The Future under the New Mandarins

Daniel Hannan, The New Road to Serfdom (HarperCollins, 2010). 

Dinesh D’Souza, The Roots of Obama’s Rage (Regnery, 2010). 

What do you get when you take the demos out of democracy? You are left, says British Conservative politician Daniel Hannan, “only with the kratos—the power of a system that must compel by force of law what it cannot ask in the name of civic patriotism”. 

Hannan, a Member of the European Parliament, has written a slim volume to demonstrate that is exactly what has happened in Europe. He has subtitled his book “A Letter of Warning to America” and a stern warning it is. The New Road to Serfdom brings Friedrich Hayek’s attack on collectivist orthodoxy up to date with the fearsome example of Europe’s erosion of individual and civic liberties. Hannan argues exhaustively and passionately that Americans must not allow President Obama to abandon the constitutional vision of their founding fathers and lead them to a social democracy in the European Union style. Two years into the presidency, Hannan is nervous that Americans’ self-belief is waning; America is becoming less American—less independent, less prosperous and less free. But there is a universality in the forces he identifies as behind these changes. For an Australian, an unnerving aspect of the book is the extent to which this country could be substituted for the United States in so many of the observations. With only a few mental reservations, it could and should be read as “A Letter of Warning to Australia”.

Hannan opens his polemic with a reminder to Americans of where they came from, the ideals and founding texts of the republic: freedom, self-reliance, limited government and the dispersal of power. America is different, he points out, for the most basic reason: while other countries tend to be defined by territory, language, religion or ethnicity, most of America’s people owe their nationality to the fact that they or their relatively recent ancestors chose it. So the essence of America is not blood and soil, but freedom. Escaping from the external discipline imposed by princes and prelates, the pilgrims to the New World defined their new liberty not simply as an absence of rules—what Milton abjured as “licence”—but as the virtuous application of informed judgment. The Constitution enshrined this concept in the principles of decentralisation and representative government, recognising long-standing custom. Hannan’s message is clear: there is a risk that this “brilliant design of extraordinary men”—dispersed jurisdiction, limited government, strong local democracy, low taxes and personal freedom—could be lost by those who have become blasé about their transcendental political inheritance. Most don’t realise how lucky they are.

Compare this, says Hannan, with Europe, where there has been a comprehensive shift in power from elected representatives to permanent functionaries, from local councils to central bureaucracies, from legislatures to executives, from national parliaments to Eurocrats, from the citizen to the state. The “Quango”, the quasi-autonomous non-governmental organisation, which has largely taken over the administration of the United Kingdom, is now replicated in the functionariats of the EU. 

And Europe is prolix. The US Constitution, with all its amendments, contains 7200 words, and begins: “We, the People …”; the EU Constitution, now known as the Lisbon Treaty (which was forcibly rammed down the throats of sceptical countries like France, the Netherlands and Ireland) runs to 76,000. Its Preamble opens: “His Majesty the King of the Belgians …” and goes on to list eleven other kings, queens and presidents “resolving to mark a new stage in the process of European integration”. 

Perhaps we don’t pay enough attention to what is happening on the top side of the world. The EU is now a government machine that no longer answers to anyone. Other Australians may be as surprised as I was to learn that the European Union’s executive, the European Commission, has the monopoly right to initiate legislation. An admirable postwar determination to prevent future conflicts and any rise of new demagogues has led, inexorably, through pooling first economic resources, then administrative structures, to political integration that has crushed democratic accountability. In what Hannan angrily describes as an extraordinary and outrageous concentration of power, twenty-seven democratic states have submitted themselves to a system of government in which power is wielded by appointed officials deliberately made invulnerable to the ballot box. 

Is this the end result of the “European miracle” that Australian historian Eric Jones described in his 1981 book of that name? Jones believed the historical reason Europe had developed and flourished, while the Ottoman empire, India and China had not, was that its states benefited from their competitive diversity, while the Orient became centralised, bureaucratised and heavily taxed. Hannan describes Europe today as abandoning the pluralism that was its greatest strength and instead pursuing the Ming–Mogul–Ottoman road towards uniformity, mandarinism and central control. The result, to take Germany as an example, is that 84 per cent of all its national laws are merely to give effect to EU regulations or directives.

The United States has slowly been sliding in the same direction. Just as the 1942 introduction of a uniform federal system of income tax in Australia laid the foundations for increased Commonwealth budgets and centralised power, the Sixteenth Amendment to the US Constitution in 1913 revolutionised the relationship between federal and state authorities by authorising Congress to levy income tax. (As in Australia, states were compensated for the loss of revenues centralised under the pressure and pretext of wartime necessity. US states receive federal allotments on a per capita basis which return them a variable proportion of the tax collected; unlike Australia, all but seven states still levy income tax.) 

