Category Archives: Current Events

What does the Obama administration hope to accomplish?

It is widely believed that the Obama administration will extend deferred action to include a significant portion of the United States illegal alien population following Labor Day. Some analysts are estimating that as many as five million illegal aliens will be provided some form of amnesty. I am skeptical this is the case, and believe it is more likely we will see smaller actions taken. The executive branch has a high degree of freedom when it comes to applying immigration law, but there are limits. The President’s actions thus far have been made with the goal of getting Congress to pass immigration reform, and any future actions are likely to follow that trend.

Let us consider for example the announcement of Deferred Action for Childhood Arrivals (DACA). DACA has provided temporary relief for half a million migrants in the form of work permits and legal presence. Perhaps more importantly it also strengthened a constituency that has a strong stake in seeing immigration reform passed by Congress. A cynic is tempted to say that the ultimate purpose of DACA was to create several thousand lobbyists.

Earlier this year the Obama administration also mused with the idea of extending the Military Accessions Vital to the National Interest (MAVNI) program to include those who had received DACA relief. The MAVNI program allows those who enter it an opportunity to earn US citizenship by serving in vital military roles. The actual perquisites to join the MAVNI program are high and it is doubtful more than a handful of DACA recipients will ever earn citizenship in this manner. As it is clear that this program is of little practical use, why did the administration bother with it at all? I suspect it was because it was hoping to win over support for immigration reform from military constituencies.

The administration has also proposed allowing spouses of certain legal migrants to acquire work authorization. Here too the idea is better in principle than actual practice, as only spouses of H-1B visa holders already in the process of gaining permanent residency are eligible. It is clear that the purpose of this proposal had more to do with gaining support among skilled migrants and their employers than it was about actually providing relief.

Opponents of increased immigration may consider the above actions to be instances of executive abuse, but they are all minor compared to what the Obama administration could do.

The Obama administration could, for example, lower the threshold necessary for a waiver of inadmissibility to be approved. A significant portion of the illegal alien population would be eligible to readjust their legal status either through their family connections to US citizens or by employer sponsorship, but they are barred from doing so because they have accrued unlawful presence. A waiver of inadmissibility is an existing process that pardons said unlawful presence, and it may suffice for the Obama administration to instruct US Citizenship and Immigration Services (USCIS) to be more generous when it decides whether to grant the waiver. Allowing illegal aliens to attain permanent residency and citizenship via this method would be a significant departure from past executive actions by providing long term relief.

The Obama administration has previously altered how the waiver of inadmissibility is granted by allowing it to be filed inside the United States instead of requiring applicants to do so in a consulate abroad. I am therefore skeptical that the administration is not aware of how relatively easy it would be to use the existing system to grant massive relief to the illegal alien population.

Furthermore I doubt the administration wishes to grant deferred action for a large portion of the illegal alien population as it may then find a decreased willingness to include a pathway to citizenship as a perquisite for immigration reform. Prior to DACA’s announcement there was broad support for passing a version of the Dream Act, but said support was lost as many saw DACA as being a de facto Dream Act. Few people know or care about the marginal differences between the two and many have perceived DACA as being sufficient. A large expansion of deferred action for the illegal alien population may, in the short term, provide them relief at the expense of making others perceive that there is no need for further action to help them. It may also lead to the current pro-immigration reform coalition to break apart and make it more difficult to increase the number of legal immigrants.

Liberalization of immigration law paradoxically makes it more difficult to find support for fully open borders. How much support would there be for open borders if all one had to do to legally enter a given country was sing the national anthem and pay for a ten dollar entrance visa? I suspect under such loose regulations the desire for open borders would be restricted to a handful of individuals interested in it on philosophical grounds.

The Obama administration cannot create any new pathways to citizenship for the United States’ illegal alien population. Nor can it create new pathways for legal immigration. It can however provide relief for the illegal alien population and ease the process for legal immigration. I doubt it will though, as its goal is to get Congress to pass comprehensive immigration reform with as few as possible executive orders.

О психологии законодательной системы в России

Привет, друзья!

Давно ничего не писал, так как не имел такой возможности по причине частичной блокировки сайта wordpress.com в России и соответственно сообщества Notes On Liberty, которое базируется на этой платформе. Как говорится у нас в стране, “горе от ума”, что означает: “чем больше знаешь – тем больше проблем имеешь”. В данном случае с wordpress сработала российская система цензуры. На одном из сайтов, который базируется на этом популярном хостинге, была обнаружена переписка, затрагивающая интересы кого-то из членов правительства. В итоге была команда на удаление. Так как наша организация, отвечающая за блокировку “неугодных” ресурсов не обладает широкими возможностями в области коммуникаций с держателями данных ресурсов, было принято гениальное решение: зачем блокировать отдельный сайт? Давайте заблокируем весь ресурс полностью. Так мы на некоторое время лишились возможности пользоваться wordpress. Однако через неделю решение было найдено и сайт разблокировали, удалив лишь “запрещенный материал”. К сожалению, такая политика действует и с другими ресурсами. Вместо того чтобы лечить вывих пальца – ампутируют руку. Вместо того, чтобы заблокировать один сайт – блокируют весь ресурс, оставляя миллионы пользователей без возможности вести блоги и работать в сети.

Последние недели были не самыми лучшими в российской политике. Я осознанно не затрагиваю вопрос с Украиной и Крымом, потому что меня уже бесит эта тема. Она мне надоела. Помимо этого в мире много всего еще происходит. Если кто-нибудь хочет узнать мое мнение по этому вопросу – я с радостью включусь в дискуссию.

Думаю, что наиболее обсуждаемая тема в мире сейчас – это санкции, которые Россия ввела против стран Европейского Союза и Америки. Как часто бывает, русских граждан они задели даже больше, чем страны, против которых они вводились. Это тоже особенная черта нашей политики: “бей своих, чтобы враги боялись”. Давайте вспомним закон Магнитского. После того как Америка внесла русских политиков, причастных к этому делу в черные списки, – каков был наш ответ? Правильно. Мы запретили американцам усыновлять русских детей из детских домов и фактически перекрыли многим детям дорогу в другую счастливую жизнь. Сейчас примерно такая же ситуация. Стараясь максимально навредить странам, которые ввели против нас санкции, мы бьем по своим же гражданам, лишая их возможности покупать импортные продукты, которые по определенным показателям лучше российских. Фактически нам навязывают, что мы должны есть. Живешь в России – ешь русское. Здесь дело даже не в том, что я или кто-то еще не переживет без норвежской рыбы или французского сыра. Переживем отлично. Проблема в том, что некоторые специфические продукты питания в принципе не производят в России. Например, безлактозное молоко, которое пьют люди со специфическими болезнями, например с непереносимостью молочного сахара. Фактически, эти люди лишаются возможности употреблять молоко вовсе.

Теперь, собственно, о том, как у нас составляются законы.

Недавно я вернулся из поездки в Париж и в Голландию, где прожил суммарно 10 дней. За это время я имел неплохой опыт общения с коренными голландцами и французами. С голландцами общался больше, поэтому буду говорить применительно к Голландии. Я думаю, что принципиальная разница в законотворчестве России и Голландии кроется в психологии законодателей. Так, например, большинство российских законов направлены на запрещение или ограничение чего-либо. Таким образом, в России работает принцип “запретить то, что не разрешено”. С психологической точки зрения – это негативная практика. Человек открывает сборник законов и видит одни лишь запреты, упуская из виду все разрешенное. В Голландии немного другой принцип – “разрешить то, что не запрещено”. На вид обе формулировки одинаковые, но на самом деле они имеют важное принципиальное различие. Имея перед глазами четкий список того, что “можно”, человек будет подсознательно следовать ему. В то время как у нас человеку приходится догадываться самостоятельно – что можно делать, а что нельзя. Незнание законов не освобождает от ответственности, поэтому человеку приходится идти на хитрости.

