LP Presidential Candidate Jacob Hornberger on Socialism, Freedom, and Reform vs. Repeal

The day of the Iowa Caucuses (or as it turns out, the first day of the caucuses), I had a chance to talk to Jacob Hornberger. He’s the president and founder of the Future of Freedom Foundation, and is currently running for the Libertarian presidential nomination with the backing of the Mises Caucus.

He’s got not just a Ron Paul bent, but a Ron Paul cadence. In the words of this site’s founder, he is “too nice for politics”. We talked about modern problems, and in most cases his solution is simple and consistent— a return to freedom without intermediate steps of reform.

TLR: I’m talking with you the day of the Iowa caucus, a contest that Bernie Sanders could actually win. As such, I’d like to start with a couple of questions about socialism. In your presidential campaign announcement video, you called the following things socialism: Social Security, Medicare, Medicaid, public schooling, educational grants, farm subsidies, corporate bailouts and foreign aid to dictators. What does the US government currently do that you don’t think is socialism?

JH: Very little, in that the primary source, the driving force in the federal government is to take care of people through the coercive apparatus of the state. It seizes money from people to whom it belongs, and it gives it to people to whom it does not belong. That is classic socialism. It embodies the Marxian principle, from each according to his ability to each according to his need.

And many of these socialist programs came into existence as a direct result of socialists in Germany advocating them. Social Security is a primary example. The idea originated among German socialists. It was adopted by Otto von Bismarck, the so-called Iron Chancellor of Germany. It was imported to the United States and they became part of our laws in the 1930s. And it’s the same thing as socialized medicine, Medicare and Medicaid… public schooling was another German socialist idea. So whenever you have coercive redistribution of wealth or central planning. That’s another central feature of socialism. You have socialism, even when it’s run by Americans.

TLR: There is a “Libertarian Socialist” caucus within the Libertarian Party. Are those two designations compatible or are they a complete contradiction?

JH: They’re a complete contradiction. Socialism is the opposite of libertarianism, because socialism is based on coercion. It’s essentially mandatory charity. The state is forcing people to be good and caring, which negates the idea of good and caring because giving, caring can only come from the willing heart of an individual.

And so, libertarians believe that people should be free to keep everything they earn, and then decide for themselves what to do with it – whether to help out others or not. I mean, that’s the essence of freedom. Socialism negates that. So this group that calls itself “Libertarian Socialists” is like a group that would call itself Christian Atheists. They’re two completely opposite principles.

Now, if what they mean by this is a commune form of system where people get together voluntarily and decide to pool their wealth and share their their resources and share their work efforts? That’s something different. That’s not socialism. That’s just a communal effort by people who are acting voluntarily. But if they’re talking about using the coercive apparatus of the state, to force people to do things that they might not otherwise do as free individuals? That’s the exact opposite of freedom and libertarianism.

TLR: I’d like to switch to something more specific about the nomination you’re running for and, more importantly, the purpose of running for it.

What’s more important: spreading the message or getting a higher vote total?

JH: Really, neither. I think what’s much more important is that we fight for a free society. And that’s what our goal is. We want to be free. That’s my goal. That’s the reason I’ve entered this race, that I want to live in a free society. I want to know what it’s like to live in a free society. And I’m one of those who strongly believes that there is a very realistic and distinct possibility of winning our freedom. So I see these kind of races as a way to achieve our freedom.

Now, in the process, you have to make the case for freedom. This is one of my objections to people who have settled for reform. Reform is not freedom. You’ve got to dismantle abridgments on freedom. In the campaign… and this is what I would do if I were accorded the honor of being the presidential nominee… I would be making the case for liberty to the American people, that this is what we need to do to achieve a free society. This is why a free society is worth going for… and that these are the principles for which we stand.

And while, you know, anybody who thinks that a Libertarian is going to be elected president, I don’t think that’s a very realistic assumption. I think we have to fight like we have a chance to win. And we fight with our principles. So in the process, you’re educating people. I see it as an effort to win freedom. And we do that with our ideals, our principles and ideas on liberty.

TLR: You’re known as the Mises Caucus candidate right now. One of the issues which most motivates them… and me… revolves around monetary reform. So I’ve got a couple questions about monetary policy, especially in a historical context.

You claim the framers of the Constitution rejected the concept of paper money and central banking. Certainly some, like TJ, did. Others however, you know… Robert Morris and Hamilton and such… had a different view of these matters and just three years after the Constitution was ratified the nation had its first central bank signed into existence by Washington himself. One of your arguments against the very existence of the Federal Reserve is that it’s unconstitutional. If the framers couldn’t keep the nation away from central banking for even one presidential term, why do you think there’s hope that a 21st century America could end the fed?

