The archive.

Government debt, Sennholz insists, is not stimulus but consumed capital—a distinction that anchors this April 1995 essay written as the U.S. debt neared five trillion dollars. Private borrowing can finance production and raise output per worker; public borrowing merely absorbs savings that would otherwise become productive investment, redirecting scarce resources toward political uses that voters see as costless benefits and never as the goods forgone. Behind the marble temples of politics he reads hidden deprivation, and behind the debt a moral outrage: one generation has no right to mortgage the labor of the next. Legal restraints alone, he concludes, cannot break the spending habit; only a change in economic ideas can, beginning with visible sacrifice—salary cuts for the president and legislators—before citizens are asked to accept restraint.

The federal debt is a pyramid of IOUs for income and wealth consumed in the past.

Americans measure their institutions against wisdom, righteousness, justice, and liberty, and so feel the painful distance between the Founders' principles and modern interventionism - yet measured against the world's actual alternatives, Sennholz argues, they remain unusually fortunate. Moving from lament to comparison, he surveys Canada's stagnating welfare state, Mexico's one-party corruption and currency collapse, Britain's diminished pound, Germany's "double-barreled" post-reunification transfers, and Japan's ordered but statistically distorted prosperity, reading each outcome as a consequence of taxation, regulation, monetary instability, and ideology rather than accident. The American advantage is not perfection but relative room for enterprise and correction. Writing in the mid-1990s, he detects signs that the interventionist habit is weakening as anti-business politics and organized labor lose their grip, and closes on conditional rather than triumphant hope.

The sixty-year-old death grip of government is loosening.

Valuable chiefly as a peaceful procedure for changing rulers, democracy degenerates—on Sennholz's account—the moment majority power slips its constitutional limits and turns toward economic leveling. He strips government of mystique (officials are ordinary people, not a higher caste), grants the state only a protective task, and then draws his central distinction: between mere majoritarianism, which can violate individual rights and destroy the very conditions of its own existence, and constitutional democracy, which shields minorities from the majority's whims. Enforced economic equality, he argues, denies human difference and the division of labor, requiring coercion and exploiting resentment. The essay's moral psychology rests on envy, which it names the engine of demagoguery—turning politics into an art of promises and evasions, and the body politic into a source of strife.

Envy is more irreconcilable than hate. It is the most corroding of all political vices and also a great power in our land. The friends of freedom are content to be envied, but envy not.

Envy, once it enters politics, becomes for Sennholz the emotional engine of coercive redistribution, demagoguery, and social conflict. This 1995 “Notes” essay distinguishes natural human inequality—of ability, industry, and productivity—from the equal legal standing that lets unequal persons cooperate in peace. The demand for equal results, he argues, is not justice but force, requiring endless taxation and confiscation because the inequalities it targets keep reappearing; it opens the door to demagogues who convert resentment into electoral power. Against this he sets the market order as an envy-free arrangement in which income tracks service rendered. The deeper danger is capital consumption: confiscatory taxation, welfare transfers, and deficit spending divert savings from future production, pitting present beneficiaries against taxpayers and against generations not yet born.

All kinds of problems are solvable except those which spring from envy.

No wage mandate, Sennholz argues, can manufacture the productivity that sustains high wages; it can only forbid employment below a statutory cost and so bar the least skilled from the first rungs of the ladder. Treating the minimum wage as a prohibition rather than a gift, he insists the posted hourly rate understates the real barrier: employers must also carry payroll taxes, Social Security, unemployment insurance, workmen's compensation, and paid holidays, so the relevant floor is the total cost of employment. When that cost exceeds a worker's output, hiring becomes a loss and the worker goes unhired—teenagers, the untrained, and minority youth first. Unions and Northern industry back the floor, he claims, to blunt lower-cost Southern and nonunion competition. If decrees could create prosperity, poor nations could abolish poverty by statute.

Few economic laws, if any, are more malicious and malignant than minimum wage laws.

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.

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.

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.

Prosperity, employment, stable prices, a clean environment, care for the disadvantaged: on such ends most Americans agree, this compact 1996 essay argues, and the bitter quarrels begin only over means. Sennholz sorts the combatants into activists who would mandate, tax, and print money and those who would trust property and exchange, and traces the split to incompatible theories of social order. Against the Marxian conflict dogma, which he sees extended into later idioms of race, gender, and generational struggle, he sets Adam Smith's Invisible Hand and a harmony thesis grounded not in sentiment but in the higher productivity of cooperation and the division of labor. The closing turn is ethical: rights and justice cannot be reduced to votes, and a majority can violate them as surely as any private actor.

Evil is evil; it is none the better for being committed on behalf of the majority.

The share of national income flowing to America's top fifth rose sharply between 1968 and 1994—a fact Sennholz concedes before turning the standard explanation on its head. Rising inequality, he argues, is not a market failure calling for more redistribution but the predictable result of intervention itself: deficit spending crowds out private investment, consumes capital, lifts interest rates, and depresses wages while inflating returns to capital. He indicts Federal Reserve easy money for the era's financial bubble, adds corporate taxation and regulation that push firms toward downsizing and mergers, and notes how dual-earner professional households widen the gap further. From Roosevelt's New Deal through Johnson's war on poverty to Clinton's tax increases, egalitarian effort has produced its opposite, confirming his rule that political intervention in economic life is bound to make matters worse.

It is ironic that the spenders create the very pressures that cause interest rates to rise and capital income to soar.