The archive.

When Prime Minister Chernomyrdin announced that “the period of market romanticism is over,” Sennholz read it as a confession that reform had been politically defeated. This 1994 commentary examines Russia's stalled post-Soviet transition, where officials favoring “stability” propped up state conglomerates through subsidies, central-bank credit, and inflationary finance. Small shops and service firms flourish under new private titles, he grants, but legal ownership has not yet become economic control, and the large enterprises still look to the state to preserve unproductive employment. Currency confiscations, price controls, and indexation he dismisses as futile inflationist maneuvers. The verdict is uncompromising: no durable middle ground exists between capitalism and socialism, and partial reform will end in monetary collapse before genuine recovery becomes possible.

The failure once again will demonstrate that there is no durable middle-of-the-road between capitalism and socialism and that any attempt at building one invariably will lead to hyperinflation and chaos.

Dictators and avowed socialists are the obvious threats to liberty, but Sennholz's polemical diagnosis reaches further: the more durable enemies are the ordinary beneficiaries of coercive systems—government employees, public educators, tax consumers, and the recipients of AFDC, Medicaid, food stamps, Pell Grants, Social Security, and Medicare—whose incomes depend on the state's expansion. Translating political economy into a moral psychology of dependence, he argues that bureaucracy breeds a class with no interest in deregulation or fiscal restraint, and that when voting follows income interest, democracy becomes an engine of endless redistribution. Yet the essay refuses fatalism. Because these constituencies quarrel among themselves and defend only their own subsidies, no unified anti-liberty coalition can form, and a residual attachment to freedom survives in every human heart.

Power pollutes whatever it touches.

Theft remains theft even when a majority blesses it—the austere charge at the heart of Sennholz's essay on democratic redistribution. Beginning from cooperation as the basic fact of economic life, he contrasts the market's contractual order of private property with command systems that direct labor by official decree, then argues that each rests on a distinct ethical order. His decisive move applies the commandments against theft, violence, and fraud not only to private persons but to democratic majorities: people who would never steal individually endorse tariffs, transfer payments, and compulsory benefits collectively. Inflation earns special scorn as hidden redistribution enriching politicians while robbing savers and pensioners, and public debt as a promise the spenders mean to inflate away. Two souls, he writes, contend in every breast—one honest, one eager to plunder by ballot.

A very popular form of thievery is inflation. It takes property away from millions of unsuspecting individuals and enriches politicians and their favorites by printing and emitting ever-new quantities of money.

Free trade is the banner NAFTA raises, Sennholz argues, and then quietly lowers with side accords, labor provisions, environmental restrictions, and a thicket of regulation. This 1994 essay treats the agreement not as liberalization but as managed trade dressed in liberal rhetoric. Against popular fears of mass relocation, he insists that firms follow productivity, infrastructure, and institutions rather than nominal wages, and that Mexico remains burdened by corruption, union militancy, the unproductive ejido system, and PEMEX oil kept in political hands. Economic law, he maintains, will override political design, but the agreement itself cannot improve business conditions on either side of the border. What it most resembles, he concludes, is mercantilist policy—promoting exports while limiting imports and empowering commissions and bureaucrats.

NAFTA officially raises the beautiful flag of free trade and peaceful exchange, but then quietly takes it down again with numerous qualifications, regulations, side accords, sequels, and supplements.

Christian churches have always shaped the economic affairs of their believers, but two modern movements trouble Sennholz precisely because they pursue mercy and justice through political coercion rather than charity: the Social Gospel and liberation theology. Separating ends from means, he grants their humanitarian language while arguing that their programs hand moral authority to legislators, regulators, and expropriating states. Liberation theology, in his reading, smuggles the Marxian doctrine of class struggle and Leninist dependency theory into Christian ethics, then blames Latin American poverty on a capitalism that scarcely exists there, the region's economic life being interventionist and bureaucratic rather than free. Against clerical appeals to equality he sets differences in ability, industry, and responsibility, warning that the rhetoric of justice curdles into a politics of envy. Compassion divorced from economic reasoning, he concludes, becomes an apology for coercion and violence.

While the churchmen are speaking of peace, they are sowing the seeds of violence.

Primitive man invents rites to master dangers he cannot understand; the modern citizen, Sennholz argues, does much the same with the state, attributing magical powers to government whenever reason fails. Moderns do not openly believe in sorcery, but they preserve magical expectations dressed in the language of policy, theory, and planning. He runs the analogy through inflation, a willful monetary policy disguised as a war on rising prices; through unemployment worsened by minimum-wage laws; through protectionism that teaches the public to fear exchange; and through Keynesianism, which credits public spending with generating wealth rather than merely redirecting it. His sharpest move is linguistic: replace the reverential abstraction 'government' with legislators, regulators, tax collectors, judges, and jailers, and its mystical benevolence dissolves. Its power lies in confidence rather than argument, and naming its agents remains the only antidote.