JH: Well, because the Constitution actually brought into existence a gold coin syst–

We’re often taught to believe that the gold standard was paper money backed by gold. Nothing could be further from the truth. There was there was no paper money.

There were bonds that were billed, there were notes… but everybody understood those were instruments of indebtedness. They were promises to pay money. And that money was gold coins and silver coins. That that was our official money–gold coins and silver coins and it was clearly established by the Constitution and the states were prohibited from making anything but gold coins and silver coins legal tender.

And there actually was no central bank for 150 years. The National Bank that you described was was a national bank. It was a Federal Bank. But it certainly did not centrally plan the monetary system in any sense, it was really just a national bank. And it went out of existence as you point out. So, for most of that history, up to 1913, there was no monetary central planning, which, again, is a socialist construct.

There was no paper money, it was all gold coins and silver coins. And then Roosevelt comes in and destroys that entirely. He nationalizes gold. He makes it a criminal offense to own gold. In 1913 the Federal Reserve had been established, which was the principal cause of the stock market crash in 29. Even though we’ve all been taught that it was a failure of free enterprise, it really wasn’t. It was the failure of the socialist institution called the federal reserve that had been in existence, you know, since 1913.

So what I favor? So that was the second best system, because the coins were solid. They were reputable. They were credible. They were a major cause of the tremendous prosperity in the latter part of the 1800s in the early 1900s. So I’d say that’s the second best system because the best system is a free market monetary system, one where there’s no central plan at all, where you have no central bank, and where people choose their own medium of exchange. The market determines what money is, whether it’s gold or silver, or bitcoins or American Express bank notes or whatever. But where the government is entirely out of this. Where there’s essentially a separation of money in the state.

Is it possible to achieve that? Absolutely. I mean, this is where the power of ideas comes in. If people hear this idea, then some of them– a certain percentage– will say I like that. Just, I mean, that’s why there’s so many of us libertarians, because we saw the idea and we said, “Hey, we like it”. And so we’ve got to presume that there’s a lot more people out there that will share that sentiment.

TLR: Um, you had just talked about how in the earlier days of America we had a much better monetary system and you express support for Hayek’s idea of a free market monetary system. Wasn’t wildcat banking during the free banking era widely considered to be unstable by many historians, filled with unregulated competing currencies often lacking backing by any fixed assets and prone to fraud?

JH: Well, they weren’t really competing currencies. They were competing banknotes, which again, were instruments of indebtedness. And yes, there were banks that were hitting the market with their bank notes, and some of them were going under. But that’s the process of a free market. I mean, you take stocks, there’s penny stocks, there’s all kinds of speculative stocks. And people make a choice as to whether to invest in those stocks or not. Sometimes they hit and they skyrocket up. There’s there’s more speculative stocks where all of a sudden you got a penny stock that goes to a million dollars. There’s people that lose fortunes in the stock market, we’ve come to accept that.

And the same thing would happen with respect to banking. If there was free banking, there would be banks taking bigger risks, issuing more bank notes than they have, but as long as they’re upfront about it, and people understand that… “hey, this is a bank that’s taking some risks there. They’re issuing more instruments of indebtedness.” I don’t think people are going to be all coming in and demanding their money at the same time. Fractional reserve banking the sense of, as you know, there’s people in the movement who consider that fraud and think that there should be 100% banking reserve requirements.

I don’t. I’m not among them. I think that as long as the bank is up front and discloses what they’re doing, that people are free to patronize that bank or not patronize that bank. If you want to go with a solid bank that’s got 120% reserve in there, that’s great. You’re going to get paid a lower interest. Do you want to go with a speculative bank is paying you 20% interest, and you know what the risks are? And I think that’s what a free market system is, is people being upfront, no fraud, but everybody making his own decision of what risks they want to assume.

TLR: I appreciate the focus on transparency there, obviously. President Trump has in the recent past expressed support for literally negative interest rates. How awful an idea is that exactly… like on a scale of modern monetary theory to Ron Paul?

JH: Well, it’s ridiculous. I mean, Trump is your classic central planner. And he believes that is the role of a president to plan the economy, to manage the economy. That’s why he claims credit for the boom in the economy, good conditions and so forth. And part of this… interest rate manipulation is part of this.

Now, obviously, it’s the Fed that’s setting the interest rates, and they’ve been doing it extremely low. We’ve got this quantitative easing that’s been going on for 10 years now. And all they’re doing is inflating a new bubble. And this is all the Fed has done since 1913. It inflates bubbles and then they burst. The burst, the big burst was was the greatest Depression in 29. And into the 30s. 2008 was another bubble bursting and they immediately start going in there with the low interest rate, which Trump supports. He supports this idea of a managed economy.

