Income Inequality and Income Mobility

There has been much discussion about income inequality lately so it seems relevant to compile some information about it. Has it been increasing? Decreasing? or remaining the same? What about income mobility and tax revenues?

Income Mobility

Mark Perry of the American Enterprise Institute has analyzed the recent research from the Federal Reserve Bank of Minneapolis. The summarized table below is based on income data from the Panel Study of Income Dynamics that followed the same households from 2001 to 2007.

The bottom row in the chart shows that for households in the second, middle, and fourth income quintiles in 2001, more than half of each group moved to a different earnings quintile by 2007 (61 percent, 58 percent, and 55 percent, respectively)

• Here we can see that from 2001 to 2007, 44% of the lowest 20% had moved up, mostly to the second lowest quintile but there are also signs of moving further in that short time.
• Of the highest 20% earners, only 66% remained in their position while 34% had moved down the income ladder. 
• For the middle 20% of income earners, 58% had moved either up or down from their quintile.

The point of this data here is that income mobility was actually changing more than what many would expect, and in a short time frame. It shows that income mobility goes both ways in a dynamic US labor market: upward and downward.

Professor Steven Hortiwz does an excellent job of explaining the dynamics of income mobility. It is worth the 3 minutes.

Additional reading:
Income Mobility and the Persistence Of Millionaires, 1999 to 2007.
Markets and the Economic Condition of the Poor
Facts on the Distributions of Earnings,Income, and Wealth in the United States:2007 Update

Income Inequality

According to Political Calculations, the most common measure of income inequality in a nation is the Gini Coefficient. "0" represents absolute equality and "1" represents absolute inequality. Contrary to popular opinion, below you can see that the trend in income inequality from 1994 to 2010 has leveled off. This information is the Gini Coefficient for the U.S. population based on the 2010 U.S. Census.

The following graph shows the Income Dispersion for U.S. households and families from 1967 to 2010. According to Professor Mark Perry,

According to three different Census Bureau measures, income inequality in America increased only gradually from the 1960s through the mid-1990s, but since then has remained relatively constant. Therefore, the factual record of income data in the United States certainly doesn’t support the claims that income inequality has “exploded” recently. A more accurate description of income inequality over the last several decades would be to say that it “flat-lined” starting in about 1994.

Additional reading:

U.S. Income Inequality: It’s Not So Bad
CONTEMPORARY ECONOMIC MYTHS

Three Contemporary Economic Myths About Income and Material Well Being
Thinking Clearly about Economic Inequality

Income Inequality and Demographics

It is important to not only look at relative inequality but to determine the differences between high-income households from low-income households.

Professor Mark Perry summarizes some of the main points in the graph above:

• On average, there were significantly more income earners per household in the top income quintile households (1.97) than earners per household in the lowest-income households (0.43).2. 

• Married-couple households represented a much greater share of the top income quintile (78.4 percent) than for the bottom income quintile (17 percent), and single-parent or single households represented a much greater share of the bottom quintile (83 percent) than for the top quintile (21.6 percent).3. 

• Roughly 3 out of 4 households in the top income quintile included individuals in their prime earning years between the ages of 35-64, compared to only 43.6 percent of household members in the bottom fifth who were in that age group.4. 

• Compared to members of the top income quintile, household members in the bottom income quintile were 1.6 times more likely to be in the youngest age group (under 35 years), and three times more likely to be in the oldest age group (65 years and over).5. 

• More than four times as many top quintile households included at least one adult who was working full-time in 2010 (77.2 percent) compared to the bottom income quintile (only 17.4 percent), and more than five times as many households in the bottom quintile included adults who did not work at all (68.2 percent) compared to top quintile households whose family members did not work (13.3 percent).6. 

• Family members of households in the top income quintile were about five times more likely to have a college degree (60.3 percent) than members of households in the bottom income quintile (only 12.1 percent). In contrast, family members of the lowest income quintile were 12 times more likely than those in the top income quintile to have less than a high school degree in 2010 (26.7 percent vs. 2.2 percent).

One would expect that households with more people earning income would be in a higher quintile than those with fewer income earners. Education, age, employment duration (full-time, part-time, or not working), and marital status are seen to be additional factors for this inequality. This should not be much of a surprise.

Income inequality can be explained by household demographics

The cost and standard of Living

Steven Horwitz writes:

The ultimate measure of the cost of consumption goods is the labor time needed to purchase them. A pair of pants might cost $20, but if the average industrial wage is $2/hr then those are more "expensive" than if the average industrial wage is $10/hr. Five times more expensive, we might add. When looked at this way, the real cost of living has dropped significantly and consistently over the course of the century and the last few decades. 

