Sunday, August 5, 2018

Dinesh D’Souza as a Charlatan

Could there be anything more absurd than the spectacle of Dinesh D’Souza?

His new movie is called Death of a Nation: Can We Save America a Second Time?.

Some videos below give us a summary of his ideas:







The fundamental thesis of Dinesh D’Souza is, in essence, that the Democratic Party and American progressive Liberalism are linked to Nazism and are, by implication, on a moral level with Nazism. Furthermore, D’Souza thinks that Nazism (or German National Socialism) was a fundamentally left-wing ideology.

D’Souza’s narrative and his “arguments” plumb the depths of idiocy.

Dinesh D’Souza is really nothing more than a free market Classical Liberal, as are much of the so-called American “Conservatives” who represent the pre-Trump GOP. D’Souza’s ideology stems from Classical liberalism, which was a 19th-century left-wing movement.

If anything, one could make a much stronger case that Dinesh D’Souza and his free market, individualist “Conservatives” are really just a modern manifestation of 19th-century Leftism, and, furthermore, they are infected with fundamental Cultural Leftist ideas of the late 20th century, e.g., that ethno-nationalism is evil, and that genetic and biological factors that cause individual and group differences do not exist.

First of all, let us take some fundamental points that Dinesh D’Souza never addresses. He strongly implies that the Democrat Party of the early 20th century was somehow unique and anomalous within the American political spectrum for supporting racial segregation and being a kind of “white nationalist” movement.

But what kind of nation did the American founding fathers actually envisage?

We need look no further than United States Naturalization Law of March 26, 1790, passed by the first Congress of the United States:
“Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That any Alien being a free white person, who shall have resided within the limits and under the jurisdiction of the United States for the term of two years, may be admitted to become a citizen thereof on application to any common law Court of record in any one of the States wherein he shall have resided for the term of one year at least, and making proof to the satisfaction of such Court that he is a person of good character, and taking the oath or affirmation prescribed by law to support the Constitution of the United States, which Oath or Affirmation such Court shall administer, and the Clerk of such Court shall record such Application, and the proceedings thereon; and thereupon such person shall be considered as a Citizen of the United States. And the children of such person so naturalized, dwelling within the United States, being under the age of twenty one years at the time of such naturalization, shall also be considered as citizens of the United States. And the children of citizens of the United States that may be born beyond Sea, or out of the limits of the United States, shall be considered as natural born Citizens: Provided, that the right of citizenship shall not descend to persons whose fathers have never been resident in the United States: Provided also, that no person heretofore proscribed by any States, shall be admitted a citizen as aforesaid, except by an Act of the Legislature of the State in which such person was proscribed.”
http://www.indiana.edu/~kdhist/H105-documents-web/week08/naturalization1790.html
As even the basic discussion of the 1790 United States Naturalization Law here points out, this legislation excluded “American Indians, indentured servants, slaves, free blacks, and Asians” from US citizenship. So the founding fathers of America envisaged the United States as a colony for European people, and if the Democrats of the early 20th century were “Nazis” or “white nationalists” than so were the American founding fathers. Obviously, the founding fathers of America would never have even given Dinesh D’Souza citizenship.

Furthermore, D’Souza’s account of the US Immigration Act of 1924 is also laughable. The Immigration Act of 1924 essentially limited immigration to Europeans, and excluded Africans, Arabs and Asians, and was quite clearly designed to preserve the white European majority in America. This was signed into law by the Republican president Calvin Coolidge (president from 2 August 1923 to 4 March 1929) and passed in both houses by a Republican-controlled 68th United States Congress (4 March 1923–4 March 1925). D’Souza lamely falls to mention this and pretends that it only passed because of “progressive Republicans” (who mysteriously were not real Republicans at all).

Secondly, Dinesh D’Souza compares Donald Trump with Abraham Lincoln, but what did Abraham Lincoln – the first Republican party president – actually think about African Americans?