Мне кажется, что эта изначально “запретительная” система негативно сказывается на настроении людей.

Tamny on Fractional-Reserve Banking: Right Conclusion, Faulty Analysis

John Tamny has posted a long and thought-provoking piece entitled “The Closing of the Austrian School’s Economic Mind.” He begins with a cogent critique of the anti-fractional-reserve stance of certain Austrian economists at the Mises Institute. Unfortunately, he follows that with a discussion of fractional reserves, the money multiplier, and other issues in which he goes badly astray.

As Tamny says, it is only some Austrians who have a problem with fractional-reserve banking. I consider myself an Austrian but I do not share the view of fractional reserves of the Mises Institute contingent, whom I prefer to call hard-money advocates.

The alleged problem, as the hard money people have it, is that under fractional reserves it appears that two people have a claim on the same dollar. This, they say, is fraud. But it is not fraud if the arrangement is disclosed to all parties. There are problems with our present-day fractional-reserve system, which I discuss below, but fraud is not one of them. (Incidentally, Tamny scores a point when he wonders about the hard money people calling in the state to crush the alleged fraud, but I believe most of them are anarchists and would have private protection agencies do the job. Just how this might work is beyond me.)

Tamny recognizes that fractional-reserve banking is the norm in all modern societies but he goes a little too far when he says fractional-reserve banking is a tautology. Modern banks do offer warehousing of money to those few who want it, via safe-deposit boxes. Anybody can rent one and stuff it full of currency or near-money assets like gold coins, and of course pay an annual fee. This is a minor sideline for banks, but it exists, so there is no tautology.

Also, contrary to Tamny, it is possible for a well-run business to fail for lack of money. This can happen if the supply of money in an economy falls short of the demand to hold it. (We must not mistake the demand to hold money with the demand to acquire money for spending. We all want to hold a certain level of cash, enough to cover emergencies or unexpected bargains but not so much as to pass up good opportunities for spending or investing it.) Money supply can get out of balance with money demand when there is a monopoly supplier, as there is in all modern economies, which has no market forces to tell it how much money to issue. There would be such forces in a free banking system, which is a topic for another time.

I promised to mention problems with fractional-reserve banking. The first is that government control of the banking system has short-circuited market forces that would signal to bank managers the amount of reserves they ought to keep on hand. If managers keep too little in reserves, they risk a liquidity crisis, or short of that, fear of a crisis on the part of depositors or would-be depositors. If they keep too much, they pass up profit opportunities and dis-serve their shareholders. The safety of a fractional-reserve bank depends critically on its reputation for prudence in lending. Without government interference in the forms of both controls (among them reserve requirements, capital requirements, and asset restrictions) and support (two that come to mind are Federal deposit insurance and the privilege of borrowing from the Federal Reserve), managers would very likely be more prudent about lending, and even more, about maintaining their reputation for prudent lending. Depositors would come to understand banks as something more like a mutual fund than a piggy bank.

This first point is not a strike against fractional reserves, but the government’s failure to let a free-market fractional-reserve system work honestly and efficiently.

The second problem is the flip side of the first. Federal Deposit Insurance relieves depositors of any incentive to question the soundness of their bank’s lending process. Depositors have no reason to look beyond the FDIC sticker in the window. Such is not the case with mutual funds which bear some resemblance to fractional-reserve banks. Most fund investors look carefully at ratings before investing. FDIC insurance does not eliminate risk, it socializes it, wreaking all sorts of distortions in the process.

I agree with Rothbard that occasional bank failures, leaving depositors and shareholders as well as other bank creditors empty-handed, should be welcomed because they put the fear of God into managers and depositors alike.

An advantage of a fractional reserve system over a 100% gold-backed system is that the latter would suck almost all the world’s supply of gold into underground vaults leaving very little for industrial or ornamental uses. Fractional reserves free up a lot of that gold for these uses, more so over time as the reserve levels needed to maintain confidence in the system fall as the system works well and confidence increases.

Tamny next takes up the money multiplier, and in so doing goes wildly off the rails. He cites the textbook example:

  • Someone deposits $1,000 cash in bank A
  • Bank A lends out $900 and keeps $100 cash as reserves
  • The recipient of the $900 deposits it in bank B which loans out $810 and keeps $90 cash as reserves
  • The $810 is deposited in bank C, and on it goes.

Textbooks use this example to show how money is created by fractional-reserve banks via a multiplier which approaches 1/r where r is the fraction of deposits maintained as reserves by each bank, 1/0.1=10 in the example. The new money is categorized as M1, which includes currency and travelers’ checks in addition to demand deposits (checking account balances).

So is M1 really money? Most definitely, because it fits the definition perfectly: a generally accepted medium of exchange. Is there anyone reading this piece who does not keep much more of his money in a checking account than in cash? How often do we pay cash these days? We use our debit cards, paper checks, or on-line transfers instead of currency. Or we use credit cards which we pay off by on-line transfer or check. All this is M1 money, all created by private banks under the aegis of fractional reserve banking. Notwithstanding the problems cited above, it all works rather well.

Tamny will have none of it. He goes through the same textbook exercise, imagining a group of friends in a room instead of a sequence of banks. He is wrong to say that no money is created in the process. To be sure, the amount of currency in circulation has not increased but he fails to notice that M1 money has increased. That’s because each loan recipient has, in addition to some currency, a bank balance that he correctly believes he can spend without ever converting it into currency: M1 money. Tamny could give each borrower in his thought experiment an old-fashioned bank book as evidence of the new money. We have here the nub of Tamny’s problem: his failure to recognize that M1 money (or rather the demand deposits that dominate that category) is real spendable money.

Tamny says money doesn’t grow on trees, but he’s wrong. The Fed creates base money out of thin air, as I’m sure Tamny agrees, but most money creation is done by private banks via the multiplier. And in truth, a fractional reserve system does create real wealth in the long run relative to a 100% reserve system because it increases the efficiency of the money and banking system, freeing up resources for alternate productive uses.

Is the fractional-reserve system inflationary? Yes, when currency flows into banks and is multiplied, it is. The reverse process is deflationary. But if overall bank reserve levels hold steady no price inflation is triggered, other things being equal.

Tamny’s use of NetJets as an analogy to fractional-reserve banking is flawed. The same jet plane cannot be in two different places at the same time. But two dollars of checking account money, each having its origin in the same dollar of currency deposited, can both be spent. Yes, money does grow on fractional-reserve trees. No, real wealth does not.

Tamny asks, if banks can multiply money, why can’t the same be done by “enterprising entrepreneurs eager to quickly turn $1,000 into $10,000 without doing anything?” They can actually, but they must do a lot of work first, like raising capital, setting up an office and web site, rounding up depositors and borrowers. To see details, go to www.startabank.com. The barriers to entry caused by licensing and such are actually rather modest.

Incidentally, the failure to recognize demand deposits as money goes back at least to the Currency School in 1840’s England. This school of thought held that bank notes should be backed 100% by gold but failed to understand that checks payable on demand were also money and required backing.

“Credit is not money,” says Tamny. What is it, then? “Credit is real resources.” But this is a wide departure from the accepted meaning of the term and one that leads to all sorts of confusion. The common definition of credit is a willingness or commitment of lenders to provide loans to certain parties under certain conditions. Businesses often carry lines of credit with banks. Individuals have credit limits on their credit card accounts. No, credit is not money, but it comes close. We feel reassured by credit commitments which we can tap into when needed. Credit is a way to buy stuff, not the stuff itself. I should add that later in the same paragraph Tamny calls credit access to real resources (my emphasis). This is closer to the mark but is not the defining characteristic of credit. Stuff can be bought on credit or with currency or barter. Again, credit is the willingness or commitments of lenders to loan money. But later in the piece Tamny flips back to credit as “resources in the real economy.”

