Remember Lady Justice, who wears a blindfold and holds the scales? She is a state creation, too, and when it comes to state wrongdoing, her thumb holds the scales down.
Original Article: “The State Will Always Set the Rules in Its Favor”
This Audio Mises Wire is generously sponsored by Christopher Condon.
One of the principles of good public policy is to focus efforts on understanding social problems and searching for effective responses where those problems are serious, not where they are minor or missing. Local problems justify locally focused and decided policies, problems that have effects that are more widely spread justify geographically broader policies, and the broadest problems justify national policies, as illustrated by the federalism of the US Constitution, particularly the Tenth Amendment.
That such a principle is well established is illustrated by t Edgar K. Browning and Jacquelene M. Browning’s textbook, Public Finance and the Price System, which I used when teaching my first such class over four decades ago and which said, “The key issue here is the geographic area over which persons necessarily benefit [or are harmed],” which requires that “care is needed in determining what types of policies are more suitable for local governments.”
However, that principle is often honored in the breach today, as politicians at higher-level governments are always trying to regulate and legislate issues that are more local in character. Why? It lets politicians in areas where the problems are greatest pretend they are a national problem rather than ones tied to their jurisdictions and policies. Further, the power to vote on national-level plans gives politicians representing other areas the leverage to “rent” their support for such programs in exchange for more of what they want through the legislative pork barrel.
Just think how many times a single event in one place starts trending, then immediately gives rise to proposals for new state or national policies as “the solution,” as is so common with issues of crime. The Monterey Park mass shooting is a good illustration. The same day it was reported in the Los Angeles Times, they ran an editorial about mass murder shootings becoming “a sickeningly frequent occurrence in America” arguing that mass shootings “have one thing in common: They have guns” and asserting that we must limit the Second Amendment in the US Constitution—not only federal law, but the highest law of the land—because “national suicide is not the compulsory price of freedom.”
The result of such broad, national responses is also poor “target efficiency,” because too little attention focuses on the more local reasons for where the problems are worse.
An excellent example of this is provided by recent research on the US murder rate by the Crime Prevention Research Center, and its president, John R. Lott Jr., whom I have known since we overlapped many years ago in the UCLA Economics PhD program. I would note that John’s work is often controversial, which also makes him a frequent subject of ad hominem attacks, because the empirical data he develops can strongly contradict what others are “selling” as the truth in some area, particularly with regard to crime. However, I have never seen him abuse logic and statistics to get a particular answer he set out to find (or was paid to, as many “researchers” are). His focus, which strongly reminds me of the work of Harold Demsetz, who taught both of us, is on designing empirical tests to differentiate among alternative explanations, then following where the evidence leads, rather than torturing evidence to create the “right” wrong answer.
Increases in homicide rates tend to be treated by state and federal politicians as if they are broadly distributed national problems to scare Americans into supporting overly broad-brush “solutions.” But Lott’s research shows instead that “homicide rates have spiked, but most of America has remained untouched.” Or as David Strom summarized the results, “There are vast swathes of the country where violent crime is very, very rare, and small areas of the country where it is common.” If that is true, we should focus our attention on those small areas, not on national policies poorly focused on where the actual problems are most severe.
Lott’s research, which used 2020 homicide data, examined the concentration of homicides in particular areas to see whether America’s increasing homicide problem is national or local. He let that data tell its story.
First, he focused on county-level data rather than national data. Some of the dramatic results he found:
The worst five counties (Cook, Los Angeles, Harris, Philadelphia, and New York) accounted for about 15 percent of homicides.The worst 1 percent of counties (31), with 21 percent of the US population, accounted for 42 percent of the homicides.The worst 2 percent of counties (62), with 31 percent of the population, accounted for 56 percent of the homicides.The worst 5 percent of counties (155), with 47 percent of the population, accounted for 73 percent of the homicides.In contrast, over half of US counties (52 percent) had zero homicides in 2020, and roughly one-sixth of the counties (16 percent) had only one.
