Glenn Greenwald and civil libertarians’ ‘double paradigm’ syndrome

Glenn Greenwald and civil libertarians’ ‘double paradigm’ syndrome
Profile photo of Giovanni Birindelli

greenwaldThose who value privacy intended as respect of individual property rights, for example in one’s own communications, will forever be in debt of Edward Snowden. And even those who today don’t value privacy will be. Snowden is the great hero of our time. For the most part, completely alone, he defended privacy against its violations by the organized system of the most powerful states in the history of mankind. He gave up a lot in order to do this, and was ready to give up everything.

Even more deserving of admiration is the fact that his heroic act was not to defend privacy against its violations by states which did not have the moral support of the ‘good and honest citizens’, as for example would have been the case of an heroic act against the crimes of the Nazi state. No. His heroic act was to defend privacy against its violations by states which represent a new, evolved form of totalitarianism: one which, thanks to purposefully distorted and abstractly incoherent ideas of ‘law’ and of ‘democracy’, does have the moral and material support of the ‘good and honest citizens’. This made Snowden’s act even more heroic also because it exposed it to the highest risk of isolation and misunderstanding.

Even though in my life I try to stand on the side of liberty intended in terms of absence of arbitrary and illegitimate coercion of some by others, I don’t think that I deserve such a heroic act. I’m not worthy of it. The debt that I, as a freedom-loving individual, have with Snowden is one that is so huge that it can never be extinguished.

I’m in debt also with the two courageous journalists who, having Snowden as a source, have reported the violations of privacy by the Western system of totalitarian democracies: Glenn Greenwald and Laura Poitras. Writing about Snowden’s leaks they also gave up a lot: they have jeopardized their liberty, they have been harassed and bullied, but they did not let themselves be intimidated and produced, in my opinion, one of the greatest masterpieces of journalism of all time.

This article is mainly about a book written by one of these two journalists: Glenn Greenwald. Its purpose is not that of praising this great journalist but that of criticising some aspects of his book With Liberty and Justice for Some. The reason why I do this is not to attack personally Glenn Greenwald, whom I admire in many respects, but to expose his logical inconsistencies. These inconsistencies are those of civil libertarians and, more in general, of many so-called ‘progressives’ and people of good faith.

In this article I will try to show that, because of these inconsistencies, Glenn Greenwald in part intellectually supports the system of arbitrary political power that he so strongly and honourably attacks in his works.

Political élite immunity

With Liberty and Justice for Some is an extremely interesting book in which Greenwald documents what he calls élite immunity: i.e. the fact that in the US the law is sometimes bent in order to protect the members of “political and financial elites” and therefore equality before the law is systematically violated to this end.

Greenwald shows that the culture of élite immunity started with the pardon of Nixon’s crimes and that it got worse in time. Its apex, so far, has been reached in 2008. In 2002, and for three years, the telecoms had helped the Bush administration violate the law by allowing the warrantless wiretapping of Americans’ communications. This scandal became public in 2005, after an article by the New York Times. However, in 2008 telecoms were granted retroactive immunity by Congress (more precisely, by Democrat-controlled Congress).

It was good to be reminded that in 2007, Barack Obama, under the pressure of civil mobilization, said he would have opposed any immunity bill and “went even further, vowing to filibuster any bill containing such immunity”[1]. However, in 2008, when the Democrat-controlled Congress passed the FISA Amendments Act that, among other things, granted full retroactive immunity to the telecoms, Obama (by then the Democratic nominee for president), actually voted in favour of the bill and against the filibuster sponsored by Democratic Senator Chris Dodd[2].

(Evidently, Mr. Obama seems to be the perfect embodiment of famous Lord Acton’s maxim “power corrupts, absolute powers corrupts absolutely”. As Glenn Greenwald reminds in No Place to Hide, while campaigning for the presidency, Obama vowed to have “the most transparent administration in history” and declared that whistle-blowers were “noble” and “courageous” persons and that, if elected president, he would protect them. However, once in power, he waged a proper war against whistle-blowers. The number of whistle-blowers prosecuted by the Obama administration is more than the double of the total number of whistle-blowers prosecuted by all administrations in the entire history of the United States[3]).