At one point he says true inflation is “devaluation of the dollar.” No, devaluation refers to a drop in exchange rates for a particular currency relative to other currencies. Devaluation is often but not always accompanied by inflation. I’ll give him a pass on this and assume he means true inflation is a drop in the dollar’s purchasing power.

Elsewhere he denies any role for Fed-induced “easy credit” in the housing bubble. It may not have been the dominant factor, and it may have been overpowered by countervailing factors in the examples he cites, but can there be any doubt that lower interest rates stimulate the quantity of housing demanded, other things being equal? Don’t mortgage payments consist almost entirely of interest in the early years? Exercise for the reader: how much more house can you afford given $3,000 per month to spend on a 30-year mortgage if the rate drops from 5% to 4%? Answer: a lot more.

Another Tamny claim is that a growing economy always needs more money. This seems right, since growth generally means more of everything. But as clearing and payment system efficiencies increase, as we turn more to debit cards, credit cards, PayPal, and whatever comes next, our desire to hold money declines. This countervailing tendency could cancel out most or all of the effects of growth on money demand.

Tamny calls government oversight of money “horrid” and wishes for abolition of the Fed. Amen to both, but how can he be sure that, as he claims, credit would soar as a result? It probably would in the long run as sound money prompted increased confidence, but in the short run there could be liquidation of mal-investments and a general hesitation to save and invest pending clarification about where things were headed under the new setup.

John Tamny is correct: the anti-fractional-reserve crusade of the hard-money people is misguided. That case has been made repeatedly, deftly, and at length by Larry White and George Selgin, two of the best contemporary monetary economists. Sad to say, Tamny’s analysis, riddled as it is with errors and confusions, falls far short of their work.

Israel-Palestine: Is a reasonable debate possible?

The question in the title is to be taken very seriously and not just as a prelude to a comforting ‘of course there is’ answer and a few helpful hints to how to engage in respectful debate. This is a debate which stretches at the  limits of debate, at all attempts at civility and respect for other points of view in debate. I am trying to find a way to discuss the issues in a way that is equally considerate of the rights and interests of all parties to the debate, while also finding that debates about Arab Palestinian and Jewish Israeli positions may at some point just not be open to rational debate, and can only be settled by pragmatic compromise at best, and violent imposition  in the less happy scenarios.

This started with a social media post on my part condemning George Galloway, a very left socialist British politician for making remarks in response to Israeli Defence Force operations in Gaza that to my mind cross a line between criticism of the government of Israel or acts of the Israeli state into anti-Semitism, in demanding that Israeli tourists be excluded from the English city, Bradford, he represents in Parliament. I paired it with a social media message condemning the University of Illinois for withdrawing a tenure track job offer to Steven Salaita (just before the start of semester and after he had resigned from another job), evidently as a result of social media messages criticising Israel and Jewish settlers in land outside Israel’s 1967 boundaries in a quite extreme way. Both Salaita and Galloway have the right of free speech, as recognised in the United States in the 1st Amendment to the Constitution. Less protection exists for free speech in the UK, I am sorry to say, if the speech is deemed racist or to be ‘hate speech’, and I have to say I am very unhappy that the police in Britain are investigating Galloway’s comments, and I will certainly condemn any attempt to prosecute him. Unfortunately if a public university in the US withdraws a job offer over a free speech issue, then the situation there is also open to improvement.  I am against Salaita’s speech in the same way as I am against what Galloway said, both stepped over a line.

I won’t dwell any further on Galloway and Salaita, but will now move into some discussion of what distinguishes criticism of Israel as a state from anti-Semitism, posing as just standing up for Palestinians suffering from the actions of Israel’s armed forces, and will then move onto more general comments about the Israeli-Palestinian conflict.

First of all though I accept that not not all those who define themselves as anti-Zionist are anti-Semites, condemning all Zionism is anti-Semitic. Yes there are Jews who are proud of their identity who define themselves as anti-Zionists, but they are complicit with views discriminatory against Jews if they condemn all Zionism.

There is a stream of bi-national Zionism, that is a state shared between Jews and Arabs, which has always had some appeal to liberal and left leaning Jewish intellectuals, and which was certainly prominent amongst some of the early European migrants to Ottoman and then British Palestine, before the state of Israel was established. They were arguing for non-discrimination against the Arab population and peaceful forms of settlement. Dismissing this as just an expression of the European colonialism and racism of the time is completely wrong. The wish to create peacefully a national homeland without discrimination  against the existing Arab population and to create a state for both peoples cannot reasonably be defined in  this way, and the more aggressive forms of Zionism should not lead anyone to deny the existence of a form of Zionism that was not based on aggressive nationalism.

Even before the Zionist movement got going in the late nineteenth century, there was a Jewish population in Ottoman Palestine that could trace its history back to ancient Biblical times. Inevitably estimates of what per cent age of the population  was Jewish before the modern Zionist movement are contentious, but I have not seen any figure less than 5 per cent. Was it inherently racist and aggressive for those people to have some corner of Palestine for a Jewish state? That is war implied in saying that all Zionism is to be condemned and adopting an anti-Zionist political posture. Was it inherently racist and aggressive to hope that Jews persecuted in Europe and elsewhere might seek a homeland with that historic population in some part of Ottoman Palestine, presuming there was no intention of pressure on the Arab population to give up land or deprive that population of full rights?

I will return to the historical issues soon and what I say will not all lean towards the Israeli side at all. Picking up on current ways of discussing Israel and Palestine, all attempts to burden all Jews everywhere with some responsibility for the most unpleasant acts of the Israeli state, and target them with demands for condemnation, or worse, are anti-Semitic. Moving to a more contentious discussion, while I accept that many who target Israeli citizens or non-state institutions for sanctions are not deliberately anti-Semitic and may again be Jews who are proud of their identity, that is a discourse which is at the very least unintentionally complicit with anti-Semitism.

Demands for  boycotts of Israeli universities, unless they condemn the actions of the government are highly discriminatory unless part of a more general and global scheme for boycotts of academic institutions in countries where the government is doing very bad things. I would not welcome such a global scheme, which is applied strictly and consistently could have disastrous affects on international academic life, for no proven benefit, but it would have the merit of consistency. Demands to boycott Israeli universities are not part of such a plan. Since they are linked to demands for academics and university boards to take positions contrary to Israeli government polices, they look very much like attempts to control to speech of Israeli academics and tell them what opinions they are allowed to have. While public universities are by definition supported by the state, they should be treated as educational institutions not arms of state propaganda, or as on a level with armed parts of the state inflicting violence on civilians, and indeed Israeli universities are quite successful in promoting free thinking education, which it should not be forgotten benefits Israeli Arabs as well as Jews.

Demands to restrict, or end, contacts with the Israeli government or military are a different matter, but punishing the educational sector or indeed discriminating against ordinary Israeli Jews travelling outside Israel is not something to be welcomed by advocates of liberty, or by anyone concerned with equal rights for everyone. Where is the evidence that boycotts will bring any benefit to Palestinian Arabs?

