71. Seeking and Finding Liberty

71

ROBERT STEWART

SEEKINGAND FINDING LIBERTARIANISM

UNLIKE MANY OF YOUR OTHER CONTRIBUTORS, I can pinpoint the exact date on which I started on the road to being a libertarian. On June 14th, 1994 I read in a testimonial to Henry Hazlitt (who died in 1993) entitled, “A Rembrandt among commentators,” written by Michael Prowse in the Financial Times of June 13th. One of the disadvantages of living in Bermuda, is that the FT arrives a day late, although some of its advantages such as not having to pay income tax provide compensation.

I was mesmerised by the quotation heading his column, a text that will be so familiar to all Austrians that it should not need to be repeated. However, it is so eloquent, so simple, so obvious, so correct, so enlightening that it is worth restating: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequence of that policy not merely for one group but for all groups.”

Fortunately, for me at least, Michael gave the address of the Foundation for Economic Education and from directory assistance I was given the telephone number and immediately ordered what most libertarians consider the finest introductory book on the subject of economics—Economics in One Lesson. When the book arrived some weeks later (another disadvantage is that we have a government post office in Bermuda) I was mesmerised when I read the text.

From then on, I was a convert. It took only a short time to discover other books by Hazlitt, Ludwig von Mises, F.A. Hayek, Murray Rothbard, Leonard Read, and many others. Subsequently, I navigated the web and found Mises.org and other free-market organizations. The daily email from Auburn and from LewRockwell.com is one of life’s simple pleasures for someone who became hooked on benefits of the free market at a late age.

However, I am getting ahead of myself. I took a degree in economics from the University of London in 1967 at the ripe old age of 28, when the reigning giants on the subject were Samuelson, Lipsey, and of course Galbraith. Government intervention was at its zenith and there were lots of nonsensical things to study such as the U.K. National Economic Plan of 1965. I first voted in 1964, foolishly for Harold Wilson’s Labour Party, and again in 1966—these are confessions that should be made in private but are now embarrassing to make public.

At that time, I had never heard of the giants of Austrian economics. These omissions clearly did not qualify me to teach economics when I returned to Bermuda, although I did for two years until following the timeless advice of Adam Smith (of whom I had heard) I decided to follow my self-interest and leave teaching to earn a bigger salary at Shell.

There I remained for almost 30 years (a great company) and just before I retired in 1998, I published a book entitled Bermuda—An Economy Which Works that was sprinkled with many ideas and quotations from Hazlitt and Mises. In many ways, the Bermuda economy was a classic laissez-faire economy, the main reason for its stupendous success from the 1950s to the present.

Although a British Colony, it had the good sense not to follow the nonsensical welfare-state policies of U.K. Bermuda with its combination of low taxes, limited government, respect for the rule of law, and private property led inexorably, as one knows as a libertarian, to increasing prosperity and a per capita income higher than the U.S., and a great quality of life—no tax returns to complete. Although, I had not wholly appreciated it before 1994, I was living in a society that largely followed libertarian ideas.

Why was I so slow on the uptake? Apart from a natural inclination to being one sandwich short of a picnic, I had been hoodwinked by conventional and statist economics. In addition, apart from voting for Harold Wilson in 1964, I was an admirer in the 1960s to the early 1980s of Presidents Kennedy, Johnson, Carter, and even of Richard Nixon. I admired, from afar, their ideas of bold government action to stimulate domestic reforms, to undertake utopian social engineering projects, to distribute wealth and their other fanciful plans. What a clown.

As I travelled the world for Shell, I saw at first hand in countries as different as Jamaica, India, and Guatemala the nonsense of economic planning and government intervention. In many countries, economic chaos reigned. Corruption, incompetence, poverty, penal taxation, starvation, ill-health and so on were the norm. As an executive of a Western company I was immune from most of the failures. I travelled first class, stayed in great hotels, and was paid a bundle. The economic chaos and distress that I witnessed was something I put down to as being akin to an act of God, not the self-imposed penalties of official incompetence and conceit.

I moved in 1982 from the tax-free sunny climate of Bermuda to London, and I was fortunate to be again in a highly privileged position by being quarantined from the excesses of economic incompetence. The U.K. was a mess. Huge inflation, high taxes, the destructive power of special-interest groups, labor unrest and strikes, public services that did not work, and a welfare state that did little for the disadvantaged but did much for those who were able to write letters and lobby for special privileges.

Prime Minister Thatcher was in the midst of trying to change the moribund U.K. economy but the opposition to many of her policies was strident. Over time, I became a great admirer of her, and President Reagan, as they both labored to undo the mess bequeathed by their predecessors. What I had learned as a student of economics made very little sense in that environment, and apart from getting myself a good job my years of study in the mid-1960s seemed something of a waste of time.

My return to Bermuda in 1985 was a relief. Things worked, taxes were low, business flourished, government maintained a hands-off policy, and people worked hard although it was difficult to get that message across to my senior management in the U.K. who believed that all we did was go to the beach and play golf. What was not apparent was that Bermuda seemed to have found the financial philosopher’s stone, whilst most countries continued to flounder. For several years, I simply accepted the fact that the economy of Bermuda was superior to that of most countries, and that other countries had somehow lost their way.

That was until I came across Henry Hazlitt in 1994. When I read Hayek, Rothbard, Mises, and the others I began to realize how foolish the rest of the world was in following the dead end of government intervention and high direct taxation; and how lucky Bermuda had been by unconsciously following libertarian precepts.

I, for one, am happy to be a small part of a movement that seeks to show ordinary people the extraordinary benefits that capitalism and economic freedom bring to everyone. As Ludwig von Mises wrote: “Economic prosperity is not so much a material problem; it is, first of all, an intellectual, spiritual, and moral problem.”

Bob Stewart has lived in Bermuda all of his adult life, and was chief executive of the Royal/Dutch Shell Group of Companies in Bermuda until his retirement in 1998.