But I guarantee you this–when the when the bubble bursts, and I think it’s gonna bust at some point, you never know when… Trump’s not going to be saying, “Well, I turned out to be a bad manager of the economy after all”. At that point, he will shift gears and blame it on the Fed. But we Libertarians and me in particular, we object to this idea of a centrally managed economy.

We don’t want these booms and busts and bubbles bursting and people losing fortunes because the Fed is over there playing around with interest rates. We want to get rid of the Fed, End the Fed, and then have a free market monetary system where people plan their own economic activities. Where the government does not centrally plan anything. Where the President lacks the authority to plan economic activities.

Including these destructive trade wars, that Trump is unilaterally waging on his own and bankrupting countless farmers in the process, except for those that he then puts on a massive welfare program. This is what distinguishes us– one of the things that distinguish us Libertarians– we don’t want a centrally planned economy or managed economy. We want people to manage their own economic activity.

TLR: Liberty, individuals, and voluntary communities are often seen as preferable to government solutions as a default position for many of us. However, there are those who charge that such non-government actors fall short at addressing some of the are pressing modern problems. What are the best libertarian solutions to, say, confronting climate change?

JH: Well, for one thing, there’s a lot of people that don’t believe in that whole theory of climate change in terms of it’s causes. But my position is… I’m skeptical myself. But my position is that even if it exists, the worst thing you can do is turn it over to government. Because all you’re going to do is end up with a tyrannical corrupt agency. The government doesn’t do very many things well. One of the things it does do well is it kills people well, and it destroys people well. So to put something as important as the climate in the hands of the government, makes absolutely no sense to me that all. What you’re going to end up doing is have a worse problem. And you’re going to end up with the omnipotent tyrannical government in the process.

We’ve seen what the EPA is done to people in terms of destroying their lives and destroying their property rights. So I put faith in the free market. I mean, the market produces the best of everything. And I understand that there’s externalities involved here, especially like areas like pollution so forth. I think that’s what a judicial branch of government is for, where people can file suits and bring litigation against people that are causing damage to other people. But I think the the private sector is remarkable in terms of producing advances in all kinds of areas.

And so I would say that in this area of the environment, we’re better off leaving it to the courts in terms of nuisance law and trespass law, and violation of people’s rights in that way, as well as free market innovations. The worst thing we could do is leave it to the government to solve.

TLR: Last year, the US federal government spent something like a trillion dollars on Social Security, which makes it the largest federal program and about a quarter of the federal budget. It recently started paying out even more than it’s taken in through FICA. You’ve talked about literally abolishing it. If the world were to heed such advice, what time frame would be appropriate to accomplish that? And how would you advise winding such a large program down in a responsible way?

JH: The best and most responsible way would be just to repeal it immediately. And that’s all you have to do. You just enact a law that repeals the laws that set up Social Security. I mean, the government… the program came into existence through Congress. Well, Congress can easily just put the program out of business by repealing it, and that’s exactly what should be done.

Now that scares people. Freedom scares people. I mean, now we’re talking about a free society. Now we’re talking about a society where people are free to keep their own money, and they decide what to do with it. Well, if you believe in freedom works, and I do believe freedom works, there’s nothing to worry about. I mean, I know people worried about that, “oh my gosh, seniors will die in the street, they won’t have any more money”.

Well, some seniors don’t need the money. They’re very wealthy are they’re very middle class. And the Social Security payment is like an extra little bonus for them to, to play poker with or whatever. So there’s a large sector of the society doesn’t need the money. Some seniors might have to go back to work. That’s not necessarily a bad thing. I see seniors working all the time. And they’re in the mainstream of life. They’re interacting with other people and young people. I think it’s a better alternative than just sitting in your living room waiting to die.

But there are some people that truly need help. But if you believe that freedom works, you have no doubt. And I have no doubt that if it were repealed today, that young people would come step forward to the plate. Now they’re keeping all their money now. No more FICA tax, no more money as needed to pay all the salaries of Social Security bureaucrats. They were talking about salaries, ranging 50,000, 200,000 a year, that’s just wasted money. Young people will be able to keep all that money, and then step up to the plate and help their parents and grandparents.

I have no doubt that you can do that, that they would do that. Or in those cases where they say, “I’m not going to help my parents or grandparents”… you’ve got church groups. You’ve got community groups, all on a voluntary basis. And this is what I’m saying that we need to recapture in this country, a belief in ourselves. A faith in others. A faith in the free market. For me, have faith in God rather than the faith of government.