Examples of prices of various inflation-adjusted goods relative to year are  here, here, and HERE. This shows that the cost of living has decreased in many important ways relative to the past, and that our general standard of living has increased. In fact, as society has grown wealthier, the poor have been able to obtain goods that they rarely had access to in the past. For example, in 1984 only 42.5% of the poor had an A/C unit, but in 2005 that grew to almost 86%. These units are not just for luxury either, they can help save lives from extreme conditions.

Adjusted Gross Income versus Taxes Paid

From an article by Michael Tanner of the Cato Institute, he says that "data just released by the Tax Foundation, the top 1 percent of the wealthiest Americans earned 16.9 percent of all adjusted gross income in the United States. While no doubt that's a lot of money, it actually represents a decline from 2008, when the rich earned 20 percent of all income."

The October 2011 Tax Foundation study  includes charts on the AGI earned and income taxes paid:

The following chart compares 1980 income earned and federal taxes paid versus 2009 Income earned and Federal income taxes paid based on the information above from the Tax Foundation (I just whipped this up).

Here we can see that the Top 1% AGI was 8.46% in 1980 and 19.05% in 2009 whereas the Federal Income taxes paid was 19.05% and 36.76%, respectively. Regarding the top 0.1%, the Tax Foundation says:

The study also takes a look at the very highest earners, the top 0.1 percent of tax returns, which the IRS only began singling out in recent years. In 2009, those 138,000 tax returns accounted for nearly 7.8% of adjusted gross income earned (down from almost 10% in 2008), and they paid around 17% of the nation's federal individual income taxes (down from 18.5% percent in 2008)."
The very highest income group—the top one-tenth of one percent—actually has a lower average effective income tax rate than the rest of the top 1 percent of returns because these extremely high-income returns are more likely to have income from capital gains and dividends, which are typically taxed at lower rates," said Logan. "It's worth pointing out that in the case of capital gains and dividends, however, income derived from these sources has already been taxed once by the corporate income tax, which is not included in the current study, meaning the average effective tax rate numbers can be somewhat misleading."

The bottom 50% had a total AGI of 17.68% in 1980 and 13.48% in 2009. The bottom 50% as a group did see less overall income as a percentage of the total but their income tax burden went from 7.05% in 1980 down to 2.25% in 2009. So while they are making almost 24% less in adjusted gross income, they are paying 68% less in Federal income taxes as of 2009.

 Tax Revenues

Raising taxes if often thought of as a way to provide greater revenue but as Hauser's Law demonstrates, the following chart shows that there has been almost no correlation between the top marginal tax rate on individuals and total federal revenue as a percentage of GDP. Hauser says, "Tax revenues as a share of GDP have averaged just under 19%, whether tax rates are cut or raised. Better to cut rates and get 19% of a larger pie."

Date sources: top marginal rates from the IRS, Historical Table 23, federal revenue 1930-2002 from US Statistical Abstract, Historical Statistics, federal revenue 2003-07 from US Statistical Abstract, Table 451.

The following site has more charts than you probably need but it includes more data on total tax revenues including, state, local, property, business, and social taxes.
THE TRUTH ABOUT TAXES: Here's How High Today's Rates Really Are

Government Policy and the Housing Crisis

IBD had an article out today that discusses 20 page "Policy Statement on Discrimination in Lending" back in 1994 and the impact that had on creating the conditions for a housing bubble.


In summary, the conclusions of the original "discrimination" study was wrong. The reason for a disparity in lending to minority groups was not due to racial discrimination from banks, rather it was the result of their (good) traditional underwriting standards. According to criticism of the original study of bank lending practices back in 1994:

The study did not take into account a host of other relevant data factoring into denials, including applicants' net worth, debt burden and employment record. Other variables, such as the size of down payments and the amount of the loans sought to the value of the property being bought, also were left out of the analysis. It also failed to consider whether the borrower submitted information that could not be verified, the presence of a cosigner and even the loan amount.

When these missing data were factored in, it became clear that the rejection rates were based on legitimate business decisions, not racism.

Another excerpt from the article:

The fair-lending task force's original policy paper undercuts the notion the financial crisis was all about banker "greed," though it certainly played a role after the fact. Rather, it offers compelling evidence that the crisis evolved chiefly from government mandates and threats to increase lending to applicants who could not afford them.

I highly suggest reading the entire article. Tom Woods has a great book on the subject as well. While "greed" and other variables naturally came along afterwords, this looks more and more like it began as a policy of putting people (or certain protected groups) before profits. It created the conditions for what was to come: manipulated markets, a housing bubble, and the Great Recession.