It was also interesting to learn in With Liberty and Justice for Some that the illegal wiretapping activity exposed in December 2005 by the New York Times was not the original one, but apparently a ‘less illegal’ version of the original. The original wiretapping activity by the government was so much illegal that even the Bush administration’s top officials in the Department of Justice were outraged by it: “Comey [Bush’s vice attorney general in 2003 and 2004] and the entire top level of Bush’s Justice Department team -including [attorney general] Ashcroft, FBI director Mueller, and Jack Goldsmith, the newly appointed chief of the Office of Legal Counsel- threatened to resign en masse unless Bush immediately put an end to the unlawful spying”[4]. Eventually, because of this internal opposition, the original program was abandoned and a new, ‘less illegal’ version of it was approved by these rebelling officials: “it was this ‘modified’ approach that the New York Times exposed in December 200”»[5] and that was shielded with immunity by Congress. What that original wiretapping activity was, today is still a secret.

What is the law?

Now, the central theme of the book With Liberty and Justice for Some is, in the author’s words, the replacement of the rule of law with the rule of men in the US. Greenwald’s whole argument revolves around the concept of the rule of law and of equality before the law. However, he does not really define the term ‘law’ and therefore he does not really define the term ‘equality before the law’. He takes the meaning of these terms somehow for granted. As we will see, this is not casual: a coherent definition of the term ‘law’ (and therefore also of the term ‘equality before the law’) that is compatible with the rule of law as opposed to the rule of men, is logically incompatible with many functions and actions of the state that civil libertarians such as Greenwald advocate and support.

There can be an infinite number of particular definitions of law (and therefore of equality before the law). However, broadly speaking, the law can be either an instrument for the exercise of arbitrary political power or a non-arbitrary limit to the exercise of any power. The rule of men necessarily implies the former idea of law. The rule of law necessarily implies the latter.

In the first case, the law is a particular measure or decision (such as the one granting retroactive immunity to telecoms for their crimes). This measure derives from authority in the sense that it is made by it: it has been decided by it; it expresses its particular will. Whether this authority is a dictator, a majority of representatives or a majority of citizens, it does not make any difference for the abstract concept of law.

The concept of equality before the law that is necessarily associated with this idea of law is one that is compatible with legal inequality in particular cases. Legal inequality consists in forming different categories of citizens on the grounds of certain criteria (e.g. race, wealth, or other) and in treating in the same way citizens that have been grouped into the same category, but in a different way those that have been grouped into different categories (as it happens for example in the cases of racial laws and of progressive taxation). These criteria need not be general (such as race or wealth, in our example) but can be entirely particular (such as in the case of retroactive immunity for the telecoms).

In the second case (the case of the Law intended as non-arbitrary limit to the exercise of any power), the Law is a general and negative rule of individual conduct (‘negative’ in the sense that it says what an individual or an organization cannot do: it does not say what he/it has to do). This general rule of individual conduct has three main characteristics.

First: it applies equally to all individuals and organizations (and first of all to the state, where there is one) in the same way without any possibility of legal inequality, not even in relation to the government: if an action is unjust when it is done by an individual, then it cannot miraculously become just when it is done by the government or by a majority. If it is unjust for an individual to appropriate other individuals’ resources coercively, for example, then it is unjust also for the state to do it. There’s no ‘social justice’ different from justice: there’s no ‘macro’ justice opposed to ‘micro’ justice.

Second: the law intended as general rule of individual conduct is incompatible with the defence and pursuit of ‘collective interests’, such as an arbitrarily defined ‘national interest’ or ‘national security’, for example. ‘Collective interests’ do not exist as an operatively definable concept: only individual interests exist because only the individual thinks, feels, and prefers. A collective interest can exist only as the aggregate of these individual interests, and therefore it can never be known by anyone, let alone acted upon.

