The archive.

Rename the welfare state an 'exploitation state,' and its politics look different: not a set of correctable errors but a structure that lives off its productive members and rewards its own expansion. Sennholz's diagnosis is that electoral rollback fails because the transfer system has already manufactured its own constituencies—students, retirees, public employees, welfare recipients, regulated interests—who experience spending as right and livelihood, while reform's gains stay diffuse and delayed. Once interest on accumulated debt competes with transfer payments, he warns, the state reaches its terminal crisis, resolved only through inflation or capital levies. Yet the essay's decisive turn is outward: modern communications, transportation, and global commerce give capital and enterprise the mobility to escape predatory jurisdictions, so that national governments must now compete for the productive property they once simply seized. Hope drives lengthy campaigns, he concludes, but increasingly cannot deliver reform.

Markets have sprung up virtually everywhere, internationalizing commerce and capital and depriving governments of their restrictive powers. They have given productive capital unprecedented mobility, allowing it to escape exploitation and confiscation with the speed of E-mail.

Strip the language of national defense from protectionism and what remains, Sennholz argues, is raw political force: the power to tax one man to subsidize another's business. This 1995 essay treats tariffs, import restrictions, and export promotion as a recurring alliance of fear, interest-group pressure, and economic fallacy shared by old mercantilism and new labor-nationalism alike. The claim that barriers preserve jobs he answers by showing they lower productivity and purchasing power, destroying more employment than they create. The “cheap foreign labor” argument collapses, he notes, once the fiercest agitation targets high-wage Japan and Germany. And the trade deficit with Japan reflects not foreign unfairness but American policy—low saving, capital taxation, and federal deficits—since Japanese dollar earnings flowed back into U.S. Treasury bonds.

Every form of protectionism builds on raw political force.

Even a genuine insurance crisis, Rothbard argues, would give insurers no claim on legislative rescue—and he doubts the crisis is genuine, reading its alarming anecdotes, unsupported by transparent industry data, as a device to deny injured parties fair recompense. Insurers are entrepreneurial firms whose losses reflect failed forecasting like anyone else's. Against the tort-reform campaign of insurers, manufacturers, and organized medicine, he defends contingency fees as the instrument that gives poorer plaintiffs their day in court, and the jury as an inherited safeguard against arbitrary caps on justice. His own reform is qualitative, not quantitative: liability should fall in full, but only on those who actually caused the harm—never on retailers or shareholders singled out for their deep pockets.

So there may well be no insurance crisis at all, and the entire hysteria may be trumped-up to gain benefits for the insurance industry at the expense of victims of injury to person or property who are entitled to just compensation.

Sold to the public as insurance, Social Security is in Sennholz's account a coercive political transfer, class legislation that rewards early beneficiaries who drew far more than they paid while loading mounting payroll taxes onto workers and generations yet to come. Born of the New Deal as a full-employment measure that failed, it survived by becoming the most powerful welfare mechanism ever devised, moving trillions from the working population to some thirty million retirees, Medicare included. Every such transfer, he argues, splits society into beneficiaries and the victims forced to bear the cost, breeding a conflict that grows with its size. His remedies aim less at solvency than at honesty: benefit stubs disclosing contributions and payouts, means testing once recipients recover their own money, renewed family responsibility, and freedom to opt out. Reform, he insists, begins by naming the system's true nature.

Politicians love it because it buys votes and re-elections.

Both the conservatives who would criminalize flag 'desecration' and the civil libertarians who defend it as 'symbolic speech' are convicted at once in this compact test case for Rothbard's theory of rights. To make the flag sacred, he argues, is to embrace statolatry and leave the police to divine intent—sparing reverent Legionnaires who ceremonially burn worn flags while jailing hippie-sneerers for the identical act. The opposing camp fares no better: treating flag burning as protected expression collapses the distinction between speech and conduct until any action can claim shelter. Both errors dissolve, he contends, once the question shifts from expression to ownership. One may fly, wear, bury, or burn a flag one owns; burning another's is not protest but arson—and private property, not free speech, is the ground on which dissent stands.

There is no way, then, that flag laws can be declared unconstitutional as violations of the First Amendment.

Strip a business's earnings of implicit wages, market interest, and the return on owned capital, and a residue remains that fits no ordinary category — pure economic profit, income seemingly without a productive factor behind it. That residue poses an ethical puzzle as much as an economic one, and Kirzner works toward it through the theorists who circled it: J.B. Clark on dynamic friction, Hawley on risk-bearing, Knight on uninsurable uncertainty and residual claimancy, Schumpeter on innovation. Each, he argues, explains when profit appears but leaves the moral gap open, since profit still looks like neither wage nor property income. Mises supplies the resolution: profit is the reward of alert discovery, of noticing that resources are underpriced against the future value of what they can yield. Between deliberate labor and blind luck stands a third title — a finders-keepers claim on opportunities one's alertness first made real.

What does the entrepreneur, qua entrepreneur, contribute to the emergence of the product?