Thriving in the darkness of irrationality, political magic is in a sense invulnerable to reason.

The official price of crime is radically understated, this 1994 essay contends, because statistics count offenses while missing fear, lost production, defensive spending, and the diversion of police and courts toward regulatory enforcement. Sennholz sorts illegality into three kinds—violent crime, property crime, and violations of government rules—arguing that the third often criminalizes mutually beneficial exchange and manufactures the caseloads that agencies then cite to demand larger budgets. American crime control, he estimates, exceeds $150 billion a year yet grows more expensive without producing security. Fear itself becomes a social tax that suppresses movement, work, and investment. Behind the inefficiency he sees a welfare-transfer state that, by normalizing coercive redistribution, teaches private criminals to imitate its logic on a smaller scale.

A fearful society is a poor society that is crippled by fear and burdened by high costs of defense.

To retire into idle leisure while still capable of work is, in this brief essay of moral economy, a form of waste—of human energy and of the capital that future generations will need. Sennholz opposes a “trough philosophy,” in which retirees draw down private savings or public benefits, to an “accountability philosophy” that treats continued productivity and capital preservation as duties owed to one's descendants. Every consumption of capital, he argues, diminishes society's productivity regardless of who does it. Drawing on Austrian capital theory and a Protestant-inflected discipline, he holds up Ludwig von Mises, who taught and wrote until death, as his model of productive old age, and indicts Social Security and Medicare for sustaining a leisure class at the expense of active producers.

Fortunately for the world, the great men among us retire only when death calls them.

As the federal debt crosses the $5 trillion mark, Sennholz calls it bankruptcy already underway—not the legal kind that liquidates a debtor, but a moral and monetary default achieved through inflation, taxation, and currency debasement. He dismantles the comforting slogans: “we owe it to ourselves” erases the real distinction between creditor and debtor and ignores the foreign institutions holding much of the debt, while the promise that future income will offset present borrowing founders on the fact that deficits produce political claims, not productive assets. His core Austrian move treats debt as a present reallocation of scarce capital: government borrowing consumes real savings, lowers productivity, and rewards industries tied to public spending, leaving later generations a weakened, politicized economy along with the interest bill.

Debts, follies, and crimes are generally mixed together; the federal debt is a $5 trillion mixture.

Government first distorts markets and injures vulnerable groups, then expands its own power by claiming to repair the damage—so runs Sennholz's reading of affirmative action as a case study in self-defeating intervention. Tracing the program from the Civil Rights Act of 1964 and the EEOC through comparable-worth doctrine and ERISA pension mandates, he argues that hiring by ethnicity rather than productivity drove business from the inner cities, that comparable worth revives a discredited just-price theory, and that pension rules meant to protect the elderly instead closed private plans. The market, he insists, rewards services valued by consumers, not academic degrees or occupational dignity. The verdict is severe: the minorities, women, and elderly the program names as beneficiaries become its primary victims.

Affirmative Action does both; it inflicts economic harm and then seeks to alleviate it.

Government debt, Sennholz insists, is not stimulus but consumed capital—a distinction that anchors this April 1995 essay written as the U.S. debt neared five trillion dollars. Private borrowing can finance production and raise output per worker; public borrowing merely absorbs savings that would otherwise become productive investment, redirecting scarce resources toward political uses that voters see as costless benefits and never as the goods forgone. Behind the marble temples of politics he reads hidden deprivation, and behind the debt a moral outrage: one generation has no right to mortgage the labor of the next. Legal restraints alone, he concludes, cannot break the spending habit; only a change in economic ideas can, beginning with visible sacrifice—salary cuts for the president and legislators—before citizens are asked to accept restraint.

The federal debt is a pyramid of IOUs for income and wealth consumed in the past.

Americans measure their institutions against wisdom, righteousness, justice, and liberty, and so feel the painful distance between the Founders' principles and modern interventionism - yet measured against the world's actual alternatives, Sennholz argues, they remain unusually fortunate. Moving from lament to comparison, he surveys Canada's stagnating welfare state, Mexico's one-party corruption and currency collapse, Britain's diminished pound, Germany's "double-barreled" post-reunification transfers, and Japan's ordered but statistically distorted prosperity, reading each outcome as a consequence of taxation, regulation, monetary instability, and ideology rather than accident. The American advantage is not perfection but relative room for enterprise and correction. Writing in the mid-1990s, he detects signs that the interventionist habit is weakening as anti-business politics and organized labor lose their grip, and closes on conditional rather than triumphant hope.

The sixty-year-old death grip of government is loosening.