Montreal, January 6, 2007 No 247



Martin Masse
is publisher of QL.




by Martin Masse


          Many things about Ron Paul are unconventional. The 10-term Republican congressman from Texas is polling in single digits among likely Republican primary voters, behind several better-known front-runners. Most mainstream commentators still dismiss him as an oddity with no chance to win the nomination, let alone the presidency.


          Despite that, he has won more than half of all straw polls held locally across the country. Soft-spoken and an obstetrician by trade, he is inspiring a devotion worthy of a rock star. His supporters have an overwhelming presence on the Internet and seem intent on proving the Hayekian notion that a decentralized, spontaneously emerging order is more efficient than any type of top-down organization.

          On December 16, on the occasion of the anniversary of the Boston Tea Party, they not Paul's official organization, but volunteer supporters raised $6-million on the Internet, breaking an all-time record for single-day fundraising. With $18.5-million amassed so far this quarter, he could end up with more cash on hand than any other Republican candidate when caucuses and primaries begin in early January.

          Philosophically a libertarian, Paul brings together disaffected fiscal conservatives, antiwar and pro-civil liberties left-wingers, and a vast array of people who believe the U.S. government is out of control. Although personally a social conservative, he gets support from brothel owners in Nevada and vows to put an end to the war on drugs. And his economic beliefs promise nothing short of a revolution.

          Paul has been studying the most uncompromising branch of free-market economics, the one propounded by the Austrian School, for more than 30 years. That sets him apart in a political and academic world where supply-side, monetarist and other neoclassical ideas usually dominate free-market discourse. From an Austrian viewpoint, these are hopelessly muddled creeds that have made their peace with big government, and especially with what for Austrians is the central issue of government manipulation of the money supply.

          His decision to first run for office in the 1970s was spurred by Nixon's decision to take the U.S. off the gold standard. He's been writing articles and books and giving speeches about the evils of government intervention and fiat money ever since. These themes resonate more than ever at a time when the greenback is sinking, financial bubbles are bursting, the country is drowning in bad debt and a credit crisis is in full bloom.

          Whether one agrees with him or not, Paul is so serious about economic theory that he has become some sort of standard bearer for nerds in politics. David Frum, an unpaid Rudy Giuliani advisor, was far off the mark when in this paper last Saturday he accused Paul of not having the faintest idea what he was talking about and being "too lazy or too arrogant to learn."

A Ron Paul administration, though not in the cards, would turn conventional political and economic thinking upside down.

          A Ron Paul administration, though not in the cards, would turn conventional political and economic thinking upside down.

          All of a sudden, all those on the left who have been denouncing the American empire and its military adventures would find an ally in the White house. Ron Paul not only wants to bring back U.S. troops home from Iraq, but also those stationed in Europe and Asia. Cutting the half-trillion dollars a year military budget is a central part of his plan to put the country's finances back on a sound economic footing.

          Paul never voted for a tax increase or for spending that he deems unconstitutional, which includes pretty much everything contained in federal budgets nowadays. He wants to abolish the income tax and the Internal Revenue Service. He would also eliminate the Departments of Education, Commerce, Energy and Homeland Security, get rid of corporate and agricultural subsidies, foreign aid, and a host of other programs. He would allow young people to opt out of Social Security and Medicare and let these two massive unfunded entitlement programs for the elderly slowly disappear.

          The effect on the U.S. economy of such policies would be tremendous. Ottawa would have to react, or else we could lose the little competitive advantages that fiscal prudence has earned us over the last decade. Reducing the lowest income tax bracket from 15.5% to 15% will not do it. And who knows how far the loonie would fall back again if hard money and sound finances were to prevail south of the border?

          Ron Paul policies would also threaten what has been a fundamental feature of Canadian economic policy for the past two decades, free trade or rather, relatively free managed trade with the United States. Paul's idea of free trade is to get the government out of the way, not to create more international bureaucratic structures that are not accountable. That would raise interesting debates. Would the NDP and the Council of Canadians denounce the threat of genuine free trade and launch a campaign to save NAFTA?

          However many votes Paul ultimately gets, we shouldn't wait for a U.S. politician to force those reforms on us, especially one who wants to do away with Yankee imperialism. Freedom is a universal, not an American value. Free markets work everywhere. Why not get rid of all this government deadweight of our own volition, and for our own good?


* This article was first published on Friday, December 21, 2007. Reprinted courtesy of the National Post.