What Keeps the Free Market Free?

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If you want to understand the basis for freedom and the free market then you should listen to Supreme Court Justice Antonin Scalia’s Oct. 5, 2011 testimony before the Senate Judiciary Committee. According to Scalia, our freedom is secured by way of the U.S. Constitution. Unfortunately, he says, we aren’t adequately passing along the secret of the Constitution to the next generation. Scalia frequently meets with students from the best law schools and asks them, “How many of you have read the Federalist Papers?” Never more than about 5 percent raise their hands. About this, Scalia says, “That is very sad…. Here is a document that says what the Framers thought they were doing. It is such a profound exposition of political science … yet we have raised a generation of Americans who are not familiar with it.”

Scalia goes on to ask why America is a free country and what sets it apart. According to Scalia, most people will say that the Bill of Rights is the basis of our freedom. Scalia shook his head, “If you think that a Bill of Rights is what sets us apart you’re crazy. Every banana republic in the world has a Bill of Rights. Every president-for-life has a Bill of Rights. The Bill of Rights … of the Union of the Soviet Socialist Republics was much better than ours.” Scalia reminded his listeners that a Bill of Rights is merely “words on paper, what our Framers would have called a ‘parchment guarantee.’ And the reason is that the real Constitution [is a structure] … and a sound constitution has a sound structure…. The constitution of the Soviet Union did not prevent the concentration of power in one person or in one party. And when that happens the game is over….”

“The real key,” said Scalia, “is separation of powers.” The system was built for gridlock, and that’s a good thing. According to Scalia, America is not about democracy. In fact, the Framers didn’t like democracy. Checks and balances was what really mattered to them. Unchecked power could not be permitted. Such power tends toward corruption. This ancient principle was best stated by Lord Acton in 1887, who famously wrote, “Power tends to corrupt, and absolute power corrupts absolutely.” He pointed to the murderous actions of English monarchs, and one might point to a larger history in which powerful men and women have killed and plundered without being held accountable.

The famous sociologist, Gustave Le Bon wrote a book titled The Psychology of Revolution in which he wrote, “One of the most constant laws of history is that of which I have already spoken: Immediately any one class becomes preponderant – nobles, clergy, army, or the people – it speedily tends to enslave others.” Whatever democratic idealism we find expressed today, self-advancement is not far to find in it. Men are not as good as they often pretend, and those who appear as champions of the people are more often champions only of themselves. Therefore, the U.S. Constitution is about the separation of powers, as Scalia said.

Critics of the U.S. Constitution say it is an instrument of class oppression – made by the rich to the disadvantage of the poor. They deny the reality of separate powers under the Constitution. For them, the inequalities of the market economy must be corrected by government intervention. A century ago Le Bon wrote of the difficulties involved in “reconciling Democratic equalization with natural inequalities.” As Le Bon pointed out, “Nature does not know such a thing as equality. She distributes unevenly genius, beauty, health, vigor, intelligence, and all the qualities which confer on their possessors a superiority over their fellows.” When a politician pretends to oppose the inequalities of nature, he proves to be a special kind of usurper – personifying arrogance in search of boundless power. 

Logically, the establishment of universal equality would first require the establishment of a universal tyranny (a.k.a., the dictatorship of the proletariat). A formula for doing all this was worked out in the nineteenth century, and was the program of Karl Marx. Le Bon warned that socialism might indeed “establish equality for a time by rigorously eliminating all superior individuals.” He also foresaw the decline of any nation that followed this path (i.e., see the Soviet Union). Such a society would aim at eliminating all risk, speculation and initiative. These stimulants of human activity being suppressed, no progress would be possible. According to Le Bon, “Men would merely have established that equality in poverty desired by the jealousy and envy of a host of mediocre minds.”

The U.S. Constitution as written blocks the path to universal equality and universal tyranny. Yet there is a chink in our constitutional armor. Separation of powers will not work when the various powers agree on a socialist re-interpretation of the Constitution. In recent decades, some have suggested that we have a “living constitution,” which would be amenable to socialist re-interpretation without amendment. Perhaps anticipating such a possibility, Justice Scalia humorously remarked, “I’m hopeful the living Constitution will die.” In Scalia’s thinking, the living Constitution signifies disregard for the actual Constitution. Such would undermine protections offered to property rights under law. To borrow words from Le Bon, it would result in “a kind of bureaucratic servitude or parliamentary Caesarism which will at once enervate and demoralize an impoverished country.’”

It is doubtful that many people today understand the basis for our economic freedom. Many students are not properly educated today, as Justice Scalia testified. Political forces are at work aiming at a fundamental re-interpretation of the Constitution, and these forces dominate education and the media. The time may not be far off when we entirely forget the secret of our prosperity along with the secret of liberty.

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About JR Nyquist

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