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“The candidate you never heard about: U.S. Libertarian Presidential candidate Ron Paul interviewed by Lawrence W. Reed,” The Optimist (Sydney, Australia), Sept/Oct 1988, pp. 20-22.

The Libertarian Party is America’s third largest political party. Its Presidential Candidate, Ron Paul, was a Congressman for 10 years. He was a member of the House Banking Committee, championed the gold standard, and opposed the Federal Reserve System. Former Treasury Secretary William Simon once termed him “the one exception to the Gang of 535”.

Professor Lawrence W. Reed, our US Correspondent, interviewed him exclusively for The Optimist.

L.R.: What is your view of the Republican and Democratic candidates for President this year?

R.P.: I find George Bush and Michael Dukakis to be philosophically identical. Both of them endorse the use of government to serve special interests, not individual liberty. Each, however, serves different special interests. The Republicans are said to serve banking interests, big business, and foreign dictators. Democrats are said to serve the welfare bureaucrats, unions, and leftists.

But those stereotypes don’t tell the entire story. When we look below the surface, we find that both parties readily abandon their public philosophies to trade votes and build coalitions for projects that benefit their political interests.

I remember a bill that came before the House of Representatives to fund the Export-Import Bank, an institution designed to benefit US big business in its dealings overseas. When its passage was threatened, both big business and big labour went to the Republicans and the Democrats to make sure the subsidies continued. It was the same with the famous Chrysler bailout.

The Republicans and the Democrats work together more than the media lets on. And if they are truly divided on some issue where government is at stake, they can compromise and make sure it goes to both camps. America is largely governed by the special interests, pressure groups, and political stooges.

L.R.: We normally think of the interests of big business and big labour as opposed to one another.

R.P.: Behind the scenes, they are allies more than enemies. The both want big government and are willing to work together to get it. The big losers are the consumers and the tax payers who get fleeced. We should also remember that most political disagreements are not over whether to use the machinery of government, but on how to do so.

L.R.: From your 10 years in Congress did you see a kind of “permanent government” operating in the US which is there no matter which party is in power?

R.P.: Yes, I did. It is they and their lobbyists, rather than the people, that control the government. And because government is so big, no one can keep tabs on what is going on. This is what happened with the so-called tax simplification bill of 1986. It was so big and there were so many players involved that no one individual — certainly not any politician — could have read and understood the whole bill. It was written by a slew of unelected committee staffers and lifetime bureaucrats. As another example, a huge pay rise was included in the massive continuing resolution Bill of 1987. To this day, nobody knows who wrote it. That’s how out of control this government has become.

L.R.: Does the permanent part of Washington care who wins in November?

R.P.: I don’t think so. Whether we have Carter or Reagan, Bush or Dukakis, their major administration appointments will come from the same group of people all of whom endorse massive federal intervention at home and abroad. Regardless, the same class of people will be in charge.

Ronald Reagan championed the cause of smaller government. Yet taxes have gone up 60%, deficits have exploded, bureaucracies have ballooned, even those he promised to abolish. Things are not only like the Democrats want to make it, but much worse. And with Republicans in power, all criticism is squelched. Conservatives don’t attack their own people in power and the statist liberals like what’s happening.

A country is most in danger when its political leaders champion freedom and do the opposite. That’s when government grows the fastest and when the ill effects are blamed on the market. In that sense, it’s worse to have a President who is a free market fraud than one who is an open statist.

When John F. Kennedy was in office, he couldn’t get his Bills past the conservatives. Yet Nixon came along a few years later and the same legislation sailed through Congress, with added power to the government and diminished bank accounts of the tax payers. He signed treaties with the Soviets and gave them low interest loans. That is less likely to happen with a Democrat in power.

The Democrats always criticise the Republicans on foreign policy, saying that the Republicans are more militant. But the Democrats have a lousy record when it comes to keeping the peace. All the major military conflicts of this century occurred under Democratic administrations. They get away with more militarism than the Republicans do.

US policies don’t change, the mix is merely modified, depending on who is in power. Contrary to popular wisdom, when the Republicans are in power, I fear deficit spending and rapidly expanding domestic programs. With Democrats in power, I fear militarism.

L.R.: That’s contrary to the way the media like to report on the two major political parties.

R.P.: If we listened to the media, we’d think that Ronald Reagan cut taxes and lowered spending. In truth, he never introduced a balanced budget and never vetoed anything significant.

L.R.: What is the worst trend you see in America right now?

R.P.: The lack of concern for the idea of individual liberty. The government is always coming up with new schemes of distributing wealth through taxation or inflation. And the government is consequently violating our right to privacy by invading our financial freedom and telling us what our personal habits ought to be. The recent federal effort to curtail immigration amounts to a direct attack on the freedom of movement. Eventually we could go a national ID Card which every citizen will have to carry.

L.R.: What should we do about immigration?

R.P.: We should have such a respect for freedom, which would create a healthy economy, that immigration would be a benefit to us instead of a threat. The expense and the risk of coming across the border is so great that most people want to stay once they are here. If we have open borders, we would have more freedom to move in and out. Because our economy is weak, we can’t absorb immigration as well as we used to.