The term ‘national security’, for instance, does not make any logical sense: there’s only the security of the individuals. In addition, different individuals often have different priorities in relation to their own security: for example, while some of them may not be willing to trade a part of their liberty (and/or of their property) for more security, others may be willing to do it, everyone to a different degree. Last but not least, this term in particular (‘national security’) is often used by the government to obtain easily the immediate support of the courts and of public opinion for its violations of the law, quite independently of the existence of actual security threats of any kind.

As Anthony Lewis writes in relation to freedom of speech, “[after the Pentagon Papers] the Supreme Court was increasingly deferential to the executive branch of the government whenever it claimed that national security was at risk. … [In the case Snepp v. United States and in other cases too] the Court has deferred to the C.I.A. and national security claims, carving out what amounts to an exception to the First Amendment. This is in spite of the belief of just about everyone who has been inside the national security system that it claimed needs for secrecy are grossly exaggerated. Erwin Griswold, who argued the Pentagon Papers case for the government, said later that he had “never seen any trace of a threat to national security” arising from publication of the Papers. … No doubt the Supreme Court’s deference to Presidents on issues of national security is a reflection of the general growth of presidential power in the nineteenth century. … Presidents have used the needs of national security in such an age to justify cloaking more and more the vital business of government in secrecy. … The one area of the First Amendment law that most needs attention is the exception that the courts have implicitly created for anything arguably related to the national security”[6]. (These words have been written in 1992, decades before Edward Snowden’s leaks).

However, even if, ad absurdum, one assumed that ‘collective interests’ were an operatively definable concept, the law intended as general and negative rule of individual conduct could never be an instrument of their realization. In fact, its fundamental characteristic is that it should be respected whatever the practical consequences. Killing an innocent person is illegitimate even if it implies saving one thousand. Stealing would remain unjust even if it was necessary to save one’s own life (human understanding and legitimacy are quite different concepts). Violating privacy intended as respect of property rights of individuals on their communications (for example) would be unjust even if it actually helped preventing terrorist attacks, which in the case of mass surveillance doesn’t by the way[7]. In other words, the law intended as general rule of individual conduct cannot be an instrument to realize a particular end-state, however noble and good that particular end-state may be arbitrarily believed by some (e.g. the majority) to be.

Third: the law intended as general rule of individual conduct exists independently of any authority and of the will of any majority. The action of rape would remain illegitimate even if a majority approved of it and made that action legal or gave legal immunity to those performing it. As Friedrich A. von Hayek says, “It would […] probably be nearer to the truth if we inverted the plausible and widely held idea that law derives from authority and rather thought of all authority as deriving from law -not in the sense that the law appoints authority, but in the sense that authority commands obedience because (and so long as) it enforces a law presumed to exist independently of it”[8].

Many people find it unconceivable that the law can exists independently of authority. They usually ask: “who decides what the law is?”. The problem with this question is that, precisely because it exists independently of any authority, the law cannot be decided, it can only be discovered and defended, precisely like language. Who decided the rules of language? There’s no name, there’s no date: rules of language were not “made.” Like the law, it is the result of a spontaneous and dispersed process of cultural selection of successful uses and conventions. In the case of the law, this evolutionary process started with the respect of certain rules of conduct because it was noticed that it had beneficial effects for the individuals respecting them. However, that evolutionary process produced in the end moral rules of conduct (abstract principles) that, as such, have to be respected quite independently of the consequences of their respect[9].

For simplicity, in what follows, I will refer to the law intended as instrument for the exercise of arbitrary political power with the term “law” (in inverted commas – or fiat “law”). Vice-versa, I will refer to the law intended as non-arbitrary limit to the exercise of any power with the term Law (with capital L – or Law intended as principle). I will call legality the respect of fiat “law” and legitimacy the respect of Law, from which follows that something that is legal is not necessarily legitimate and vice-versa (hiding Jews in Nazi Germany was illegal but clearly legitimate, for example)[10].

