Missouri's 7th District, U.S. House of Representatives




Congressional Issues 2010

by Gary North

There are two groups of people, H. L. Mencken once remarked: those who work for a living, and those who vote for a living.

Mencken had a good point. It was not really as relevant as he thought, but there is a ring of truth about it. Actually, those who are exclusively dependent on welfare payments seldom vote. Children supported by aid to dependent children, people in mental institutions, the hard-core unemployed, and those in the inner cities are not usually voters. Those who are legally eligible to vote among these groups are seldom proficient readers, and they take little or no interest in political affairs, since they have little knowledge of them, interest in them, or confidence concerning them.

Then where do the votes come from? Where do the welfare supporters come from? To some extent, from the elderly. The Gray Panthers are only the most vocal of the retirees. But generally the votes for more welfare programs come from those who are only partially dependent on government intervention, or in some cases not dependent at all. Obviously, there are more middle-class, middle-aged voters than anyone else. They finance the welfare budgets, and they vote for them. But they vote for the programs on a piecemeal basis. If you asked them if they were in favor of a welfare State, they would deny it. If you asked them if they think the welfare system today is beneficial, they would deny it. But they elect representatives who vote for welfare on a massive basis.

Why? Why should people support a system that they have to finance through taxes and which they do not have confidence in? There are several very good reasons, but I think you can summarize them in a few words: guilt, greed, fear, and confusion. And, of course, envy. Always there is envy.


This guilt stems from many sources. One is simply religious. Rebellious men sense their own inadequacy in the face of ultimate moral standards. They're absolutely correct. But they seek relief from these guilt feelings though strange means: political action, charity, “good works," masochism, sublimation (I don’t know what this is, but Freudian psychologists are always talking about it), and so forth. Remember the commercial that made Zest famous? “For the first time in your life, feel really clean!” Some Madison Avenue psychology major knew exactly what he was doing when he wrote that jingle. It sold a lot of Zest.

Modern politics is based on the systematic manipulation of guilt. In fact, without guilt feelings, the whole modern political structure would collapse. If the State passes enough laws, so that everyone has to break many of them daily—sometimes competing Federal bureaucracies mandate mutually contradictory requirements—then the bureaucrats can make people feel guilty constantly. They feel guilty, and they fear exposure. This makes even more manipulation necessary, for people seek salvation through political action. Rushdoony has called this the Politics of Guilt and Pity (Thoburn Press, 11121 Pope’s Head Rd., Fairfax, VA 22030: $5.00).

Are you better off than your neighbor? If we assume that there is a fixed quantity of resources, then your "large piece of the pie” is the cause of his smaller one. President Nyerere of Tanzania, whose socialistic policies of forced agricultural collectivization and State monopoly over agriculture have crippled that little nation, has put it this way:

I am going to argue that the whole concept of aid is wrong. I am saying it is not right that the vast majority of the world’s people should be forced into the position of beggars, without dignity. In one world, as in one state, when I am rich because you are poor, and I am poor because you are rich, the transfer of wealth from the rich to the poor is a matter of right; it is not an appropriate matter for charity... .If the rich nations go on getting richer and richer at the expense of the poor, the poor of the world must demand a change, in the same way that the proletariat in the rich countries demanded change in the past.

Yet if the West had really kept the African tribes in poverty, Nyerere would not have received his education in Marxist and socialist-dominated Western universities. But in any case, his party line is echoed daily in the speeches of United Nations representatives, not to mention California farm union organizers’ speeches. The world has bought the “fixed pie” line, in the face of the greatest economic growth in history. If you have wealth, then you are a thief, obviously. And you must be expropriated for your theft. You can’t even give it away. As one socialistic fellow student in the university (a middle-ranking Naval Reserve officer, by the way) remarked to me: “I would abolish private charity, make it illegal. It lets a lot of rich thieves assuage their guilt.” The State, through taxation, is to be the agency of charity.

We teach this theology in our universities. We preach it in our mainline religious denominations. We fill the high school social studies textbooks with such reasoning. And, having made two generations of potential taxpayers feel guilty—not guilty before God, but guilty before The Masses and their incarnation, the State—we find that social programs of compulsory wealth redistribution are the law of the land.

The tax revolt will not work. You cannot wipe away two generations of bad theology with a few years of political hoopla. If we see a few taxes cut, or the budget balanced (officially), then the off-budget Federal agencies will multiply like flies—like flies on welfare, even—and the Federal Reserve System will buy up private debt (laundered through some modern version of the Reconstruction Finance Corporation) with fiat money. The modern theology of guilt-atoning taxation will destroy the dollar. You must not put your hope in the tax revolt. Maybe you can personally escape some taxes by joining the tax revolt, but you will not bring down the modern Welfare State. The tax revolt will only hasten the demise of the dollar, and every other fiat currency in the West. To have a successful tax revolt, we have to find a way to deal with the problem of real guilt, and the State (as well as the anti-State) cannot rectify the problem of guilt. Howard Jarvis is not Jesus Christ, after all.

