Special to L. Neil Smith’s The Libertarian Enterprise
One of the sadder facts of human existence is that power will get you through times of no brains better than brains will get you through times of no power.
—L. Neil Smith
The next time anyone offers you a ration of excrement because you appear to believe in a conspiracy theory (despite the incontrovertible fact that these United States of America were founded by a band of conspirators) be sure to bring up the name “Jekyll Island”. Jekyll Island lies off the coast of Georgia (the one in the American South, not in the former Soviet Union), and at one time was the location of a grand luxury resort—the Jekyll Island Club—whose membership was limited to the one hundred most wealthy and powerful men in the country.
These were the wealthy, powerful men who, in 1913, at the urging, and with the assistance, of New York Senator Nelson W. Aldrich, along with other protofascists, arrived at the island by a secret, private train to devise what would be advertised as a “scientific currency system”—the same system that is falling apart all around our ears today.
That system was (and remains) the Federal Reserve. Most Americans don’t think about it very often. At some level, they assume that it’s a part of the United States government. But it’s no such thing. The Federal Reserve is a cartel (or a cabal, if you prefer the expression) of gigantic and powerful private banking institutions, the majority of which are not even American. From 1913 to this day, these foreigners—often malign foreigners—have largely controlled our monetary system.
They’re the principle reason you’re not encouraged to believe in conspiracies.
By any measure, 1913 was a very bad year. Mexico and China were both having revolutions. In the Philippine Islands, to which we had promised independence 15 years earlier after the Spanish-American War—and then reneged—the Moros were in rebellion, and US troops under John “Blackjack” Pershing massacred 2000 civilians. There was a war raging in the Balkans, the King of Greece was assassinated, the Romanovs in Russia were having their last good year, a trolley and its passengers were buried in garbage in Niagara Falls, New York, a freighter full of dynamite blew up in Baltimore harbor, and a women’s suffragette was trampled to death by the King of England’s carriage horses.
Richard Nixon was born.
On the other hand, the zipper was invented.
It was also, absolutely and without a doubt, the worst year for individual liberty and for private capitalism in America—and on that account for our entire species—since the War Between the States. Princeton professor, former New Jersey governor, and unabashed racist Woodrow Wilson was elected President and, largely because of that, 1913 basically witnessed the recission of every single precious economic and political principle ever established by the American Revolution. Huge strides were made toward turning the children of that Revolution back into the powerless serfs their ancestors were before 1776.
On February 3rd of that year, the 16th Amendment to the United States Constitution was declared to have been ratified (although some doubt among historians lingers, even to this day, over the legality of the procedure), allowing the federal government to overcome certain restrictions that had been established on it by the Founding Fathers and to impose and collect—from individuals—a graduated income tax.
From each according to his ability, to each according to their power.
On April 8th, the 17th Amendment mandated the direct election of United States Senators (who had originally been chosen by their state legislatures), removing yet another layer of insulation between the individual and the all-consuming, increasingly imperialistic federal government.
America had begun as a handful of small, independent republics, united for some—but certainly not for all—purposes, through the nexus of a virtually powerless central government. What we might refer to as the new nation’s basic “operating system”, the Articles of Confederation, were almost immediately flushed down the “Memory Hole” and the United States Constitution was adopted in its place, doing irreparable damage to the original concept the Founders had in mind, by establishing a strong, essentially unanswerable central government. The War Between the States wrecked the concept almost completely. The 17th Amendment rendered state governments essentially irrelevant and finished off the Founding Fathers’ dream of a peacefully united confederation.
On October 3rd, the United States Revenue Act of 1913 was passed by Congress, reimposing the federal income tax spawned by the Abraham Lincoln administration—and later declared unconstitutional by the Supreme Court—first imposed to finance what was perhaps the first total war in human history. Now, backed up by the 16th Amendment, the new tax would soon be employed to finance the country’s second total war.
Finally, on December 23rd, the Federal Reserve System, little more than an elaborate counterfeiting scheme that continues to this very day, was erected—without the consent of the governed—at the behest of President Woodrow Wilson and the Jekyll Island conspirators, ending an unprecedented and almost miraculous century and a half of ever-increasing, freely-generated and mutually-exchanged American wealth.
Early libertarian thinker Frank Chodorov wrote of the income tax, “… it gives the government a prior lien on all the property produced by its subjects. [Thus the government] unashamedly proclaims the doctrine of collectivized wealth … That which it does not take is a concession.” Meaning that anything we slaves get to keep, out of what we’ve labored to create, is seen by the government as a charitable sacrifice.
Any discussion about whether the United States is being overcome by “creeping socialism” is ludicrous. The United States has operated as a socialist dictatorship—albeit, until recently, a dictatorship with velvet gloves on its iron fists—since that cursed year of 1913.
