Welfare, Warfare, & Police: Dispelling the Mythology – Part 4

This essay was written by guest-author Will Porter.

Continued from Part 3

As we’ve seen, all of this public demand for government counter-measures can only compound the problems that already exist, leading to even more public commands for additional government intervention. The great economist Ludwig von Mises almost a century ago pointed out the exponential growth of government-created problems. Their attempted solutions complicate matters even further, and until this process is put to a halt, there is no end to the disasters which may be brought forth.

The Fed’s destruction doesn’t end with fractional-reserve banking and fiat money-printing, though. America’s central bank often intervenes to artificially set interest rates. When interest is pushed below the natural market rate, this spurs on mal-investment, primarily in the higher stages of production, like capital goods and the mining raw materials. Interest rates play a vital role in coordinating investments across time in any modern industrial economy.

Signing of the Federal Reserve Act in 1913

Signing of the Federal Reserve Act in 1913

The normal market function of the interest rate is to signal to entrepreneurs and investors that consumers are generally saving their money, instead of spending it. When people save, they refrain from consuming resources and this frees them up for longer-term investment projects. The relatively greater amount of money saved also allows for banks to make cheaper loans, because their pool of loanable-funds is more abundant. Putting this all together, the interest rate allows an investor to gauge consumption in society and determine whether or not a long-term project would be fruitful. When rates are low, this means credit is cheaper, and thus makes such long term projects more attractive.

However, when the Fed arbitrarily sets the interest rate, usually very low, the signal is sent out to investors to begin their time-consuming projects. Yet, at the same time, the populace is not actually saving their money, nor are they using up fewer resources. Somewhere along the line, a “cluster of errors” is revealed and many entrepreneurs realize their projects are simply unsustainable, and this can send the economy into a downturn, not to mention causes immense waste of time and resources.

This process is known as a “business cycle”,[i] and every major cycle in U.S. history has been brought on by the various actions of a central bank. Economic depressions are the result of government intervention, expansionary credit, money printing, and tampering with interest rates, thus harming the whole of society and further oppressing the already downtrodden lower and middle classes.

As already alluded to, the Federal Reserve System also gives government the impetus to wage offensive wars against vastly out-gunned foreign nations.[ii] This brings us to our third, and final, government myth: the myth of the Warfare-State.
It is oft-alleged that without a massive military-industrial-complex, hundreds of overseas bases, and colossal “defense” budgets, the United States would be at the mercy of foreign invaders and terrorists. This claim might seem valid if one has no historical context of the aggressive posturing of the United States government and armed forces.

It is said that people across the world “hate our freedoms” and culture, and so seek to destroy us. We are said to be in constant danger from extremist zealots who would gladly die for the cause of harming America in any way possible.

The modern-day bogeyman is found in various Middle Eastern nations like Syria, Iraq, and Iran. As the Cold War specter of Communism has proven to be incapable of offering a real threat since the collapse of the U.S.S.R. in the 1990s, new dangers must be presented to the American populace in order to spur on the perpetual fear which is so often the health of the state.

When people refer to the peril faced by America all around the globe, they almost never take into consideration the fact that the United States may have created these threats. This phenomenon is known as “blowback”,[iii] and it occurs when a belligerent nation provokes unexpected retaliations from their victim. The dangers presented to America by foreign aggressors are almost exclusively the result of blowback. The countless military occupations and interventions of the U.S. government over the last century have fomented a radical hatred of America and Americans.

For example, has anyone considered the possibility that some Iranians might hate the U.S. because once upon a time in the 1950s a CIA-backed coup overthrew the democratically-elected Iranian Prime Minister, Mohammad Mosaddegh, and propped up the brutal[iv] military dictatorship of the Shah?[v] Mosaddegh sought to nationalize Iran’s oil industry, and the U.S.-backed coup reversed this process to allow Western corporations continued participation in the Iranian oil trade. Not that the nationalization of an industry is usually a good thing, but the point is that rebellion against U.S. interests is not tolerated, regardless of what country it is, and there is no hesitation in disrupting, bombing, or somehow subverting a non-compliant country. This coup-de-tat eventually led to the fermenting of radical-Islamic factions in Iran, which culminated in the bloody Iranian Revolution of 1979.[vi]

Further down the line, Iran and Iraq go to war, and the United States backs Saddam Hussein[vii] with money, supplies, and bio-chemical weapons (including nerve gas, Anthrax, and the Bubonic Plague),[viii] which may or may not have been used in the mass killing of Iraqi-Kurds by Hussein during this war.

In addition, U.S. economic sanctions in the post-Gulf War period contributed to the death of over 500,000 Iraqi children, about which U.S. diplomat Madeline Albright said on television “it was worth it”.[ix] On top of this, “strategic” bombing of Iraqi sewage systems in the most recent Iraq war have contributed to new Cholera epidemics[x], as well as the general filth and unsanitary conditions which result in even more death and suffering of an already-oppressed people.

An entire series of books could be devoted to the list of moral outrages supported or directly undertaken by the United States military apparatus, as well as other Western nations, but these few anecdotes should begin to prove the point. Hatred for the United States, especially from the Middle East, is perfectly reasonable and justified! In case after case, Western military powers have continually bombed, invaded, and oppressed the populations of various Middle Eastern nations.[xi]


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