Thomas Woods, Jr. on Libertarianism Versus the Catholic Church, Ron Paul's Presidential Chances and US State Secession

The Daily Bell is pleased to publish an interview with the distinguished libertarian scholar, Thomas E. Woods, Jr.

Introduction: Dr. Woods is a senior fellow at the Ludwig von Mises Institute. He holds a bachelor's degree in history from Harvard and his M.Phil. and Ph.D. from Columbia University. He is the author of nine books, including two New York Times bestsellers: Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse and The Politically Incorrect Guide to American History. His other books include Who Killed the Constitution? The Fate of American Liberty from World War I to George W. Bush (with Kevin R.C. Gutzman), Sacred Then and Sacred Now: The Return of the Old Latin Mass, 33 Questions About American History You're Not Supposed to Ask, How the Catholic Church Built Western Civilization, and The Church and the Market: A Catholic Defense of the Free Economy. His writing has appeared in dozens of popular and scholarly periodicals, including the American Historical Review, the Christian Science Monitor, Investor's Business Daily, Catholic Historical Review, Modern Age, American Studies, Intercollegiate Review, Catholic Social Science Review, Economic Affairs (U.K.), Quarterly Journal of Austrian Economics, Inside the Vatican, Human Events and many more.

Daily Bell: Thanks for sitting down with us again. Let's jump right in. Do you think Ron Paul has a real chance to win the GOP presidential nomination?

Thomas E. Woods, Jr.: It won't be easy, but it's less difficult to imagine a scenario in which he wins than it was even four or five months ago. An outright win in Iowa, which is a strong possibility, gives him momentum going into New Hampshire. At least a strong second-place showing there silences the doubters who hesitate to support him because they think he can't win. Now those are on board. The momentum builds further. Money pours in like crazy. It is not impossible.

I'll never forget, in 2008, reading articles about the GOP primary following John McCain's win in New Hampshire. Voters in states where the primary election had yet to be held were actually saying things like, "I don't like McCain but I guess I have to go vote for him." What? Why do you have to go vote for him? There are other candidates still in the race! What possible reason could you have for voting for someone just because he won the New Hampshire primary?

It's bizarre behavior, and apparently there's no getting rid of it. Might as well hope it can be used in our favor this time.

Daily Bell: Why is the United States involved in so many wars and military adventures today? Is this a function of the Pentagon, the power elite or Wall Street? Who wants these wars and why?

Thomas E. Woods, Jr.: In the old days there was a much greater willingness to consider that something other than patriotism and "national security" might have a teensy weensy bit to do with why the pressure for war builds and becomes irresistible. In 1934, for example, H.C. Engelbrecht and F.C. Hanighen wrote their famous book Merchants of Death: A Study of the International Armament Industry. In the ensuing decades it has been fashionable to reject the argument in that book – why, only a crank would think arms manufacturers might have a vested interest in military conflict! More often, the book's thesis is caricatured by people who have never read it. In recent years historian Hunt Tooley has rehabilitated and extended its thesis.

The fact is lots of people grow wealthy and powerful from war. Gen. Smedley Butler didn't say "War is a racket" for nothing. For some reason, though, people find it difficult to believe that one's material interests might lead him to support war, even though most people do not find it difficult at all to think one's material interests might lead him to support steel tariffs, sugar quotas, health-insurance mandates and so on.

In his useful book, Washington Rules, Andrew Bacevich, a contributing editor of The American Conservative, explained that the bipartisan foreign-policy consensus delivers

"profit, power, and privilege to a long list of beneficiaries: elected and appointed officials, corporate executives and corporate lobbyists, admirals and generals, functionaries staffing the national security apparatus, media personalities, and policy intellectuals from universities and research organizations. Each year the Pentagon expends hundreds of billions of dollars to raise and support U.S. military forces. This money lubricates American politics, filling campaign coffers and providing a source of largesse — jobs and contracts — for distribution to constituents. It provides lucrative "second careers" for retired U.S. military officers hired by weapons manufacturers or by consulting firms appropriately known as "Beltway Bandits." It funds the activities of think tanks that relentlessly advocate for policies guaranteed to fend off challenges to established conventions. "Military-industrial complex" no longer suffices to describe the congeries of interests profiting from and committed to preserving the national security status quo."

That is a shockingly candid statement but I think it describes the situation to a "t."

Incidentally, some people wonder whether oil may after all be overemphasized as a reason for US military involvement in the Middle East, since other countries are more reliant on Middle East oil than the US is. But whether or not the US itself needs the oil, the US government can use its control of important oil sources as a lever to bring pressure against other powers.

Daily Bell: What is the source of the religious commitment to a bellicose American foreign policy?

Thomas E. Woods, Jr.: This deserves an extended response because although people know the Christian Right in the US favors supporting the Israeli government militarily, I think not so many people quite understand why.