The next step was Franklin Roosevelt’s New Deal of the 1930s, a massive power grab. Roosevelt’s policies unbalanced the Constitution, packed the Supreme Court and increased executive power. As I pointed out in “New Deal or Bad Deal?” (Quadrant, October 2009) the confused and counter-productive socialist policies “tilted the balance in America from a country of free enterprise to one of interfering centralised government, empowering the so-called progressive movement which dominated American politics until the Reagan era”. The global financial crisis has provided the impetus for even greater federal intervention, resulting in nationally exhausting budget deficits and an overwhelming debt. As we have just observed in the actions of the Rudd and Gillard governments, both the New Deal and Obama Democrats were in the grip of a most dangerous political fallacy—that government response must be proportionate to the degree of public anxiety.

But look out, says Hannan. “I am living in your future. Let me tell you a few things about it.” He finds it alarming that President Obama seems to believe that the United States can learn from the European political and social model, with policies that amount to a sustained project of Europeanisation: state health care, government day care, universal college education, carbon taxes, support for supra-nationalism, bigger government, a softer foreign policy. Sound familiar? 

Since 1974 the EU has fallen comprehensively behind the USA. The Old World remains relatively sluggish, with slow growth, high taxes, short working days and structural unemployment. Capital outflows continue, and Europe’s share of world GDP has shrunk by 4 per cent—and Hannan was writing before the debt crises of Greece, Ireland, Portugal, Spain and Italy exposed the inherent foolishness of the Euro and the monetary impotence of a central European bank. The Europeans had persuaded themselves of their genius in hitting on a “third way’ between the excesses of American capitalism and the totalitarianism of Soviet communism. Their belief in regulated markets and consensual coalition governments led to burgeoning bureaucracy, more spending, higher taxes, slower growth and rising unemployment. As well, an entire political class has grown up believing in its moral superiority. It’s not that everything European is bad and everything American is good, says Hannan; it’s that the bits of the European model that Obama seems intent on copying are the ones that are most visibly failing.

In Europe, dependency has become structural. After health, a field in which politicians, once they assume responsibility, find their irreversible decision opens taxpayers to unlimited liabilities, welfare is the biggest growth industry. The policy of paying people to be poor has created more and more poor people. That is not new. In Harold Wilson’s Britain in the late 1960s, welfare became the country’s second religion. I recall reporting with some incredulity the instruction by Richard Crossman, then Secretary of State for Health and Social Security to a woman with several children that she had a duty to stay home and “take the welfare” instead of struggling to work to bring them up. The modern welfare state, keeping people well fed but idle, is the ideal terrorist habitat, as Britain and several other European countries have found. 

In the USA in 1996, the Personal Responsibility and Work Opportunity Act, designed by the Republicans but signed into law by President Clinton, proved the value of taking the opposite policy. It shifted responsibility to the states, giving local authorities the incentive to help the unemployed return to work. Wisconsin became the great success story, reducing its caseloads by 70 per cent over ten years. It did not deport its unemployed; it increased spending per family by 45 per cent but found them jobs and self-respect. Florida went further, with regional boards to match local conditions. Sadly, says Hannan, the stimulus package of 2009 returned welfare to Washington; America is drifting back to dependency.

Hannan goes on to list the features of a Europe that has lost many of its freedoms, and progressively is losing more: declamatory lawmaking; gesture politics; the hypocrisy of self-deceit in unbelievable slogans; genuflection to the moral authority of the UN; patriotism made outdated and discreditable; the goal of trans-national integration placed above democracy; the internationalisation of criminal justice; the imposition of obligations under EU treaties on individuals. Where once international law consisted of treaties between states, Hannan explains, the European treaties have now created a superior legal order, binding on individuals, and directly enforceable by national courts, with or without implementing national legislation. The very existence of international courts, such as the European Court of Human rights in Strasbourg, violates the principle of territorial jurisdiction. The key link between national policy, the law-making process, and law enforcement is broken. It becomes an integration, instead of separation, of powers. Now the Obama administration appears to be wavering in America’s opposition to the International Criminal Court, even as the technocrats at The Hague presume to apply their writ where they please. Dictators are free to ignore the ICC, while free democracies may be bullied on the treatment of asylum seekers or whether employment constitutes exploitation of children.