And then all of a sudden you’re talking about how a free society works, how a free people work. But Social Security is really an insult to the younger people in the society. It’s saying that “you are a bad people. You can’t be trusted with freedom. And we need to force you to take care of seniors by taking your money and given it to them”. Well, I say nonsense to that. I think young people should rebel against the system. I think they should join up with us libertarians and say, “we can handle this. We can handle freedom. We can take responsibility for parents, grandparents, other people in the community, who need help. And we don’t need to be forced by anyone to do this”.

TLR: You mentioned your faith in God. Does believing in the concept of natural rights necessitate a belief in God or can secular thinkers come to the same conclusion through simply looking at the natural world?

JH: The latter. I mean, we’re looking at two separate concepts. That’s nature and then God. And so somebody who doesn’t believe in God can arrive at the exact same conclusion, simply through the inherent part of being a human being. They can look at this as just in terms of nature. It’s natural to think that a person has a right to his life. That he has a right to sustain his life by going out and providing goods and services that other people are willing to pay for. That he has a right to accumulate his own, the fruits of his earnings, and to decide for himself what to do with it.

So I put them in both categories that… these are God given rights and that they’re natural rights. But certainly somebody who doesn’t believe in God, can just simply default to the natural rights aspect.

TLR: What is the functional difference between the proposals to legalize and to decriminalize drugs, which method is preferable and why?

JH: Legalization is much more preferable because then we’re talking about freedom. Decriminalize means that the state is still treating this as some type of an offense. For example, like parking ticket type of offense. So you say “well, okay, it will no longer be punishable to possess marijuana in terms of being sent to jail. But we’re still going to fine you if you if you get caught”. Like a parking ticket. So they still consider it an offense.

We talk about legalization, we’re talking about no offense at all. We’re talking about a society in which people are free to ingest whatever they want to ingest. No matter how harmful, no matter how destructive. Now, that’s not to suggest that we endorse the use of such things. We’re just saying that they don’t belong in the criminal justice field. Drug use and drug abuse don’t belong in the criminal justice field. They belong in the private sector of Alcoholics Anonymous or narcotics rehab groups.

But the the the ideal system in terms of freedom is one where the criminal justice system has absolutely nothing to do with the possession, distribution or ingestion of any drug or any other substance.

TLR: You mentioned earlier opposition to Trump’s trade war with China. What has been the worst consequences of that?

JH: The destruction of liberty. The people have a right to do what they want with their own money. That’s a fundamental aspect of liberty. This is what Donald Trump does not understand. That when he unilaterally, and without specific congressional approval, initiated the this trade war with China, along with imposing unilaterally sanctions on Iran or North Korea or any other country… that in Cuba, Russia, that he’s he’s not only hurting people in those countries, which he clearly has, but he’s also destroying liberty of the American people the same time, and we’re talking about economic liberty.

So that’s the biggest adverse consequence, is the further destruction of our freedom, which Republicans are notorious for, along with Democrats. They’re co-responsible for the destruction of freedom in America.

And then the secondary aspect of this, is the the bankruptcy and the economic harm that you’ve caused American farmers. Not to mention the fact of all the Chinese people he’s hurt, but he’s also hurt American farmers. And to make up for this, he takes the money that has been raised with his tariffs, which apparently he thought at first that the Chinese were paying this… but then when he discovered that it was the Americas paying for, he takes this tariff slush fund, and he started sending gigantic welfare payments to these farmers who he has destroyed with his trade war.

So it’s been it’s been a horror story all the way around. Destruction of liberty, destruction to the farmers, and the implementation of this welfare state socialist system, even while he’s decrying the socialism of Bernie Sanders.

TLR: Much of the current libertarian divide is between minarchists and anarchists. Where do you fit on that spectrum?

JH: Minarchist.

TLR: Alright, last question I got for you is about the USMCA–the new NAFTA–is it better than NAFTA, worse, or is it roughly the same?

JH: They’re all bad. Because the only real proper position on trade is no negotiated trade agreements at all. This idea of a of a ‘free trade agreement’ is ridiculous. But a genuine concept of free trade is one where the government has no role in it whatsoever. I mean, that’s what the word free means in free trade. It’s free trade or free enterprise. It means enterprise or trade that is free of government control, management or regulation.

And so what the proper position is, and the position that I will fight for if I’m this party’s nominee is unilateral free trade. When the US government unilaterally drops all trade restrictions on the right of the American people to travel and trade with whoever they want anywhere in the world. It’s their money. That’s an essential aspect of economic liberty.

It’s your money, you have a right to go wherever you want, including Cuba, North Korea without being put in jail by your own government, which is what happens today, if you go somewhere without the permission of the US government. You also have a right to sell whatever you want to anyone in the world, anywhere in the world. You have a right to buy whatever you want, anywhere in the world. I would ditch all of these trade agreements and just unleash the private sector to interact with the people of the world.