Progressive Era Eugenics

I have two objectives for this post: 1) to create a page with some basic information on the various dark issues of the progressive era and 2) to provide a one-stop place for additional resources for further reading and reference. (I may update this page)

Eugenics and the Progressive Era

Steven Horwitz and Art Carden presented a great article in the Freeman this month titled Eugenics: Progressivism's Ultimate Social Engineering, which is something I find very fascinating, as it is often a neglected part of America's history, and perhaps this is very intentional. It reminds me of intentions and how different they may be between, say, the progressives in the progressive era and progressives today (or are they?), yet how they have similar outcomes. Minimum wage laws are just one prime example where progressive eugenic advocates used  laws enforced by government to indirectly exclude “the unemployable” or  “low-wage races” from gaining employment. Back then, Fabian socialists and progressives acknowledged the consequences of greater unemployment with minimum wage laws but, as Sidney and Beatrice Webb put it, "this unemployment is not a mark of social disease, but actually of social health." 

It should be clear that for supporters of individual liberty and reduced government (or anti-Statist), Eugenics would not be possible. A government is the only institution that can be used to create and enforce eugenic policies. Here is where America--and much of the world-- transforms from laissez-fair to Collectivism.

Social Darwinism- Two Very Different Realities.

Thomas C. Leonard in Mistaking Eugenics for Social Darwinism: Why Eugenics is Missing from the History of American Economics writes:

“Social Darwinism” is not understood as a description of Darwin’s ideas applied to society. It has devolved into an omnibus term of abuse, encompassing the full catalog of capitalist ideologies the progressives are seen to have opposed. In the United States, “social Darwinism” connotes the use of vaguely Darwinian ideas—as reduced to stock phrases such as “survival of the fittest” and the “struggle for existence”—to explain and justify a brutish laissez-faire capitalism of late-nineteenthcentury America, and nearly always applies to laissez-faire scholars seen to oppose progressive-minded reform.

Darwinian Individualism

Social Darwinism owes much of its currency to Richard Hofstadter, and had been most frequently used as a pejorative against classical liberalism or laissez-faire capitalism. Herbert Spencer is known for coining the concept of "survival of the fittest" but his work predated Darwin and he did not fit the "Social Darwinist" type as commonly understood, i.e., he opposed the justification for war and imperialism. Laissez-faire could hardly be consistent the idea of State control of human breeding, yet social Darwinism is still attributed to the philosophy. Here we start to see the nascence of another type of Social Darwinism.

Survival of the Unfit

Progressives had an underside that included scientific racism, eugenics and imperialism. Progressives viewed laissez-faire as a policy of promoting the 'unfit' to breed while the so-called 'fit' would be dwarfed in size over time because they tended to repopulate at lower levels. Eugenics policies needed to be adopted by the government in order to close the door to the unfit breeds of humans so that the "superior races" can survive and thrive.  Progressive Era reformers drawn to eugenics believed that some human groups were inferior to others, and that evolutionary science explained and justified their theories of human hierarchy. This was a radical departure from the laissez-fair principle, but this became the other, more dominant, version of Social Darwinism.  Richard Hofstadter developed a name for it: “Darwinian collectivism.”

Darwinian Collectivism

Eugenics advocated planned state control of human breeding. It was thought of as a method of population control, which could weed out the 'unfit' from society. Herbert Croly, founder of the magazine, The New Republic, was a proponent of Eugenics. For instance, he wrote an unsigned editorial in 1916 which tried to make peace between the eliminationists and sterilizers on the one hand and the uplift-the-downtrodden eugenists on the other. The common ground, TNR argued, was to be found in socialism:

We may suggest that a socialized policy of population cannot be built upon a laissez faire economic policy. So long as the state neglects its good blood, it will let its bad blood alone. There is no certain way of distinguishing between defectiveness in the strain and defectiveness produced by malnutrition, neglected lesions originally curable, or overwork in childhood. When the state assumes the duty of giving a fair opportunity for development to every child, it will find unanimous support for a policy of extinction of stocks incapable of profiting from their privileges.

Leo Lucassen of Leiden University in the Netherlands, writes in a journal, A Brave New World: The Left, Social Engineering, and Eugenics in Twentieth-Century Europe,  "Today, there would seem to be a large degree of consensus regarding the relationship between eugenics and the progressive movement, certainly in the first half of the twentieth century, as Paul Crook remarked in his recent book on Social Darwinism: ‘‘In fact if you examine the rhetoric of eugenic science you find that it actually best fitted in with contemporary ‘progressivist’ language that celebrated social engineering and meritocracy, professionalism and the dominance of experts."