Hannan’s plea to America is most interesting when he gently de-legitimises the comfortable nostalgia of its brave revolution against the British tyranny of George III by proving that its very freedoms derived from Britain. The patriot leaders of the time saw themselves not as revolutionaries, but conservatives, he says. The ideas that animated them, eventually enshrined in the Constitution, were commonplace in British politics: laws should be passed only by elected representatives; taxes might not be levied without permission of the legislature; no one should be subject to arbitrary punishment or confiscation; ministers should be held to account by elected parliamentarians; property rights should be defended by independent magistrates; and there should be a separation between the executive, legislative and judicial arms of the state. 

Last year Hannan, Britain’s most consummate political showman, who leapt into the headlines with his devastating attack on Gordon Brown in the European Parliament, staged his own Tea Party in Brighton to emphasise these points. The taxpayers’ revolt that sparked the American Revolution had started on the other side of the Atlantic, he said: the cost of the Seven Years’ War had pushed up taxes on the British subject to forty times those on the colonists; it had been the government’s determination to export part of this cost to North America that began the quarrel. The bottom line, he concluded, was that a common political culture encompassed Britain and America before and after the rupture; amity was soon restored in fulsome speeches—and the future for the United States is in the Anglosphere, not in following Europe.

Where is all this leading, for America and also Australia? Hannan says the Euro-integrationists dimly perceive that the assumptions of the 1950s no longer pertain, but their response to increased competition from more efficient polities is in seeking to globalise their costs, extending Europe’s socio-economic model to the rest of the world. The first President of the EU, Herman Van Rompuy, former Belgian prime minister, hailed 2009 and its G20 summit as “the first year of global governance” and the Copenhagen Climate Summit as “another step toward the global management of our planet”. Europe has poured large resources into establishing and supporting regional blocks around the world. It has tried to lead the world down the slippery slope of carbon trading schemes, with a rigged market resulting in massive losses due first to over-optimism and more recently to extensive trading frauds. While celebrating its accession to the G20 table, Australia should be aware that it is being sucked inexorably into the whirlpool of international decision-making, a trend that has already seen it cede significant slices of its national sovereignty to unelected administrators of UN conventions.

Is Hannan the new Hayek, from whom he borrowed the title for his book? By no means, nor would he claim to be. But his message to America is the same as Hayek’s to Britain in 1944. The original Road to Serfdom, recently re-issued in a definitive edition edited by Bruce Caldwell with a valuable appendix of related documents, was never the blueprint for rampant laissez-faire capitalism that its modern detractors have falsely attacked. As Caldwell says in his introduction, the immediate objective was to “persuade his British audience that their heritage of liberal democracy under the rule of law should be viewed as a national treasure rather than an object of scorn, as a still-vital roadmap for organizing society rather than an embarrassing relic of times gone by”.

As will be seen from the extracts quoted above, Hannan is a highly articulate politician; his treatise is generalised, at times simplistic, and makes no attempt at economic analysis. But just as Hayek saw the danger of England sliding from a welfare state into socialism, following Nazi Germany’s path to loss of personal freedoms, Hannan points to where the Eurocrats could lead the English-speaking world. Hayek championed the rule of law, and as an economist, he set out clearly who benefited and who suffered from government control and planning. “Utopia,” he wrote later, “is worthwhile as a guiding ideal or a philosophical vision, but it has usually not been a programme of practical political reform and accomplishment.” The European Commissioners have never listened. As for Hannan, what he is trying to din into American heads is the importance of that last sentence of The Road to Serfdom: “The guiding principle, that a policy of freedom for the individual is the only truly progressive policy, remains as true today as it was in the nineteenth century.” 

* * *

What a change to turn from cool British erudition and logic to the hot breath of American paranoia! Dinesh D’Souza is one of a bunch of Obama-haters who for reasons of political or personal animosity have leveraged universal disappointment with the President’s performance into best-selling pretences at policy or character analysis. Here’s an up-to-date selection of their output in the last two years; the subtitles best illustrate the flavour of the contents:

