Ron Paul on Liberty

Here’s Ron Paul on Chris Matthews’ show talking about giving people greater liberty and freedom on a number of different issues. I agree with much of what he says. But here’s the part I want to focus in on: property rights. I am all for property rights. See my post "Three eminent domain cases show corporatism in action" for example. But this conversation pitted business property rights against individual liberty – and I say individual liberty wins. The conversation picks up at about the 4:20 mark:

Paul: Yeah, but I also know that the Jim Crow laws were illegal and we got rid of them under that same law and that’s all good.

Matthews: You would have voted against that law.

Paul: Yeah, but not — I wouldn’t vote against getting rid of the Jim Crow laws.

Matthews: Honestly, Congressman, you were not for the ’64 civil rights bill.

Paul: Because of the property rights element, not because it  got rid of of the Jim Crow Laws—

Matthews: Right. A guy owns a bar, says no blacks allowed, you say that’s fine.

Paul: No, Chris, you’re demagoguing it. Segregation was created by government laws. slavery was created by government laws. segregation — let me go — segregation in the military by government laws. what we want to do as libertarians is repeal the laws and honour and respect people —

This is ridiculous. Slavery wasn’t created by government laws. It was created by the desire to use cheap labour and it was common throughout the Americas for that reason. As for the US, segregation was not created by government laws. It was a legacy of slavery.

More to the point, this position on the Civil Rights Act is indefensible. If private businesses had been allowed to continue to discriminate against blacks in 1964 in the south they would have done just that. Insisting that market forces would have ended Jim Crow without the Civil Rights Act is, as Matt O’Brien told me, "offensively stupid.  We had an empirical test: i.e. history."

I see this as an extreme ideological and utopian position that takes no account of the facts on the ground.

Here’s my take:

Let me give you an example. Say I was walking down the street in Louisville, Kentucky and saw a cute little shop that sold Kettle Korn. For those of you who don’t know kettle korn, it is salted and sweetened popcorn that was brought to the U.S. by German immigrant farmers in Pennsylvania,Maryland and into the Midwest over two hundred years ago. In Germany, popcorn is sweet not salty like it is in the U.S. So, I see this store and I am thinking, "They have Kettle Korn in Kentucky? Wow, who knew. I love this stuff. Let me go get some." Here’s the problem: the owner of the store has a business policy that no black people are allowed inside. Mind you, this isn’t a government policy because government discrimination based on race or ethnicity is illegal in the United States. But, this business owner doesn’t want Blacks in his store. So when I enter, he tells me to leave because I am violating his store’s liberty to choose its own policies.

I would say the individual liberty trumps the business liberty in this case, especially since the owner is violating his own government’s business policy as well as societal norms. A corporatist would say that the business owner wins since it is his business. Again, that’s the difference…

it is not about liberty at all. It is about entrenching the interests of a select few at the expense of the rest– and that has nothing to do with liberty.

Corporatism masquerading as Liberty

Ron Paul is old enough to know better. Yet, he insists that "free markets" would eliminate discrimination, something endemic to human society. People will continue to discriminate, whether in Nigeria, where different ethnic groups kill each other, in the Balkans, where different ethnic groups also have fought each other, or even in the US in Alabama, where in 2000 40% of the electorate voted against repealing laws forbidding mixed-race marriage. Free markets aren’t going to legislate away ethnic, racial or religious animosities. 

As I have been saying, the facts don’t really matter though. People will believe what they want to. And these are the kind of arguments you have to come up with to support the notion that free markets are always good. Plus, this is the kind of ideological purity that is infectious:

a leader or pundit who seems to make coherent but more inaccurate statements is better regarded than one who makes less coherent but more accurate statements. A June article in New Science summed this regard up as “Humans prefer cockiness to expertise.”  What this means in practice is that ideologues (those who express extreme but more coherent views) are attractive because of the apparent coherence of their views – and I stress the word apparent.

Humans are built to be hypocritical

All I know is this is not my idea of liberty.

Video below.


Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.