Welcome to the Progressive Libertarianism Movement

The stock market does not work the way most people think. A commonly held belief — on Main Street as well as on Wall Street — is that a stock-market boom is the reflection of a progressing economy: as the economy improves, companies make more money, and their stock value rises in accordance with the increase in their intrinsic value. A major assumption underlying this belief is that consumer confidence and consequent consumer spending are drivers of economic growth.

A stock-market bust, on the other hand, is held to result from a drop in consumer and business confidence and spending — due to inflation, rising oil prices, high interest rates, etc., or for no reason at all — that leads to declining business profits and rising unemployment. Whatever the supposed cause, in the common view a weakening economy results in falling company revenues and lower-than-expected future earnings, resulting in falling intrinsic values and falling stock prices.

This understanding of bull and bear markets, while held by academics, investment professionals, and individual investors alike, is technically correct if viewed superficially but is substantially misconceived because it is based on faulty finance and economic theory.

In fact, the only real force that ultimately makes the stock market or any market rise (and, to a large extent, fall) over the longer term is simply changes in the quantity of money and the volume of spending in the economy. Stocks rise when there is inflation of the money supply (i.e., more money in the economy and in the markets). This truth has many consequences that should be considered.

Since stock markets can fall — and fall often — to various degrees for numerous reasons (including a decline in the quantity of money and spending), our focus here will be only on why they are able to rise in a sustained fashion over the longer term. Read More

Stephen Articles

Stephen Articles

Voters are increasingly unsatisfied with their choices on the ballot. Incumbent politicians are fighting back with legislation to reduce the number of choices voters can make. Voters are left choosing between the lesser of evils and leave the voting booth angry and depressed with their vote. All of this results in very poor voter turnout.

Where do Libertarians stand?

What if there was a way that voters would not have to face choosing between the lesser of evils? What if there was no concern that voting for one candidate would “steal votes” from another candidate? What if political parties and incumbent politicians had no incentive to exclude choices from the ballot?

For as long as I can remember, the Libertarian Party has advocated giving voters more choices and reasonable reforms to elections. One of the methods that we have found most successful is Approval Voting.

Consider this; you have candidates A, B, and C. Today you can only vote for one of them. But what if you like both A and C? You would approve of both of them to serve in office, but today can only express your approval for one. With Approval Voting you have one ballot and cast a vote for each candidate you approve of. The candidate with the highest approval wins. It is simple and accurately reflects the will of the voters. Read More

Stephen Articles

It has often been said — though not often enough — that democracies cannot be empires, and empires cannot be democracies. This has never been more evident than now, when our own “democratic empire” has become less and less representative of the people in these United States. However, this is a fault of representative democracy — the larger it gets, the less representative it becomes. It may still represent the majority, but as the represented population gets larger and wider in scope and diversity, the majority does not always make correct decisions for everyone in the population. Hence, the fewer people a representative democracy represents, the more representative it will be.

That is why our Founding Fathers saw the importance of having a constitutional republic oversee this collection of representative democracies, and for this collection of democracies to be ruled by law. They established what freedoms the people would always be entitled to, and specifically limited the government’s powers, therefore always allowing people to have a certain amount of authority over their government. Anything not addressed within those guidelines could be left up to the local government, so the people living in those areas could be as happy as possible.

All of these thoughts came to me while I traveled to Austin, Texas in February. I was visiting for a national Libertarian Party conference in preparation for my U.S. Congress run in Ohio’s 12th District against Pat Tiberi and Paula Brooks, and was completely blown away by the unique culture, intelligence and overall freedom of the City of Austin. It is hands down the most progressive libertarian city I have ever been to — thanks to its progressive libertarian people and local government. Read More

Stephen Articles

Mark Lilla is a professor of humanities at Columbia University, where he specializes in the history of ideas — in particular, the intellectual legacy of the Enlightenment. Now, one of the principal intellectual legacies of the Enlightenment is the libertarian tradition, so it was not at all inappropriate that Lilla’s article in the May 27, 2010, issue of The New York Review of Books is on the growing influence of libertarian ideas in American society. Lilla writes of the “libertarian impulses that have unsettled American society for half a century now.” He writes of “the libertarian spirit [that] drifted into American life [over the past 50 years], first from the left [during the 1960s], then from the right [during the Reagan '80s].” He writes pessimistically of how this “libertarian spirit has spread to other areas of our lives,” but he reserves his main pessimism and hand wringing for the impact of this libertarian spirit on our national political life. “Welcome,” he writes, “to the politics of the libertarian mob.”