Continuing his investigation, Lott looked at even finer-scale zip code data for Los Angeles County. He found that the worst 10 percent of zip codes in the county accounted for 41 percent of the homicides, and the worst 20 percent accounted for a total of 67 percent of the homicides.
From such data, Lott concluded that: “Murder isn’t a nationwide problem.” Instead, “It’s a problem in a small set of urban areas, and even in those counties murders are concentrated in small areas inside them, and any solution must reduce those murders.”
Despite the constant political and media drumbeat to portray homicides as a national problem that threatens everyone everywhere, and thus demands national solutions in line with what the political Left wants, the evidence points us in a far more local direction.
That may well explain the political reason for the volume and persistence of that drumbeat. It provides camouflage for those whose policies (and those who support them) would come under far greater scrutiny if people recognized just how concentrated homicides are and then asked what is different in those places, rather than the “blame America first” bromides they are routinely misdirected toward today.
But that means if we really cared about those most harmed by the murder rate, rather than imposing broader-than-necessary restrictions on Americans, it is important to follow the evidence so many would prefer to keep hidden.
According to popular thinking, the government’s definition of money is of a flexible nature. Sometimes it could be M1, and at other times it could be M2 or some other M money supply. M1 includes currency and demand deposits. M2 includes all of M1, plus savings deposits, time deposits, and money market funds. By popular thinking what determines whether M1, M2, or some other M is considered money is whether it has high correlation with key economic data such as the gross domestic product (GDP).
However, since the early 1980s, correlations between various definitions of money and the GDP have broken down. The reason for this breakdown, many economists believe, is that financial deregulation has made the demand for money unstable. Consequently, the usefulness of money as a predictor of economic activity has significantly diminished.
Some economists believe that the relationship between money supply and the GDP could be strengthened by assigning weights to money supply components. The Divisia indicator, named after the French economist François Divisia, adjusts for differences in the degree to which various components of the monetary aggregate serve as money. This, in turn, supposedly offers a more accurate picture of what is happening to money supply.
The primary Divisia monetary indicator for the US is M4. It is a broad aggregate that includes negotiable money market securities, such as commercial paper, negotiable CDs, and T-bills. By assigning suitable weights, which are estimated by means of quantitative methods, it is held that one is likely to improve the correlation between the weighted monetary gauge and economic indicators.
Consequently, one could employ this monetary measure to ascertain the future course of key economic indicators. However, does it make sense?
No definition of money can be established by means of a correlation. A definition is supposed to present the essence of the subject being identified.
To establish the definition of money, we must determine how a money-using economy came about. Money emerged because barter could not support the market economy. A butcher who wanted to exchange his meat for fruit would have difficulty finding a fruit farmer who wanted his meat, while the fruit farmer who wanted to exchange his fruit for shoes might not have been able to find a shoemaker who wanted his fruit.
The distinguishing characteristic of money is that it is the general medium of exchange. It has evolved from the most marketable commodity. According to Murray Rothbard:
Just as in nature there is a great variety of skills and resources, so there is a variety in the marketability of goods. Some goods are more widely demanded than others, some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability. Eventually, one or two commodities are used as general media—in almost all exchanges—and these are called money.
With money, the butcher can exchange his meat for money and then exchange money for fruits. Likewise, the fruit farmer could exchange his fruit for money. With the obtained money, the fruit farmer can now exchange it for shoes. The reason why all these transactions become possible is because money is the most marketable commodity (i.e., the most accepted commodity).
According to Rothbard:
Money is not an abstract unit of account, divorceable from a concrete good; it is not a useless token only good for exchanging; it is not a “claim on society”; it is not a guarantee of a fixed price level. It is simply a commodity.
It follows then that all other goods and services are traded for money. This fundamental characteristic of money is contrasted with other goods. For instance, food supplies the necessary energy to human beings. Capital goods permit the expansion of the infrastructure that, in turn, permits the production of a larger quantity of goods and services. Contrary to the mainstream thinking, the essence of money has nothing to do with financial deregulation as this essence will remain intact in the most deregulated of markets.