According to the dispensationalist theology at the root of this, Christ came in order to bring a political kingdom to the Jewish people, to rule from the throne of David for one thousand years and to fulfill all the prophecies of the Old Testament. But Christ was rejected and crucified, thereby postponing the divine intervention. 

The so-called "Church age," established from Christ's crucifixion up to the moment of the rapture (more on which is below), was in this view not prophesied in the Old Testament at all. Thus dispensationalists refer to Church history as the "great parenthesis." It is a long pause in God's relationship with the Jews, which to the dispensationalist is the central drama of human existence.

Eventually – we do not know when – Christ will come and "rapture" the Christians into heaven, at which point He will return once again to dealing with the Jews. The rapture will be followed by a seven-year tribulation and the appearance of the Antichrist. The Battle of Armageddon will occur, Christ will return (His third coming), the conversion of all Israel will take place, and the millennium bypassed at Christ's first coming will at last be established.

Since the Jewish people are at the center of salvation history, and since none of the prophets could have foretold the coming of the Church (which was, after all, the unanticipated great parenthesis in God's salvific plan), none of the Old Testament prophecies can be taken in anything other than a purely literal and physical sense. Since a number of Old Testament prophecies have not yet been literally fulfilled, such fulfillment is destined to occur at some point in the future. Thus, for example, since the land of God's promise stretched from the Nile to the Euphrates, these must someday become the borders of Israel.

These views would not have been recognized by Christians before the nineteenth century. Orthodox belief held that the Old Testament foreshadowed the New, with its prophecies and promises having been fulfilled in a spiritual rather than a physical sense in the coming of Christ and the establishment of the Church. The "seed of Abraham," according to traditional Christian belief, is to be understood in a spiritual rather than a racial or nationalistic sense. "They who are of faith, the same are the children of Abraham" (Gal. 3:7). "And if you be Christ's, then you are the seed of Abraham, heirs according to the promise" (Gal. 3:29).

This is not to say that the idea of a Jewish national homeland established by human effort is incompatible with traditional Christian belief – one might support such an effort for various humanitarian and other reasons – but only that it is not mandated by it. Nor is the bellicose foreign policy of most of the Christian Right any necessary part of the Christian worldview.

(The rendition of dispensationalism I've given helps to account for the centrality of Israel and the Jewish people in the drama of salvation history according to some Christians, which in turn accounts for the unconditional support for the Israeli government. On the other hand, some dispensationalists contend that their views do not require such support, given that in their view Israel will be around forever regardless of what man does.)

Daily Bell: You are a Catholic scholar. What do you think of the recent suggestion by a policy arm of the Church about the positives inherent in world government?

Thomas E. Woods, Jr.: I wasn't particularly thrilled about it, needless to say. Oddly enough, part of the document attributed the world's economic problems to financial bubbles created by excessive money growth – an important insight. The rest of the document then seems to think more of the same, except with an additional layer of bureaucracy added, is just what the world needs now.

When the recent document was issued, NPR asked me to write a 500-word commentary. That's frustratingly brief but I did it. I wrote a longer piece about similar concerns regarding Pope Benedict XVI's encyclical Caritas in Veritate.

I've written quite a bit on Catholic social teaching and tried to answer some of the previously unexamined questions it raises from a pro-capitalist point of view. One of the problems with documents like this is that although much of what is said in them does not bind Catholics – obviously there can be no official Catholic position on how to recapitalize banks – it does put Catholics in an awkward position. This is wholly unnecessary.

I've discussed this sort of thing in greater detail in my book, The Church and the Market: A Catholic Defense of the Free Economy, which can be read by Catholics and non-Catholics alike who are interested in an introduction to Austrian (free-market) economics.

Daily Bell: Do you believe the resurgence of free-market thinking in the last few years will continue to grow? Or will the likely coming depression put a damper on it?

Thomas E. Woods, Jr.: I am certain it will keep growing. Ron Paul has given Austrian economics enough energy and visibility that it will continue to grow in influence in the coming years, at which point it will grow still further on the basis of its own momentum. And if the economy worsens, people looking for answers will continue to find the Austrian School, as they did in the wake of the recent financial crisis.

Daily Bell: Is Keynesianism dead? What will it take to kill it?

Thomas E. Woods, Jr.: A lot of people assumed it was dead quite some time ago, but it has emerged with renewed strength over the past several years. It's hard to kill in part because it seems non-falsifiable: if its policy prescriptions fail to bring economic relief, the reason is said to be not the policy itself but the fact that it was not applied with sufficient gusto. At that point, one has no choice but to fall back on economic theory in the fight against Keynesianism.

I can see two things that could finish it forever.

The first is an academic strategy. Gary North calls for this at KeynesProject.com. We need a systematic dismantling of the Keynesian system, piece by piece. Henry Hazlitt refuted Keynes' General Theory line by line in his The Failure of the "New Economics," it's true, but he is so relentless in his line-by-line refutation that I've always felt the big-picture aspect was missing.