The short term material effects of reducing Israeli economic activity and employment opportunities would be very negative for Palestinian Arabs, and the long term political return no more than speculative. Supporters of the Boycott, Divestment and Sanctions movement are presumably going to respond that their movement is popular with Palestinians suffering from Israeli military, administrative, and economic pressure, but it is a movement committed to ‘return of refugees’, which for reasons I explain below is simply not going to happen except at some very small level in a period of much happier relations than exist now between Israelis and Palestinians. A movement committed to full return, even if it does include some Jewish supporter, is committed to unrealistic maximalism. Since it exists, I can only hope it has some effect in moderating the actions of Israeli governments, but I fear it is more likely to foster polarised reactions and with no real change to the benefit of Palestinians.  Israel looks more not less nationalistic at a time when its international reputation has declined, and moments like BDS have grown. The sort of economic pressure from the major western economies, particularly America that could force change is not on offer now, or in any foreseeable future. The biggest impact would come from Israel’s neighbours becoming economically dynamic democracies with much improved individual right, eager to trade with Israel and benefit from its technological achievements. The activism of a far left minority in the west, supporting some of the most implausible and damaging maximalist Palestinian demands has rather less potential to influence Israel in the right way.  A campaign that condemned the anti-Semitism and terrorism of Hamas, as well as the not entirely pure record of Fatah on these issues, as much as the brutality of the Israeli state, might just have more influence on Israel than BDS in its present form.

Getting onto the broader issues, I have to say that whatever impression the above gives, I do not find that there was any strong original justification for an Israeli state dominating all of, or most of, the land between the eastern Mediterranean and the Jordan River. However, it is also the case that I do not find there was any strong original justification for a Palestinian state dominating the same land area.

The problem with the Zionist claims, leaving aside bi-national Zionism or a Zionist project in one corner of what was Ottoman Palestine, and concentrating on what Zionism has largely been in practice, is that the Jewish population of Ottoman Palestine, was a small per cent age of the population. The historical and religious affinities of Jews elsewhere to the land of the Biblical Jews, and the persecution they endured, might justify some concessions of land to create a state in what was Ottoman Palestine beyond the population per cent age of the time, but some large part of the Zionist movement  (roughly speaking Revisionist or right-wing Zionism)was always ready to take all of Ottoman Palestine regardless of the wishes and rights of the Arab population, and some other large part (roughly speaking Theodor Herzl Zionism, which defined the mainstream of the original large scale Zionist movement) simply evaded the issue of how the majority of Ottoman Palestine could be settled without conflict emerging between Jews and Arabs, and without violating any hopes Arabs in the area might have or, might come to develop, for sovereign national existence. Given that Zionism emerged as an imitation of 19th century European nationalist movements, and the growing tendency of European peoples with some kind of collective historic identity to express that identity in state sovereignty, it is not too much to ask that the original Zionists should have been aware of the likely development of Arab nationalism, on a general scale, and in distinct pre-national parts of the Arab world (i.e. nearly all of it) under Ottoman or European colonial control.

Arab nationalism grew rather later than Zionism, and the Palestinian aspect of it was definitely later. If there had been no Zionist movement, it seems likely that Palestine would have been part of a post-Ottoman Syrian or possibly Jordanian state, with no more than regional consciousness within than entity. Can we justify the emergence of an Israeli state of its current extent on the grounds that European Jews develop a Zionist movement more speedily than Arab national and in independence movements developed? That is not just a question inviting the reply ‘no’ though it might appear so. The reality is that throughout history states emerged where one people was more strongly organised than another and could imposed its will on another people, or at least a state elite could impose a statehood more suited to one group than others. The same applies to modern nationalist movements which drew on various democratic, republican, and populist ideas of self-government, or at least monarchy with popular legitimacy, for self-contained peoples, with anything that contaminated a pure self-contained identity pushed out of public recognition (or violently eliminated). If Israel’s existence in its current form in its current borders is simply based on winning out in struggles about who get to define the people who ‘own’ that land, then it is not obviously weaker in its foundations than many other states. Enthusiasts for the Israeli state often like to find some justification of pure right in the Balfour Declaration, that is the letter Arthur Balfour, British Foreign Secretary directed at the Zionist Federation of Great Britain and Ireland, via Lord Rothschild:

I have much pleasure in conveying to you, on behalf of His Majesty’s Government, the following declaration of sympathy with Jewish Zionist aspirations which has been submitted to, and approved by, the Cabinet.

“His Majesty’s Government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of the object, it being clearly understood that nothing shall be done which may prejudice the civil and religious’ rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country”.

I should be grateful if you would bring this declaration to the knowledge of the Zionist Federation.

The declaration was written into the League of Nations Mandate that legitimated British occupation and administration on Palestine until 1948. However, the same people eager to take the letter and the League of Nations recognition of it, as the basis for Israel’s domination of most of what was British Palestine (and the more radical kind of Zionist thinks that what is now Jordan was promised to them, because it was included within the first borders of mandate Palestine, before a division was effected) are not so eager to mention United Nations resolutions after the 1947 resolution that envisaged an Israel state. What was envisaged, in any case, was a partition of almost 50-50 proportions between an Israeli state and a Palestinian state, with Jerusalem as a bi-national enclave under UN administration, so well short of the boundaries Israel established. Of course the selective approach to League of Nations or United Nations resolutions is also practised on the Arab side. In any case, the Balfour Declaration was not the result of consultation with the Arab population of Palestine, who were placed under British administration with no regard for their opinion in the matter, and seems a poor example of a purely just foundation for a state

Of course if Israel’s existence is justified by struggle rather than pure right, then Palestinian domination would be no more or no less just if the Palestinian people had been better organised or just more lucky early on in the Zionist movement, or even before the Zionist movement. However, there was no Palestinian national movement before the Zionist movement, it was a reaction against that movement. The word Palestine was used, sometimes, during Ottoman times to refer to the parts of what was then the Province of Syria round Jerusalem, Haifa and so on, with no idea of a separate identity or people there. There was no idea of a Palestinian people until the British Mandate, which inadvertently became the hot house for two mutually hostile national movements.

The 1948 attack of several Arab states on Israel, as it existed within the boundaries defined by the 1947 UN Resolution, was not an attempt to institute a Palestinian state. The Arab Legion (that army of the Jordanian monarchy) grabbed the West Bank and the East Jerusalem, and Egypt seized Gaza. Syria certainly hoped to turn Palestine into a southern part of its own territory. Palestinians fled their homes in all Israeli controlled territory, because of a mixture of Zionist violence and incitement by Arab states who promised to arrange a rapid return. The balance between these two causes is of course hopelessly contentious, but I will at least say that no one who denies that both were a reality is engaged in reasonable discussion. The emergent Israeli army succeeded in establishing the 1967 boundaries, which are still the recognised boundaries of Israel, though in practice Israel now exists as the completely sovereign power in East Jerusalem  and a number of settlements in the West Bank.

The 1947 UN Resolution was preceded by a British plan to award 17% of Mandate Palestine to a Jewish state. Palestinian nationalists succeeded in negotiating quasi-statehood in Gaza and some parts of the West Bank in the 1990s, but the idea of a Palestinian state in all of the West Bank as well as Gaza is now essentially dead, though various people find it necessary to claim in public that a two state solution on that basis is coming. One obvious point here is that if the Palestinians had negotiated pragmatically on the basis of existing realities instead of trying to go back to some earlier situation, at various times, they would have much  more territory in a viable state. Maybe 83% per cent of the land between the Mediterranean and the Jordan. Of course it is also the case that many Zionists would not have settled happily for 17% during the Mandate or even 50% in 1948, except as a short term expedient before establishing a state in all of, or at least the great majority of, Mandate Palestine, but at least the Palestinians would have gained some credit with the international community, and how would they now be worse off, it they had accepted those deals and tried to make them work?

The Arab states did not bring the Palestinian refugees of 1948 back to their homes and did not give them equal citizenship in the independent Arab nations either. Leaving them as symbols of Arab unity in refugee camps was a ‘solution’ which simply adds to the intractability of the Israeli-Palestinian conflict. Most people in refugee camps were born after 1948 and increasingly so. Their numbers have grown and cannot be absorbed into their ‘home’ towns or villages, without a complete transformation of Israel’s demography. This is simply not going to happen, except though a massive military defeat of Israel, which is most unlikely anyway because Israel would use its nuclear arsenal in such a situation, and the US would probably intervene massively before that point. It is not a reasonable demand for anyone who genuinely wants a settlement. Arab states should integrate refugees and their decedents with full citizenship rights in the places where they have been based for decades. In such circumstances, some very limited ‘return’ of refugees and descendants might be negotiated, though by that time whenever it might be, I doubt any original refugees will still be alive.