The “politics of the libertarian mob,” according to Lilla, is “[a] new strain of populism” that is “anarchistic like the Sixties, selfish like the Eighties, contradicting neither.” He points out that “[h]istorically, populist movements [have] use[d] the rhetoric of class solidarity to seize political power so that ‘the people’ can exercise it for their common benefit.” But the “populist rhetoric” of the “libertarian mob” is “something altogether different.… It fires up emotions by appealing to individual opinion, individual autonomy, and individual choice.”

More important, according to Lilla, this new populist rhetoric of the libertarian mob is “all in the service of neutralizing, not using, political power. It gives voice to those who feel they are being bullied, but this voice has only one, Garbo-like thing to say: I want to be left alone.” This rhetoric, Lilla tells us, “appeals to petulant individuals convinced that they can do everything themselves if they are only left alone, and that others are conspiring to keep them from doing just that.”

And, in Lilla’s view, such “petulant individuals” are legion in America today. “Many Americans,” he writes, “a vocal and varied segment of the public at large, have now convinced themselves that educated elites — politicians, bureaucrats, reporters, but also doctors, scientists, even schoolteachers — are controlling our lives. And they want them to stop.” Read More

Stephen Articles

Proposition 14, also known as a Top Two election system and mistakenly called an “open primary”, would abolish our current party primary elections and replace it with a free for all June election to pick the top two candidates for the November election. Only two candidates will appear on the November ballot, even two candidates from the same party, and write-in candidates will no longer be allowed.

Presently during the June election, voters affiliated with one of the ballot qualified parties choose their party’s candidate for the November election. Currently in the November election each party’s candidates competes against each other along with any independents, giving voters more than two choices along with the write-in option.

Proposition 14 turns the current system upside down. All voters would get the same ballot in the June election. Voters would choose one candidate from every candidate running from every party. Similar to the free for all California saw when Arnold was first elected; all candidates from all the parties would compete together in the free for all June election. The top two vote getters, even if both of them get less than 10% and they are from the same party, would advance to the November election.

Proposition 14 forbids voters from write-in candidates for the November election, so if Top Two passes California voters will no longer have more than two choices in the November election; except for the Presidential race.

Visit StopTopTwo.org for more information.

Stephen Articles, Legislation

It seems incredible that in the last days, a fundamental right of the whole of humanity, the freedom of association, has been denounced by the New York Times and all major opinion sources, even as a national political figure was reluctant to defend his own statements in favor of the idea, and then distanced himself from the notion. Has such a fundamental principle of liberty become unsayable?

Or perhaps it is not so incredible. An overweening government, in an age of despotism such as ours, must deny such a fundamental right simply because it is one of those core issues that speaks to who is in charge: the state or individuals.

We live in antiliberal times, when individual choice is highly suspect. The driving legislative ethos is toward making all actions required or forbidden, with less and less room for human volition. Simply put, we no longer trust the idea of freedom. We can’t even imagine how it would work. What a distance we have traveled from the Age of Reason to our own times.

Referencing the great controversy about the 1964 Civil Rights Act, Karen De Coster put the issue to rest by turning Rachel Maddow’s question on its head. She demanded to know whether a white businessman has the right to refuse service to a black man. Karen asked, does a black businessman have the right to refuse service to a Klan member? Read More

Stephen Articles

I assume that you know how the banking system developed and how the banks could improve the services rendered by gold, by transferring assets from one individual to another individual in the books of the banks. When you study the development of the history of money you will discover that there were countries in which there were systems in which all the payments were made by transactions in the books of a bank, or of several banks. The individuals acquired an account by paying gold into this bank. There is a limited quantity of gold, so the payments which are made are limited. And it was possible to transfer gold from the account of one man to the account of another.

But then the governments began something which I can only describe in general words. The governments began to issue paper, which they wanted to serve the role, perform the service, of money. When people bought something they expected to receive from their bank a certain quantity of gold to pay for it. But the government asked, What’s the difference whether the people really get gold or whether they get a title from the bank that gives them the right to ask for gold? It will be all the same to them.

So the government issued paper notes, or gave the bank the privilege to issue paper notes, which gave the receiver the right to ask for gold. This led to an increase in the number of paper banknotes that gave to the bearer the right to ask for gold.

Not too long ago, our government proclaimed a new method for making everybody prosperous: a method called “deficit financing.” Now that is a wonderful word. You know, technical terms have the bad habit of not being understood by people.

The government and the journalists who were writing for the government told us about this “deficit spending.” It was wonderful! It was considered something that would improve conditions in the whole country. But if you translate this into more common language, the language of the uneducated, then you would say “printed money.” The government says this is only due to your lack of education; if you had an education you wouldn’t say “printed money;” you would call it “deficit financing” or “deficit spending.”

