(Aron Huddleston, Roland Manarin, Ron Paul)

This past weekend Roland and Aron visited Jekyll Island, birthplace of the Federal Reserve System for a conference sponsored by the Mises Institute.  Young and old free market thinkers from all over gathered on this small island off the coast of Georgia to explore the history of the Fed, it’s impact on American public life, as well as what the future may hold for the Fed.

Among the notable speakers was Congressman Ron Paul (pictured above).

Some key notes Roland and Aron brought back include:

• John Maynard Keynes isn’t the only game in town.  The far superior free market “Austrian” economic model is getting more attention today.  The American public is fed up with the borrow and spend attitude of our government and the incredible expansion of Federal Reserve policy.
• Inflation is a hidden tax that destroys purchasing power.  Look at the below Consumer Price Index chart dating back to 1790.  Keep in mind that the Fed has been in existence for the past 96 years. 

• We have actually had prosperous times in our history while experiencing deflation.
• Below is the scene of the crime where the meetings took place in 1910 that led to the Federal Reserve creation.

Photo Credit: Mises Institute

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Last week I returned from the Von Mises Institute’s Birthplace of Economic Theory Summit held in Salamanca, Spain. 

Here is a brief overview of what I observed:

- The genesis of free market economics wasn’t really Adam Smith.  He merely brought to the Anglo-Saxon world that which the Jesuit scholars in the 1500’s brought to Spain.

- The same free market model that was applied all those centuries ago hasn’t changed because it’s based on human actions. 

- My time in Salamanca reinforced my inner beliefs that free market economics (or what we in the West call Austrian economics) is absolutely the best out there because it takes into consideration the natural state of human behavior. 

- The pragmatists there agreed with my thoughts that the next two years in the market and economy ought to be fine and thereafter the outcome will hinge on what changes may occur with our fiscal and monetary policies. 

- It seemed half of the Americans in attendance were followers of the Von Mises Institute, free market advocates and Libertarian/Classic Liberal thinkers.   

- There is a wonderful free market renaissance going on in Europe but unfortunately not in America yet.  The internet is driving this movement and opening a lot of eyes to show people there is an alternative to big government.

Photo Credit: Ludwig von Mises Institute

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During patriotic holidays, the news media applaud the Founding Fathers.  But rarely does anyone mention some important facts about them:  that they were smugglers, tax evaders, and traitors.

Not only is this important, it is also praiseworthy; it produced the most advanced civilization ever known. 

The Revolution is often said to have begun in 1775 at the Battle of Lexington.  In truth, it began in the 16th century when the first colonists began traveling to the New World.  Consider the hardships these people faced.  Abandoning their relatives and friends, they boarded small leaky boats like the Mayflower – which was only as long as six automobiles – to spend months crossing 3,000 miles of storm-tossed ocean.

Many of these tiny, primitive vessels went down, yet as the years passed, more and more colonists risked their lives to make the journey.  In THE OXFORD HISTORY OF THE AMERICAN PEOPLE, historian Samuel Eliot Morison tells us;

Gottlieb Mittelberger, who came to Philadelphia in 1750, described the misery during his voyage: bad drinking water and putrid salt meat, excessive heat and crowding, lice so thick that they could be scraped off the body, sea so rough that hatches were battened down and everyone vomited in the foul air; passengers succumbing to dysentery, scurvy, typhus, canker, and mouth rot.  Children under seven, he said, rarely survived the voyage, and in his ship no fewer than thirty-two died.  One vessel carrying 400 Palatinate Germans from Rotterdam in August 1738 lost her master and three-quarters of the passengers before stranding on Block Island after a four-month journey.

Why?  What in Europe could have been so horrible that rational people would risk their lives and their children’s lives to escape it?

Socialism.  It wasn’t called socialism in those days, but that is what it was – unlimited government control and taxation of everything and everybody.  There were no free markets and no free enterprise.  Regardless of how honest or hard working a person was, it did him little good unless he was in bed with the government.

Out of desperation many rebelled.  They evaded the controls and taxes, creating an underground economy.  In ROOTS OF CAPITALISM, historian John Chamberlain writes that in France:

For example, it took more than two thousand pages to print the rules established for the textile industry between 1666 and 1730.  Weavers had to negotiate with the government for four years in order to obtain permission to introduce “blackwarp” into their fabrics.  The effect of the regulations was to freeze French textile production at a certain level, though smuggling and evasion of manufacturing regulations did alleviate the situation somewhat.  The violation of the rules often brought terrible penalties:  for breaking regulations governing printed calicoes some 16,000 people were either executed or killed in armed brushes with government agents.

America was a vast, uncharted wilderness beyond the reach of the politicans and tax collectors.  It was nominally under the control of the European governments, but everyone knew it was too big and too far away for laws to be enforced there.

