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Volume 6, Issue 35: August 30, 2004

  1. What’s Wrong with Government Today? New Book Explains Causes and Cures
  2. Next Steps in Venezuela
  3. The Future of Iraq—Transcript Now Available

1) What’s Wrong with Government Today? New Book Explains Causes and Cures

“If I had to use a single word to describe what is fundamentally wrong with government today, I would use the word fraud,” writes economist and historian Robert Higgs in the introduction of his new Independent Institute book, AGAINST LEVIATHAN: Government Power and a Free Society. “Certainly nowadays—perhaps in every age—government is not what it claims to be (competent, protective, and just), and it is what it claims not to be (bungling, menacing, and unjust). In actuality, it is a vast web of deceit and humbug, and not for a good purpose, either.”

In AGAINST LEVIATHAN, Higgs shows that denial and deceit permeate U.S. government policy and foster the growth of big government—with dismal consequences for the average citizen.

AGAINST LEVIATHAN combines an economist’s analytical scrutiny, an historian’s respect for the facts, and a refusal to accept the standard excuses and cruelties of government officialdom. In the book’s most prescient chapter, first published shortly before the 9/11 terrorist attacks, Higgs argues that the U.S. Defense Department budget has reflected Cold War-era security concerns, rather than current realities, and thus has put American lives at risk.

Additional topics include Social Security, the paternalism of the FDA, the “War on Drugs”, the nature of political leadership, the welfare state, civil liberties, the conduct of the national surveillance state, and governmental responses to a continuing stream of “crises,” including domestic economic busts and foreign wars both hot and cold. In an eye-opening analysis of “our glorious leaders,” Higgs shows that some of America’s most popular presidents have done the most harm to the liberty and prosperity of its citizens.

Confronting the widespread belief that the era of big government is over, or soon will be, Higgs offers evidence that this anticipation represents little more than wishful thinking. After a century of fighting a losing battle against their own government, most Americans have accommodated themselves to government’s victory. AGAINST LEVIATHAN is a thorough and penetrating critique, and a significant contribution in this current time.

For a summary of AGAINST LEVIATHAN: Government Power and a Free Society, by Robert Higgs, see

To purchase AGAINST LEVIATHAN, see

Robert Higgs will speak at the Independent Institute in Oakland, Calif., on September 29th, 6:30 to 8:30 p.m. For more information, see


2) Next Steps in Venezuela
Venezuelan president Hugo Chávez defeated a recall referendum earlier this month by portraying himself as an embattled reformer under attack from the corrupt oligarchs whom he ousted. Although this charge is hypocritical—rather than abolish the corrupt spoils system, Chávez has redesigned it to serve his own political purposes—his victory at the polls was legitimate—at least in the standard usage of the term. Chávez’s opponents therefore will have to invent a better strategy to win the hearts and minds of Venezuelans, according to Alvaro Vargas Llosa, research fellow at the Independent Institute, who witnessed the election first-hand.

“The opposition made huge mistakes, such as the attempted coup in 2002 and the oil strike in early 2003, that made Chávez the victim and blurred the fact that during his government alone, 5 million people have joined the ranks of the poor,” Vargas Llosa writes in an op-ed published in the SAN FRANCISCO CHRONICLE.

“The strike also gave Chávez the pretext to purge the state oil company of all vestiges of independent management,” Vargas Llosa continues. “He then turned it into a source of funding for many radical groups in Latin America, from the ‘piqueteros’ in Argentina to MAS in Bolivia.”

Chavez has been no less collectivistic in his own country, Vargas Llosa explains. “After coming to power in 1999, Chávez threw away the constitution and used referendums and ad-hoc elections to replace the standing institutions with a loyal National Assembly, a government-controlled Supreme Court and a subservient electoral tribunal.” Instead of dismantling the corrupt spoils system that had impoverished Venezuelans, Chávez took it to the extreme, handing out huge sums to favored groups—at the expense of small businesses and the economy as a whole, which has suffered a 10 percent fall in Gross Domestic Product, according to the International Monetary Fund.

Concludes Vargas Llosa: “If the opposition learns to live with this defeat, allows the new generation to come to the front and exposes the similarities between Chávez’s system of oil-related patronage and that of the old regime, it will have a good chance of winning the presidential elections a couple of years from now.”

See “Next Steps in Venezuela,” by Alvaro Vargas Llosa (SAN FRANCISCO CHRONICLE, 8/25/04)

Also see:

“Why Liberty Is Failing in Latin America” by Alvaro Vargas Llosa (5/14/04)

“The Individualist Legacy in Latin America,” by Alvaro Vargas Llosa (THE INDEPENDENT REVIEW, Winter 2004)

“Latin American Liberalism: A Mirage?” by Alvaro Vargas Llosa (THE INDEPENDENT REVIEW, Winter 2002)—Latin America


3) The Future of Iraq—Transcript Now Available
How well is Iraq’s new government likely to serve its citizens? And what can the United States do to best promote peace, self-governance, and economic well being in Iraq? These and related questions were addressed in the very timely June 17th Independent Policy Forum, “The Future of Iraq: Democracy or Quagmire?” The transcript of this event is available at

Ivan Eland (senior fellow, director, Center on Peace & Liberty, The Independent Institute) began by proposing a constitutional convention composed of delegates from every Iraqi locality, tribe, and religious group—but without representatives of the U.S. or the interim Iraqi government. Only this approach would give the convention full legitimacy in the eyes of Iraqis, Eland argued. It would also likely result in a decentralized government structure like the Swiss canton system, a partitioning of the country, or the secession of some regions—thus greatly reducing the incentive for Iraqi groups to fight each other, according to Eland.

George Bisharat (professor of law and Middle East Affairs, University of California, Hastings College of the Law) predicted that violence would likely plague Iraq in the short and intermediate term. Iraq’s lack of true sovereignty, its ethnic and religious divisions—and its lack of experience with democracy and the rule of law—are serious obstacles to the attainment of a Western-style liberal democracy, Bisharat argued. The best way for the United States to help Iraqis is to end the occupation and to allow an Iraqi-style democracy to emerge, he said. “We also have to understand that democracy is not imposed at the point of a gun,” he cautioned. “It is a gradual, painstaking process of years and cannot be affected quickly and forcefully.”

James Noyes (research fellow, Hoover Institution) reprised Bisharat’s pessimistic forecast and added that because it was very unrealistic to believe that a U.S. occupation could mentor democracy in Iraq, the architects of U.S. policy must have sought some other aim. One consequence of the disruptions caused by the war and occupation, he said, is the likely “return to old militias…inimical to the development of a broadly representative government for Iraq.”

Christopher Scheer (co-author, THE FIVE BIGGEST LIES THAT BUSH TOLD US ABOUT IRAQ) was similarly pessimistic. “The best-case scenario for Iraq is that you end up with authoritarian, yet semi-democratic, leaders who don’t murder and torture as much as their neighbors, and there’s not a civil war in Iraq,” he said. “I hope it will turn out much better than that, but it is likely that we will end up with another Saddam Hussein. After all, that has been the result of U.S. policy in the region for the last 45 years.”

For a transcript of “The Future of Iraq: Democracy or Quagmire?” see

Center on Peace & Liberty

For information on Ivan Eland’s forthcoming book, THE EMPIRE HAS NO CLOTHES: U.S. Foreign Policy Exposed, see

To order a copy of the video, UNDERSTANDING AMERICA’S TERRORIST CRISIS: What Should be Done?, see


  • Catalyst
  • Beyond Homeless