On 14 August, 1862, Abraham Lincoln received a deputation of African Americans at the White House. This is what Abraham Lincoln said:
“… President [Lincoln], after a few preliminary observations, informed them that a sum of money had been appropriated by Congress, and placed at his disposition for the purpose of aiding the colonization in some country of the people, or a portion of them, of African descent, thereby making it his duty, as it had for a long time been his inclination, to favor that cause; and why, he asked, should the people of your race be colonized, and where? Why should they leave this country? This is, perhaps, the first question for proper consideration. You and we are different races. We have between us a broader difference than exists between almost any other two races. Whether it is right or wrong I need not discuss, but this physical difference is a great disadvantage to us both, as I think your race suffer very greatly, many of them by living among us, while ours suffer from your presence. In a word we suffer on each side. If this is admitted, it affords a reason at least why we should be separated. You here are freemen I suppose.

A VOICE: Yes, sir.

The President – Perhaps you have long been free, or all your lives. Your race are suffering, in my judgment, the greatest wrong inflicted on any people. But even when you cease to be slaves, you are yet far removed from being placed on an equality with the white race. You are cut off from many of the advantages which the other race enjoy. The aspiration of men is to enjoy equality with the best when free, but on this broad continent, not a single man of your race is made the equal of a single man of ours. Go where you are treated the best, and the ban is still upon you.

I do not propose to discuss this, but to present it as a fact with which we have to deal. I cannot alter it if I would. It is a fact, about which we all think and feel alike, I and you. We look to our condition, owing to the existence of the two races on this continent. I need not recount to you the effects upon white men, growing out of the institution of Slavery. I believe in its general evil effects on the white race. See our present condition – the country engaged in war! – our white men cutting one another's throats, none knowing how far it will extend; and then consider what we know to be the truth. But for your race among us there could not be war, although many men engaged on either side do not care for you one way or the other. Nevertheless, I repeat, without the institution of Slavery and the colored race as a basis, the war could not have an existence.

It is better for us both, therefore, to be separated. I know that there are free men among you, who even if they could better their condition are not as much inclined to go out of the country as those, who being slaves could obtain their freedom on this condition. I suppose one of the principal difficulties in the way of colonization is that the free colored man cannot see that his comfort would be advanced by it. You may believe you can live in Washington or elsewhere in the United States the remainder of your life [as easily], perhaps more so than you can in any foreign country, and hence you may come to the conclusion that you have nothing to do with the idea of going to a foreign country. This is (I speak in no unkind sense) an extremely selfish view of the case.

But you ought to do something to help those who are not so fortunate as yourselves. There is an unwillingness on the part of our people, harsh as it may be, for you free colored people to remain with us. Now, if you could give a start to white people, you would open a wide door for many to be made free. If we deal with those who are not free at the beginning, and whose intellects are clouded by Slavery, we have very poor materials to start with. If intelligent colored men, such as are before me, would move in this matter, much might be accomplished. It is exceedingly important that we have men at the beginning capable of thinking as white men, and not those who have been systematically oppressed.

There is much to encourage you. For the sake of your race you should sacrifice something of your present comfort for the purpose of being as grand in that respect as the white people. ….

The colony of Liberia has been in existence a long time. In a certain sense it is a success. The old President of Liberia, Roberts, has just been with me – the first time I ever saw him. He says they have within the bounds of that colony between 300,000 and 400,000 people, or more than in some of our old States, such as Rhode Island or Delaware, or in some of our newer States, and less than in some of our larger ones. They are not all American colonists, or their descendants. Something less than 12,000 have been sent thither from this country. Many of the original settlers have died, yet, like people elsewhere, their offspring outnumber those deceased.

The question is if the colored people are persuaded to go anywhere, why not there? One reason for an unwillingness to do so is that some of you would rather remain within reach of the country of your nativity. I do not know how much attachment you may have toward our race. It does not strike me that you have the greatest reason to love them. But still you are attached to them at all events.

The place I am thinking about having for a colony is in Central America. It is nearer to us than Liberia – not much more than one-fourth as far as Liberia, and within seven days' run by steamers. Unlike Liberia it is on a great line of travel – it is a highway. The country is a very excellent one for any people, and with great natural resources and advantages, and especially because of the similarity of climate with your native land – thus being suited to your physical condition.