Some commentators maintain that money’s main function is to fulfill the role of a means of savings. Others argue that its main role is to be a unit of account and a store of value. While all these roles are important, they are not fundamental. The basic role of money is to be a medium of exchange, with other functions such as unit of account, a store of value, and a means of savings arising from that role.
Through an ongoing selection process over thousands of years, individuals have settled on gold as money. In today’s monetary system, the money supply is no longer gold, but metal coins and paper notes issued by the government and the central bank. Consequently, coins and notes constitute money, known as cash, that is employed in transactions.
At any point in time, an individual can keep money in a wallet or somewhere at home or deposit the money with a bank. In depositing money, an individual never relinquishes ownership over the money having an absolute claim over it.
This contrasts with a credit transaction, in which the lender of money relinquishes a claim over one’s money for the duration of the loan. As a result, in a credit transaction, money is transferred from a lender to a borrower. Credit transactions do not alter the amount of money. If Bob lends $1,000 to Joe, the money is transferred from Bob’s demand deposit or from Bob’s wallet to Joe’s possession.
Consider the money M2 definition, which includes money market securities, mutual funds, and other time deposits. However, investing in a mutual fund is, in fact, an investment in various money market instruments. The quantity of money is not altered because of this investment; only the ownership of money has temporarily changed. Hence, including mutual funds as part of money results in double counting.
The Divisia monetary gauge is of little help in establishing what money is. Because this indicator was designed to strengthen the correlation between monetary aggregates such as M4 and other Ms with an economic activity indicator, the Divisia gauge can better be seen as an exercise in curve fitting.
The Divisia of various Ms, such as the Divisia M4, does not address the double counting of money. The M4 is a broad aggregate and includes a mixture of claim and credit transactions (i.e., a double counting of money). This generates a misleading picture of what money is.
Applying various weights to the components of money cannot make the definition of money valid if it is created from erroneous components. Furthermore, even if the components were valid, one does not improve the money definition by assigning weights to components.
The introduction of electronic money has supposedly introduced another confusion regarding the definition of money. It is believed that electronic money is likely to make the cash redundant. We hold that electronic money is not new money, but rather a new way of employing existing monetary transactions. Regardless of these new ways of employing money, definitions and the role of money do not change.
The attempt to strengthen the correlation between various monetary aggregates and economic activity by using variable weighting of money supply components defeats the definition of money. The essence of money cannot be established by means of a statistical correlation, but rather by understanding what money is about.
The Federal Reserve is no more “private” than the Environmental Protection Agency, and through its special government status, the Fed inflicts many economic crimes on regular people.
Original Article: “The Fed Is a Purely Political Institution, and It’s Definitely Not a Bank.”
This Audio Mises Wire is generously sponsored by Christopher Condon.
The Moral Foundations of Civil Society
by William Röpke
Transaction Publishers, (1948) 1996; xxxvii + 235 pp.
In an earlier column, I discussed Wendell Berry’s stress on land and locality, and. among Austrian school economists, Wilhelm Röpke is most sympathetic to these themes. In The Moral Foundations of a Civil Society, first published three years after the end of World War II, Röpke says: “The proletariat is lacking in precisely that which characterizes the peasants and the craftsmen, wholly apart from the purely material aspects of life; the independence and autonomy of their whole existence, their roots in home, property, environment, family and occupation; the personal character and the traditions of their work” (p. 140). He often denounces the “cult of the colossal.”
Röpke recognizes, though, that the large population of the contemporary world makes it impossible to return to the type of society he most prefers, perhaps best exemplified by Switzerland in the eighteenth and nineteenth centuries. The relevant question then becomes how we can come closest to his ideal society, given modern conditions, and. here, he says, we confront two alternatives: the free market and collectivism.
