17A025 Cosa Nostra by Jim Davies, 8/1/2017    

Thomas DiLorenzo's book Organized Crime: The Unvarnished Truth about Government is a masterpiece; and unless you want the hard-copy version, it's free. He and the Mises Institute are offering it electronically without charge. If you've not read it, don't neglect that fine offer.

I was re-reading it recently, and cannot commend it too highly. The original Cosa Nostra, in Sicily, was formed in response to totally corrupt government; if people wanted justice, there was no point in applying to it, so an informal alternative arose to dispense some. The "justice" was very rough, and was based less on restitution and more on vengeance, but it was seen as better than nothing. Such were the origins of the Mafia. Its subsequent history, here and in Italy, is less attractive. DiLorenzo compares that sordid example with today's government in America.

There are 52 short chapters, concerning that number of subjects, and each one pulls no punches but tells it like it is. The range of topics is such as to present us with a reference book on all the major myths of economics which we face from propagandists for statism. It's therefore a priceless resource!

In the author's words, it is "a collection of essays in the tradition of Austrian political economy—a combination of applied economics and the study of governmental reality." The 52 essays are grouped into six sections: "Coercion and Regulation", "Politics and Thieves" (which he calls the "inherent nature of government"), "Centralization versus Liberty", "Money and the State", "Workers and Unions" and "Truth and Lies about Markets."

The very first chapter is about price controls, which I might have associated with wartime directives of the 1940s or perhaps the 1910s. Not at all; its title is "Four Thousand Years of Price Controls" and DiLorenzo details the shambles caused by that kind of government intervention in ancient Egypt, ancient Babylon, ancient Rome of course, and even ancient Greece. Wish I'd known that when writing my Denial of Liberty. We've all heard of the anti-monarchist story of how, in pre-Revolutionary France, the callous Queen Marie Antoinette advised, on hearing that the people were short of bread, "Let them eat cake!" but we may not have known - I did not - that in 1793, four years after the revolution, Robespierre and other Pols imposed the "Law of the Maximum" prices on grain and other foods, as a result of which, very predictably, thousands starved to death. When he in turn was taken to the guillotine, the crowd derided him with "There goes the dirty Maximum!"

Here are a few other tidbits from the book,to help stimulate an appetite for more. First in Chapter 4 on Regulation, DiLorenzo notes that in 2011 the monetary cost of complying with Federal regulations was $1.7 trillion, or twice the amount collected that year as Income Tax. He then quotes Mises, who noted that such regulation "eviscerates three of the most important ingredients of capitalism: private property, freedom of contract, and freedom of association." So are wealth producers dealt a double whammy; thus shackled, it amazes me that the US economy produces as much growth as it does, and it's the removal of such obstacles in the coming zero government society that supports my belief that it will long sustain rates of growth even into double digits.

As for "Anti-Trust" (Chapter 6) this was, he says, "a protectionist racket from the very beginning" and gives numerous examples of savage prosecution of innocent but successful companies. One of them was IBM, for whom I worked at the time: "In 1969 IBM had a 65 percent market share in the computer market and was sued by the federal government for allegedly monopolizing the computer industry. IBM was mired in a court battle for thirteen years before the government finally gave up on the case. In the meantime, the company was eclipsed in the marketplace by Intel, Microsoft, and other companies. This governmental assault on IBM undeniably weakened the company." It did indeed, as I remember well.

A nice feature of this book is that more than once, its Austrian author quotes the monetarist Milton Friedman; as in Chapter 8 about health care: "while medical expenditures rose by 224 percent from 1965 to 1989, the number of hospital beds per 1,000 population fell by 44 percent and the number of beds occupied declined by 15 percent." Yet still, the ruling classes want even more government participation.

Chapter 36 has the best account I've seen anywhere on how government was "responsible for the [2008] sub-prime mortgage meltdown", a.k.a. the Great Recession, yet to end. DiLorenzo shows it was not just the original Community Reinvestment Act, but amendments to it, together with Mafia-like pressure from ACORN and the government's "justice" system that combined to make it extremely difficult for banks not to issue loans that were most unlikely to be repaid.

The final chapter of "Organized Crime" takes apart the "Myth of the Male/Female 'Wage Gap'" and that alone is worth the price of the book, for that myth remains one of the most persistent. DiLorenzo shows that men pursue careers in greater demand, work longer hours, accept harsher conditions and take more risks than women; and that "women are nine times more likely than men to drop out of work for family reasons." He doesn't use what may be the most powerful argument against this myth (that, if it existed, labor-market competition for lower-cost help would swiftly negate it) but all of the detail he does supply combines to support that reasoning.

Thomas DiLorenzo has become one of my top few favorite authors, for as well as this excellent work he has published magnificent deconstructions of Abraham Lincoln, even though as histories they are outside his particular specialty.

Is there any shortfall, in this book? - not that I saw, in anything it said; my only criticism lies in one thing it does not say. I did not notice that DiLorenzo drew the very obvious conclusion that since government is so utterly destructive an influence in society, it ought to be abolished outright; nor, naturally, was any proposal outlined for accomplishing that end.

That omission is alas rather typical of works published by the Mises Institute. Mises himself never came out clearly in favor of anarchism. Perhaps Misesians focus on presenting the facts, and letting readers draw our own conclusions about what ought to be done, and how. I hope the present reader has no doubt about the stance of the ZGBlog about either of those.