Freeman

PERSPECTIVE

Is Serfdom an Executive Order Away?

MAY 30, 2012 by SHELDON RICHMAN

Sometimes a step back helps to provide perspective on a matter. President Obama provided such a step with his March 16 Executive Order, National Defense Resources Preparedness. In it we see in detail how completely the government may control our lives—euphemistically called the “industrial and technological base”—if the president were to declare a national emergency. It is instructive, if tedious, reading.

President Obama claims this authority under the Constitution and, vaguely, “the laws of the United States,” but he specifically names the Defense Production Act of 1950. As Freeman columnist and Independent Institute Senior Fellow Robert Higgs observed, “Under this statute, the president has lawful authority to control virtually the whole of the U.S. economy whenever he chooses to do so and states that the national defense requires such a government takeover.”

We shouldn’t assume this is merely an academic exercise or that a third world war would need to break out. In the last decade, under circumstances representing no “existential threat” to our society, the executive branch has exercised extraordinary powers.

Reading the Executive Order, I was reminded of a quotation of Leonard Read’s: “[A]nyone who even presumes an interest in economic affairs cannot let the subject of war, or the moral breakdown which underlies it, go untouched. To do so would be as absurd—indeed, as dishonest—as a cleric to avoid the Commandment ‘Thou shalt not steal’ simply because his parishioners had legalized and were practicing theft.”

The Executive Order begins by authorizing executive-branch officers to “assess on an ongoing basis the capability of the domestic industrial and technological base to satisfy requirements in peacetime [!] and times of national emergency, specifically evaluating the availability of the most critical resource and production sources, including subcontractors and suppliers, materials, skilled labor, and professional and technical personnel.”

But these officials are to do more than assess. They are to be prepared to “ensure the availability of adequate resources and production capability,” to “improve the efficiency and responsiveness of the domestic industrial base to support national defense requirements,” and to “foster cooperation between the defense and commercial sectors. . . .”

Further, the President’s order notes his authority to “require acceptance and priority performance of contracts or orders (other than contracts of employment) to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense” (emphasis added).

That is, the executive branch is first in line for whatever it wants (except civilian labor—perhaps).

Under the section titled “EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY,” the heads of agencies engaged in procurement are authorized to “guarantee loans by private institutions,” “make loans,” and “make provision for purchases of, or commitments to purchase, an industrial resource or a critical technology item for Government use or resale, and to make provision for the development of production capabilities, and for the increased use of emerging technologies in security program applications, and to enable rapid transition of emerging technologies.”

Think of the potential for corporatist rent-seeking.

In the section on personnel we learn that the secretary of labor shall “collect and maintain data necessary to make a continuing appraisal of the Nation’s workforce needs for purposes of national defense and upon request by the Director of Selective Service, and in coordination with the Secretary of Defense, assist the Director of Selective Service in development of policies regulating the induction and deferment of persons for duty in the armed services.”

So along with the commandeering of private resources, there will be a draft, the commandeering of military (and other?) labor—that is, slavery by another name.

Advocates of the freedom philosophy have a dual concern: that the executive has virtually unchecked authority to declare an emergency and that in an emergency the private economy would be commandeered by government officers. The Executive Order is a breathtaking reminder that, as Higgs put it, “private control of economic life in the United States, to the extent that it survives, exists solely at the president’s pleasure and sufferance.”

* * *

Economics is not often thought of as something to fall in love with. But in his new book, Living Economics, that’s exactly what Peter Boettke describes. We’re pleased to present an excerpt.

A centerpiece of the original New Deal was brought down by several kosher butchers. Steven Horwitz tells the story.

Lord Acton famously said that “power tends to corrupt.” Arthur Foulkes says it also spreads the “I’m Smarter than Everyone Else” disease.

Fuzzy thinking about the housing bubble, the Great Recession, and what to do about it stems from poor understanding of capital, a point Austrian economists are well positioned to make. Peter Lewin explains what capital is and why understanding it is important.

As World War II wound down, the American power elite planned a postwar world that would consist of the New Deal writ large. Aparicio Caicedo explains.

It’s widely agreed that at least some communities are in decline. Many remedies—mostly involving government—are proposed, but Sandy Ikeda says too little attention is given to spontaneous order.

Argentina had a liberal and prosperous past. Then it came under the sway of statist ideas about progress. Decline followed. Ariel Barbero chronicles the sad story.

As for our columnists, here’s what they’ve come up with: Lawrence Reed examines the many natures of equality. Donald Boudreaux attributes bad thinking about economic policy to a lack of imagination. Stephen Davies has praise for middlemen. John Stossel says that complex societies don’t need reams of laws. David Henderson defends free immigration. And Tyler Watts, seeing rising gasoline prices once again blamed on speculators, responds, “It Just Ain’t So!”

Books on stagnation, commercial culture, morality and markets, and socialism engage our reviewers.

—Sheldon Richman

srichman@fee.org

ASSOCIATED ISSUE

June 2012

ABOUT

SHELDON RICHMAN

Sheldon Richman is the former editor of The Freeman and TheFreemanOnline.org, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families.

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