The death of ex-President Jimmy Carter on December 26, 2024, at the age of one hundred resulted in many comments about him. Most that have come my way have been favorable, and, at least by comparison with his successors, he can point to some genuine achievements. We shouldn’t be deceived though, into rating him as a good president. The great Murray Rothbard certainly didn’t think so, and in this week’s column, I’d like to consider some of the things Murray said about him.
Murray identified a key theme in Carter’s presidency, the stress of pain and sacrifice, and he mordantly mocked it: “Pain—our pain, of course—has been a constant theme of Jimmy Carter’s since he burst on the national scene. During the 1976 campaign, Carter assured us that ‘Ah feel yo’ pain,’ and such is his enthusiasm for this empathy that he has gone out of his way to inflict pain ever since. After he went to the mountaintop last summer to receive his revelation on energy, he proceeded to remind us of his ‘pain’ motif and then to scourge us for the mortal sin of wishing to buy foreign oil.”
Murray identified a deep foundation of Carter’s calls for sacrifice. Politicians love sacrifice because it enhances the power of the state. The best way to get people to accept sacrifice is to involve them in war. But this is risky. War is dangerous, especially in the nuclear age. By calling for a war to conserve energy, Carter hoped for the advantages of a war without the risks of a military confrontation. “What the State, what every would-be tyrant wants, of course, is war. War, especially a war that the State is in no danger of losing, provides the perfect milieu for all power to redound to the State, for siphoning wealth from private into governmental hands, for making the bastards obey. War, as Randolph Bourne so perceptively pointed out a half-century ago, ‘is the health of the State.’ For, generally, in their private lives, people wish only to go about their business in freedom, to be left alone with the money they have earned to run their lives as they see fit. Throughout history, governments and their rulers have sought to pull the wool over the eyes of their subjects, to make them like, or at least be resigned to, the oppression and exploitation they suffer at the hands of the State. War has always been the open sesame to this end: the specter of the enemy at the gates makes the public yield to the eternal plea of their State masters for discipline and sacrifice. The plea for sacrifice is always the harbinger of the despot. And so the Carter administration looked frankly for the ‘moral equivalent of war’ — the peacetime substitute for war hysteria and war despotism, for the zeal for sacrifice.”
Murray argues that the free market can handle all problems of shortages without a government campaign for “sacrifice,” and what he said about energy conservation in the 1970s applies to government calls today to curb our use of fossil fuels: “Is there an ‘energy shortage,’ and are Carter’s draconian measures necessary to alleviate it? Here, we must point to a vital distinction that lies at the heart of economic science: between ‘scarcity’ and ‘shortage.’ Not only are all forms of energy scarce, but all goods and services, without exception, are scarce as well. That is, people could always use more of them if available. We have always lived in a world of scarcity for all goods, and we always will, short of the Garden of Eden; economic development over the centuries has consisted of making goods relatively less scarce than heretofore. The test of whether or not any good or service is scarce is very simple: is its price greater than zero? If it is, then it is scarce. Happily, air is not scarce, and so its price on the market is zero (although this is not true of conditioned air.) Everything else is scarce. How, then, are these universally scarce supplies to be allocated, to be ‘rationed’? In the free market, such ‘rationing’ is done, smoothly and harmoniously, by the free price system. The price of any good on the market equates its available supply with the demand for it — with the amount that consumers are willing to purchase at the market price. The free market smoothly adjusts to differences in relative scarcity. Suppose, for example, that a frost kills much of the orange crop, and the supply of oranges on the market is reduced. The free market price then rises to equate supply and demand. There is no need for anyone, least of all government, to order everyone to ‘conserve’ their purchases of oranges because supply has been reduced.”
During the Carter years, inflation was a big problem, and Carter also proposed to deal with it through pain and sacrifice. For those of us who lived at that time, inflation wasn’t funny, but Murray still makes us laugh; “Now the old maestro of pain is back again, with his ‘comprehensive anti-inflation package’ of March 14. Inflation, continuing for over two decades, has accelerated dramatically under Jimmy’s ministrations and is now approaching the banana republic mark of 20 percent per annum. So Jimmy has decided to take off the gloves. It’s ‘no more Mr. Nice Guy’; the time has come for stern measures, for ‘discipline’ and especially—you guessed it—pain. The theory of the Carter administration, like all other administrations before it, is that inflation is some form of mysterious social disease, an epidemic among the American people. The job of the government is, like a white knight on a fiery charger, to go out and do combat with this dragon, to fight the disease. The theory, too, is that, while the causes of the inflation disease are bewildering and multifaceted (hence the need for a ‘comprehensive package’), they all boil down to sin—to excessive greed and hedonism on the part of some or all of the American public. Businessmen cause inflation by charging higher prices, unions by asking for higher wages, consumers by presuming to buy goods or borrow with their own money on credit, and citizens by urging the poor old government to spend more. Since repeated exhortations from the White House to reduce our greed and enjoyment have failed, the time has come for the pain-master to get his jollies once again.”
Murray reminds us of a basic truth of Austrian economics. Inflation isn’t caused by greed but rather by the Fed’s expansion of the money supply. “The point in all this is that there is no dragon that the federal government must go out and slay if only it had the will. Inflation is not caused by hedonism or greed out there in the economy; it is not the result of sinful actions by businessmen, unions, speculators, or consumers. It is not mysterious, nor is it especially multifaceted. A price is the result of the interaction between money and the supply of a good; if a loaf of bread costs 70 cents, this is the result of the interaction between the supply of bread and the number of dollars seeking to buy bread. The more money bidding for commodities, the higher their prices will be. Massive, chronic, and accelerating inflation can only come about because the supply of money has been increasing at a rapid rate. And this can only happen when the sole legal creator of new money—the federal government—expands its activities as the only legalized counterfeiter in the society and keeps increasing the money supply.”
We should do everything we can to remember that Jimmy Carter’s calls for “sacrifice” were threats to our freedom and that he had no idea of how to stop inflation or conserve energy.
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