In short, America was a huge underground economy.  Here trade was free and enterprise unrestricted.  Taxes were so often evaded that for all practical purposes there were none; a person could keep everything he earned.  He could save, and invest, and eventually have his own thriving business or farm that would provide jobs for the next wave of immigrants. 

Inhabited by rebellious, individualistic smugglers and tax evaders, America quickly became the most prosperous place on earth.

You may have seen pictures of the Pine Tree Flag flown by American warships during the Revolution.  Why would the colonists put a pine tree on their battle flag?

The (British) government had enacted a regulation saying no colonist could cut down tall, straight trees; these trees were to be reserved for masts on Navy ships.  This meant the best, most valuable trees on a person’s land had, in effect, been confiscated by the government.

When a government tree inspector would come through the forest to select and mark the best trees, colonists would follow him.  These inspectors were highly trained experts, good at identifying the best trees for Navy ships – the Navy ships that were constantly pursuing smuggling ships.

When the government’s lumberjacks then came through the forest to collect the marked trees, they would find the trees had already been cut and sold – for use on the smuggling ships.

One of these ships was THE LIBERTY, owned by John Hancock.  Hancock was a successful wine merchant known throughout the colonies as “The Prince of Smugglers.”  His reputation eventually earned him the honor of being the first to sign the Declaration of Independence.

Unfortunately, as the story of the Pine Tree illustrates, America did not remain beyond the reach of government.  As the colonists’ wealth increased, politicians began making more and more efforts to steal – “tax” – this wealth.  More and more bureaucrats and troops were sent to the colonies to enforce laws and shut down down the underground economy.

The colonists’ reaction was dramatic.  The infamous Stamp Tax, for instance, was greeted by armed rebellion; tax collectors were tarred and feathered, a procedure which usually resulted in death.  When John Hancock was arrested, the people rioted and the government’s agents barely escaped with their lives.

This brings us to one of the most important but forgotten events in American history.  In his 1818 analysis of the Revolution, John Adams spoke of it when he asked,

But what do we mean by the American Revolution?  Do we mean the American War?  The Revolution was effected before the war was commenced.  The Revolution was in the minds and hearts of the people, a change in their religious sentiments of their duties and obligations.

The key word here is religious.  In Adams’ analysis, he said a sermon delivered by Reverend Jonathan Mayhew on January 30, 1750, was “read by everybody” and was crucially import in leading to revolution.

In that sermon Mayhew argued that there is a Higher Law than any government’s law.  The people, he said, are required to obey their government’s law only when it is in agreement with Higher Law.  Indeed, he argued, if the government violates Higher Law, “we are bound to throw off our allegiance” and “to resist.”

What was this Higher Law? – the ancient common law which most colonists understood and obeyed faithfully even through they ridiculed and ignored the laws and taxes enacted by politicians.

Common law had evolved from two basic principles:  1) do all you have agreed to do, and 2) do not encroach on other persons or their property.  These are the two principles on which all major religions and philosophies agree.  Each expresses them a bit differently, but all agree on these two laws (and not much else).

These two laws are the source of all our essential prohibitions against theft, fraud, murder, rape, etc.  “Do all you have agreed to do” is the basis of contract law.  “Do not encroach on other persons or their property” is the basis of criminal and tort law.

Common law was the law to which the American colonists were dedicated, and it was the law the politicians and bureaucrats were breaking – they were encroaching.  So the colonists overthrew their government; they committed treason.

This is what the American Revolution was all about – treason.  And, this treason was regarded as moral, ethical, and right in every way.  It was derived straight from common law which was based on the people’s religious beliefs.  Wrote the great legal scholar Sir William Blackstone,

This law of nature, being coeval with mankind and dictated by God himself, is of course superior in obligation to any other…no human laws are of any validity if contrary to this.

Contrary to what we so often read, the Americans were not fighting the British.  The Americans were British. 

The war broke out at Lexington in April 1775, fifteen months before independence was declared.  Therefore, for the first fifteen months of the war, America was still a part of Britain and Americans were still Englishmen fighting their own government.  As many pamphlets and speeches explained, they were fighting for “The Rights of Englishmen!”

They were enforcing Higher Law.  This eternal and immutable law said the politicians and bureaucrats were as human as anyone else and they had no special rights or privileges; they could not encroach on others.  “All men are created equal,” wrote Thomas Jefferson.

So, the most important and praiseworthy fact about the Founders which is rarely discussed is they believed in a Higher Law than any government’s law, and they did something about it.  They evaded their government’s taxes and regulations.  They delivered speeches and wrote pamphlets informing others, and they eventually overthrew their government and set up a new one more closely in agreement with Higher Law.

The highly advanced, prosperous civilization we now enjoy was the direct result of their enforcement of Higher Law, and this civilization will continue only if Higher Law is re-applied, soon.

Written by Richard J. Maybury and republished with permission from THE FREE MARKET, July 1987 issue, published by the Ludwig von Mises Institute, www.mises.org

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