The current situation is that the Palestinians have not succeeded in creating well functioning institutions in the West Bank or Gaza. No doubt some blame belongs to Israel. If any Israeli government ever genuinely hoped for a viable Palestinian state as a neighbour, the idea is certainly dead now. Palestine for the foreseeable future will only exist as a fragmented entity, increasingly hemmed in by West bank settlements and security measures, which are turning that area into an aggregate of not very well connected Palestinian zones side by side with element of Israeli sovereignty. This is not a viable long term basis for peace and stability.

The only long term solutions now are: the forcible expulsion of Arabs from the West Bank and Gaza, which is not likely, but might just happen if war breaks out between Israel and neighbouring Arab states; the removal of West Bank settlements, because Israel decides that full Palestinian sovereignty is a welcome prospect, but I presume there are too many settlements too deeply embedded for that to happen now; a complete defeat of Israel by a military alliance of Arab states, but that would lead to the use of Israel’s nuclear arsenal, if not massive US intervention before that stage; gradual movement towards a binational state of Israel-Palestine. I believe that last option is the most likely long term result, but I mean long term, and I expect much polarisation, violence and suffering in the meantime. Gradual pragmatic adjustment will I believe lead both sides to see that total victory or total separation between two national entities is just not viable.

Personally I’m deeply disturbed by the Israeli treatment of Palestinian civilians now and in the past. However, dramatic gestures, boycott calls, and anti-Zionist discourse will not resolve the issue. Realistically errors and crimes on the Arab side have brought us here as much as the bad things done by Zionists, and the Zionist movement did not destroy an existing national entity. The early pacific binational Zionists were often in practice irrelevant and naive, as well as paternalistic and patronising towards Arabs, but their ideas are the only basis now for an enduring settlement. That will require some Arab equivalent, some new ways of thinking about Palestinian nationality and sovereignty, which can find precedents such as the sympathy of the Saudi monarchy at the end of World War One, for a Jewish presence in Palestine (not that the House of Saud is without great faults. Such a movement will progress at a micro-level only for decades and maybe generations, involving Israeli Arabs as well as Israeli Jews and the Palestinian of the West Bank and Gaza. At some point a critical mass on both sides will realise that exclusivist nationalism cannot win a complete victory, certainly not if the wish is to live in a democracy with individual rights and flourishing civil society.

Ken White explains the legal logic of the Ferguson shooting

Read the whole damned good post at Popehat.

In other news, I read a post from somewhere calling out libertarians for not voicing an opinion about the Ferguson shooting. I think the post also managed to blame libertarians for the militarization of police forces across the country.

Seriously.

Dave Weigel points out the obvious over at Slate; Ilya Somin takes the writer who tried to claim libertarians didn’t care about black people getting shot by police departments to task over at Volokh Conspiracy (a very good blog, by the way); Dan Balz (hehe) points out in the WaPo that Ferguson is only strengthening the libertarian wing of the GOP; Senator Rand Paul’s op-ed in Time is required reading if you take your US citizenship seriously.

Update 8/18: Here is Congressman Ron Paul in 2002 asking rhetorically, on floor of the House of Representatives (the lower parliamentary house in the US federal government), if America has become a police state.

From the Comments: On the Impossibility of Secession Within the European Union

Dr Stocker brings my musings on secession and the European Union back to reality:

Some good historical analysis here, but I’m not so sure about the conclusion. I certainly support a right for regions to secede, but not all EU member states recognise such a right. Spain is the obvious example, since while it gives a high degree of autonomy to regions, including enhanced autonomy for Catalonia and the Basque country, it does not recognise any right to secede except through a law passed by the Cortes (parliament of Spain), which is extremely adverse to allowing any procedure for secession.

Greece has been extremely adverse to secession by Kosovo from Serbia, and does not recognise Kosovo, on the basis that a majority vote within a region-aspirant nation is not enough to justify secession under international law, if opposed by the nation from which the secession is taking place. I suspect there are some other countries with similar barriers to secession.

They’d do well to recognise that right, but the EU can’t force this kind of change on existing member states since unanimous consent would be required for the necessary treaty changes, and even without that barrier, the idea of the EU forcing countries to accept a right to secede and then define when and how that right to secede, which could create conflict with counties like the UK which do recognise the possibility of secession by referendum within the relevant region-aspirant nation, as in the current Scottish vote.

The time might come in the future when all EU countries might recognise a right to secede and then recognising that right could be a requirement for membership. However, it is not Putin’s Russia that would be concerned. Recent events in Ukraine show Putin’s agents fomenting violent secessionism in Crimea etc and a rigged referendum in Crimea. Of course Putin’s meddling is not the same a secessionism exercised peacefully and through fair voting, but such differences are likely to be overlooked by many in light of the still unfinished Ukraine crisis.

My response can be found here. Longtime reader A. Herkenhoff chimes in as well.

A Brief Glimpse into Autarky: Russian Edition

Libertarians loathe autarky (economic, and therefore political and cultural, isolationism), and for good reason. As Dr Delacroix puts it, economic autarky (protectionism) is the “royal road to collective poverty.”

The recent invasion and occupation of Crimea by the Russian state has led many observers to bring up the still unofficial ideology of the Kremlin these days. One part neo-imperialism and one part pan-Slavism, and mixed together with shards of religious conservatism, ecology (Russia has a long tradition of ecology that is distinct from the West, but still similar since it’s an idea and ideas tend to outweigh cultural and material differences in societies; our own Dr Znamenski is an expert on just this subject), and socialism, the Kremlin’s ideological glue is slowly being melded into something that resembles a Russian-led bloc that is completely self-sufficient from the West and culturally distinct from its trading partners on Russia’s China-led eastern border and its Muslim-led southern border.

If Moscow is trying to forge a society that is completely self-sufficient from the West, we have little to fear from such actions (I say ‘little’ because there is the possibility that such an order would end up like North Korea, and the irrational actions associated with Pyongyang would have a much bigger influence if transposed to a Moscow-led autarky; I don’t think such a scenario likely because of the sheer geographic size of the Russian state and its clients).

Here is a glimpse of what a self-sufficient Russia would like (thanks to the sanctions currently in place):

[...m]ore than 6,000 animals in Russia’s largest zoo have been caught up in the worst fight between Russia and the West since the Cold War. A wide-ranging ban on Western food announced this week by the Kremlin has forced a sudden diet change for creatures that eat newly forbidden fruit.

The sanctions against meat, fish, fruits and vegetables from the United States, the European Union and other Western countries were intended to strike a counterblow to nations that have hit Russia over its role in Ukraine’s roiling insurgency. But the measures will also have an impact on stomachs at the zoo.

The sea lions crack open Norwegian shellfish. The cranes peck at Latvian herring. The orangutans snack on Dutch bell peppers. Now the venerable Moscow Zoo needs to find politically acceptable substitutes to satisfy finicky animal palates.

“They don’t like Russian food,” zoo spokeswoman Anna Kachurovskaya said. “They’re extremely attached to what they like, so it’s a hard question for us.

[...]

None of the animals eat such a specialized diet that they will starve, she said [...]

The Russian people are not worried, of course. The response to Moscow’s sanctions on Western food is one that hearkens back to history: The Russian people have been through worse times. This is nothing to them, and Putin is fighting a righteous war against an immoral West so the sacrifices are worth it.

WordPress was recently unblocked in Russia, so hopefully Evgeniy can offer readers some insights into the logic of the Russian street.