We can fairly say that the dominant form of "Social Darwinism" in the late 19th and 20th century was that of Darwinian Collectivism. 

Scientific Racism

Government policies were to be adopted to help weed out the inferior races through primarily labor and immigration laws. Thomas C. Leonard writes:

Leading professional economists were among the first to provide scientific respectability for immigration restriction on racial grounds. They justified race based immigration restriction as a remedy for “race suicide,” a Progressive Era term for the process by which racially superior stock (“natives”) is outbred by a more prolific, but racially inferior stock (immigrants). The term “race suicide” is often attributed to Edward A. Ross (1901), who believed that “the higher race quietly and unmurmuringly eliminates itself rather than endure individually the bitter competition it has failed to ward off by collective action.” Ross was no outlier. He was a founding member of the American Economic Association, a pioneering sociologist and a leading public intellectual who boasted that his books sold in thehundreds of thousands. Ross’s coinage gained enough currency to be used by Theodore Roosevelt (1907), who called race suicide the “greatest problem of civilization,” and regularly returned to the theme of “the elimination instead of the survival of the fittest.” In that same year, more than 40 years after the American Civil War, Ross (1907) wrote: “The theory that races are virtually equal in capacity leads to such monumental follies as lining the valleys of the South with the bones of half a million picked whites in order to improve the conditions of four million unpicked blacks.”

Protecting the Family and Race

The Progressives had to develop additional reform policies to not only prevent the 'undesirables' from labor and immigration but they needed to promote policies that encouraged breeding of the "superior races. From the abstract of Thomas C. Leonard's work, 
Protecting the Family and Race: The Progressive Case for Regulating Women’s Work

Leading progressives, including women at the forefront of labor reform, justified exclusionary labor legislation forwomen on grounds that it would (1) protect the biologically weaker sex from the hazards of market work; (2) protect working women from the temptation of prostitution; (3) protect male heads of household from the economic competition of women; and (4) ensure that women could better carry out their eugenic duties as “mothers of the race.” What united these heterogeneous rationales was the reformers’ aim of discouraging women’s labor-force participation.

The Negro Project

The Negro Project 
MAAFA 21 is a very carefully reasoned, well-produced exposé of the abortion industry, racism and eugenics. It proves through innumerable sources that many founders of Planned Parenthood and other parts of the abortion movement were interested in killing off the black race in America and elsewhere.
If you would like to learn more about the progressive eugenics era, Thomas Leonard of Princeton University has more information.
Eugenics and Economics -how the first min-wage and other economic laws were used for eugenic purposes.
Excluding Unfit Workers - The "unemployable", Race Suicide, David-Bacon act, Progressive Scientific Statism.

Connections to National Socialism and Fascism

There are many factors that come into play with National Socialism and Fascism but it could be considered a sort of sister movement to Progressivism. The overall characteristics can be reduced to a hostility to laissez-faire, individualism, and limited government. The economics of Fascism and National Socialism closely resembled what Progressives advocated in for America and, in fact, many progressives praised the social and economic progress made in Germany; more on the economics of these ideologies here.

A Yale Study says that "While Nazi claims of Aryan superiority are well known, researchers said U.S. advocates of sterilization worried that the survival of old-stock America was being threatened by the influx of lower races from southern and eastern Europe. There was also mutual admiration, with early U.S. policies drawing glowing reviews from authorities in pre-Nazi Germany."

Germany is perhaps the most progressive nation in restricting fecundity among the unfit, editors of the New England Journal of Medicine wrote in 1934, a year after Hitler became chancellor.

John Hunt also noticed in his work, Perfecting humankind: a comparison of progressive and Nazi views on eugenics, sterilization and abortion, that it was in North America, especially the United States, that the eugenics movement really became established. Historian Garland E. Allen wrote in Science misapplied: The eugenics age revisited that "the eugenics movement eventually became a worldwide phenomenon...[but] by far the most work occurred in Germany and the United States, whose eugenicists had formed a particularly strong and direct bond, especially after the Nazis came to power in 1933."

Garland E. Allen also wrote,

Progressive ideology, which called for rational planning and scientific management of every phase of society, was seen as the new and "modern" approach, and hence "progressive" by the standards of the day. For laissez-faire views it substituted an emphasis on state intervention and promoted the use of trained experts in setting economic and social regulatory policies. 

And

A parallel between the economic and social milieu of the United States today and that of Germany in the Weimar and especially Nazi periods emerges in the debates over health care. Then as now, the discussions centered on decisions about who should receive what kind of health care and for how long.