We need the work either of a single great thinker and scholar or, more likely, the collaborative effort of a team of scholars, each with a devastating case to make in a particular Keynesian subfield. Finish the job. Do what F.A. Hayek should have done in the 1930s but didn't.

Second, major fiscal and economic difficulties will tend to damage the reigning paradigm. No one can seriously pretend that what is coming is the Austrians' fault. That's the devastating double-edged sword of condemning us for being "fringe" or "out of the mainstream." If that's true, then whatever happens can't be blamed on us – we're out on the "fringe" without any influence, remember? We should be prepared to capitalize on this.

Daily Bell: Could some states begin to take a real look at secession, state sovereignty and Tenth Amendment actions if the economy continues to worsen?

Thomas E. Woods, Jr.: Ron Paul has been saying we should expect de facto nullification when the real crisis comes and the federal government has trouble paying its bills. It will be harder for it to intimidate the states into doing its bidding. At that point, they may garner the courage to take a real and long-overdue stand against Washington.

Filling in for Peter Schiff on his radio show not long ago, I asked Pat Buchanan how likely he thought it was, on a scale of one to ten, that secession might be seriously entertained sometime over the course of the next several generations, given the scope of the problems the country is sure to face. He said 8 or 9. But he was thinking in terms of the American Southwest, which will increasingly be culturally Mexican, so that's a different scenario from the one you're describing.

Students of recent world history would be advised not to rule out a possible outcome just because it seems unlikely or "out of the mainstream" (ooh, beware!) today.

Daily Bell: What's your latest book and when is it scheduled to come out?

Thomas E. Woods, Jr.: That's it for books from me for a while. I've written five books (and edited a book of essays) in the past five years: 33 Questions About American History You're Not Supposed to Ask, Who Killed the Constitution? (with Kevin Gutzman), Meltdown (on the financial crisis; foreword by Ron Paul), Nullification: How to Resist Federal Tyranny in the 21st Century (see my Interview with a Zombie promo video), Back on the Road to Serfdom and, most recently, Rollback.

Rollback makes a pretty relentless case against just about everything the federal government does, from the regulatory apparatus to the military-industrial complex, the war on drugs, economic "stimulus," the Federal Reserve, and on and on. It could have been called "Everything Should Be Abolished, And Here's Why."

Daily Bell: Finally, after the 2012 election what actions and tactics should most freedom advocates consider to best defend liberty and advance our freedoms against Washington over the next four years?

Thomas E. Woods, Jr.: I speculate about this a bit in the final chapter of Rollback. My answer would be a little bit of everything. Acquaint yourself with ideas you might have disparaged or indeed never have heard of in the past: jury nullification, agorism, the Free State Project, you name it.

Daily Bell: Any publications you want to bring to our attention?

Thomas E. Woods, Jr.: Not a publication but a website. I get a lot of people who enjoy reading my books and who want to know more about American history, or who wish they knew more about economics – both out of natural curiosity and to refute the bad guys – and don't really know where to start.

My site, organized into courses you can view at your convenience, will teach US history, European history and economics. You can watch everything in video or you can put audio files on your iPod. Some of the videos will feature me teaching, and I'll be joined by several other professors you can trust, including Kevin Gutzman, author of The Politically Incorrect Guide to the Constitution. And you can ask us questions in our discussion forums.

It's by far the most important thing I have done. Please keep an eye on my personal site, TomWoods.com, where I'll be announcing it.

Daily Bell: Thanks for sitting down with us.

Thomas E. Woods, Jr.: My pleasure.

Thanks to Thomas Woods for another fascinating interview. We wish him good luck with his new project. Likewise, we wish Dr. Gary North the best of luck with The Keynes Project, which Mr. Woods mentions and that seems like a great idea.

We weren't aware of the Keynes Project but we looked it up and found it at GaryNorth.com. He calls the larger effort, which has yet to get underway, "A Critical Analysis of the Economics of John Maynard Keynes from an Austrian School Perspective." Here's something from the introduction:

John Maynard Keynes was the most influential economist of the twentieth century. This speaks poorly of the twentieth century. In October 2009, I wrote an article for Lew Rockwell in which I outlined a plan to refute Keynes, line by line. Austrian economists are not found on major university campuses. I wrote it for a younger, untenured academic economist at some private college or obscure university who is willing to devote his career to the task. I still hope such a person takes up my challenge.

Having written this, Gary North tells us he's shifted focus and now conceives of The Keynes Project as a model for a "joint effort." He suggests focusing on Keynes' 1936 book, The General Theory of Employment, Interest, and Money, and indicates he intends to put up a blog site where participants can "discuss specific research issues in forums, submit articles or links to articles, and establish off-site communications with other participants."

Hope he gets it up and running. Once it's online, perhaps we'll write more about it. As Thomas Woods knows, education is more important than ever, and the Internet provides a platform to promote ideas that did not have a chance to be disseminated in the 20th century.