From the Comments: Does Israel have the moral upper hand on Palestinians in Gaza?

In the ‘comments’ thread on his excellent post about Israel/Palestine (I hope he produces Part 2 soon), Matthew reveals some of the skepticism he has regarding Israel’s current policy towards Gaza. You should read the whole thing. Matthew does an exceptional job of summarizing the thoughts of millions of Americans – especially younger ones – regarding the US’s relationship with the Jewish state. Here was my response:

I think the allegations of anti-Semitism can be found if you follow along with me while I tease this out.

First, though, an important geopolitical thought. The settlements in the West Bank are the worst policy to come out of a Western government since overthrowing democratically-elected Leftist governments during the Cold War. The settlements are absolutely toxic to peace and prosperity in the region, and for this reason I cannot count myself among the “supporters” of Israel.

The reasoning behind this policy probably has to do with the buffer zone, though. If I were an Israeli I would view the settlements as an important “human buffer,” if you will, to another (another) invasion from the east. I don’t think the settlements are a nefarious attempt on behalf of Right-wing Israelis to ethnically cleanse the West Bank of indigenous Muslims (that is a charge being leveled by some otherwise serious Leftist quarters). My opposition to the settlements in the West Bank is more of a strategic one than a moral one (though the moral argument underlies the strategic). A human buffer zone will not prevent another invasion from the east any more than an Iron Dome will discourage rocket attacks from Gaza. All these settlements do is stir bad blood between already hated enemies, and that is as stupid as you can get.

Speaking of Gaza, I can agree to an extent that Israelis should try to limit civilian casualties as much as possible. This is a standard that should be held up to all of the world’s states (even if it is not). However, Israel and Hamas are fighting an undeclared war and as such I do not think it just to condemn Israel and overlook the targeting of civilians by Hamas. (I am sure you are in agreement on this.) As a rule of thumb I don’t trust governments to take necessary precautions of any kind when it comes to interests of state, but I think the overwhelming scrutiny that Israel faces from the international community pressures it to take precautions that would be unheard of in the non-Western world. Hence I am caught between disavowing war – as all good libertarians must do – and acknowledging that Israel is fighting a just one.

On to the implicit anti-Semitism of Israeli criticism. Usually I can spot anti-Semitism by the reliance upon conspiracies or money to explain events pertaining to Jews or Israel, but the pinkwashing argument – which I suspect is anti-Semitic, or at least anti-Western – is a tougher nut to crack.

Pinkwashing is certainly anti-Western, as you don’t see many organizations – especially those on the Left – criticizing policies of despotic non-Western governments that would be condemned outright in Western states. Anti-Semitism exists, indeed permeates, Arab and European societies in a way that is hard to fathom in places like the United States or, say, India. Thus I conclude that the criticisms of Israel that do not include equal criticisms of Hamas or other non-Western organizations, and that stem exclusively from Arab or European capitals, are anti-Semitic. I know this is a broad brush and there are certainly principled dissenters among the ranks of anti-Israeli critics in these regions, but sometimes all you can do is call a ‘cat’ a ‘cat’.

If you delve into the critiques of Israel that come from European or Arab capitals, you will often find such critiques to be superficial and, indeed, relying upon conspiratorial explanations for Israeli actions. This is of course not true in the American or Israeli media, where critics are often more principled and have a better understanding of the mechanisms of Israeli society.

In this sense, you are right to criticize Netanyahu for dissemblingly conflating Israeli society with Jewish society, but in another sense Netanyahu and other Israeli politicians are dealing with factions that extend far beyond the borders of the United States or Israel, and these are factions that I would describe as being most savage in nature.

Your responses to my analysis would be most welcome. It seems to me that the global Left and the Arab Right is unwilling to look at the issue at fairly. Israel is a state, and it exists in the Middle East. Opponents of Israeli tactics in the most recent fighting hardly mention this, though. Instead, I can barely sort through the muddle of ‘Zionist’ or ‘imperialist’ epithets hurled its way (and at anybody willing to suggest that Israel is not 100% at fault for the violence).

Some of this, especially from Western Leftist quarters, can be viewed as more of an opposition to colonialism than to Israel itself, but for the most part – after reading accounts from many different sides – I find the opponents of Israel to be engaging in a battle that is far removed from reality.

This is not to say that Israel should not be criticized (especially given its socialist roots), but in order for criticism to be effective it has to be smart and objective, and this is completely lacking in the accounts offered up by many Leftists and virtually all Muslims.

Again I’d love to hear your thoughts, especially from our Middle Eastern readers.

“Cut the crap about the gender pay gap”

That is the title of this piece in the Left-wing British zine spiked online by Joanna Williams, a lecturer in higher education at the University of Kent. Here is the money shot:

A gender pay gap, albeit one that is rapidly decreasing, still exists; but the good news is that when occupation, contracted hours and most significantly age are taken into account, it all but disappears. In fact, the youngest women today, even those working part-time, are already earning more each hour than men. We need to ask why this is not more widely known and question the motives of those who seem so desperate to cling to a last-ditch attempt to prove that women remain disadvantaged. We should be telling today’s girls that the potential to do whatever job they want and earn as much money as they please is theirs for the taking, rather than burdening them with the mantle of victimhood.

The emphasis is mine. I know Jacques has dealt with the pay gap canard many times on this blog before (“Yes, women earn less than men but it’s not a case of unequal pay for equal work. It’s a case of unequal pay for unequal work.“), but it is still worth asking why politicians and so-called feminists are still beating such an obviously dead horse.

Politicians, especially anti-market ones, can use the pay gap to gain votes and hurt their rivals. This is an easy one.

Feminists are a horse of a different color, though, largely because there are so many variants of feminism out there (I am feminist in the sense that I think women are people, just like the old bumper sticker says!). Again, some of the peddling of this myth in feminist quarters is due to Left-wing animosity against markets, and some of it is just women in their thirties trying to remember what it was like to be in college.

Another reason might simply be economic. If an individual can get away with playing the victim in a business setting, why would she not do so? That is to say, if the rules are set to reward “playing the victim,” or if the rules were made several decades ago in order to combat an injustice (whether real or perceived), the most logical thing to do would be to play along with such rules.

The pay gap is therefore a political problem, not an economic one, and political solutions tend to be ones gained from obfuscating or ignoring outright the relevant facts of the matter.

The political undertones of the pay gap are exemplified by this 1995 paper (h/t Dr A) by two academic sociologists whose empirical work justifies Dr Delacroix’s and Dr Williams’s arguments (“it’s not a case of unequal pay for equal work”). In the conclusion of the paper, though, the sociologists go on to suggest that more legislation is needed to account for the overall pay gap. Why? Because men tend to find work in fields that pay more than women, and men don’t have vaginas with which to push out babies. In the minds of the sociologists, then, the best thing to do to ameliorate a non-existent problem (the pay gap that does not account for occupation, age, or hours worked) is to pass legislation that will somehow create more female engineers out of thin air (hello double standards, or hello decline in quality education).

h/t Mark Perry

Around the Web

  1. Arms in the Several States. This is a great post by a law professor at Fordham (Nicholas Johnson) on the legal history behind the struggle of black Americans to arm themselves in the face of State oppression.
  2. World War I and Australia
  3. Held up in customs: Life in China gave Brittany Griner more than she bargained for. This is an excellent piece on the life of a female (former) college basketball star living in China.
  4. Putin’s Cold New World. This is a piece in Dissent magazine by a Polish Left-wing sociologist who deplores what he thinks of as inadequate protection from the United States. Interesting to read in tandem with the knowledge of factions and rent-seeking that is often addressed here at NOL.
  5. The House sues Obama: Political theatre, political pain. A penetrating insight from Will Wilkinson into the House’s decision to sue the Obama administration. The best account I’ve read of the drama so far.

