Congressman Ron Paul presents “The Case Against the Fed.” Click here for PDF Copy
On January 27, for the second Wednesday evening in a row, McGuire Hall played host to a famous guest speaker. This time, the conversation turned to politics, with Congressman Ron Paul presenting “The Case Against the Fed.” Paul is a Republican who has served in Texas’s 14th district for 20 years. He has been in the national spotlight lately due to his campaign as a candidate for the Republican presidential nomination in the 2008 election. More infamously, he was also recently ambushed by comedian Sacha Baron Cohen in an interview featured in last summer’s Brüno. Dr. Thomas DiLorenzo, professor of economics, arranged Paul’s appearance. The event was part of the Moral Foundations of Capitalism lecture series that is being run by Dr. DiLorenzo.
After an introduction by Dr. DiLorenzo, Paul spoke for an hour to a sold-out crowd. The crowd was made up of students who were encouraged by their professors to attend the talk and students who were actually interested in what Paul had to say, as well as members of the Baltimore community, who were obviously enthusiastic supporters, as several of them sported “Ron Paul for President 2012” posters. The congressman was happily surprised by the turnout, confessing that he expected only 10 or 15 students would come to hear him.
The “Fed” in question that Paul was speaking against is the Federal Reserve, which is the central banking system of the United States. It was created in 1913, largely in response to financial panics and bank runs. The argument that Paul presented during his talk is discussed further in his 2009 book, End the Fed. His political positions, particularly when it comes to the Fed, tend to follow a libertarian philosophy. Libertarianism advocates the maximization of individual liberty and minimization of the role of the state in the lives of individuals.
Paul began his talk by discussing the beginnings of his political career as well as how he became interested in economics. He noted that, unlike many politicians who rose from careers as lawyers, he came from a medical career. In fact, he is an obstetrician by training. This led him to say, “America’s a great place – almost anybody can get elected to Congress.” There was a certain folksy quality to his talk, as he made use of some idiosyncratic phrases such as, “What in thunder is going on?”
In the 1960’s, when he was still a medical resident, he began studying economic works, particularly those by Austrian writers. He was especially influenced by the ideas of Friedrich Hayek. Paul believed that the warnings of the Austrians were coming true in 1971 when President Nixon took the country off the gold standard.
Paul painted the urgency of ending the Fed as a matter of protecting freedom. As far as Ron Paul is concerned, every individual should have the freedom to live life the way he or she sees fit, as long as he or she does not hurt anybody. He explained that generally, people agree that personal individual liberty, i.e., lifestyle choices, should not be restricted. But when it comes to economic liberty, there is an assumption on the part of government that there should be restrictions, and Paul does not see why there should be any difference between these two forms of liberty. As far he is concerned, they are both in the same basket of freedom. Thus, restrictions on somebody’s economic freedom are tantamount to a restriction on one’s lifestyle. “If you give … up [your economic freedoms], you can’t be free,” Paul insisted.
Paul pointed to the recent financial crisis as evidence of the problems of the Fed. He did not have the time to go into the details of this argument, but it is the case that some people would disagree with him in this regard and claim that the current financial crisis happened because the market was not regulated enough, not because it was too regulated. But this was not a debate, and so Paul declared that there was only one “simple solution – get rid of the Federal Reserve.” While this goal may be beneficial to the country, efforts by Paul to bring it about have not been encouraging. He has routinely introduced bills to abolish the Fed, which have routinely found little support among his colleagues. He did mention, though, one piece of news to encourage his supporters: 317 members of Congress have signed the most recent bill that he introduced to audit the Fed. He sounded the note that each individual is ultimately responsible for protecting his or her own freedoms, going so far as to praise the virtue of civil disobedience.