“We are the 99%!” This slogan of the Occupy Wall Street protesters has been called the most memorable quote of the past year. Those who rally to its cry do so in opposition to the villainous 1%.

For a handful of the protesters, being a member of the 1% means being a wealthy recipient of a government bailout, or some other form of corporate welfare. But for the economic egalitarians in their ranks, it simply means being too rich. They say the wealthiest 1% of the country are getting more than their fair share of the wealth in society, at the expense of the 99%.

Whatever one thinks of the current plight of the 99%, throughout almost all of history, things were much worse for the vast majority of the population. In precapitalist ages, the average member of the economic 99%, if lucky enough to survive infancy, was consigned to a life of back-breaking work and poverty, constantly on the verge of famine, disease, and death.

The only individuals who did not have such a wretched life were the “1%” of old. This economic 1% was virtually identical with the state. It was made up of the French kings, the English lords, the Roman senators, the Egyptian viziers, and the Sumerian temple priests. The members of this elite lived in Olympian splendor: servants at their beck and call, as much food as they could possibly want, spacious homes, an abundance of jewelry, and a tremendous amount of leisure time.

And of course, this lifestyle was borne on the backs of the masses. It was the 99% who produced the bread that stuffed the mouths of the 1%, who felled the trees to erect their mansions, and who mined the precious metals and stones to adorn their bodies.

CONTINUED at the Ludwig von Mises Institute. Written by Daniel James Sanchez.

In his lecture at George Washington University on March 20, 2012, Federal Reserve chairman Ben Bernanke said that under a gold standard the authorities’ ability to address economic conditions is significantly curtailed. The Fed chairman holds that the gold standard prevents the central bank from engaging in policies aimed at stabilizing the economy after sudden shocks. This in turn, holds the Fed chairman, could lead to severe economic upheavals. According to Bernanke,

Since the gold standard determines the money supply, there’s not much scope for the central bank to use monetary policy to stabilize the economy.… Because you had a gold standard which tied the money supply to gold, there was no flexibility for the central bank to lower interest rates in recession or raise interest rates in an inflation.

This is precisely why the gold standard is so good: it prevents the authorities from engaging in reckless money pumping of the sort Bernanke has been engaging in since the end of 2007 by pushing over $2 trillion in new money into the banking system.

The Federal Reserve balance sheet jumped from $0.889 trillion in December 2007 to $2.247 trillion in December 2008. The yearly rate of growth of the balance sheet climbed from 2.6 percent in December 2007 to 152.8 percent by December 2008. Additionally the Fed has aggressively lowered the federal-funds rate target from 5.25 percent in August 2007 to almost nil by December 2008.

Consequently the yearly rate of growth of the AMS measure[3] of the US money supply climbed from 1.5 percent in April 2008 to 14.3 percent by August 2009.

CONTINUED at the Ludwig vin Mises Institute. Written by Frank Shostak.

Recorded 10 March 2012 at the Ludwig von Mises Institute in Auburn, Alabama. Featuring Peter Klein, Joe Salerno, David Gordon, Shawn Ritenour, Guido Hulsmann, and Jeffrey Herbener. Includes a Question and Answer period.

1. Authoritarian Capitalism (Fascism) and Liberal Capitalism (the Free Market)

What is sometimes referred to as “authoritarian capitalism,” or fascism, is in fact a variety of statism, specifically socialism, the system of political economy in which the prerogatives of ownership over the means of production and distribution are vested in the state. Under the fascist economic system, private capitalists are nominally regarded as the owners of the means of production, meaning that they hold property titles to these assets and are referred to as “owners” of these assets. However, this so-called ownership is merely illusory. The actual prerogatives of ownership are vested, not in the private capitalist, but in the state and its bureaucracy.[1] It is the state that tells the private capitalist how he must use “his” property, under the threat of confiscation or even imprisonment. In the words of economist Ludwig von Mises, it is “socialism in the outward guise of capitalism.”[2]

This is a very different political-economic system from “liberal capitalism,” also known as “free-market capitalism.” Free-market capitalism is an authentically capitalist system, in which the prerogatives of ownership over the means of production are vested in private citizens, not in the state. Under this system, the means of production are genuinely privately owned, and the private-property owner holds, not just a property title, but, more importantly, the actual prerogatives of ownership and ultimate control. In the system of free-market capitalism, the private-property owner is regarded as having property rights (i.e., an enforceable moral claim to the prerogatives of ownership) that must be respected by all others, including the state and its functionaries.