They often worked in terms of negative eugenics, which included forced sterilization, birth control, economic policies to segregate and dis-employ the 'unfit', and other methods of family planning. The goal is to week out the weak and collectivize society. The progressive financier George Perkins said the “great European war … is striking down individualism and building up collectivism.” 

"President Woodrow Wilson signed New Jersey's sterilization law, and one of his deputies descended to greater fame as a Nazi collaborator at Buchenwald. Pennsylvania's legislature passed an 'Act for the Prevention of Idiocy,' but the governor vetoed it .... Other states, however, joined the crusade. ... Eventually, the eugenicist virus found a hospitable host in Germany. There... it led to the death chambers of Buchenwald and Auschwitz. Thanks to the Nazis, highly praised by eugenicists here, the movement eventually collapsed. But not before nearly 50,000 Americans were sterilized." Writes R. Cort Kirkwood.


The whole idea of a scientifically planned and organized State is based on Socialist ideals.It was libertarian, classical liberal, and conservative people who held ideals based upon individual liberty that were against Eugenics and the other evils. The government is the only institution that can legally do these deeds and whether it is in 'benevolent' or malevolent hands, good intentions or bad, the problems will continue so long as the State maintains this power over the lives of individuals. 


Flynn, in his penetrating book, The Road Ahead, examining  America's creeping revolution stated, ". . . the line between Fascism and Fabian Socialism is very thin. Fabian Socialism is the dream. Fascism is Fabian Socialism plus the inevitable dictator."


More Sources.

The Frightening Agenda of the American Eugenics Movement

THE EPOCH OF NATIONAL SOCIALISM.

• The Darwinian left and the concept of Eugenic socialism
• Empire Socialism and the Cult of Efficiency 
• Socialist Nationalism and Nationalist Socialism 

Perfecting Humankind: A Comparison of Progressive and Nazi Views on Eugenics, Sterilization, and Abortion.

Yale Study: U.S. Eugenics Paralleled Nazi Germany

Eugenics and the Left and More on Eugenics and the Left By JOHN J. RAY (M.A.; Ph.D.)

Further Reading:
Thomas C. Leonard of Princeton University is has some of the most accomplished work on the Progressive Era.

All of his work is available at his Princeton University website.

Individually:

Retrospectives: Eugenics and Economics in the Progressive Era.

Excluding Unfit Workers:  Social Control versus Social Justice in the Age of Economic Reform

American Economic Reform in the Progressive Era: Its Foundational Beliefs and Their Relationship to Eugenics

Protecting Family and Race: The Progressive Case for Regulating Women's Work.

More Merciful and Not Less Effective': Eugenics and American Economics in the Progressive Era

Additional Scholarly works:

EUGENICS AND PROGRESSIVE THOUGHT: A STUDY IN IDEOLOGICAL AFFINITY. 

Richard T. Ely: The Confederate Flag of the AEA?

A Brave New World: The Left, Social Engineering, and Eugenics in Twentieth-Century Europe. 

PERILS OF DEGENERATION: REFORM, THE SAVAGE IMMIGRANT, AND THE SURVIVAL OF THE UNFIT. 

EUGENICS, CRIME AND IDEOLOGY: THE CASE OF PROGRESSIVE PENNSYLVANIA. 

The Long Arm of Eugenics. 

Harry Laughlin's eugenic crusade to control the 'socially inadequate' in Progressive Era America

The Dialectics and Social Impact of the American Eugenics Movement on African Americans. (p.993)

Defending the Indefensible

John Stossel brings you Defending the Indefensible (8/18/2011)

For additional reading on these subjects, see Walter Block.

Buy the book here.

Read the book for Free here.

Listen to the audio book for Free here.

Emergency Bag supplies

A BOB or "bug out bag" is a collection of basic necessities for emergency situations where one is able to quickly "grab" and easily "bug out" to another location.  In having a bag already prepared for general situations, it helps to avoid the panic of compiling essentials in the last minute--where things are more likely to be forgotten, overlooked, or not yet acquired. Are tornadoes, hurricanes, blizzards/storms, power outages, earthquakes or some man-made disasters possible? Yes. It is not just for the "paranoid" people out there but for people who want to be able to take care of themselves and their families in times when something unfortunate happens. It's just like having an emergency bag of necessities in a car during the winter or summer in the case of a break-down, a stock of food acquired for the week/month, etc. A BOB is just  preparation for a different occasion and hopefully will never need to be used.


Here is my BOB. It is by no means the best or ultimate bag but has what I think would fit a general need for various circumstances. 

The following are some things you may want to consider for your bag.