Almost immediately, there were dire consequences. Before 1913, Americans didn’t allow themselves to be tagged, earmarked, tracked, traced, folded, spindled, or mutilated by government busybodies. They were free to live their lives, if they wished, in perfect privacy and anonymity. Thanks first and foremost to Wilson and his “Progressive” movement, this is no longer possible, and the results, for individual liberty as well as for the health and safety of the nation, have been disastrous.
It shouldn’t have come as a surprise to anyone that the process was helped along, massively accelerated, in fact, only three years later, when Wilson’s government tested its brand new shiny powers of taxation (and seized the “emergency” power to take over, control, and use every American’s life) by involving the US—unnecessarily, and contrary to Wilson’s campaign promises—in the First World War, at the eventual cost of 22,625,253,000 1914 dollars, and 117,465 American lives.
The cost today would be $319,611,416,417.56.
Altogether, fifteen million people were killed.
The fact that the British Cunard liner RMS Lusitania, whose innocent American passengers were the Wilson government’s principle excuse for entering the conflict, was, in fact, a ship of war under international law—it had deck guns, under canvas cover, and carried a hold full of munitions—was a secret kept by both governments for decades. In the 1950s, the wreck was depth-bombed by the British navy in an attempt to destroy evidence that Lusitania was legally a warship.
Historian Barbara Tuchman devoted a whole book—among her best, The Guns of August—to trying to figure out what the hell caused World War I. Dismissing the popular theory that it was just a pissing contest over a dead Archduke, the best even she could do was guess that everybody in the vast incestuous extended family that European royalty consisted of, had all kinds of nifty new toys—tanks, machineguns, airplanes, poison gas—and were simply itching to try them. We got to play because our toys (paid for by Wilson’s income tax) were even niftier, and we American “cowboys” were better at using them.
Philosopher and social commentator Bob Dylan put it this way: “World War I, it came and it went, the reason for fighting I never did get.”*
The Crash of 1929 and the Great Depression became inevitable, caused directly by passage of the Federal Reserve Act of 1913, which allowed the private banking system (mostly a small handful of foreign crooks) to control a phenomenon—the price of borrowed money, which we call “interest”—that formerly had only been controlled by the “Invisible Hand” of the free market system. Cheap money is always popular, especially politically, and people borrowed and spent money on things their common sense and better nature would have kept them from buying if the interest rate, kept artificially low, had been higher.
Nobody today seems to have learned a goddamned thing from that event.
The famous libertarian columnist and editor Vin Suprynowicz has frequently suggested that most of America’s problems today could be solved simply by repealing every law passed in 1913 and afterwards. I find it very hard to disagree. Allowing for others who would place that date earlier—1860, 1794—or who, like the late Robert LeFevre would prefer a Constitution consisting only of five words, “Congress shall make no law”, it would certainly represent a good beginning.
Life was unquestionably better (not necessarily easier, mind you, we do love our dishwashers, flat-screen televisions, and computers) when people had more freedom. The loss of significant amounts of that freedom occurred in 1913, when the Federal Reserve and income taxation were imposed on Americans, followed by endless volumes of so-called “Progressive Era” legislation that still has us bound hand and foot today.
Naturally, those nations that had not preceded America in its descent into tyranny were quick in their attempts to catch up with it. It is no coincidence that the 20th century featured the largest, most powerful governments in human history, and at the same time, the most deadly and devastating wars. The link is unprecedented control by governments of the money supply, and equally unprecedented powers of taxation.
Without a doubt, taxation is the fuel of war.
I’ll say it again, so there’s no mistake: taxation is the fuel of war.
Taxation is the fuel of war.
Doing something serious and permanent about that—beginning by auditing the Federal Reserve, declaring a tax amnesty retroactive to 1913, establishing a commission to investigate the Constitutionality of the Sixteenth Amendment and possible legal irregularities in its ratification—will do more to restore confidence in our civilization than anything else anyone can think of, end our economic problems, and lead America back to unprecedented peace, freedom, progress, and prosperity.
As popular lecturer and former Libertarian Presidential candidate Michael Badnarik (among others) often points out, America, “the best idea for a country anybody ever had”, survived perfectly well for over a century without an income tax, chiefly by maintaining a much smaller government, which represented a much smaller threat to individual liberty.
In 1943, Austrian economist and philosopher Friedrich von Hayek described Western Civilization’s seemingly inexorable descent into totalitarianism as The Road to Serfdom. We do not know, yet, whether that road can be traveled both directions, but we can only learn by trying.
At the moment we have a massive task before us, throwing off an openly socialist regime while trying to avoid electing a fascist government in its place. Many another nation has failed at this. On the other hand, we are better equipped to accomplish it, in terms of what we have learned, how much the public understands, and who we have to help us—more Americans are aware of their rights now, under the first ten amendments, and, if all else fails, are vastly better armed than ever before—than any previous generation in history since the Revolution.
Perhaps by 2013, we can be back again, on the road to freedom.
* “With God On Our Side”, copyright 1963, by Bob Dylan, from his album “The Times They Are A-Changin'”
Reprinted from The Libertarian Enterprise for September 5, 2010
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