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Volume 9, Issue 48: November 26, 2007

  1. Crackpot Realism Is Riding High
  2. Argentina’s First Lady
  3. How Troop Withdrawal Can Work
  4. What Would Adam Smith Say?

1) Crackpot Realism Is Riding High

When sociologist C. Wright Mills coined the term “crackpot realism” back in the 1950s, he had in mind the arrogance of movers and shakers whose opinions carry influence, but whose real-life experience is too limited to foster sound judgments about the subjects on which they pontificate. Foreign policy writer Max Boot, who in a recent New York Times op-ed calls for the U.S. Agency for International Development to be infused with enough resources to become a “global FEMA” for nation building, is precisely the type that Mills had in mind, according to Independent Institute Senior Fellow Robert Higgs.

“Does Boot have any idea how people develop effective means of community policing, a viable criminal-justice system, or a physical infrastructure for providing reliable water supply, sewerage, and electrical power generation and distribution?” writes Higgs in his latest op-ed. “Does he imagine that one simply hauls in experts from Dubuque and Dallas, sets them down in Basra, and—shazam!—everything clicks into place and works like a diamond-jeweled watch thereafter?”

Hayek called the similar presumptions of socialist economic planners a “fatal conceit.” To a straight shooter like Higgs, it is simply fraud. Whatever its name, it is an especially tempting vice for those media pundits, corporate tycoons and academic administrators who mix freely with those that wield power. “Maybe these Übermenschen can run a big corporation, a major newspaper, or a federal government department,” Higgs continues, “but they cannot run the world, except in the limited sense that they can mistreat a great number of people in various countries in order to line their pockets, gratify their vanities, and fulfill their savage fantasies. For all the rest of us, however, they produce nothing but wreckage and grief.”

“Crackpot Realism Is Riding High,” by Robert Higgs (11/21/07) Spanish Translation

Robert Higgs will address the question, “Why Are Politicians Always Trying to Scare Us?” in person at the Independent Institute, Oakland, Calif. (12/6/07)

More information

Neither Liberty nor Safety: Fear, Ideology, and the Growth of Government, by Robert Higgs

Opposing the Crusader State: Alternatives to Global Interventionism, edited by Robert Higgs and Carl P. Close


2) Argentina’s First Lady

Nestor Kirchner, outgoing president of Argentina, has steered the country toward such perilous waters that the incoming president, his wife Cristina Fernandez, would have to commit virtual treason against his legacy if she wishes “to avoid the iceberg for which Argentina’s Titanic is headed,” writes Independent Institute Senior Fellow Alvaro Vargas Llosa in a recent column published in the Wall Street Journal.

Kirchner, according to Vargas Llosa, had an opportunity to make Argentina an economic leader in Latin America but squandered it by systematically undermining the independence of the country’s courts and by artificially stimulating the economy to unsustainable levels. Inflation is high, investment is low, living conditions have fallen to the levels of the 1990s, but presidency is increasingly endowed with Peron-type powers.

Concludes Vargas Llosa: “Jorge Luis Borges, Argentina’s late poet, used to say, ‘Peronismo is neither good nor bad—it is incorrigible.’ Will Cristina’s love of the good life serve as an antidote to Peron-style populist socialism? Although the chances are extremely slim—she has announced that nine of her husband’s ministers will stay on to serve in her cabinet—let us pray that Cristina proves Borges wrong.”

“Argentina’s First Lady,” by Alvaro Vargas Llosa (The Wall Street Journal, 11/16/07)

Liberty for Latin America: How to Undo Five Hundred Years of State Oppression, by Alvaro Vargas Llosa

The Che Guevara Myth and the Future of Liberty, by Alvaro Vargas Llosa

El Independent—the Independent Institute’s Spanish-language website and blog—updated daily!


3) How Troop Withdrawal Can Work

The main reason for the failure of the U.S. occupation in Iraq is not poor planning, but a faulty “script,” opined Leon T. Hadar (author, The Diplomatic Road to Damascus) at the Independent Institute’s September 21 panel discussion, “Troop Withdrawal: Looking Beyond Iraq.” By “script,” Hadar explained, he meant the assumptions that have long guided U.S. policy in the Middle East. Advancing U.S. interests, he continued, requires completely abandoning those faulty assumptions and not, as most of the U.S. foreign-policy establishment believes, simply returning to the role of peace broker and security guarantor that the U.S. played in the region in the 1990s.

The event’s second speaker, David R. Henderson, examined the leading economic rationale for U.S. intervention in the Middle East: oil security. Drawing on his recent study, Do We Need to Go to War for Oil?, he argued that because oil is sold in a world market, an oil-exporting government cannot effectively target an enemy country by ending its exports to that country. Furthermore, an oil-exporting country is unlikely to the amount of oil it sells in the market because doing so would entail foregoing oil revenues and hurting itself economically, he argued.

Finally, Ivan Eland (director of the Independent Institute’s Center on Peace & Liberty) argued that pressuring the Iraqi government to pursue political decentralization, either by partitioning the country or by creating a loose confederation of ethnic states, could enable the U.S. to withdraw troops without intensifying the sectarian conflict. Previous partitions in the 20th century, he explained, offer several lessons in how and how not to partition Iraq.

Transcript of “Troop Withdrawal: Looking Beyond Iraq,” featuring Leon T. Hadar, David R. Henderson, and Ivan Eland (9/21/07)

The Diplomatic Road to Damascus: The Benefits of U.S Engagement with Syria, by Leon T. Hadar (10/1/07)

Do We Need to Go to War for Oil?, by David R. Henderson (9/1/07)

The Way Out of Iraq: Decentralizing the Iraqi Government, by Ivan Eland (1/14/05)

Order The Empire’s New Clothes: U.S. Foreign Policy Exposed, by Ivan Eland

“In The Empire Has No Clothes, Dr. Eland shows that the concept of empire is wholly contrary to the principles of liberals and conservatives alike and makes a mockery of the Founding Fathers’ vision for a free republic.”
—Ron Paul, U.S. Congressman


4) What Would Adam Smith Say?

The role of government in the lives of ordinary Americans is far larger than it was in 1776, the year Adam Smith’s classic, The Wealth of Nations, was published. What would Smith say about that?

“If Smith is right that national defense, administration of justice, and public goods are essential to a free and prosperous society, might government’s expanded roles one day crowd out its traditional and essential functions to that society’s detriment?” ask Jody W. Lipford and Jerry Slice in a new op-ed.

Lipford and slice examined long run trends in federal spending and found that its composition has shifted dramatically away from the mix advocated by Smith. From 1962 to 2005, the percentage of federal spending on programs favored by Smith fell by about 50 percent. At the same time, the percentage spent on social services rose by about 50 percent—a trend “will require higher taxes, larger deficits, or dramatic cuts in other government programs, such as those deemed essential by Smith,” Lipford and Slice continue. “Despite these dire predictions and their resulting consequences, the political will for change is weak. And the longer these trends continue, the more difficult it will be politically to change them. Perhaps it is time for the American public and its elected officials to give more heed to the wise words of a Scottish philosopher who wrote some 230 years ago.”

“The Role of Government in Modern U.S. Society: What Would Adam Smith Say?” by Jody W. Lipford and Jerry Slice (11/21/07)

“Adam Smith’s Roles for Government and Contemporary U.S. Roles: Is the Welfare State Crowding Out Government’s Basic Functions?” by Jody W. Lipford and Jerry Slice (The Independent Review, Spring 2007)

“On The Wealth of Nations, featuring P. J. O’Rourke (2/9/07)

More on Adam Smith


  • Catalyst
  • Beyond Homeless