You cannot have your cake and eat it

The above-mentioned two general ideas of law have different implications and necessary consequences (social, political, economic). However, the fundamental aspect that I would like to emphasize in this article is not that the Law intended as principle is better than fiat “law”. It is, not only in abstract terms but also because it tends to produce peace and prosperity, while fiat “law” necessarily tends to produce conflict and poverty. But, again, this is not the point I want to make here.

The central point that I want to make is this article is that one cannot logically have both ideas of law at the same time, in the sense that one cannot coherently adopt one idea of law in a particular case and the opposite one in a different case.

In fact, these two different ideas of law are two opposite paradigms: adopting both at the same time and using one or the other according to what is more convenient in different circumstances, is equivalent to adopting the eliocentric cosmological system in some particular situations and the geocentric one in other situations, according to which one of the two simplifies calculations in the particular case under consideration, for example. Either it is the law that derives from authority or it is authority that derives from the law, just as either it is the Sun that orbits the Earth or vice-versa. It cannot logically be both.

However, civil libertarians like Glenn Greenwald, for example, tend to apply the paradigm of the Law intended as non-arbitrary limit to the exercise of any power (or “paradigm of the rule of Law’) in the case of “civil liberties” and the paradigm of the “law” intended as an instrument for the exercise of arbitrary political power (or “paradigm of the rule of men”) in the economic field. And they do this as if liberty was divisible: i.e. as if the existence of “civil liberties” without economic liberty was a condition of liberty. For example, they condemn “élite immunity” because it is a form of legal inequality but, at the same time, they are in favour of “social equality” and therefore of redistributive measures such as progressive taxation that imply legal inequality.

This fundamental inconsistency does not create an impossible ‘balance’ between the two paradigms: it actually implies the adoption of the second one. Only the paradigm of the rule of men gives one the ‘freedom of choice’ of where to allow legal inequality, for example, and where not to allow it. The paradigm of the rule of men is not incompatible with the absence of legal inequality in particular cases (e.g. with the absence of ‘élite immunity’ for particular crimes): it is incompatible with an idea of law that does not allow any form of legal inequality.

Redistribution of resources, taxation, central banking, fractional reserve banking, state monopoly of money, regulation beyond the Law, state interventionism in any sector, democracy itself when it is intended as the rule of the majority, are logically incompatible with the rule of Law: you cannot have your cake and eat it. ‘Élite immunity’, the surveillance state and other expressions of limitless and arbitrary political power is the material price civil libertarians have to pay in order to have coercive redistribution of resources and other violations of economic liberty that they support. Of course, that heavy price is imposed also on coherent libertarians, but the difference is that the latter don’t support coercive redistribution of resources and other violations of economic liberty. They see that you cannot have your cake and eat it. And, unlike civil libertarians, for both moral and economic reasons, they don’t want to eat it.

Outcome equality v. equality before the law

It will suffice to discuss only a few passages of Greenwald’s With Liberty and Justice for Some to give an idea of his logical inconsistencies.

In one of these passages, for example, Greenwald writes (italic mine): “due to those unavoidable circumstances, the American conception of liberty was not only consistent with, but premised on, the inevitability of outcome inequality – the success of some people, the failure of others. The one exception was the rule of law. … Law … was the non-negotiable prerequisite that made all other forms of inequality acceptable. Only if everyone was bound to the same rules would outcome inequality be justifiable[11].

First, the rule of law is not an “exception” to outcome inequality. It is its necessary cause. In fact, outcome equality and equality before the Law are necessarily mutually exclusive. Because all individuals are different in infinite ways (e.g. they have different strengths and weaknesses, different qualities, different talents, different preferences, different backgrounds, they find themselves in different places at different times, etc.), in order to artificially produce outcome equality (even assuming, ad absurdum, that this was possible) they would have to be treated in different ways: that is, equality before the Law should be violated. In other words, given those individual differences, equality before the Law necessarily produces outcome inequality. Therefore, outcome inequality (or ‘social inequality’ as Greenwald sometimes calls it) is not something bad: it is something good because it is the necessary consequence of the rule of Law and of equality before the Law. Coherent (i.e. Austrian) economics shows why the defence of the rule of Law (and therefore, indirectly, also of outcome inequality) is the most efficient way to improve the economic position especially of the poor. However, as we have seen, Law should not be defended because of its outcome but independently of it.