A grassroots revolt against Big Government swept Republicans into Congress in November 1994—and was betrayed, Rothbard charges, almost before the ballots cooled, when party leaders recalled defeated Democrats to a lame-duck session to pass Gatt and midwife the WTO. From that opening scandal he builds a diagnosis of American politics as rule by a bipartisan establishment of big business, high finance, media, and technocrats, arrayed against a public grown hostile to immigration restriction, foreign aid, welfare, gun control, and the Federal Reserve. Against Gingrich and Dole's balanced-budget theater he demands genuine rollback—abolished departments, not caps—and offers an acid test for every Republican: forget the rhetoric, and ask what they actually did. Hope, he ventures, rests with paleoconservative freshmen like Metcalf and Stockman.

The terrible news is that it took less than twenty-four hours for that revolution to be grievously betrayed.

The 1994 midterms register, in Rothbard's reading, not as a routine swing but as a popular anti-statist revolt against Clinton, the Democratic Party, and the machinery of centralized federal power. The celebration is brief. What follows is a warning: the two-party 'duopoly,' cemented by winner-take-all districts and the socialized ballot, works as a cartel that absorbs insurgent anger into elite-managed reform. Rothbard audits the Republican 'contract' against a stringent standard of genuine rollback—on taxes, gun control, the Federal Reserve, foreign aid, GATT, and the federal departments—and finds evasion where he wants abolition. Naming Gingrich and Dole as accommodationists, he argues that only sustained grassroots pressure and a refusal of bipartisan respectability could keep the revolt from being tamed by the party that rode it to power.

The election of 1994 was an unprecedented and smashing electoral expression of the popular revolution that had been building up for many months: a massive repudiation of President Clinton, the Clintonian Democratic Party, their persons and all of their works.

Every major advance in economic theory, Hayek once claimed, has been a further application of subjectivism — and this essay asks what that word came to mean along the divergent paths descending from Carl Menger. Menger's revolution, Kirzner contends, was not chiefly marginal utility but the vision of the whole production structure as bearing the imprint of human valuation, with consumer wants conferring significance on higher-order goods. Yet Menger assumed those wants translate into resource values automatically, under complete knowledge — a gap the socialist-calculation debate exposed. Three heirs emerged: Robbinsian-Walrasian formalism, which keeps subjective choice but presumes coordinated knowledge; the radical subjectivism of Shackle and Lachmann, which surrenders any systematic tendency to coordinate; and the Mises-Hayek revival, which deepens subjectivism through entrepreneurial alertness amid pervasive mutual ignorance.

Briefly put, the Mises—Hayek theory of the market process sees it as a systematic process of knowledge expansion, the equilibrating character of which is the expression of entrepreneurial discovery.

Do not make money your god, an old Christian saying warns, for it will plague you like the devil, to which Sennholz adds that placing politicians in charge of money plagues worse still. American banking, he argues, has been turned from private intermediation into an arm of the state by cumulative regulation: the Federal Reserve Act, the 1933 gold confiscation, FDIC and FSLIC deposit guarantees, and a myriad of later statutes. His method is inversion, terms of protection recast as instruments of control. Bank 'secrecy' under the Bank Secrecy Act now means concealed reporting to the authorities, and the Community Reinvestment Act supplants creditworthiness with race, gender, and national origin. Compliance costs, he predicts, will force mergers and concentration, hollow out the character of the profession, and drain capital markets toward the conditions of poor countries.

Men of character, integrity, and independent judgment will give way to two types which thrive in all kinds of command systems: the servants and bondsmen who obey all orders and the villains who corrupt all orders.

Postwar Europe, in Sennholz's telling, defended itself against communism without any confidence in its own inheritance, gripped by a general mood of despair over an order that seemed to have failed of its own accord. This April 1996 commemorative essay reconstructs the climate in which the Foundation for Economic Education arose and advances a pointed revisionist thesis: the classical liberal order had not collapsed but had been smothered and dismantled by political authority. Sennholz gathers the scattered remnant that resisted, from Orwell and disillusioned socialists to Hazlitt's Economics In One Lesson and Mises's Human Action, and links Marxian planning to Keynesian deficit finance as forms of the same drift toward political supremacy. He closes by reading election-year credit expansion and permanent deficits as a political business cycle of manipulation and debt transfer.

It was the surrender of freedom that provoked the return of autocracy and tyranny.

Theoretical innovation does not guarantee an intellectual tradition’s survival. In this 1996 commemorative essay, republished in 2016 as Austrian Economics and FEE, Israel M. Kirzner connects the postwar fortunes of Austrian economics to the practical support of the Foundation for Economic Education. His account turns on a tension: while Mises and Hayek were developing explanations of entrepreneurial judgment and dispersed knowledge, much of the economics profession regarded their tradition as exhausted or already absorbed. Writing as an Austrian economist and participant in its revival, Kirzner combines theoretical interpretation with recollections of funding, doctoral training, and summer seminars. Readers can discover both what he believes mainstream equilibrium analysis missed and how teaching, patronage, and scholarly contact kept those alternative ideas available to a later generation.