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L. Neil Smith's
Number 446, December 2, 2007

"Socialists of a different color"

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Ending the Empire of Lies
by L. Neil Smith

Attribute to The Libertarian Enterprise

Despite its widely-advertised—and for the most part sincere—aspirations, American civilization presently stands on a foundation of corrosive lies that, slowly but insidiously, have poisoned its every effort to become the first truly decent society in the history of the world.

Several years ago, at a New Mexico state Libertarian Party convention, I delivered an address called "Empire of Lies". I had a lot of different lies in mind then—the sinking of the "helpless, unarmed" Lusitania, the Gulf of Tonkin "Incident", and the attack of the Word Trade Center "because they hate our freedom"—are some examples.

Here are three more. . .


The first of those three lies—and I wouldn't wish to give the impression that these are the only lies propping up this culture's power elite—is the doctrine of Sovereign Immunity, a curiously medieval provision in a nation proud to have thrown off the rule of kings.

The idea at work here is that, since the authority of the monarch is backed up the will of the deity, "the king can do no wrong", or be expected to pay much in the way of consequences for anything that he or his minions do. You can't sue him—which is to say, the system won't let you sue him—nor can you have him busted if, for example, he comes to your wedding and forces your bride to have sex with him first.

Because this doctrine is still alive and well in what represents itself as a republic, you have to beg for the permission of the government in order to sue it. I recall quite vividly the first time I ever heard that—from my parents, when I was five or six, although I don't remember why—and even then, exactly as it does now, it seemed wildly absurd, and transparently self-serving, if you happen to run a government.

"Why if people could sue the government, nothing would ever get done!"

"Yes, and. . .?" I remember thinking.

Now I know that there's a small legal cottage industry dedicated to getting the government's permission to sue it, and then suing it, an exercise that protects nobody, and seldom benefits anybody but lawyers. But imagine what American history would look like—better yet, read my first novel, The Probability Broach—if those farmers in western Pennsylvania had been able to sue George Washington and his buttboy Alexander Hamilton to keep them from preferentially taxing whiskey.

Imagine how American history might have turned out if southerners could have taken Abraham Lincoln to court to prove that they had a right to secede. Or if they could have obtained an injunction to stop Philip Sheridan's mind-bogglingly destructive Shenandoah campaign. Or if a restraining order could have kept William Tecumseh Sherman from marching through Georgia. Six hundred thousand lives—and more than a century of rebuilding the southern infrastructure and economy—could have been spared, not to mention the lives of their descendants, possibly among them the individual who might have found a cure for cancer.

Later, Woodrow Wilson could have been held legally responsible for lying the United States into World War I, Franklin Roosevelt for the enormities he committed in a futile attempt to end the Depression (as it turns out, created by Wilson's policies) and provoking the Japanese into attacking Pearl Harbor, Truman for murdering a hundred thousand innocents in Hiroshima and Nagasaki and for prosecuting an illegal war in Korea, and John Kennedy and Lyndon Johnson for lying our way into Vietnam.

I know that Randy Weaver successfully sued the federal government for two or three million dollars (if it had been my wife and kid they murdered, that word would at least have started with a B rather than an M), although I don't know what circumstances made it possible. What if, instead of being railroaded into prison, the surviving members of the Branch Davidian church had been able to sue the Bureau of Alcohol, Tobacco, Firearms, and Explosives, and—surely the most innacurately named entity in the entire six thousand year history of government—the Federal Bureau of Investigation's bloody-handed "Hostage Rescue Team"?

Finish out the rest of recent history for yourself. The fact is that most of the government atrocities of modern times would never have happened, if the threat of a lawsuit carried any weight. There would have been no Oklahoma City bombing (I know, you think Timothy McVeigh did it; you can go back to sleep, now; sorry I disturbed you), no destruction of the World Trade Center, no wars in Afghanistan or Iraq.

Instead, a greatly-reduced federal government (state governments, as well) would be up to its earlobes in lawsuits, and the rest of us might enjoy something a little more closely resembling freedom than we do now. There would be no shield laws to protect politicians and bureaucrats from the consequences of their insanity, stupidity, and malice, so taxpayers would suffer less, whenever the government is sued.