To any lover of liberty, the choice is a simple one. Collectivist central planning can’t coexist with the regime of small landholders which Röpke favors. Some people, including Wendell Berry, have sought the salvation of agriculture from fluctuating market prices in part through state-mandated price controls, but Röpke warns against this:
Experience and consideration convince us that agrarian monopoly and agrarian collectivism have the effect . . . of bringing about the paradoxical result of sharpening the crisis through the production of unsaleable surpluses if peasant production is not effectually regulated by the familiar methods of coercive economy (forced restriction of production or collectivization pure and simple). But since peasant economy owing to its sociological structure opposes the strongest resistance to such regimentation and will hit upon ever new evasions in order to ensure the full exploitation of all members of the family to assure their incomes, the State instruments of agrarian collectivism will find themselves forced to employ ever wider and more formidable methods of coercion. (p. 189)
One might at first be inclined to object that the process Röpke describes here has not taken place in the United States. Whatever the defects of the government’s agricultural programs, American farmers have not become transformed into Soviet collective farmers or the like. But Röpke could respond that American farm subsidies do not aim to maintain a substantial number of small farmers but instead benefit a relatively small group of the wealthy.
Röpke extends his point to collectivism more generally:
Collectivist economy must always be coercive and can never be anything else. . . . No other system save that of market economy which conveys every particle of demand as an immediate impulse to the producers has been or can be found for getting consumers constantly to vote upon the use of the forces of productivity. That which in a collectivist economy necessarily takes its place is that procedure which has been designated the “Politicalization” of economic life. This means nothing less than that the most important decision in the daily life of the community, the question of the quantity and quality of production, can be determined not democratically but only despotically. (p. 20)
Like Ludwig von Mises, Röpke argues that socialism cannot work. The problems of deciding which goods to produce, “the solution of which untold individuals count through cooperation in the market, . . . . [i]n a collectivist economy . . . must all be solved centrally and consciously by a single head watching over the whole economic process down to the very smallest detail. This task is simply insoluble” (p. 14).
The argument against socialism applies also to the fascist notion of general control of the economy through government regulation, which leaves private property to exist in name only; and, in this connection, Röpke, who was forced to leave Germany by the Nazis in the 1930s, makes a most valuable point, based on his intimate knowledge of that country:
A collectivist economic system will attempt in the beginning to continue the economic process on the basis of prices and costs taken over from the market economy, as happened in Germany by means of the price stop in 1936, and to maintain these as rigid as possible in an attempt to stave off economic chaos. Were all economic data to remain unchanged. . . . [t]he price structure would still retain its significance. Since however this presupposition is more utopian than ever today it is inevitable that sticking to the historical price levels is bound to lead to ever greater dislocation of the economic system. . . . This is precisely the picture that developments offered in Germany after 1936. (pp. 14–15)
Given these problems, what can a collectivist economy do? Here Röpke offers an important insight. He says that the leaders of a collectivist country will be driven to war. In that way, the cohesion lacking in the population because of diverse views about what should be produced can be overcome, since a nation will usually unite against a foreign foe; and, he prospect of territorial gains offers a chance to secure new resources:
In contrast with [the] market economy, since nation and the economic system have only now become merged, the economic well-being of the nation becomes a function of the size of territory and the national resources within the territory. . . . Only now does imperialism as a struggle for the maximal size of the autarkic and collectivistically ruled economic territory become an absolutely inherent and inescapable law of national existence. (p. 228, emphasis removed)
Again, like Mises, Röpke argues that there is no intermediate system between the free market and collectivism:
In this way the government must be drawn with progressive speed along the slippery slope of collectivism. For the more it takes over the “guidance” of the economic system, all the less capable of functioning must what remains of the market system become, and the greater the necessity to submit even this remainder to economic “guidance,” that is to say, the collectivist economy of coercion. (p. 209)
I cannot help thinking that Röpke, in his eagerness to secure a “humane economy” against the dangers of “proletarianization” and the “cult of the colossal,” sometimes recommends government interventions, such aa antitrust action, that would be subject to the same slippery slope.