Contents include (from left to right, then down):

First-Aid Kit-Binoculars-Multi-purpose wipes-face masks-TP- Water filter-Solar Radio-Rope- Flashlights- clothing
Hand Warmers-Mess kit/ utensils-Binoculars-shovel-flare/glow sticks-Fishing gear-
Plastic bags of various sizes-Poncho-fire starters and cooking fuel- mini stove- Tent- Food
Cash-Silver-water bladder.

Not shown- Mini-SAS survival guide and IOSAT tablets

FIRST-AID Kit and Hygiene

A Nation of Freeloaders?

John Stossel asks: Are we a Nation of Freeloaders?

Botched Paramilitary Police Raids

From the Cato Institute

Death of an innocent.	Death or injury of a police officer.	Death of a nonviolent offender.
Raid on an innocent suspect.	Other examples of paramilitary police excess.	Unnecessary raids on doctors and sick people.

View Original Map and Database

Praxeology made simple- by Praxgirl

Praxeology is the study (or logic) of human action, which is purposeful behavior. It had been popularized by Ludwig von Mises and the Austrian School of Economics.




Praxgirl's website is located here.

Episode 1, Introduction
Episode 2, Methodology
Episode 3, Purposeful Action
Episode 4, Prerequisites and Happiness
Episode 5, The Rational and Irrational
Episode 6, Ends and Means
Episode 7, Action Determines Value
Episode 8, The Concept of Time
Episode 9, Uncertainty

Additional Reading:

Praxeology: The Methodology of Austrian Economics By Murray N. Rothbard
Human Action By Ludwig von Mises

Liberalism- A Repository of Classical Liberal Quotes

What is true liberalism and how does it differ from what is called "liberal" in America today?


Note, this post may occasionally be updated.


Also see part 1. Liberalism- The Terminological Theft- Classical liberal quotes




Liberals believe that the main institutions of society can function in entire independence of the state:
"Liberalism ... is based on the conception of civil society as by and large self-regulating when its members are free to act within the very wide bounds of their individual rights. Among these, the right to private property, including freedom of contract and exchange and the free disposition of one's own labor, is given a high priority. Historically, liberalism has manifested a hostility to state action, which, it insists, should be reduced to a minimum."
—Classical Liberalism and the Austrian School by Ralph Raico


"The liberal vision offers an entirely different solution. Many western countries satisfy at this stage much more closely the social democrat model than the liberal vision...It differs fundamentally from the other three [socialism, social democratic, and conservative] positions by a severe constitutional limitationon the range of admissible government activities. It also involves a much stricter constitutional anchoring of property rights...The constitutional emphasis of the liberal position implies, of course, a dominant reliance on markets and market prices as a social coordination mechanism.”
—Economic Analysis and Political Ideology by Karl Brunner

"But libertarianism, however weak its influence today, is a much greater long-term threat to the left than is any form of conservatism, and the leftist intellectuals sense this even if they can’t articulate why. Leftism, whether they know it or not, is a distorted permutation of the classical liberal tradition. The statist left did their deal with the devil – the nation-state, centralized authority of the most rapacious kind – supposedly with the goal of expediting the liberation of the common man and leveling the playing field. More than a century since the progressives and socialists twisted liberalism into an anti-liberty, pro-state ideology, they see that they have made a huge mess of the world, that, as they themselves complain, social inequality persists, corporatism flourishes, and wars rage on. As the chief political architects of the 20th century in the West, they have no one to blame but themselves, and so they target us – the true liberals, the ones who never let go of authentic liberal idealism, love of the individual dignity and rights of every man, woman and child, regardless of nationality or class, and hatred of state violence and coercive authoritarianism in all its forms."
—Why the Left Fears Libertarianism by Anthony Gregory


"But under Obama we have seen the reinvigoration of the progressive left – perhaps the worst element of the left. It distrusts social authority, but not as much as the radical left, and not when that social authority – corporations, unions, even religious institutions – can be co-opted for the purpose of advancing the state. The progressives truly are the tradition that destroyed liberalism in America, erected a national police state, embraced corporatism in the disingenuous name of egalitarianism, and turned the U.S. into a global empire."
—What About the 'Real' Left? by Anthony Gregory

"The Ron Paul campaign proved that classical liberalism is on the side of youth. Failing to provide it for the generations to come would be to put out the light completely."
—Quo vadis, domine? by Terry Hulsey


"No one quite knows what to do about Congressman Ron Paul, Republican candidate for president.He refuses to play by the rules. He's a bigger supporter of the free market than anyone in Congress, but he's also the most consistent opponent of war. (That the conjunction of these positions — which amount to classical liberalism in a nutshell — should actually seem surprising or odd goes to show how perverse our political system has become.)"
—The Revolutionary Candidate by Thomas E. Woods