The second untruth on which the present establishment depends is the mercantilist privilege of "limited liability", the "legal fiction" (for which read, lie) that a corporation is an individual person, in and of itself. It is, in fact, the marketplace equivalent of Sovereign Immunity.

Under limited liability, whenever a corporation commits a hideous blunder, or perpetrates some evil against somebody, its owners—the stockholders—can only be held responsible to the limit of whatever they have invested in the company. When I looked it up, I was surprised to see how recent the concept of limited liability is. I'd had a vague impression that it had arisen with the Hanseatic League, or originated within European trading associations during the Bronze Age.

In fact, it is a child of the 19th century, born illegitimately of exactly the same corrupt arrangement of state-sanctioned privilege that Adam Smith had complained bitterly about in his Wealth of Nations in 1776, that had helped to spark our American Revolution in the same year, and which we continue to see reflected in obscenities like the Supreme Court's Kelo decision, that allows a local government to steal somebody's private property and hand it over it to somebody else—provided that there's more tax revenue to be realized by the process.

Leftist historian Gabriel Kolko pointed out four decades ago that American corporations had already swollen to unmanagable size by the late 19th century. To make up for their bulk and unweildiness—in a market environment that usually favored smaller, faster, more nimble entities—they had to be propped up from the outside by legislation like the Sherman Antitrust Act, the actual function of which (and this was no accident) was to act as a barrier to market entry by any newer, smaller companies that, among other things, could not afford huge, powerful legal departments to fend off attacks by the government.

Protected by laws like this, and shielded by limited liability, corporations were free to keep expanding into the disgustingly bloated monstrosities they are today, while smaller businesses—which still supply a majority of jobs in this country—find it ever harder to compete.

A country without special laws written to benefit huge companies, while crippling and stifling smaller, newer outfits, would not be dominated by corporate fascism the way America is today. Our market system would be capitalistic—that is, compelled to offer the best possible goods and services at the lowest possible prices—rather than mercantilistic, in which the shoddiest goods and services are offered at the highest possible prices because political pull (and not customer satisfaction and return business) is the focus of company effort.

It would be a country in which a Halliburton or a Blackwater USA would actually have to please their clients or go out of business, because nobody—stockholders and officers inside the corporation, or politicians and bureaucrats on the outside—would be willing to face the ruinous legal and economic consequences of starting a war to benefit them.

On this same principle, libertarian philosopher and teacher Robert LeFevre wanted to abolish the secret ballot in America, so that voters could be sued for the criminal behavior of the politicians they had elected.

Sounds like a plan to me.

The third lie on which America's economic and political elite rely is the most modern, and it, too, is a mercantilist's dream. So called "fractional reserve banking" is a special privilege granted to favored financial institutions by the King—er, um, I mean the government. It's a policy any rational person would call "virtual counterfeiting", under which banks are allowed to commit the fraud lending out more money than they actually have on deposit. And it sounds to me like an even better scam than actual counterfeiting, because you don't have to bother with nastly old paper and ink or with running the printing presses.

It also sounds to me like an engine for creating inflation.

Repealing the laws that make these lies possible, and you will have cut all three legs from under what might be called the tripod of tyranny.

And it will be the beginning of the end of the "Empire of Lies".

Four-time Prometheus Award-winner L. Neil Smith has been called one of the world's foremost authorities on the ethics of self-defense. He is the author of 25 books, including The American Zone, Forge of the Elders, Pallas, The Probability Broach, Hope (with Aaron Zelman), and his collected articles and speeches, Lever Action, all of which may be purchased through his website "The Webley Page" at

Ceres, an exciting sequel to Neil's 1993 Ngu family novel Pallas was recently completed and is presently looking for a literary home.

Neil is presently working on Ares, the middle volume of the epic Ngu Family Cycle, and on Roswell, Texas, with Rex F. "Baloo" May.

The stunning 185-page full-color graphic-novelized version of The Probability Broach, which features the art of Scott Bieser and was published by BigHead Press has recently won a Special Prometheus Award. It may be had through the publisher, at, or at


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