Those sympathetic to the agrarian concerns of Wendell Berry will find the work of Röpke, whose knowledge of economics far surpasses Berry’s, a source of illumination.
The move from feudalism to the relatively free capitalist societies occurred slowly, beginning with the emergence of the city-states in Italy in Medieval Europe.
Original Article: “The Italian City-Republics Were the Manhattan of the Twelfth Century”
This Audio Mises Wire is generously sponsored by Christopher Condon.
The recent inflationary episodes in the USA have led to the emergence of several different explanations, ranging from overexpansion of the money supply to supply-side constraints, not to mention the role of rising markups along with price gouging and greed for profits. Each emphases the unique role that the category has played in the elevated price level.
However, the various explanations are more than alternative accounts of the same phenomenon. The latter phenomenon of rise in markups, so-called price gouging, and elevated profit levels being experienced today are, in effect, results that have arisen out of adjustments between market participants in response to the unexpected shock of increased “real scarcity” through sudden increases in effective demand because of expansive fiscal and monetary policies.
The unemployment rate in the US was 3.5 percent in February 2020 before the stringent lockdowns were implemented and production was effectively closed, except for “essential” services selected by the government. Following the draconian lockdowns and government-mandated closures of production, unemployment skyrocketed to levels unseen since the great depression of the 1930s. Real GDP fell by 4.1 percent in the first quarter and subsequently by 29.9 percent in the second quarter and since the demand for labor is a derived demand for output, the unemployment rate increased from 3.5 percent to 4.4 percent in March and to 14.70 percent in April.
Many economists predicted a fall in the level of output and employment due to a total collapse in consumer spending. These sentiments were bolstered by their belief in the “paradox of thrift” (where an increase in savings causes a reduction in the spending that the economy depends for growth), and as a result, they had advised the governments to hand huge monetary help to consumers.
Thus, consumers had more money at their disposal than they had previously or would have had if they lost their business or their job. This was a problem from the beginning, as the real purchasing power of money in terms of actual goods did not increase corresponding with the distribution of fiat money. There was, instead, a redistribution from savers to people who had received the additional help.
It led to various efforts by both congress as well as the fed to adopt an expansionary monetary stance. First by an outgoing trump administration who signed a $900 billion pandemic relief package and later by the Biden administration who ensured new fiscal spending of around $1.9T of stimulus, which included another $1,400 in cheques.
The combination of these factors meant additional consumer income was spent by consumers on increasing their consumption, which sporadically jumped during lockdowns, while the flow of output decreased due to the closure of production in form of lockdowns. According to the Bureau of Labor Statistics, when the pandemic began, consumer spending in the second quarter of 2020 had fallen and was down 9.8 percent from the same period in 2019.
One year later (post-injection of monetary stimulus), however, consumer expenditures were 15.7 percent higher than a year earlier. Consumer expenditures in the first and second quarters of 2021 were even higher than in the first quarter of 2020, which was largely unaffected by the pandemic because it began late in the first quarter.
The facts of economic life that we see around us at any point in time in form of quantities of goods, and prices are the result of a process of coordination where order appears spontaneously out of the voluntary interactions of millions of economic agents each economizing on resources and pursuing their own private good. Individuals acting as consumers choose particular goods and services on the basis of their preferences which are in turn dependent on their past learning experiences with those products as well as expectations about their future availability and future price. Similarly, producers and sellers operate their production and output plans based on historical demand, historical availability of their inputs at particular prices, and future expectations about the same.
The smooth functioning of the market thus depends on the degree of coordination of plans between various market participants, the order which emerges out of such coordination also depends on the regularity and surrounding economic environment, for example, a producer would be able to better carry out his plans and coordinate with its buyers and suppliers if there were no sudden jumps in prices of his inputs and output.
The effect of lockdowns and covid led to disruptions in supply chains and production. The capacity utilization index does a great job of highlighting the effects of lockdown on a fall in production activity. The capacity utilization index (which measures the output currently produced as a percentage of its full capacity) dipped below 65.0 percent, whereas in the United States, the long-run average (1972–2019) has been 80.1 percent. The index during the lockdown was just 1.9 percentage points above its trough during the Great Recession of 2007-09.
