David Henderson

March 1981

Recently, a petition was circulated among North America's professional economists which called on the U.S. Congress and executive to scrap all plans to reinstitute a military draft. The document was incribed with over two hundred names, including many notable libertarians. The author of the petition was David Henderson, a young libertarian economist teaching at the University of Santa Clara. On November 30 David was in Vancouver and spoke to UBC students on "Energy and American Foreign Policy." Earlier in the day he appeared as a guest on BCTV's Webster!. The following is a transcript of the interview.

Webster: First you want to make a disclaimer over something I said, not once, but twice, in the program.

Henderson: I was acting senior economist for the Council of Economic Advisors under President Nixon. I was not a direct advisor to President Nixon. I was twenty-three years old at the time.

Webster: Why do you say that? Because you don't want to appear to have been in any kind of touch with that dreadful man at all?

Henderson: Yes. (laughter)

Webster: How old are you now, David.

Henderson: Thirty, last Friday.

Webster: There's something suspicious about your appearance on this program. This is the third time I've had a guest and discovered that they've had a connection with a strange group called the Libertarians. And I see here that you're an advisor to Ed Clark, the Libertarian Presidential Candidate.

Henderson: Right. I did talk with him.

Webster: What is this Libertarian thing first? They're kind of right wing liberals, aren't they?

Henderson: Maybe, depending on what you mean by that. What we believe in is complete freedom for the individual.

Webster: How many votes did Ed Clark get?

Henderson: 970,000.

Webster: A most unfortunate name for anyone running for top office. Ed Clark -- 970,00 votes -- that a spit in the bucket.

Henderson: 1.2%.

Webster: 1.2%. Give me a little bit of the libertarian thing. You say that..

Henderson: We believe in freedom for the individual in all areas. Not just in economic areas, also in the area of civil liberties. The right to use anything you want, any kind of food or drug or anything you want to ingest into your own body, the right not to be drafted into the military, the right not to be forced to fight in a foreign war and so on.

Webster: I don't like that.

Henderson: No? Which part?

Webster: Anarchy!

Henderson: If you mean by anarchy a completely voluntary society, then many libertarians are anarchists in that sense. The usual image of anarchy is a society in which people throw bombs and that's exactly what we're against.

Webster: No, no. I mean a totally free society would become anarchical in a very short time if there was no compulsion for people to conform to certain standards of law or certain standards of behaviour.

Henderson: Libertarians believe in law. We believe that when you say someone has the right to do something, you mean they should be protected in their doing it. So to say that you have the right to be on this show means that if someone tries to come along and forcibly remove you, you have the right to call the law in.

Webster: My boss can remove me anytime I'm not a success.

Henderson: He wouldn't forcibly do it. I'm saying if someone comes in off the street and tries to haul you out of here...

Webster: He can't do that now.

Henderson: I know, because of the law. And we believe in the law that says you can't do that.

Webster: Do you believe in property rights?

Henderson: Yes, very definitely.

Webster: Do you believe in punishment for an individual who breaks the law?

Henderson: Yes, depending on the law. If he breaks a law that protects other people, yes.

Webster: But then you mean if someone wants to become a junkie and get heroin, you have no objection to that.

Henderson: I have no objection to someone's right to do that. I may object to his doing it, but that's a separate issue. And, in fact, if you look at most codes of behaviour we have, Christianity, Judaism and so on, they are not enforced by law. They are things that people arrive at voluntarily and they work pretty well.

Webster: They're enforced by standards of moral behaviour.

Henderson: That's right.

Webster: It's a little bit idealistic though, is it not, for society to say, "okay, we're going to make pot and hash and elephant steak and heroin or whatever legal, and my right is to sell it to whomsoever I please whether they're 9, 10, 11, or 35.

Henderson: Well, I'm glad you say it's idealistic. I think it takes...

Webster: (laughing) "Naive," I should have said!

Henderson: Well, if we can stick with what you first said...

Webster: (to the studio crew) Delete that from the tape altogether. I didn't say that!