Second, because outcome inequality is the necessary expression of the rule of Law and of equality before the Law, it does not need any “justification” whatsoever: it is not something bad that, in order to be “acceptable”, needs to be compensated by something else.

For simplicity, let us not discuss here the existence of taxation, which, as noted earlier, by itself constitutes a violation of the Law[12]. What should be, and in fact cannot be consistently justified by those who are in favour of equality before the Law, is the fact that the state takes more money from the wealthy than from the others. This is a clear expression of legal inequality (i.e. a violation of equality before the Law) and sufficient evidence of the “rule of men.” Even less, of course, could be justified the fact that the state takes from the wealthy proportionally more than from the others as it usually does today.

Throughout Greenwald’s book one gets the message that the rule of Law is violated by the state in order to protect the wealthy (e.g. “Wealth and power have always conferred substantial advantage, and it’s thus unsurprising that … the rich … have enjoyed superior treatment under the law”[13].) Generally speaking, the opposite is true: in the modern state the rule of Law and equality before the Law are systematically violated by the state in order to plunder the wealthy, for example via progressive taxation and other redistributive measures. In other words, the rule of Law is violated for the political élite (in this Greenwald is totally right) but against the wealthy, not for them: in 2011, for example, the richest 1% paid 24% of all taxes in the US[14].

Of course, not only redistributive measures are not even mentioned by the Author as violations of the rule of Law but actually they are considered legitimate. Furthermore, through increased redistributive measures the rule of law should produce, according to Greenwald, an equal starting point for all, i.e. an equality of material condition: “Not only does the law fail to equalize the playing field; it perpetuates and even generates tremendous inequality”[15]. As we have discussed, redistributive measures and a coercively imposed equality of material condition (including an equality of financial starting point) imply a violation of the Law and of equality before the Law.

The case of telecoms retroactive immunity does not contradict the fact that the Law is violated against the wealthy: telecoms have been protected not because they are wealthy, but a) because they served the government, b) because the government needed them in order to spy on the private communications of individuals and c) because legal proceedings would have directed light to its own crimes.

Greenwald rightly points out the case in which a fund manager has been spared a felony conviction because he “oversees over $1 billion in assets”[16]. However, as astonishing as these cases may be, a) they are not systematic and b) they constitute a clear violation of the Law, but they do not imply the subversion of the concept of law: i.e. they do not constitute the making of illegitimate fiat ‘law’ in order to protect particular interests and/or to defend particular crimes. This leads me to a brief discussion of another passage of Greenwald’s book…

Wall Street and the financial crisis

Greenwald writes (italic mine): “The granting of immunity to the telecoms after the Bush wiretapping program was a travesty because corporate giants were able so flagrantly to purchase retroactive exemption from the rule of law. But the steadfast refusal to hold financial elites accountable for the 2008 financial crisis and 2010 mortgage fraud scandal represents a whole new level of lawlessness. As disgraceful as the telecom amnesty was, at least it was given by an act of Congress and thus had some legal pretense to it. By contrast, in protecting Wall Street, the executive branch simply violated its core constitutional duty: to ‘take care that the laws be faithfully executed’. Moreover, while the immunized telecoms had broken the law in conjunction with government programs, the crimes for which Wall Street barons are being protected are purely private ones. Worse still, the scope of these financial crimes is so vast, and the suffering they have caused so deep and enduring, that the refusal to impose any consequences on the culprits proves the near-absolute nature of this elite lawbreaking license”[17].

On the one hand, in other parts of the book, Greenwald emphasizes that Congress granting immunity to telecoms was a case of the rule of men subverting the rule of law and rightly sees this as a very negative thing. On the other hand, however, in this passage, he sees a ‘less bad’ thing in the fact that “at least” this subversion of the rule of law was made by Congress as this gave “a legal pretense to it.”

