taught in their government-run schools that the post-1865 Industrial Revolution was bad for the working class. Government regulation of work and wages, and the creation of labor unions was needed to correct this. In reality, people voluntarily and freely left the farms for factories because the latter offered far better wages and working conditions. Between 1860 and 1890, real wages increased by 50 percent in America, as myriad new products were invented, and made available to the common working person thanks to low-cost, mass production. It was capital investment that dramatically increased the productivity of labor. This investment allowed hours worked to decline from an average of 61 hours per week in 1870 to 48 hours by 1929.

Higher worker productivity, fueled mostly by capital investment by entrepreneurs and private investors, also made it less necessary for families to force their children to work. Child labor was on the wane for decades before government got around to regulating or outlawing it. And when it did so it was to protect unionized labor from competition, not to protect children from harsh working conditions.

The “robber barons” of the late 19th century robbed no one. Most of them made their money by providing valuable – if not revolutionary – goods and services to the masses at lower and lower prices for decades at a time. John D. Rockefeller, for example, caused the price of refined petroleum to drop from 30 cents per gallon in 1869 to 8 cents in 1885. He continued to drop his prices for many years thereafter. James J. Hill built an efficient and profitable transcontinental railroad without a dime’s worth of government subsidy.

In return for their remarkable free-market success the government prosecuted both of these men, kangaroo court style, under the protectionist “antitrust” laws. The real “robbers” in this case were politically connected businessmen. For example: Leland Stanford, a former California governor and senator, succeeded in getting laws passed granting his company a monopoly in the California railroad business.

The federal antitrust laws were passed beginning with the Sherman Antitrust Act of 1890 because the government claimed industry was becoming “rampantly cartelized” or monopolized. In reality, prices everywhere were plummeting as new products and services were being invented everywhere. The entire period from 1865 to 1900 was a period of price deflation. Interestingly, all of the industries accused by Congress of being monopolies in 1889-1890 had been dropping their prices for at least a decade thanks to vigorous competition.

Libertarians already know these things, but it is always good to remind ourselves of the facts. We’ll take another look at more Government Lies next week.

Now for the weekly TidBits:

* The Gallup polling firm has stumbled upon its own BS detector for unemployment figures from the Labor Department. 19.9% of people surveyed last month say they were unemployed or underemployed. That would be equivalent to an official unemployment rate of 16.5%.

*The American people themselves say the government’s broadest measure of unemployment undercounts by a factor of about 20%.

* In California, there are so many fees, taxes, add-ons, etc. to power bills, it is actually cheaper to generate your own electricity running a diesel generator than it is to buy it from PG&E. Hmm, a new business idea? Leasing out and servicing private power generators in California? Nah, unless you are politically connected, the alphabet soup agencies would shut you down before you leased your first unit.

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