Henderson: Well, I don't see that as really the guts of the message. I mean sure, that's part of our views but, but there's just all kinds of things going on now. The government takes almost half of our incomes and we don't get to choose how to spend it.

Webster: You're an economist. Why does the government take half of our income, idealistically speaking?

Henderson: They don't do it idealistically speaking. It's true that they appeal to certain people's ideals about helping other people and they really cash in on that. But they do it because often people don't understand how they're doing it. For instance, the woman on this morning [Monique Begin, federal minister of Health and Welfare] talked about how we want to guarantee all these pensions and so on. And as you pointed out, you have to tax people to do that and if you're not going to tax people directly, you have to print money to do that. And she was talking as if somehow this inflation problem that we have with private pensions is something that they're going to solve. In fact, the problem is caused by the Canadian government because they're the ones who are printing the money causing the inflation.

Webster: Can they solve the inflation problem?

Henderson: They can, in a technical sense. They can cut the growth of the money supply and the result will be a lower level of price increases. If they cut the level of money supply growth to zero, the result will be no inflation at all. Whether they will is a separate question.

Webster: Why would they not do that? There's the answer. I've heard it so often that if you cut the growth of the money supply, inflation will cease.

Henderson: Right.

Webster: There's no more money to chase the good.

Henderson: Right.

Webster: But what's the economic effect on the ordinary American or Canadian?

Henderson: That their pension is more secure, that their savings are not indirectly taxed through inflation, they can plan better for the future.

Webster: But there would also be mass unemployment.

Henderson: There will be a short run increase in unemployment. There are ways you could ameliorate he problem. For instance, by getting rid of a lot of labor market restrictions that keep people out of work, by getting rid of the minimum wage.

Webster: Like trade unions?

Henderson: No, not getting rid of trade unions. Getting rid of the power trade unions have to force people to join against their will.

Webster: That's another of your basic facts. What was the other thing you said just now?

Henderson: Getting rid of the minimum wage. The minimum wage, which is now over $3 per hour in Canada, prices a lot of low-skilled people out of the market.

Webster: You are the direct antithesis of today's capital "L" Liberal in Canada who in fact is an egalitarian bureaucratic socialist.

Henderson: It's a funny kind of egalitarianism that prices the poorest people out of the labor market and instead of giving them, say, $2 per hour, gives them zero per hour - because they don't get work.

Webster: What do you think of the Canadian policy adopted and enforced by the federal government whereby we are subsidizing the internal price of oil to half the world market level?

Henderson: I think it's a crazy policy. I'm not just taking Lougheed's side. I think that the debate between Lougheed and Lalonde and Trudeau is like the debate between Bugs Moran and Al Capone. They both want to tax private people and I say they have no right to do that.

Webster: What would you do with social services? Would you let social services, compensation, medicare or medicaid, as you have in the States, wind down to a generally acceptable level?

Henderson: I would let it wind down gradually. I'm not running things but these are my ideals. I would have the government get out of a lot of programs that are hurting the poor so that at the same time as they're losing certain benefits, they won't lose everything because now they can work. It would be easier to get jobs and so on. And they could keep more of their money.

Webster: You came from Manitoba, I know that, but where do you work now?

Henderson: At the University of Santa Clara in California.

Webster: You have a very good quote in front of me about politics.

Henderson: Yes. "Politics represents the art of calculated cheating." Now, I quoted that from a very well-known U.S. government official, James Schlesinger, who used to be Energy Secretary and this is from an article he wrote twelve years ago in which he pointed out the nature of the political game. The idea is to tax people with as little pain as possible so they don't even know you're taxing them and to distribute the proceeds to the various special interests who come to government to get them.

Webster: Well, that, of course, is exactly what politics is.

Henderson: Right.

Webster: They redistribute wealth to maintain political and economic power in the country.

Henderson: That's right.

Webster: David Henderson, I apologize for having such a short interview. But I point out again that you're a Libertarian and a Presidential candidate advisor.

Henderson: Right.

Webster: Strange kind of peaceful anarchists. My thanks.

Copyright © 1981 West Coast Libertarian. All Rights Reserved.