Are maybe racial ‘laws’ less bad because the persecution of some minorities was done legally by the state? Why should the fact that a crime is committed (or defended) legally by an authority be ‘less bad’ than if it was committed illegally by a private individual or organization? Actually, there are various reasons why the opposite should be true. As long as a crime remains illegal, at least the Law remains intact. However, when the law is used to make a crime legal or to legally defend those who have committed it, the Law itself is destroyed, inverted. And when this happens; when those who should defend the Law (the general and negative rule of individual conduct that exists independently of anyone’s will) become those who make the ‘law’; when the Law becomes thus defenceless and citizens are forced to pay those that use fiat ‘law’ in order to legally defend crime; when the ‘law’ can be used as an instrument to attain particular ends or to support particular “government programs”; when legality conflicts with legitimacy, then the entire system is subverted: the rule of Law has been replaced by the rule of men; the non-arbitrary limit to the exercise of any power has become the instrument for the exercise of arbitrary political power. What could be worse than this in the field of Law?

Retroactive immunity for telecoms in relation to their crimes is not a general and negative rule of individual conduct; it is not valid for all in the same way and it does not exist independently of authority: in other words, it is not a Law. The fact that it is Congress (the legislative authority) that passes a ‘law’ legalizing immunity is not something that makes things ‘less bad’ but something that makes them worse. By seeing a mitigating circumstance in the fact that “at least [the immunity] was given by an act of Congress”, Greenwald’s shows that he considers the law to derive from authority, and not authority to derive from the law: in other words, here, again, he shows that he supports the rule of men, not the rule of Law. Similarly, by seeing a mitigating circumstance in the fact that “telecoms had broken the law in conjunction with government programs,” Greenwald shows a collectivist mentality according to which government programs have precedence over private ones: and collectivism necessarily requires the paradigm of the rule of men (it cannot be conceived without it) and is incompatible with the rule of law.

*   *   *

In the quoted passage, however, there is another fundamental problem. Greenwald assumes that the financial crisis was caused by Wall Street, specifically by “Wall Street barons” or “financial elites.” In another passage he writes (italic mine): “the financial crisis caused by Wall Street was easily one of the most devastating and misery-producing events in American history. To the limited extent its causes have been investigated, it has become increasingly clear that the crisis was the result of plundering, fraud, lawlessness and criminality on a massive scale[18].

By reading the fundamental texts of Austrian economics (and there are many that can be read also by non-economists[19]) Greenwald would be surprised to learn that the causes of the financial crises he refers to (as well as those of many previous crises, including the Great Depression that started in 1929, and of future ones) have in fact been extensively investigated; and actually they have been scientifically demonstrated. These causes are constituted by government’s intervention in the economy and, in particular, by the artificial expansion of money and credit by the central bank and by the banking system. Discussing the scientific reasons why such manipulation of money and credit necessarily produces cycles of boom and crisis-depression would be far too long and beyond the scope of this article (the quoted texts in the last footnote are an excellent starting point to understand these reasons). Here I would like to emphasize that Greenwald is right when he claims that “the crisis was the result of plundering, fraud, lawlessness and criminality on a massive scale, “though not for the reasons he thinks he is.

In fact, the above-mentioned artificial expansion of money and credit (the cause of the cyclical financial crises such as the 2008 one) is the result of a legal structure of privileges that Congress has granted the government, the Federal Reserve and the banking system as a whole. It is not the result of “Wall Street barons” committing illegal acts. These legal privileges, as such, are a violation of the Law intended as general and negative rule of individual conduct. And they are a violation equality before the Law. In other words, they are an expression of the rule of men and of the idea of ‘equality before the law’ necessarily associated to it: the one allowing legal inequality in particular cases. However, Greenwald mentions not a single one of these privileges in his book.

State monopoly of money is a privilege the state legally grants itself. Thanks to this privilege, the state can force individuals to use money that the state itself, via the so-called ‘independent’ central bank, can inflate at will. In other words, thanks to this privilege, the state can increasingly tax individuals in addition to what they are explicitly taxed, and with the additional benefit that those holding political power do not have to bear the political costs of increasing taxes. In fact, most individuals (even among the educated élite) do not see they are being taxed through inflation nor, as in the case of Greenwald, are they familiar with the scientific reasons why inflation necessarily produces cyclical financial and economic crises.