The particular place I have in view is to be a great highway from the Atlantic or Caribbean Sea to the Pacific Ocean, and this particular place has all the advantages for a colony. On both sides there are harbors among the finest in the world. Again, there is evidence of very rich coal mines. A certain amount of coal is valuable in any country, and there may be more than enough for the wants of the country. Why I attach so much importance to coal is, it will afford an opportunity to the inhabitants for immediate employment till they get ready to settle permanently in their homes.

If you take colonists where there is no good landing, there is a bad show; and so where there is nothing to cultivate, and of which to make a farm. But if something is started so that you can get your daily bread as soon as you reach there, it is a great advantage. Coal land is the best thing I know of with which to commence an enterprise.

To return, you have been talked to upon this subject, and told that a speculation is intended by gentlemen, who have an interest in the country, including the coal mines. We have been mistaken all our lives if we do not know whites as well as blacks look to their self-interest. Unless among those deficient of intellect everybody you trade with makes something. You meet with these things here as elsewhere. ….

I shall, if I get a sufficient number of you engaged, have provisions made that you shall not be wronged. If you will engage in the enterprise I will spend some of the money intrusted to me. I am not sure you will succeed. The Government may lose the money, but we cannot succeed unless we try; but we think, with care, we can succeed.

The political affairs in Central America are not in quite as satisfactory condition as I wish. There are contending factions in that quarter; but it is true all the factions are agreed alike on the subject of colonization, and want it, and are more generous than we are here. To your colored race they have no objection. Besides, I would endeavor to have you made equals, and have the best assurance that you should be the equals of the best.

The practical thing I want to ascertain is whether I can get a number of able-bodied men, with their wives and children, who are willing to go, when I present evidence of encouragement and protection. Could I get a hundred tolerably intelligent men, with their wives and children, to ‘cut their own fodder,’' so to speak? Can I have fifty? If I could find twenty-five able-bodied men, with a mixture of women and children, good things in the family relation, I think I could make a successful commencement.

I want you to let me know whether this can be done or not. This is the practical part of my wish to see you.”
https://quod.lib.umich.edu/l/lincoln/lincoln5/1:812?rgn=div1;view=fulltext
So, in other words, Abraham Lincoln was what would now be called a race realist and an ethno-nationalist, who thought that African Americans should be given their own nation in Africa or Central America, and that they should all immigrate to that new home. Lincoln favoured racial separation, much like the Democrats of the early 20th century, except that Lincoln was more extreme and wished to see African Americans immigrate overseas.

And then we have the bizarre attempt to blame the 19th century American colonisation of the West and dispossession of Indians on the Democratic Party (which supposedly inspired Hitler’s colonial ambitions in the East), even when the Republican administrations were also deeply involved in this project: Republican Presidents ruled America between 1869–1885, and presided over the Comanche Wars (1867–1875), the Battle of the Little Bighorn (1876), the Nez Perce War (1877), the Great Sioux War of 1876–1877, Bannock’s War (1878), the White River War (1879) and Geronimo’s War (1881–1886), all of which dispossessed Native Americans.

Naturally, Dinesh D’Souza cannot discuss any of these points. There are also numerous other dishonest and simply hare-brained narratives that D’Souza has, such as the idea that Nazis were “left-wing.” This usually hinges on the idea that the German National Socialists had some left-wing economic ideas. This is true, but it is a complete myth that Conservatives cannot support left-wing economics. For example, the American Republican president Eisenhower once said: “Anyone who questions the New Deal doesn’t belong in the political system.”

In fact, most mainstream Conservatives after 1945 accepted the Keynesian Social democratic consensus right up until the early 1970s. And even from the 19th century until today, Conservatism has had its anti-capitalist factions, though their influence has waxed and waned.

By D’Souza’s retarded logic, all such Conservatives were really Leftists.

D’Souza also argues that the Nazis took some of their ideas from progressive American Democrats, like eugenics.

Now the essence of German National Socialism was as follows:
(1) an authoritarian ideology hostile to democracy and Classical Liberalism;

(2) extreme hostility to Communism/Marxism, German Social Democracy, and all other left-wing political ideologies and anti-Semitism;

(3) an extreme German ethno-nationalism and militarism, which extended to the idea of colonising the lands of other Europeans to the east of Germany;

(4) a blend of social conservatism with certain other ideas which were often widely held in the early 20th century like racial theories and eugenics;

(5) an animus towards free market capitalism but not to the extent of abolishing private property or nationalising all industries.
American progressive Democrats did not hold (1), (2), or (3). At most, progressive Democrats supported (5) and of course many would have endorsed race realism and eugenics, which were widely believed all over the political spectrum by the 1920s or 1930s.