We should remember though, that unions are the major opponents of immigration. They consider immigration an embarrassment because they work for less and they produce more. In truth, having new workers in the country creates a bonanza for consumers.

People shouldn’t worry that foreigners will come in and live off the government welfare system. Most immigrants have a determination to work and survive — and to stay away from government bureaucracies.

L.R.: What would you do about unions?

R.P.: In a Libertarian society, nobody gets special privileges from the government. But neither is anybody prevented from organising. Workers should be free to organise and form groups. But they cannot have a special protection from the government to keep non union workers out of jobs, to keep from being replaced during a strike, or use violence to achieve their ends. Businessmen should not be able to compel workers against their will. Neither should unions force their will on business.

Present day unions are really labour cartels which hurt marginal workers, keep people unemployed, and destroy job opportunities. They raise some wages, but only at the expense of productivity and the present and future wages of non union workers. That’s why we should repeal the Wagner Act and the minimum wage law, which promote unemployment. In a free market there would always be a shortage of labour. We live in a world of scarcity and thus there is always work to be done.

L.R.: Most people think of the United States as a free country yet we find the IRS to be a major exception.

R.P.: In the contest between government agencies for abuse of constitutional rights, the IRS wins hands down. The IRS has enslaved the American people in a system of taxation where they are guilty until proven innocent, where property can be taken without due process or just compensation, where people are forced to incriminate themselves with their own financial records, and where the burden of proof is always on the taxpayer, and if the bureaucrats don’t like us, the IRS can confiscate our property, as well as our wife’s, children’s, and even our friends. The founding fathers wanted protection against the tyranny of government and the IRS runs roughshod over those protections.

L.R.: How wide-spread are IRS abuses?

R.P.: I used to think it was a small group of people, maybe three or four percent, who knew about the abuse. But I’ve found while campaigning in 47 states that the large majority of people are familiar with IRS abuses. And they are fed up with them. It’s a bit of a hot issue with the public and a big issues in my campaign.

L.R.: You have also been talking about the Federal Reserve System and replacing it with a gold standard.

R.P.: The Fed serves big government by funding its programs that can’t be paid for by direct taxation. Creating new money and credit — as the Fed does daily — is damaging to the economy. It distorts interest rates, creates business cycles. and quietly lessen the value of our currency. The biggest beneficiaries from this system are the big banks, who love inflation, and the government, which blames the problems on unions, consumers, the free market, or foreigners. We don’t need a central bank. The free market can supply money the same way it supplies groceries.

In the same period the American people got the federal reserve system, they also got strapped with the income tax and a pointless and destructive world war. The bigger government grew, the less it adhered to the gold standard. By 1971, the whole world was on a fiat money system. The result has been inflation, business cycles, high interest rates, destruction of wealth and savings, and increased misery. Gold, freedom, and prosperity: they go together now as in world history.

Libertarians don’t want to go back to the Dark Ages or even the nineteenth century. We hate the tradition of inflation and monetary abuse which began with the kings and Empires of old. We want a modern economy, a free economy, with a sound dollar that the government can’t manipulate.

L.R.: What would be your policy on international trade?

R.P.: Make it as free as possible: no tariffs, no restrictions, no subsidies, no guaranteed loans, no import duties. I would make certain exceptions for geostrategic considerations, but the US should immediately begin lawfully trading with everyone. There is no need for negotiations. Just announce that anyone who wants to trade can do so. If Japan or someone else wants to sell us goods but close their borders to US goods, that is fine. That means a boon to US consumers and eventually they will have to open them. The division of labour is essential — internationally just as domestically.

L.R.: Would you explain your controversial position on drug laws.

R.P.: Libertarians want to legalise all freedom of choice, and that includes the freedom of consumption. People should be allowed to read what they want, worship how they want, and consume substances some people may find objectionable. Alcohol and tobacco are dangerous and objectionable to some people. But they are not illegal. Making drugs illegal has driven up their price, attracted black market entrepreneurs, and made people resort to theft and prostitution to pay for their habits. These laws have actually made the drug problem, as any honest assessment of their effect shows. Therefore I favour decriminalisation of drugs on practical and principled grounds.

L.R.: Do you think the reports of CIA drug dealing are credible?

R.P.: I have no doubt about it. The Iran-Contra scandal revealed some of this, but not as much as actually goes on. Anybody who denies this is ignoring the facts. Don’t expect the government to admit it. If you’re dealing in drugs for the CIA and you’re caught, you are immediately disowned. The US government and other terrorist states love drug laws because they create opportunities for shady dealings and huge profits.

L.R.: Do you think the extent of corruption in government is over exaggerated or under estimated?

R.P.: The reports provide an opportunity for demagoguery by partisan interests. In Washington, DC, the real crime is that most of the corruption and unethical behaviour is legal. Libertarians think that the law itself should hold to a moral standard: it must promote individual liberty. Looked at this way, almost everything that goes on in Washington, DC, fails the Libertarian moral test.