In their purest forms, these two systems of political economy are fundamentally different in kind; in fact, they are polar opposites. However, this opposing nature stems from the degree to which the prerogatives of ownership of ostensibly private property are arrogated to the state — i.e., the degree of state intervention. On the one extreme we have the free market, in which there is no — or at least little — state interference with private-property ownership (which is therefore genuine); on the other extreme we have fascism, in which there is plentiful or total state interference with private-property ownership (which is therefore illusory).

Since fascism and the free market are distinguished by state intervention we can therefore see that the two systems are separated by a connecting bridge of interventionism through the system of the “mixed economy.” The fascist system can be viewed as a system of hyperinterventionism, accruing when state interference with private-property rights is so extensive that the alleged private ownership of property becomes a mere farce, and the state may properly be regarded as the de facto owner of the means of production and distribution — i.e., there is de facto socialism. For this reason, the analysis of fascism and its long-term viability is very similar to the analysis of interventionism in the mixed economy, and the same kinds of economic and political insights apply.

CONTINUED at the Ludwig von Mises Institute. Written by Ben O’Neill.

The US unemployment rate dropped to 8.3 percent for January — naturally it was a good photo opportunity for US president Barack Obama to say the economy is improving. Really? In fact, a large chunk of those people who finally found work last month landed low wage jobs, and almost half of the unemployed (43%) have been unemployed for more than 27 weeks. That’s 6 months without a job for 5.5 million people in this country, and that’s only the official tally. Youth unemployment is also awful, stuck at 23 percent. So what are we supposed to do? How do we fix this? Well, author Jeffrey Tucker is in studio with us today — a special treat — and he will tell us what he thinks should be done. One solution that washington has proposed is raising taxes, and in fact, today is the income tax’s birthday. Hurray! Wait…should we be celebrating this or should we be asking the question “where is our money going?” Maybe washington should be held accountable for all the money it not only wastes, but outright steals, before it starts extending its hands asking for more. Maybe congress should start curbing insider trading, or kickbacks, before it starts raising taxes for the majority of americans, but providing loop holes for the well-connected. And what role does the Federal Reserve play in all of this? How can it be held accountable, and should we just abolish the federal reserve as Ron Paul says? Well, Jeffrey Tucker will tell us what he thinks. He will be debating Dean Baker tonight in Washington on just this issue, and he is going to lay out his case against the fed.

Specific Reforms Required

The growth of the American government in the late 19th and 20th centuries is reflected in its increasing presence and finally monopolization of the monetary system. Any attempt at restoring monetary freedom must be part of a comprehensive plan to roll back government and once again confine it within the limits of the Constitution. That comprehensive plan may be divided into four sections: monetary legislation, the budget, taxation, and regulation. We shall begin with monetary reforms, and conclude with a word about international cooperation and agreement.

Monetary Legislation

Legal-Tender Laws

As we have seen, the Constitution forbids the states to make anything but gold and silver coin a tender in payment of debt, nor does it permit the federal government to make anything a legal tender. One of the most important pieces of legislation that could be enacted would be the repeal of all federal legal-tender laws. Such laws, which have the effect of forcing creditors to accept something in payment for the debts due them that they do not wish to accept, are one of the most tyrannical devices of the present monetary authorities.

Not only does the Federal Reserve have a coercive monopoly in issuing “money,” but every American is forced to accept it. Each Federal Reserve note bears the words, “This note is legal tender for all debts, public and private.” The freedom to conduct business in something else — such as gold and silver coin — cannot exist so long as the government forces everyone to accept its paper notes. Monetary freedom ends where legal-tender laws begin.

The United States had no such laws until 1862, when the Congress — in violation of the Constitution — enacted them in order to ensure the acceptance of the Lincoln greenbacks, the paper notes printed by the US Treasury during the wartime emergency. That “emergency” has now lasted for 120 years; it is time that this unconstitutional action by the Congress be repealed. Freedom of contract — and the right to have such contracts enforced, not abrogated, by the government — is one of the fundamental pillars of a free society.

CONTINUED at the Ludwig von Mises Institute. Written by Ron Paul.

Murray N. Rothbard presented this speech at the Michigan Libertarian Party Convention, held in Southfield, Michigan, in May 1989. This selection also includes a question and answer session. Special thanks to Bob Roddis for making this video available.