Updates and Accolades

Hello loyal readers. I apologize for being so absent from this blog lately (not that most of you are here for me, but I digress). I’ve been hitchhiking around Colorado and Utah and trying to “suck out all the marrow of life,” as it were. I’ve been busy preparing for graduate school applications, and enjoying the company of my family.

First off, updates. LA Repucci, a guest blogger here at the consortium, has launched a project of his own, and I can’t wait to see what he comes up with. Please be sure to support his endeavor.

Second, I’ve been in talks with a number of scholars around the world and am pleased to announce that I suckered a number of them into participating in this experiment with spontaneous order. You may have noticed that the ‘Recommendations‘ section, for example, has been revamped and that the Fundación Instituto David Hume, based in Buenos Aires, Argentina, is now placed prominently alongside some of the other organizations with which Notewriters are associated with.

This is because Federico Sosa Valle and Eliana Santanatoglia – the founders and most prominent researchers for the institute – will soon be blogging with us, and mostly in Spanish to boot! Federico, if you’ll remember, has actually started already.

I’ve also managed to convince Lucas Freire, who works with Dr van de Haar on libertarianism and International Relations, to begin blogging with us in both English and Portuguese. Be sure to give him a warm, NOL-style welcome when he begins.

You’ve already met Dr Barry Stocker, but in any case here is his official profile page. Be sure to keep those ‘comments’ coming!

I’ve managed to pester two historians into contributing the blog, Andrei Znamenski and Jonathan Bean. Dr Znamenski already made his debut post and you can find out more about him on his profile page. Dr Bean is currently enjoying his summer but you can check out his most recent book, Race and Liberty in America, on the sidebar.

Last but certainly not least is Michelangelo Landgrave, an economics graduate student at Cal-State Long Beach. You can check out his profile page here, and here is some of his work at .Mic and more here at Open Borders. I’m very excited to have him on board.

Our work here at Notes On Liberty has recently been featured at RealClearMarkets and at Reason magazine’s Hit & Run blog. While this is nothing to the authors who were actually featured, Dr Foldvary and Dr Hummel respectively, it is always nice to know that your project – started from scratch – has gained such a prominent readership. We couldn’t have done it without your support and especially your comments. Have a great weekend!

Is Australia’s Carbon Tax Repeal Really Market Enhancing?

Some libertarians cheer whenever there is any tax repeal. However, we need to distinguish taxes in form versus taxes in substance. Taxes in substance have no relation to a benefit or penalty attached to the payment. Taxes in form, but not in substance, pay funds to the government, but are tied to some benefit or compensation for damages.

It is standard economic theory that the best way to prevent pollution, as with other negative The effects, is to make the polluter, hence also the buyer of its products, pay the social cost of the pollution. The economist Arthur Cecil Pigou provided a thorough explanation in his 1920 book The Economics of Welfare. A tax on pollution has since then been called “Pigovian.”

One of the most discussed Pigovian taxes has been on the use of carbon-based fuels such as coal, natural gas, and oil. A “carbon tax” can be on the fuel inputs or on the emission outputs. The most effective Pigovian levy is on the emissions, as that provides an incentive to reduce pollution such as by capturing the carbon before it gets spewed out. If the polluter does not compensate society for dumping on the commons, then in effect it gets subsidized, as it sells its output at less than the total social cost of production.

Many countries have been confronting pollution with inefficient policies such as regulations, credits for offsetting pollution with purchases of forest lands, and permits that can be traded. Australia enacted what was called a “carbon tax” with the Clean Energy Act of 2011, implemented in July 2012. But this was not a Pigovian tax. The Act created a “carbon price mechanism,” a cap-and-trade emissions trading scheme that at first set a price per ton of emissions. This mandated price had the effect of a ‘carbon tax’. But after 2015, the mechanism would have transitioned to a trading scheme.

However, in 2013 the newly elected prime minister sought a repeal of the “carbon tax” emissions trading scheme. In 2014, parliament passed the repeal.

The opponents of emissions taxes claim that this increases costs to business and households. This is narrowly true, but policy should consider the total costs to society. The pollution imposes a social cost on Australia and the rest of the world. This is not a cost paid in explicit money, but costs in the form of illness, a less productive environment, and possible effects on the climate.

The opponents of emission levies overlook that the absence of compensation for the pollution costs is in effect a subsidy to the polluters and their customers. A pollution charge is not a tax in substance, but rather the prevention of this subsidy, and compensation for dumping toxic materials on other people’s property.

The repeal did not provide a replacement, and this creates uncertainty for business about any future anti-pollution policy. This policy uncertainty reduces investment and growth.

The best way to implement a pollution tax is as a replacement of other taxes. Taxes in income, sales, and value added impose the excess burden of higher costs and less output and employment. If politicians are concerned with tax costs, why are they not repealing these taxes? When a pollution tax replaces such market-hampering taxes, the total costs paid by consumers does not increase, but rather shifts in favor of less- polluting products.

Actually, the revenue obtained from Australia’s brief carbon tax was used to compensate taxpayers and affected companies. But the most effective policy would have been to have an explicit tax on pollution instead of a trading scheme, and to lower other tax rates, along with a transitional compensation to those with net losses.

Some opponents claim that Pigovian charges would be good if applied globally, but in a single country, would put its industries at a disadvantage. But that would not happen with a “green tax shift,” the replacement of inefficient taxes with a “green tax” on pollution. A green tax shift would reduce the environmental cost of pollution while not increasing the total tax costs for the country’s economy.

Israel/Palestine: An Encyclopedia, Part One

This will be the first entry into what I shall call “Israel/Palestine: An Encyclopedia,” a list of terms that provoke constant bickering as to their meaning, purpose, et cetera. I hope in writing this that I am able to clear some up rather nebulous concepts. Nota bene: Although I hope to clarify these things, do understand that this is only my own, limited take, guaranteed to please few and anger many. If your interest is peaked, I suggest you continue researching this topic on your own and come to your own conclusions.

Israel vs. the Israeli government/military/judiciary/und so weiter: it is important to keep nomenclature sound to avoid disputes. In all of my writing about the conflict in Israel/Palestine, I cleave to the following rule: “Israel” refers to the geographical and national entity contained east of Suez, west of Jordan and Syria, and south of Lebanon, but not including the occupied West Bank region nor the Gaza Strip. It may also refer to the people that live in the land of Israel, viz. Israelis. The “Israeli government” refers to the current governing coalition that wields political power over the land of Israel. Why does this matter? When a man says “Israel” and begins to criticize it, he is immediately putting into the minds of his opponents the notion that he is personally attacking the integrity of the nation and its people. “Israel does X and it’s bad!” may be true in some sense, but it threatens charges of anti-Semitism which obscures the message our interlocutor is likely trying to convey. By saying “the Israeli government does X and it’s bad!” our interlocutor is on much firmer footing: he is criticizing a discrete body of people and their actions, rather than an entire nation of 7+ million people; he cannot be charged with anti-Semitism, because his attack is leveled at a certain political echelon as opposed to all of am Yisrael; he cannot be misconstrued as anti-Israel, and thus a deligitimizer and again an anti-Semite, because he is not attacking Israel itself but the policies of its leaders.

Note: one can still attack the Zionist premises that Israel was founded on and not be an anti-Semite, for Zionism is not equivalent with Jews as people or as a religion. However, criticizing Israel as a nation-state is treading far different ground, and one must be careful to maintain legitimacy in an argument.