"The classical liberals, from Hume and Smith through to Hayek, are concerned with the construction of a social order in which individual liberty can be maximised; social order and liberty do indeed develop conterminously. Principles and processes emerge (almost accidentally) from individual action but the individual is never abstracted from social processes, whether as a rights-bearer or, even, as a utility-bearer."
—On Classical Liberalism and Libertarianism by Norman Barry


"The correct word for my view of the world is liberal. "Liberal" is the simplest anglicization of the Latin liber, and freedom is what classical liberalism is all about. The writers of the nineteenth century who expounded on this view were called liberals. In Continental Europe they still are . . . . But the words mean what people think they mean, and in the United States the unmodified term liberal now refers to the politics of an expansive government and the welfare state. The contemporary alternative is libertarian . . ."
—What it means to be a libertarian: a personal interpretation By Charles Murray

Using the term liberalism to refer to the ideas of liberty, Ortega declared:
"Liberalism and democracy happen to be two things which begin by having nothing to do with each other, and end by having, so far as tendencies are concerned, meanings that are mutually antagonistic. 
Democracy and liberalism are two answers to two completely different questions.  


Democracy answers this question — “who ought to exercise the public power?” The answer it gives is — “the exercise of public power belongs to the citizens as a body.” 


Liberalism, on the other hand, answers this other question — “regardless of who exercises the public  power, what should its limits be?” The answer it gives is — “whether the public power is exercised by  an autocrat or by the people, it cannot be absolute; the individual has rights which are over and above  any interference by the state.” Ortega y Gasset

"Constitutional liberalism ... is not about procedures for selecting government but, rather, government’s goals. It refers to the tradition, deep in Western history, that seeks to protect an individual’s autonomy and dignity against coercion, whatever the source — state, church, or society. The term marries two closely connected ideas. It is liberal because it draws on the philosophical strain, beginning with the Greeks and Romans, that emphasizes individual liberty. It is constitutional because it places the rule of law at the center of politics"


... Democracy is flourishing; liberty is not. 


— The Future of Freedom: Illiberal Democracy at Home and Abroad by Fareed Zakaria

"[A]t the heart of classical liberalism is a prescription: Nurture voluntary associations. Limit the size, and more importantly, the scope of government. So long as the state provides a basic rule of law that steers people away from destructive or parasitic ways of life and in the direction of productive ways of life, society runs itself. If you want people to flourish, let them run their own lives." 
—Civil Society and Government by Nancy L. Rosenblum and Robert C. Post


In review of the book, The Decline of American Liberalism, the following has been said,

“For [Ekirch], liberalism means the emergence of man over the State; it conveys a sense of the dignity and self-determination of the individual. The intellectuals of the present time have pre-empted the word ‘liberalism’ and corrupted it to mean the use of the State’s power to accomplish ‘social ends.’ But as this book makes clear, the true liberal—whether he calls himself a conservative, a libertarian, or an individualist—is the man who sets his heart and mind on the eternal but elusive goal of liberty.” 
—Sheldon Richmond, Editor, The Freeman



“In this stimulating book Professor Ekirch undertakes to show that American liberalism has been in steady decline since the founding of our republic. This classical liberalism has as its central doctrines ‘the concept of limited representative government and the widest possible freedom for the individual—both intellectually and economically.’ . . . In the space of a hundred and fifty years, ‘liberalism’ has practically reversed its meaning and is now used to sanction a statism potentially more absolute than anything seen in the past. But that [Ekirch] has given the true history of a decline seems to me indubitable.
—Richard M. Weaver, Professor of English, University of Chicago (in the Mississippi Valley Historical Review)


“How is it possible that one hundred and fifty years ago liberalism meant the advocacy of freedom and economiclaissez faire and that today it means the creed of totalitarian statism? Many people are aware of this total reversal. But few, especially today’s liberals, know, or care to know, how or why it came about. In an engrossing book, distinguished for its scholarship, Professor Ekirch provides the evidence for understanding and explaining how two mutually antagonistic creeds share the name of liberalism and how one led to the other. v surveys the rise and demise of liberal ideology and institutions in America.”
—Robert Hessen, Senior Fellow Emeritus, Hoover Institution, Stanford University


