What Freedom is Not

Elits disagree over the direction, the control, of our economy, on the surface at least.

Ben Bernanke, federal reserve chief, a quasi-public bureaucrat who must choose the clientele he serves--the private financial sector that funds the agency or the general public, favors the Hamiltonian model.

The federal reserve now faces another potential bailout with a combine of public and private funds as another big investment bank flounders. It could be that Bernanke may let it fail to demonstrate the effects of not supporting the Hamiltonian model of political economy.

The public administration of a consolidated capital does not mean it is not misfeasant or malfeasant. No, it can be just as irresponsible, like most central planners of a consolidated power, because the central authority (the central bank) will not allow it to fail. If the federal reserve does allow an oversized horizontally and vertically integrated financial entity to fail, the integration of which should have been illegal and the scenario prevented in priority, the assets of this company will be consolidated, further centralized, into a command and control economy.

Berkshire Hathaway will be there to consolidate the assets, with Warren Buffet standing in opposition to the federal reserve's Hamiltonian modeling. It will be the pot calling the kettle black, but Buffet will claim it is not a taxpayer bailout, and "the public" will not be paying to keep a private institution of power solvent without sharing in the profits (shareholder class status), just the losses, to be shared by the class of "little people."

The "little people" are not the stupid masses to be taken advantage of by a more clever Hamiltonian elite. No. They are commanded to be the shareholders of detriment by the indirect means of the political-economic process of power, protected by the force and legitimacy of public authority. It is the product of a "command" economy, not free market economics.

The legitimacy must be by force of public authority because command and control by an elite is not Constitutional (publicly legitimate) and the command of the economy (organized consolidation of assets) is not, by definition, a free market mechanism (private legitimacy).

The model is entirely illegitimate.

The illegitimacy must not be managed with overt force in priority, but only as a consequence, like not allowing for consolidation of your assets as a result of the business cycle, which will earn you a forceful visit from the local constabulary.

Extending from the macro level, command and control is by a central planning authority of public/private means to form a bureaucratic model of power and political economy. The private sector operates with a false free-market legitimacy, and the public sector operates to adjust for the externalities, the consequences, mostly in the form of value in demand to be retributed as disposable income. That value, however, is accumulated as capital to deprive demand to increase the supply and maximize the profit on that limited supply.

Ensuring a true free-market legitimacy will cure this problem by organizing to produce the supply to produce the profit, and not its deprivation, or supply-side economics.

John McCain and his neo-conservative company are not supply-side, free marketeers. They are command and control Hamiltonians masquerading the mere mechanics of buying and selling as proof of free market economics. It is a fraud that must be managed and applied by central authority.

At the heart of this central authority is the means of finance through the treasury department and the federal reserve system (the bureaucratic model of power).

The federal reserve system largely functions to manage the volatility of the business cycle, and along with treasury operates to attenuate the negative externalities of illiquidity (an overaccumulation, consolidation, of wealth). The Economic Stimulus Package of 2008, for example, was distributed through treasury and financed by the federal reserve (the public debt).

The volatility we experience now manifests with shorter terms and less depth. Capital, however, becomes so consolidated it literally dictates the economy, but within the limits of fail-safe mechanisms, like limits on trage programme trading (the SEC). Both hedge-fund money and programme trading accounts for at least half the volume of the NYSE every day, more than enough to dictate the direction of prices with an inequity on the bid (a suboptimal distribution of capital wealth).

While the power of a consolidated capital is contrary to the legitimacy of free markets, the choice since the trauma of the Great Depression has been monetarism or socialism. The federal reserve maintains a system of monetarism with a consolidated capital. Socialism decidely does not obtain, but as the economy becomes evermore centralized and power consolidated, all it takes is a political decision to make the switch, but it may well be just a change of legitimacy that reinvents, revolutionizes, the inequity it purports to eliminate.

As many political economists have observed, the switch of legitimacy is just a tragicomedy of a change of elites. This is something to be avoided with insistence for a free and unconsolidated marketplace. Otherwise, despite whatever "ism" you brand it, it is still central authority, a consolidated power--the problem!

The complexity, the confusion, associated with identifying the problem is avoided not by identifying what it is, but by what it is not. If it is not the design of a free and unconsolidated market mechanism, then whatever "it" is, is not sufficient to pluralistically check the elements of power toward a peacefully and prosperous, verifiable legitimacy. Anything other than freedom is just an arbitration of what that is.

Discussions always philosophically reduce to legitimacies and attempts to identify or label the means to ends. It is entirely unresolvable and left to the arbitration and caprice of the powerful. It is much easier and effective to identify what freedom is not.

I can most assuredly identify John McCain and the neo-conservative coaltion as what freedom is not!

Barack Obama, on the other hand, is a skilled pragmatist of a high moral intelligence capable of helping us realize what freedom really is.

Don't forge the chains that bind you. Forge the tools to break them.

Build the coaltion for Obama!

Very best wishes.

Copyright 2008 by Griffith Lighton.