Conclusion? Don’t expect miracles from earthly political movements. The very heart of modern polities’ problem is the existence of too much faith in political miracles. On the other hand, don’t be sucked in by professional guilt-manipulators. Know what you’re up against. That’s why I recommend the tithe. The man who tithes10% of his income to charitable causes is no easy mark for the guilt-pitchmen. He has done his duty. He has not “saved himself” by tithing, but he has saved himself from the need of paying attention to the guilt-pitchmen.


Greed is a killer. Greed tells men that they are entitled to more than the free market offers to them for their efforts. Greed tells men that they’re worth more, always more. So they start looking for ways to “beat the market,” with its limits of open competition. They start looking for aid from the State.

The politician is in the business of getting re-elected. He must go into the market for votes and buy them. He sells the public what it wants in exchange for votes. If the public wants economic favors, then that’s what the politician will sell him. (And when the bill comes due—higher taxes—the politician will then start pitching guilt back at the voter—or paper money.) The public establishes the political currency of its realm; the politician responds accordingly, in order to buy the currency of his realm, votes.

Once this process begins, it is almost impossible to reverse it. One of the few cases in history when it was reversed was in England, from 1845-75,only for a single generation. They tore down the trade barriers, strengthened the gold standard, and allowed capital free flow. The result was an outpouring of productivity. But it didn't last long. Remember: that is the only major exception that a nation has voluntarily accepted without suffering a military defeat (like Germany did after World War II, when Erhard could “throw the foreign socialist rascals out”—meaning us—and return to free enterprise with the public’s support).

This leads me to a slogan for all successful conventional investing:

“There are more voters who consume your product than produce your product.”

Let me show you some applications. Are you considering making an investment in some apartment houses? You think you can get renters to pay you for your risk and effort. Warning: “There are more renters who vote than owners who vote.” You can expect rent controls. You had better plan on rent controls. That’s why you had better buy single-family dwellings that at least can be sold to renters, allowing you to pull your capital out in a hurry. A rent-controlled apartment house is a turkey. (A non-rent-controlled apartment house is a sitting duck.) Only if you can convert rental units to condominiums can you get your money out, and there is growing political pressure to make such conversions illegal. Before you invest, find out where the voters are.

You see, it’s not that some people vote for a living. It’s the fact that they vote for subsidies to their living expenses. They work, earn, and pay taxes. But they expect you, as a capitalist investor, to finance their life style, if their life style cannot be covered by their present income level. And their own voting behavior guarantees higher taxes and more inflation, which in turn assures you that you will be continually called upon to support their life style. We are talking about a lot of people. Over 40% of American families received Federal money in 1977, not counting Federal salaries (Review of the News [June 27, 1979], p. 59, citing the Wall Street Journal).

Here’s another example. What about farming? Should a wise farmer buy more farm land? He must face the grim reality: There are more voters who eat than voters who farm.

Do you know what this implies for the future of farming? Price controls nonagricultural produce. They did it in France during the French Revolution. They did it in Europe in the fascist era. They do it inmost of the Third World socialist tribal aggregates (sometimes called nations). When food gets scarce, the voters will see to it that someone else supports their life style. I don’t mean the ghetto. I mean middle-class America. You know, the folks who are apt to remark: “Well, I’m glad to know you’re storing food. If times get tough, I’ll stop in to see you. Ha ha ha.” They will, too.

So here’s Joe Fertilizer, the American farmer, up to his ears indebt. He buys more land. Its price keeps going up. Of course, the money he earns for the land’s output can’t pay the interest costs, let alone a profit, but he buys more. He knows food prices will be going up. He will pay off the lender (bank, Federal government, or his elderly next-door neighbor who sold the land on contract) with depreciated dollars. He thinks.

Then comes the price freeze. He sells a standard crop, like wheat or soybeans. It’s a crop that is sold on the commodity exchanges. It is easily policed. And the Federal government sends out bureaucrats to see that he sells at the legal price—a loss-producing price. Or, if necessary, the Federal government sends out trucks to pick up the crop, and the Federal official hands Joe a nice check, and thanks him. “See you next year, sucker!”

He has a big farm. It’s heavily mortgaged. He can’t sell it. He can't make a decent income with it. But he's stuck with the debt. And if he sells his crop in the black market, gets paper money, and tries to pay off his mortgage, what will he tell the tax collector when the latter enquires as to the source of all that fiat money?

Sure, if we have straight-line mass inflation, and if crop prices don’t sag, and if the weather holds up, and nobody else has a good year, then Joe will indeed beat the system. Every Joe in America expects this. Every Joe since the beginning of time has expected this. And it never happens. He works his whole life in the fields, and his banker just smiles. For as long as they both shall live.

