“(…) the lesson should be constantly enforced that, though the people support the government, the government should not support the people”.

Thus Grover Cleveland wrote in 1887, vetoing a small, 10.000$ bill approved by Congress to help Texas farmers with seeds, after a drought of many years. Can you imagine an elected officer of any country today stating on the record that “the government should not support the people”? I see eggs, tomatoes and the occasional rock flying, perhaps even physically. But Cleveland was a Democratic (Republican and Democratic-Republican before) president, successor of giants like Jefferson, Madison and Van Buren. Helping starving farmers with seeds was nowhere to be found in the Constitution, and a Democratic president follows the Constitution to the letter, including the 10th amendment. Or rather followed, until Populist William Jennings Bryan hijacked the Party and crucified it in his “cross of gold” speech at the Convention of 1896. Until then, the Democratic Party stood for small government, low taxes, free-trade, hard-money and non-interventionism. Even against Federal “internal improvements”, as infrastructure projects were called. A real classical-liberal party, perhaps even a libertarian one, according to today’s “but who’s going to build the roads?” bland liberals (apologies to the friend Sebastian Piñera and his New New Deal for Chile, peace to the soul of Albert Jay Nock).

What might sound even stranger today, though, is that in XIX century US, the Democratic Party was the party of “the little people”, while the Hamiltonian Republican Party (Federalist and Whig before, politics is a messy business) was considered the party of the elites, with its big-government, mercantilist and later imperialistic program. The often immigrant and usually non-Puritan poor (for the high standards of the US, anyway) people, instinctively knew that the sweet poison of statism was against their interests. And of course they were right, public spending always enriches the already rich and well-connected at the expenses of the hoi polloi. The same hoi polloi that at the times of writing this piece seem inclined to seriously consider as president a lunatic self-described socialist and an opportunistic fascist. Which begs the question: how individuals of the same Homo sapiens species and of roughly the same social class were so smart 200 years ago and so dumb today? What happened?

Well, a great deal happened, and as usual people have different and often opposite opinions. In mine, the compulsory schooling happened, with its statist curriculum. Also the huge growth in population and the concurrent centralization of political power happened, which stunt the incentives of the citizens to get involved in the Res Publica. Finally, and perhaps most importantly, a lot of changes in technology happened, which opened the space for the development of the large corporations starting around the Reconstruction. Until that time, Americans were mostly small entrepreneurs. They were farmers, artisans, traders. They depended on making other people happy through the market, the Great Referee that gives to each exactly what (s)he deserves. They knew that blaming the rich or the foreigners was not going to bring the bread home, they had to compete if they wanted to eat. They had to be self-reliant and this usually implies individualism. Working for a corporation was seen at the start just as a convenient way to raise some seed capital to start a small business, the default occupation of an honorable citizen of the Republic. But with time, the corporation, the secure job, became the norm. Once obtained, the fires of need and ambition extinguished, the corporation providing for their needs, curiosity faded away, they stopped learning, reasoning and debating, they stagnated, Orwell’s proles are free, just like the animals. They let the predatory state grow, Franklin’s Cassandra-like “A Republic, if you can keep it” becoming reality (in truth Franklin was thinking about monarchy as the feared alternative, not having witnessed yet the raw violence of the ballot-box).

The good news is that all those trends are now reversing, and fast. Stultifying public school is under siege, with home-schooling, low-cost private education and self-learning with the Web booming. The anachronistic post-Westphalia Nation-states are devouring each other in a desperate, futile competition imposed by demography, no Ponzi-schemes charging future generations anymore; what the French enarques call the “race to the bottom”, it is actually a race to freedom, that will end, I hope and think, in an explosion of thousands of (mostly private) city-states, perhaps even in our life-time. And the boundaries of the firm are being eroded by decreasing transaction costs; more and more people are competing again every day in the human resources spot market, small entrepreneurs marketing their skills instead of a finished product or service. The great Ronald Coase was born when the large corporations were in their prime and lived long enough to witness their decline.

This is why I am an optimist. Never mind the bollocks (Sanders, Clinton or Trump, for example), here’s the Beautiful Liberty.


This piece is going to be published in Spanish next month with other 79 short pieces in a book celebrating Mario Vargas Llosa’s 80th birthday.

In the picture from the right: Alex Chaufen (Atlas, FIL…), Spencer MacCallum (The Art of Community), the author and Emi MacCallum, at a meeting with Honduran government officials to discuss the actual implementation of the first Zedes, Roatan, 2015.