By printing fiat money at will (furthermore in a condition of legal monopoly), the central bank arbitrarily decreases the purchasing power of the 10 dollar banknote Greenwald holds in his wallet. This is counterfeiting: if someone replaced the pearls of a necklace with fakes, diminishing the economic value of that necklace, he would go to jail. The central bank’s counterfeiting is not different except that a) in this particular case it is legal and that b) because the central bank counterfeits money (and furthermore money that people are forced by the state to use in their transactions) and not a necklace, its counterfeiting activity has catastrophic, systemic consequences (the “deep and enduring suffering” the Author mentions in the above-quoted passage) that the counterfeiting of a necklace does not have. Yet no mention of this privilege is made by Greenwald in his book.

These catastrophic and systemic consequences are even more amplified by the fact that commercial banks lend other individuals/businesses money that their customers have deposited in their bank accounts, but have not lent to the banks. When someone deposits money in a bank he can use it whenever he wants for his purchases. In other words, that money remains at his disposal. Vice-versa, when someone lends money to someone else he cannot spend it. That money is not at his disposal any more, it is at the other person’s disposal for the period of the loan. If the owner of a parking area rented out cars that have been parked in his premises, he would go to jail for misappropriation. The case of commercial banks’ fractional reserve banking[20] is not different (even considering the contra naturam interest rate on deposits), except that a) in this particular case misappropriation is legal and b) as in the previous case of the central bank’s counterfeiting, the artificial credit expansion deriving from fractional reserve banking has catastrophic, systemic economic consequences that the case of the misappropriation by the parking owner does not have. Yet, again, no mention of this privilege is made by Greenwald in his book.

In a nutshell, quite by accident, Greenwald is right when he claims that “the crisis was the result of plundering, fraud, lawlessness and criminality on a massive scale.” However, this plundering, fraud, lawlessness and criminality that caused the financial crisis is committed in the first place by the state and by the central bank, not by the “Wall Street barons” or by the “financial elite” as Greenwald claims. And it is done legally, through privileges granted by Congress, in order for the state to continuously expand itself.

Of course, individual cases of violation of the Law by “Wall Street barons” could not be excluded a priori. However, these could not be counted as causes of the financial and economic crisis because, however great the consequences of these crimes, they could never be as vast and as systemic as those deriving from the legal Sovietization of the monetary and credit system by the state and by the central bank.


With Liberty and Justice for Some is a very beautiful book: extremely well written (as always in the case of this author) and with an astonishing density of interesting, well-structured material and information. Glenn Greenwald is a great journalist. In addition, he is courageous and has that honourable attitude of being strong with the strong ones and weak with the weak ones, which is in stark contrast with the increasingly common attitude (especially among mainstream journalists, but also among other groups) of being weak with the strong ones and strong with the weak ones.

Like all civil libertarians, however, he suffers from a ‘double paradigm’ syndrome. His being in favour of ‘social equality’ and his not considering a violation of equality before the Law the state’s measures inspired by this nonsensical ideal (such as progressive taxation for example); his lack of consideration for the economic privileges of the state, of the central bank and of the banking system as a whole; his moral respect for legal institutions that are the embodiment of the rule of men, make him involuntarily support the same lawlessness, the same legal inequality, the same arbitrariness of power, in the end the same rule of men that he attacks in other fields in the name of the rule of Law.

Glenn Greenwald is doing a great job in defending the rule of Law in some of its aspects. He is unconsciously attacking it in other aspects. What he has done and he is doing for the rule of Law, especially in the case of Edward Snowden, even though structurally limited by his own inconsistencies, is probably much more than most coherent libertarians have done or would be ready to do.

[1] Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 94.

[2] See Greenwald G., work cited, p. 96.

[3] See Greenwald G., 2014, No Place to Hide (Penguin, London), p. 50.

[4] Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 81.

[5] Greenwald G., work cited, p. 81.