What’s the answer, long-term? Simple: a debt-free small family farm which produces produce—fruits, vegetables, organic foods that get high prices—that is sold in local markets. The farm that is small enough not to be visible, small enough not to be worth policing by the price controllers, small enough to be owned debt-free, and not involved in commodity exchange commodities, is the farm that will survive. All other farming is highly risky. All other farming is highly illiquid. All other farming will eventually go bankrupt. No debt pyramid goes on forever, and almost no farmer who plays the debt game ever knows when to quit. And even if he did, price controls may not allow him to quit. The voters who eat need him to support their life styles. There are a lot of voters who eat.


When true panic hits—I mean real, unadulterated panic—two generations of guilt-manipulated, greed-manipulated voters are going to start looking for scapegoats. They are going to look for potential victims. And the law courts are going to extend that system of jurisprudence which one friend of mine has labeled “the deeper-pocket jurisprudence.” If you are richer, you are guilty. Now, let’s hear the witnesses.

The rise of Hitler cannot be separated from the rise of Communism and the rise of fear. Men of Europe in the early 1930’s were afraid. They had seen a terrible war. They had seen mass inflation. They had seen the expropriation of the middle class. They had seen the abolition of the traditional monarchical political order. They faced grinding depression and the collapse of the world economy by 1932. The whole nineteenth-century world of optimism had disappeared. What would replace it? Not anarchy. People will not live with anarchy. Der Fuhrer. II Duce. They would restore the former glory. They would get the trains to run on time. (By the way, Italian trains didn’t run on time. It’s a myth of fascism.) They would take care of the Jews, Commies, bankers, Poles, etc. They would bust a few heads. Ah, what a pleasant sight, even when you’re hungry. Especially when you’re hungry. It takes your mind off of your growling stomach.

We have not seen real fear in this nation in four decades. We have not seen a major military defeat. We have not seen mass inflation, price controls, shortages, rioting in middle-class areas, and massive, continual strikes. But will we? And can anyone guarantee that we won’t?

There is the scent of Weimar Germany in the air—all over the West. There is the gay abandon of the Roaring Twenties in the discos. And there is the same nagging feeling that it cannot last, so let us eat, drink, and be merry, for tomorrow we die.

We are about to enter the era of fear. All it will take is a shattering of confidence in our ability to withstand a major threat to our social or political order. And as I intend to demonstrate in subsequent chapters, we are very, very close to that shattering realization.

This is why you must get out of the major cities. If you are dependent on municipal services, then you are dependent on municipal labor unions. The story of Germany in the 1920’s is a story of grinding, continual strikes and interruptions of basic supplies. The independent trucking slowdown is only a small down payment on what we can expect. New York City should be our model for the future. You must not put yourself at the mercy of municipal unions, blockades, energy black-outs, and other products of an overexpanded "public sector” economy. If you are dependent on most municipal services in a major metropolitan area, then you are only marginally less vulnerable than a Social Security recipient.

If the unions try to tie up this country—a most optimistic word, “if”—then the voters will ultimately rebel. Again, you have to figure out, in advance, where the voters will be. What will they be doing? What kind of response will they demand? I think it’s obvious: a man with a cure-all. A man with leadership abilities. He will be dynamic. He will thrive in a climate of fear. So that climate will be made available, even if it weren't built into today’s system, which it is.

But fear isn’t enough. Fear, plus confidence, produces solutions. It might even produce a traditional free market solution. Therefore, we first need confusion.


Here is the strategy. Most important, you need universal moral confusion. The voters must be confused about life’s first principles. To achieve this, you create a compulsory system of tax-supported schools. Tax support is then used to justify the neutralization of moral instruction (“religion") in these schools. The final step is to introduce into the curriculum a programmed instructional package called “values education”—a cover for total moral relativism leading to nihilism. To pull this off, you need to create another parallel institution to drain off any protests from morally outraged parents. This can be called the PTA. Eventually, you create a generation of voters who are incapable of independent moral outrage. You can then orchestrate their moral outrage for your own political goals. In 1984.

What economic system works? No one seems to know. What legal system works? Again, it’s up for debate. What is to be done? Pass another law. What if nothing makes things work? Hire two more bureaucrats to make it work. What if the whole system is disintegrating? Find a hero of the people to make it work by busting a few heads.

The public doesn’t know what it wants. The special interest groups want to chip away at the overall market system in order to get legislative goodies, and piece by piece the market crumbles. Then we vote for more protection from a crumbling system. State protection.

If the voters knew what they wanted, and if they understood what they were asking for, they would not be clamoring for tax cuts and subsidies at the same time. Congress is politically short-circuited on national issues, because the folks back home can agree only on pork barrel projects and other varieties of “down-home socialism.” The result is political drift. The current is flowing toward the “strong man.”

The elite rulers need a confused voting public. They have produced a confused voting public. Now they need a major, easily recognized national emergency to mobilize the last remaining bit of moral outrage left in the confused voting public.

We have arrived at the politics of confusion. It will soon be the politics of despair. And when it is, watch out. We will then be set up for the politics of salvation. Also known as hell on earth.

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