In particular, eugenics had prominent Conservative supporters in America and Europe, such as Reginald Ruggles Gates, Madison Grant and Lothrop Stoddard. Indeed, the First International Eugenics Congress (held at the University of London in 1912) had the former Conservative Prime Minister of Britain Arthur Balfour deliver its inaugural address – and in the audience was none other than Winston Churchill, who was at that time a Liberal and First Lord of the Admiralty.

If anything, the eugenics movement of the early 20th century was a bipartisan movement, which included Conservatives, Liberals, socialists, and even some Marxists.

Notably, the Americans Madison Grant and Lothrop Stoddard were both Republicans, and Dinesh D’Souza is forced to invoke the “No True Scotsman” fallacy in his book Death of a Nation and pretend that they were RINOs (Republicans in Name Only).

So the idea that eugenics was somehow only an early 20th century progressive idea is ridiculously false. In reality, eugenic ideas were widely held by diverse figures all over the political spectrum, including Conservatives.

In fact, free market conservative supporters of eugenics used Social Darwinian ideas to attack Leftist proposals for a welfare state and free health care, because they believed such policies would be dysgenic. Paradoxically, it was the die-hard Classical Liberal free market individualists who were fanatical supports of Social Darwinism, the very same people who are arguably the intellectual forefathers of Dinesh D’Souza’s own dumb free market, individualist “Conservatism.”

Monday, July 30, 2018

Robert P. Murphy on Rothbardians versus Free Bankers

Robert P. Murphy recently gave a talk on fractional reserve banking and free banking:



Listening to this video really brings home what a lame cult of losers American libertarians actually are.

Murphy repeats the same tired lies about fractional reserve banking we have all heard before: e.g., that a demand deposit involves two entities (the bank and depositor) owning the same money (when this is a blatant falsehood), and the fake legal history of fractional reserve banking peddled by Rothbard and Huerta de Soto.

A bank is, by nature, an institution that borrows money from “depositors” (a misleading word) by means of the mutuum contract, so that the bank becomes the legal owner of all money “deposited.” The bank client legally forfeits all property rights in the money. In return, the bank customer becomes a creditor to the bank and receives a promise to repay the debt on demand (or whatever specific terms are used): in other words, the bank client simply receives an IOU from the bank. There is nothing fraudulent about this relationship.

The mutuum contract goes back to the ancient Roman law and banking practice, and was the basis of Western banking.

The Rothbardian charlatans failed to understand the nature of the mutuum contract and have falsified the history of fractional reserve banking (see here, here, here, here, here, here).

By creating 100% reserve banks or warehouses, Austrians like Murphy would create an inherently deflationary economy that would tank private sector investment, and cripple the endogenous money system on which capitalism relies.

On the economic consequences of fractional reserve banking, the real problem is poorly regulated financial systems that can blow asset bubbles and create excessive private debt used for speculative purposes. The solution to this is rigorous financial regulation, not abolishing fractional reserve banking.

The few decent points Murphy makes come at the end, when he points out that the claim of free bankers that Canada and Scotland had stable free banking systems is not credible. Worse still, free bankers fail to look at Australia, where free banking was a disaster.

As for free banking in Canada, this was the reality of Canada’s pre-1935 bank system:
(1) the “Canadian Bank Act of 1871” regulated banks and prohibited banks from lending on real estate, a sensible regulatory measure that is hardly in line with free banking;

(2) in 1907, the Canadian government lent $5 million in Dominion notes to the private sector banks to end a credit squeeze that threatened the agricultural sector and wider economy;

(3) the Finance Act of 1914 permitted Dominion banks to borrow notes directly from the Canadian Department of Finance with no gold-reserve requirement;

(4) the consequences of (3) were that from 1914 onwards Canada had a lender of last resort in the form of government-issued money;

(5) in 1924, the Dominion and Imperial Banks experienced runs and turned not just to other banks, but to the Department of Finance for liquidity to avert a crisis.
One can hardly speak of a free banking system when Canada had a de facto government lender of last resort from 1914.