The resultant increased consumption due to the increased money balances with the public as a result of expansionary monetary and fiscal policy in effect led producers to ramp up production to meet this demand eventually, which led to increasing demand for the inputs that those companies use. But the producers of these inputs did not see any reason to increase their production level or capacity from previous periods because their supply being dependent on final consumer demand was not expected to experience increasing levels during lockdowns. These expectations were only genuine as such increases in consumer demand would have been impossible without the government’s monetary intervention which was unforeseen and was at best temporary.
This growing scarcity of real goods and available labor versus the corresponding demand for labor and goods in turn led market participants to form future expectations concerning present and future scarcity. The rise in prices during such times acted as coordinating signals, that had the specific role to signal increasing relative scarcity which should have in turn conveyed crucial information about important economic data scattered around in a decentralized manner to bring forth more supply.
Price increases by economizing firms in response to increased conflict over existing and future distribution of resources were necessary as without such increases there would be forthcoming shortages of the goods as a whole in the market due to excess demand, this is due to the fact that higher prices also incentivize increasing production capacity for prospective profits and lower prices in light of increasing scarcity creates more demand than can be brought forth at those prices.
Thus, in light of such considerations, the actions of firms increasing their markups over cost in response to increased demand turns out thus to be an equilibrating action consistent with the role of prices signaling relative scarcity. However, had there been no artificial expansion of the money supply, there wouldn’t have arisen the conditions which later led to jumps in markups and profits.
Professor Per Bylund of Oklahoma State University, author of How to Think About the Economy joins Jeff and Bob to dissect how economics went so badly wrong. A discipline rooted in theory, axioms, and deduction has devolved into statistics, models, and hard science envy. Is the economics profession doing any good, or active harm?
Per’s new book How to Think About the Economy: Mises.org/Primer
Gary North and Walter Block debate “Is it Smart to Get a PhD in Economics”: Mises.org/HAP380a
One of the most devastating moments in American history took place on August 6 and August 9, 1945, with the bombings of Hiroshima and Nagasaki. Approximately three hundred thousand civilians, forty-three thousand soldiers, forty-five thousand Korean slave laborers, and over a thousand American citizens (including twenty-three prisoners of war) would die.
The pilots watched in horror. Tail gunner Bob Caron described the horrific annihilation as a “peep into hell.” Captain Paul Tibbets, remembered thinking, “My God, women and children are getting killed!” The radio broadcaster Abe Spitzer witnessed the bombing in the accompanying plane, and his description of the smoke covering Hiroshima is truly haunting. Dwight D. Eisenhower confessed that “never has the matter ceased troubling me.”
While there is no doubt the bombings were horrific, they have been justified as needed to bring the surrender of Japan. However, this is not the case.
The Japanese culture held surrendering as the weakest thing a man could do and dying in battle as the most honorable. Despite these values, it looked like surrender was their only chance. By the end of 1944, the Japanese navy had been decimated by the loss of a substantial number of battleships, aircraft carriers, submarines, cruisers, and destroyers. Food supplies were diminishing as rapidly as public morale.
“I regret to say that Japan’s defeat is inevitable,” said Prince Fumimaro Konoe to Emperor Hirohito in February 1945. One of his biggest concerns was that “a Communist revolution that might accompany defeat.” Henry Mace, who had visited the Pacific in the spring of 1945, saw how they were “ready to surrender.”
The reasoning for their apparent unwilling to surrender was their unwillingness to accept the terms of “unconditional surrender.” The term used by presidents Franklin D. Roosevelt and Harry S. Truman was surprising to leaders like British prime minister Winston Churchill.
For many Japanese, unconditional surrender suggested that their emperor would be tried as a war criminal and executed. That scenario was too much for them to contemplate. Due to the Japanese tradition of worshipping their emperors, the execution of the emperor would have been comparable to the crucifixion of Jesus Christ to Christians, according to Oliver Stone and historian Peter Kuznick in The Untold History of the United States.