“The book takes the form of an intellectual history of the United States. . . . Ekirch’s story is one of moral and political retrogression. . . . It shows, for one thing, that the seeds of liberal self-defeat began with confusions embedded in the Founders’ own ideology, and shows how these confusions ramified through history. The book also offers a usefully critical perspective on the Progressives, . . emphasizing the continuities between American Progressivism and European anti-liberalism, both fascist and socialist. And Ekirch’s discussion of the confusions of Progressive discourse on war and imperialism around the time of World War I is both valuable and topically relevant. There are probably dissertations waiting to be written on the parallels between the wartime discourse of the Progressives and that of our contemporary “liberal hawks”; chapter 12 of Decline might not be a bad place to begin research.”
—Reason Papers

"After falling into almost complete intellectual disrepute towards the end of the nineteenth century, classical liberalism was rescued from oblivion and revived in the twentieth century by such notable thinkers as Ludwig von Mises and Friedrich Hayek." 
—David Conway, Classical Liberalism: The Unvanquished Ideal

Ludwig von Mises

Liberalism: In the Classical Tradition by Ludwig von Mises


"Rhetorical bombast, music and song resound, banners wave, flowers and colors serve as symbols, and the leaders seek to attach their followers to their own person. Liberalism has nothing to do with all this. It has no party flower and no party color, no party song and no party idols, no symbols and no slogans. It has the substance and the arguments. These must lead it to victory." 


"All modern political parties and all modern party ideologies originated as a reaction on the part of special group interests fighting for a privileged status against liberalism."


"The program of liberalism, therefore, if condensed into a single word, would have to read: property, that is, private ownership of the means of production. . . . All the other demands of liberalism result from this fundamental demand."


"Liberalism limits its concern entirely and exclusively to earthly ife and earthly endeavor. The kingdom of religion, on the other hand, is not of this world. Thus, liberalism and religion could both exist side by side without their spheres touching. . . . Liberalism proclaims tolerance for every religious faith and every metaphysical belief, not out of indifference for these higher things, but from the conviction that the assurance of peace within society must take precedence over everything and everyone."


"The goal of the domestic policy of liberalism is the same as that of its foreign policy: peace. It aims at peaceful cooperation just as much between nations as within each nation."


"There can be no more grievous misunderstanding of the meaning and nature of liberalism than to think that it would be possible to secure the victory of liberal ideas by resorting to the methods employed today by the other political parties."

Nation, State, and Economy by Ludwig von Mises

"Liberalism, which demands full freedom of the economy, seeks to dissolve the difficulties that the diversity of political arrangements pits against the development of trade by separating the economy from the state. It strives for the greatest possible unification of law, in the last analysis for world unity of law. But it does not believe that to reach this goal, great empires or even a world empire must be created."

"Liberalism knows no conquests, no annexations; just as it is indifferent towards the state itself, so the problem of the size of the state is unimportant to it. It forces no one against his will into the structure of the state. Whoever wants to emigrate is not held back. When a part of the people of the state wants to drop out of the union, liberalism does not hinder it from doing so. Colonies that want to become independent need only do so. The nation as an organic entity can be neither increased nor reduced by changes in states; the world as a whole can neither win nor lose from them."


Socialism: An economic and sociological analysis by Ludwig von Mises 


"Liberalism champions private property in the means of production because it expects a higher standard of living from such an economic organization, not because it wishes to help the owners." 


"The only task of the strictly Liberal state is to secure life and property against attacks both from external and internal foes."


"That Liberalism aims at the protection of property and that it rejects war are two expressions of one and the same principle."


"[Classical] Liberalism and capitalism address themselves to the cool, well-balanced mind. They proceed by strict logic, eliminating any appeal to the emotions. Socialism, on the contrary, works on the emotions, tries to violate logical considerations by rousing a sense of personal interest and to stifle the voice of reason by awakening primitive instincts."


The Causes of the Economic Crisis, and Other Essays Before and After the Great Depression by Ludwig von Mises


"Inflationism, however, is not an isolated phenomenon. It is only one piece in the total framework of politico-economic and socio-philosophical ideas of our time. Just as the sound money policy of gold standard advocates went hand in hand with liberalism, free trade, capitalism and peace, so is inflationism part and parcel of imperialism, militarism, protectionism, statism and socialism.

Human Action by Ludwig von Mises


"First, I employ the term "liberal" in the sense attached to it every-where in the nineteenth century and still today in the countries of continental Europe. This usage is imperative because there is simply no other term available to signify the great political and intellectual movement that substituted free enterprise and the market economy for the precapitalistic methods of production; constitutional representative government for the absolutism of kings or oligarchies; and freedom of all individuals from slavery, serfdom, and other forms of bondage."


Epistemological Problems of Economics by Ludwig von Mises


"To the man who adopts the scientific method in reflecting upon the problems of human action, liberalism must appear as the only policy that can lead to lasting well-being for himself, his friends, and his loved ones, and, indeed, for all others as well."