Addendum
In response to George Selgin’s comment below, there is a straightforward response: in order to test whether any particular pre-1933 – or relatively free market – banking system was better than the system I advocate, you need to compare the latter with the period from c. 1945 to the early 1970s, when the finance sector in the Western world was (generally) subject to effective financial regulation. In this period, there were hardly any financial crises, serious asset bubbles largely absent, and the banking sector much more stable than the more laissez-faire periods that preceded it and the Neoliberal era that followed.

I could post all sorts of data here, but let us just look at this graph:



This speaks for itself.

Further Reading
Here are my posts on fractional reserve banking refuting the Rothbardian nonsense below:
“Hayek’s Original View of Fractional Reserve Banking,” February 29, 2012.

“Fractional Reserve Banking, Option Clauses, and Government,” January 31, 2012.

“Are the Public Ignorant of the Nature of Fractional Reserve Banking?,” December 17, 2011.

“Why is the Fractional Reserve Account a Mutuum, not a Bailment?,” December 17, 2011.

“Callable Option Loans and Fractional Reserve Accounts,” December 16, 2011.

“Future Goods and Fractional Reserve Banking,” December 15, 2011.

“Rothbard on the Bill of Exchange,” December 11, 2011.

“Hoppe on Fractional Reserve Banking: A Critique,” December 11, 2011.

“The Monetary Production Economy and Fiduciary Media,” December 11, 2011

“Fractional Reserve Banking: An Evil?,” June 26, 2010.

“The Romans and Fractional Reserve Banking,” February 23, 2011.

“Gene Callahan on Fractional Reserve Banking,” February 18, 2011.

“Lawrence H. White refutes Huerta de Soto on Fractional Reserve Banking,” February 22, 2011.

“Selgin on Fractional Reserve Banking,” June 1, 2011.

“Schumpeter on Fractional Reserve Banking,” June 12, 2011.

“If Fractional Reserve Banking is Fraudulent, Why isn’t the Insurance Industry Fraud?,” September 29, 2011.

“The Mutuum Contract in Anglo-American Law,” September 30, 2011.

“Rothbard Mangles the Legal History of Fractional Reserve Banking,” October 1, 2011.

“More Historical Evidence on the Mutuum Contract,” October 1, 2011.

“What British Law Says about the Mutuum Contract,” October 2, 2011.

“If Fractional Reserve Banking is Voluntary, Where is the Fraud?,” October 3, 2011.

“Huerta de Soto on the Mutuum Contract: A Critique,” August 11, 2012.

“A Simple Question for Opponents of Fractional Reserve Banking,” August 17, 2012.

“Chapter 1 of Huerta de Soto’s Money, Bank Credit and Economic Cycles: A Critique,” August 31, 2012.

“Huerta de Soto on Justinian’s Digest 16.3.25.1,” September 1, 2012.

“Huerta de Soto on Banking in Ancient Rome: A Critique,” September 2, 2012.

“Bibliography on the Irregular Deposit (depositum irregulare) in Roman Law,” September 6, 2012.

“Rothbard on ‘Deposit’ Banking: A Critique,” July 22, 2014.

“Carr versus Carr (1811) and the History of Fractional Reserve Banking,” July 23, 2014.

Mutuum versus Bailment in Banking,” July 24, 2014.

“Foley versus Hill and the History of Fractional Reserve Banking,” July 29, 2014.

“A Critique of Murray Rothbard on the Origins and Legal Basis of Fractional Reserve Banking,” July 30, 2014.

“Coggs v. Bernard and the History of English Bailment Law,” July 31, 2014.

“The Mutuum Contract in Henry de Bracton and English Law,” August 1, 2014.

“Fractional Reserve Banking is a Fundamental Part of Capitalism,” August 8, 2014.

“A Critique of Rothbard on the History of English Bailment Law,” August 11, 2014.

“The Banking Contract in 19th Century US Law,” August 16, 2014.

“Rothbard on how Fractional Reserve Banking would be illegal in Anarcho-Capitalism,” March 2, 2016.

“The Filthy Anti-Capitalist Mentality – of Austrian Economics,” October 17, 2015.