Many in his cabinet urged Truman to soften his terms to get the Japanese to surrender. US officials had not failed to understand the intercepted Japanese coders’ emphatic willingness to surrender. There has been loads of evidence proving that Truman and the government knew the Japanese were ready to surrender. They presented this to Truman.
Truman listened to longtime friend James Byrnes, who urged him to change the terms of surrender to allow Japan to keep their emperor. Truman and Byrnes had a decade-long relationship, which had led to his becoming foreign policy advisor and secretary of state in 1945. Truman listened to him, as evidence has shown.
The main reasoning behind dropping the bomb was not just Byrnes’s influence, but also the deep hatred of the Japanese among the nation and Truman.
Historian John Dower has shown that Americans believed the Japanese were the equivalent to cockroaches, rattlesnakes, and rats. War correspondent Ernie Pyle noted that while Americans felt a hatred of our European enemies, they believed the Japanese were much more repulsive.
Anti-Japanese racism really began to pick up due to the Japanese victory over Russia in the Russo-Japanese War. In 1906, California forced Japanese descendants to be segregated in their schools. Other forms of racism were present in the Immigration Act of 1924, which severely restricted people from migrating to the United States, including Japanese immigrants. The Japanese invasion into China in 1937 made racism against the Japanese even worse with the deaths and war crimes.
Obviously, Japan’s actions and wanton cruelty were unjustifiable, but it does not justify racism toward Japanese people or the desire to bomb countless innocent Japanese civilians.
Weeks before the bombs were dropped, the US officials were informed again that the Japanese would surrender if the terms were conditional. That they recognized the signals emanating from Tokyo is unassailable. But Truman decided to interpret their message as meaning that unconditional surrender was the only obstacle to peace. Office of Strategic Services officials and future Central Intelligence Agency head Allen Dulles reported this information to Secretary Henry L. Stimson. Truman chose to ignore the pleas, wanting to deny Stalin promised territorial and economic concessions in Japan.
When Truman was informed of the successful bombings, he exclaimed, “This is the greatest thing in history!” He claimed his announcement of the bombing in Hiroshima was the happiest announcement he ever made. Quickly after this, the Soviets invaded Japan.
When Japanese leaders met on August 9, 1945, it had nothing to do with Hiroshima or Nagasaki but with the Soviet invasion. It has been reported that US officials believed a single atomic bombing was the equivalent of thousands of bombs being dropped. They could burn down the cities all they wanted to if the Soviets did not invade. Once the invasion was underway, the Soviet army’s remaining morale was completely wiped out.
In Tsuyoshi Hasegawa’s words, “The Soviet participation in the war had the most impact on Japan’s decision to surrender.” While the bombings may have increased the urgency of surrendering, the outcome of a Japanese surrender could have been achieved without the bombings.
This is worth mentioning again because of the ongoing conflict in Ukraine. President Joe Biden signed a version of an Obama administration policy that leaves the option of nuclear weapons on the table and modernizes the nuclear arsenal. Nuclear weapons can now be used in “extreme circumstances.” Biden has claimed that he will enact forceful responses against Russia in response to their attack.
The situation is all too similar to the 1945 moment, especially with the spike in anti-Russian sentiment: a country committed horrible atrocities against another country, the descendants of people from the aggressor country face racial prejudice, and in the heat of war, nuclear weapons have been brought up. In the case of Japan, they were used. While the United States has not used any nuclear weapons against Russia, the situation and the language being used are all too similar. It is worth mentioning that nuclear weapons were not necessary the first time, and I am willing to bet that nuclear weapons aren’t necessary this time either.
For all of the political “reforms” being tossed about, the truth is that government is slowly strangling the life out of our society.
Original Article: “Political Salvation Is Slow Suicide”
This Audio Mises Wire is generously sponsored by Christopher Condon.