[6] Lewis A., 1992, Make No Law (Vintage Books, New York), pp. 241-243.

[7] «As the Washington Post noted in December 2013 … a federal judge declared the phone metadata collection program “almost certainly” unconstitutional, in the process saying that the Justice Department failed to “cite a single case in which analysis of the NSA’s bulk metadata collection actually stopped an imminent terrorist attack”» Greenwald G., 2014, No Place to Hide (Penguin, London), p. 202. Se also this article by Edward Snowden

[8] Hayek F.A., 1998, Law, Legislation and Liberty (Routledge, London), Vol. 1, p. 95.

[9] According to a different view, the Law is a natural order (natural law) that, as such, exists independently not only of human design (as in the case of evolutionary Law) but also of human action (unlike the case of evolutionary Law). I will not compare here these two different abstract ideas of Law. However, I wish to underline that in both cases the Law is intended as a general and negative rule of individual conduct that, by itself, constitutes a non-arbitrary limit to the exercise of power.

[10] Unfortunately, these annoying semantic precautions unfortunately are necessary because, as Michael Oakeshott wrote, «modern Europe [but in my opinion modern Western civilization, note of the editor] has invented for itself a political vocabulary in which each word has two meanings – one appropriate to telocracy [by this word Oakeshott refers to something similar to what in this article I referred to as the ‘rule of men’, note of the editor] and the other to nomocracy [something similar to what in this article I referred to as the ‘rule of law’, note of the editor]. These dispositions of thought are the poles between which European belief on this topic has, so to speak, arced for four and a half centuries. And I think the politics of modern Europe, if it is to be understood, must be recognized as what has emerged from the tension between  these two dispositions» Oakeshott, M., 2006, Lectures in the History of Political Thought (Imprint Academic, Exeter & Charlottesville), p. 497.

[11] Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 3.

[12] In addition, the existence of taxes forces one to define the ‘social conflict’ in terms that are quite different from those used by collectivists, including civil libertarians. The latter see a social contrast between the ‘rich’ and the ‘poor’. However, while on the one hand, within the paradigm of the rule of Law, there is no reason why ‘rich’ and ‘poor’ should be in conflict with each other, on the other hand the very existence of taxes creates a fundamental conflict between those who live from money taken by coercive (i.e. political) means and those who live from money that is the result of voluntary economic exchange.

[13] Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 15.


[15] Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 14.

[16] See Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 101-104.

[17] Greenwald G., work cited, p. 104.

[18] Greenwald G., 2011, With Liberty and Justice for Some (Picador, New York), p. 107.

[19] In order of simplicity for someone who approaches economics for the first time: What is Money? (Gary North); Economics in One Lesson (by Henry Hazlitt); The Use of Knowledge in Society (Friedrich A. von Hayek, article); America’s Great Depression (Murray N. Rothbard); Money, Bank Credit and Economic Cycles (Jesús Huerta de Soto); The Mystery of Banking (Murray N. Rothbard); Economic Calculation in the Socialist Commonwealth (Ludwig von Mises, article); Socialism (Ludwig von Mises); and Human Action (Ludwig von Mises, treatise).

[20] Fractional reserve banking is the system by which banks lend to others money that has been deposited in them but that was not lent to them, in this way artificially expanding credit. Assuming a 1% reserve, when A deposits 1.000 dollars in a bank, the banking system as a whole can produce up to 99.000 dollars literally from nothing. Fractional reserve banking makes banks intrinsically bankrupt: in case of bank runs, they would immediately collapse. It is important to notice that fractional reserve baking would be harmless without the central bank as ‘lender of last resort’ and as legal monopolist of fiat money. In fact, without the safety net provided by the central bank and its privileges (but also by the state via the protection of deposits), no commercial bank would have an incentive to artificially expand credit too much beyond the existing deposits because otherwise it would expose itself to immediate bankruptcy.

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Giovanni Birindelli is President of the Catallaxy Institute, an international association whose long-term aim is to contribute to develop and divulgate the principles and values of the classical tradition of liberalism.

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