The Blueprint: Obama’s Plan to Subvert the Constitution and Build an Imperial Presidency, by Blackwell & Klukowski; The Post-American Presidency: The Obama Administration’s War on America, by Pamela Geller; Radical in Chief: Barack Obama and the Untold Story of American Socialism, by Stanley Kurtz; Crimes Against Liberty: An Indictment of Barack Obama, by David Limbaugh; Pinheads and Patriots: Where you Stand in the Age of Obama, by Bill O’Reilly; Culture of Corruption: Obama and his Team of Tax Cheats, Crooks & Cronies, by Michelle Malkin; Trickle-up Poverty: Stopping Obama’s Attack on Our Borders, Economy & Security, by Michael Savage; Guilty: Liberal “Victims” and Their Assault on America, by Ann Coulter; The Case Against Barack Obama: The Unlikely Rise and Unexamined Agenda of the Media’s Favorite Candidate, by David Freddoso; America for Sale: Fighting the New World Order, Surviving a Global Depression, and Preserving USA Sovereignty and The Obama Nation: Leftist Politics and the Cult of Personality, by Jerome Corsi; The Manchurian President: Barack Obama’s Ties to Communists, Socialists and Other Anti-American Extremists, by Aaron Klein; A Slobbering Love Affair: The True (and Pathetic) Story of the Torrid Romance between Barack Obama and the Mainstream Media, by Bernard Goldberg; Fleeced: How Barack Obama, Media Mockery of Terrorist Threats, Liberals Who Want to Kill Talk Radio, the Do-Nothing Congress, Companies that Help Iran, Are Scamming Us … and What to Do About It, by Dick Morris; Obama Zombies: How the Liberal Machine Brainwashed My Generation, by Jason Mattera; Whiny Little Bitch: The Excuse-Filled Presidency of Barack Obama, by Mike Cullen.

At the time of their publication, many of these books leapt close to the top of the New York Times weekly list. 

Given the bias inherent in the title, why then devote these few lines to The Roots of Obama’s Rage? Because, unlike other attempts to deconstruct the President from the evidence of his alleged socialism, media manipulation, Islamism, economic incompetence, corruption or constitutional and diplomatic treachery, D’Souza attempts a psychological diagnosis. The book illustrates how far denigration is prepared to twist logic, misrepresent facts and misinterpret events. His thesis is simple and simplistic—Obama is living out the anti-colonial frustrations of his Kenyan father. His logic runs: Barack admired his father; the radical Obama Snr lost out to the moderate Jomo Kenyatta in the Kenyan struggle for independence; Barack wants to live out the dreams he inherited from his father and continue his fight for a post-colonial world: 

Obama is on a systematic campaign against the colonial system that destroyed his father’s dreams. With a kind of suppressed fury, he is committed to keep going until he has brought that system down … that system is the military and economic power of the United States of America.

D’Souza, Indian-born, claims growing up in Mumbai gives him insights not available to other Americans. For example, recognising a deliberate insult to Britain by removing a bust of Churchill from the White House; for example, an affront to the Queen by presenting her with an iPod when her gift to the Obamas was an ornamental pen-holder carved from the timber of a nineteenth-century British anti-slave ship; for example, kowtowing to the French by admitting a failure to appreciate Europe’s leading role in the world: “America has shown arrogance and been dismissive, even derisive.” Even worse, extending what was termed his “self-abasement routine” to the leaders of Cuba, Venezuela, Bolivia and Haiti in 2009 by pledging an equal partnership: “There is no senior partner and no junior partner.” In China, his criticism of human rights violations, forced abortions and coerced trafficking in women for prostitution was offset by his lamentations that “in America, there are still men who have a lot of old-fashioned ideals about the role of women in society”. In all these moves, D’Souza concluded, America was soliciting the world to help regulate American foreign policy. The Gulf of Mexico oil spill was an opportunity to lambast America for exploiting the scarce fuel of the globe. First, Obama suspended all oil drilling from floating platforms, then approved loans and guarantees to Brazil for its offshore drilling. Inconsistent, but anti-American was the judgment.

The author’s special fury is reserved for the President’s attitude to Islam. A year after the Cairo speech in which Obama urged an end to suspicion and discord between America and the Muslim world, D’Souza was outraged when he caught NASA’s Administrator, Charles Bolden, announcing that the primary mission of the space agency was to improve relations with the Muslim world. In an interview on Al-Jazeera, Bolden certainly had said the President: “wanted me to find a way to reach out to the Muslim world and engage much more with dominantly Muslim nations to help them feel good about their historic contribution to science and maths and engineering”. D’Souza did not quote the next sentences, which explained that in its increasingly international space projects, NASA was “trying to get more people who can contribute to the things we do. There is much to be gained by drawing in the contributions from the Muslim nations.”

Many more incidents and anecdotes are dragged forth as a sequence of non sequiturs to bolster the case. In many instances, the absence of evidence is cited as evidence of something sinister. The best that can be said for this book is that it represents proof that the First Amendment is alive and well in America.

Geoffrey Luck wrote on Qantas’s record of fatal crashes in the January-February issue.