Now what does this mean? Deficits! This means that the government spends more than it collects in taxes and in borrowing from the people; it means government spending for all those purposes for which the government wants to spend. This means inflation, pushing more money into the market; it doesn’t matter for what purpose. And that means reducing the purchasing power of each monetary unit. Instead of collecting the money that the government wanted to spend, the government fabricated the money. Printing money is the easiest thing. Every government is clever enough to do it.

Read more: “Deficit Financing” and Inflation - Ludwig von Mises - Mises Daily

Stephen Articles

President [Leonardo] Fração, it is a pleasure to be here, at this XXIII Forum da Liberdade, whose theme is based on Ludwig von Mises’s Economic Policy book [known in Brazil as The Six Lessons].

Mises was one of the greatest intellectuals of the 20th century, a resolute and uncompromising champion of freedom. Fifty years ago, Mises came to South America and delivered those six historic lectures, which are heralded and quoted just outside, at the Forum’s exhibit.

Today, there is a great international revival of Misesian ideas — including in Brazil — which show the benefits that consumers and workers derive when they are free to venture, to chart their course, and to fulfill their desires.

This week, in Porto Alegre, there is a great concentration of intellectual heirs of Ludwig von Mises. We, from Instituto Mises Brasil, have just concluded our first conference, which was a great success, and it could not have been otherwise! The energy emanating from you is contagious. We have here today many scholars and experts of the Austrian School of economics. Tom Woods, one of the speakers at our conference and the bestseller author of Meltdown, will address you tomorrow. The legendary founder and chairman of the Mises Institute — Lew Rockwell — is also among us tonight! Without Lew, there would be no Mises Institute, no revival of the Austrian School, no Instituto Mises Brasil. Thank you, Lew. And above all, thanks to you, President Fração, to IEE [The Institute for Entrepreneurial Studies], for your support to our conference and especially for your achievements in the fight for liberty. Results come first in this contest; the results of the work of IEE and of the Forum da Liberdade are both evident and quantifiable. Congratulations, IEE!

On other occasions, I customarily speak about finance and economics, about the measures that are likely to bring about a more prosperous society; in other words, as did Mises, I usually speak about what works and what does not.

Today, for the first time, I am addressing a different subject. I speak about what moves me. I speak about where my energy, as an individual, originates. Its source is here, in this advanced and progressive libertarian community, which looks forward to real changes; not merely illusory changes from campaign slogans. I feel at home. It is a great honor to receive the Libertas Award.

The history of ethics has been a history of exploitation. From time immemorial, individuals were set apart into two groups: those that must obey the rules, and those that need not. The people must observe ethics and morals, while rulers not.

Stephen Articles

The subprime crisis left many Americans wary of financial markets and capitalist financiers. In his recent speech President Obama blamed Wall Street, and to a lesser extent Main Street, for the 2008 crisis. According to this speech, Washington bears little or no responsibility for the 2008 crisis.

Obama is not alone in blaming Wall Street for the state of the economy. Chris Matthews recently vented his own anger toward financial tycoons and free enterprise. According to Matthews, our system gives the largest rewards to the least productive people: hedge-fund investors. The most successful hedge-fund investors made two to four billion dollars last year.

According to Matthews, these investors create nothing real, “not steel, not cars, not computers, not even movies”; they only make money for themselves. The gains of these investors supposedly come from the working poor and middle class who live paycheck to paycheck. Matthews has misled his audience in this matter.

Some of these hedge-fund investors lost money in 2008, so their long-term gains are not as high as they might seem. However, this fact does not negate Matthews’s basic argument about transfers. What does Matthews see as the solution to the alleged problem? He has high hopes for the new financial regulations that Congress will vote on this year.

Is Matthews correct? Should government increase regulation of all financial markets to get back at the most successful hedge-fund investors? Given the assumption that these investors make literally nothing, the correct measure would be to expropriate their unearned income. If Matthews had really thought things through, he would have joined Marx in condemning at least these capitalists. Of course, if Matthews had thought things through, he might have also realized that his assumption that hedge-fund investors produce nothing is never true.

Investors have two functions in modern economies. First, they defer consumption to invest in future production. The only reason that workers are able to produce steel, cars, or anything else is that someone saved and invested in real capital equipment in industry.

Most everybody saves some money in one way or another. However, a disproportionate amount of investment in capital comes from a relatively small number of wealthy persons who refrain from spending their fortunes. Without the capital accumulation achieved in modern capitalism, people would not be living from paycheck to paycheck as workers, but from harvest to harvest as peasants.

Stephen Articles