Occupation: What is the occupation, and what is it about? The occupation is the military and settler presence in the West Bank, and the military blockade of the Gaza Strip. From Jewish Voice for Peace: “The rest of the West Bank has been under a military occupation ever since [1967]. This means that the Israeli army has complete control over these areas. Palestinians in these regions have no guarantee of civil rights. They have no government of their own other than what Israel will allow. Israel can impose total curfews on any part or all of the territory. This prevents people from traveling to work, to market or to see family members. It can prevent medical care from reaching people, and people from reaching hospitals.” (source)

What is it about? Some might say “security,” some might say “religion,” and while these factors certainly are very important in creating an idea of what the occupation is, the most pressing factor is certainly land. One may see this when certain supporters of the Israeli government line say that the West Bank can’t ever, really, be given up because that would leave Israel far too slim at the waist; Mother Israel needs that extra buffer zone so in the inevitable next invasion from the Jordanians, Israel will have more time to respond. Indeed, this is security playing the lie so that a blatant land grab might be legitimized.

Boycott, Divestment, and Sanctions (BDS): BDS stands for boycott, divestment, and sanctions, a rather self-explanatory acronym. The movement seeks to boycott Israeli companies, seek out foreign companies that invest in Israel and persuade them to divest, and international sanctions on the Israeli state. All of this is to peacefully persuade the Israeli government and society to disengage from the occupation of the West Bank and blockade of the Gaza Strip. What is controversial is exactly what these broad policy goals entail.

To offer an insight into what the anti-BDS movement believes BDS is, I will quote from Prime Minister Benjamin Netanyahu’s speech last year to AIPAC (source). In said speech, he said of the BDS movement that it should be “vigorously opposed… because [it is] bad for peace and because BDS is just plain wrong.” Netanyahu concludes this is so for the following reasons:

  • The BDS movement does not seek a two-state solution, because they “openly admit that they seek the dissolution of the only state for the Jewish people.”
  • BDS “sets back peace because it hardens Palestinian positions and it makes mutual compromise less likely.”
  • BDS is “morally wrong… it is about making Israel illegitimate.” Why? According to Mr. Netanyahu, only in Israel can Middle Eastern academics openly speak their minds, Christians openly practice their religion, journalists can write, gays can be gay, women can have equality. Not only that, it is an anti-Semitic movement: “today the singling out of the Jewish people has turned into the singling out of the Jewish state… the latest chapter in the long and dark history of anti-Semitism.”
  • Finally, BDS movements really should be targeting worse offenders, such as Syria or Iran, and not the “only democracy in the Middle East.”

I am unsure where Netanyahu gets the idea that the BDS movement is about the dissolution of Israel as a state. Perhaps he believes that justice for the Palestinian people constitutes the dissolution of Israel as a state? Perhaps he is referring to the right of return, or of the proposed return to 1967 borders? I have no idea, but the stated purpose of members of the BDS movement, and their actions, seem far more constrained in their scope. From the website for Jewish Voice for Peace: “we support divestment from and boycotts of companies that profit from Israel’s occupation of the West Bank, Gaza, and East Jerusalem. This includes companies operating in or from occupied Palestinian territory, exploiting Palestinian labor and scarce environmental resources, providing materials or labor for settlements, or producing military or other equipment or materials used to violate human rights or to profit from the Occupation” (source). Nowhere does this imply support for the dissolution of the Israeli state, but rather non-violent civil disobedience and non-violent divestment from companies that profit off of the occupation.

From the mission statement of the Free Gaza Movement: “We want to break the siege of Gaza. We want to raise international awareness about the prison-like closure of the Gaza Strip and pressure the international community to review its sanctions policy and end its support for continued Israeli occupation. We want to uphold Palestine’s right to welcome internationals as visitors, human rights observers, humanitarian aid workers, journalists, or otherwise. We have not and will not ask for Israel’s permission. It is our intent to overcome this brutal siege through civil resistance and non-violent direct action, and establish a permanent sea lane between Gaza and the rest of the world” (source). Again, non-violence and awareness (NB: I am unsure whether the widely-publicized violence, involving the injury of several and the death of one of the protestors, on one of the Gaza Flotilla boats, originated from the Israeli commandos or the activists themselves – perhaps it is moot, perhaps we will never know?)

If a large part of the West Bank occupation is due to economic reasons (I have read as much, at least), then making it economically unfeasible for settlements to exist there seems like a good strategy – this of course doesn’t take into account religious reasons.

The anti-Semitic one is pretty easy to refute: boycotts and divestment don’t target Jews but companies that profit from occupation. A recent divestment bill that passed at my alma mater, University of California Santa Cruz, had the following text for its resolution:

“Let it be resolved, that SUA [Student Union Assembly] should further examine UC assets for funds being invested in companies that directly profit from or support a) military support for, or weaponry to, support the Israeli occupation; b) the building or maintenance of the illegal Separation Wall or the demolition of Palestinian homes, farms, or orchards; or c) the building, maintenance, or economic development of Israeli settlements in the West Bank and East Jerusalem; … if it is found that UCSC or UC funds are being invested in any of the above-mentioned companies we call upon or University… to divest their holdings from these aforementioned companies.” (source)

As anti-Semitism is an attack on a person’s being (or perceived being, perhaps, if you take Sartre’s analysis in Anti-Semite and Jew to heart), while the above is an attack on illegal actions taken by the Israeli government, it seems hard to argue that the BDS movement is inherently against the Jewish people.

However, it becomes all too easy when a man like Netanyahu conflates the Israeli state with all of am Yisrael. Because of this, in his mind any attack on the legitimacy of the actions of the Israeli government, or the territorial incursions of the Israeli state, is ipso facto an attack on the Jewish people themselves. This is problematic for multiple reasons: one, it essentializes all Jews, regardless of their level of observance, their nationality, or their political positions, into de facto citizens of the state of Israel, so that any attack on Israel is also an attack on them; two, it marginalizes Israel’s substantial Arab, small Druze, and smaller minority populations, effectively telling them that the country they are citizens of and which they call home is not really theirs; three, it shows as barren Netanyahu’s claim that “that Israel, like all states, is not beyond criticism,” because by equating the Israeli state with the Jewish people, any criticism of Israel can be construed rightly or wrongly as anti-Semitic; fourth, it has the odd outcome that criticism of the Jewish people is also criticism of the Israeli state – does the anti-circumcision movement in Europe equate to being anti-Israel, because it has elements of anti-Semitism? Perhaps, but not necessarily; fifth, if BDS is about the dissolution of the Israeli state as Netanyahu suggests, then it is necessarily also about the dissolution of the Jewish people, which on its face makes his claim even more absurd. Regardless, the charge of being anti-Israel rings hollow anyway: no boycott or divestment bill I have seen wants anyone to divest or boycott Israel itself, only companies that profit off illegal Israeli activity. Netanyahu’s conflation is unjustified and duplicitous.

Finally, Netanyahu’s last objection is just a tu quoque fallacy – other nations, such as Iran and the Sudan, are targeted by sanctions. Israel is also not equivalent with other nations policy-wise: Israel receives more military aid than any other nation, and our “special relationship” with the Israeli state merits equally special scrutiny. Big ticket offenders like China are left alone for various geopolitical and economic reasons, so mentioning them is more of a red herring – we have to focus on what is feasible to solve.

Pinkwashing: a term coined by academics to denounce Israeli efforts, and the apologetics of their supporters, to point to purportedly positive and/or progressive policies held by the Israeli government, or attitudes held by the Israeli people, as merely a red herring distracting from their human rights abuses of Israeli Arabs and Palestinians. While it is true that Israeli actions in one area do not impinge on Israeli actions in another – the liberal policy towards the LGBT community in Israel, though arguably the most open in the Middle East, has little to do with the draconian policy on Palestinian movement of people, for example – it is precisely because of this that the charge of “pinkwashing” carries no weight. If it is true that certain Israelis and their supporters attempt to distract from a poor human rights record in one place by holding up their stellar human rights record in another, it is equally true that their detractors do the exact opposite: detract from their stellar human rights record in one place, by holding up their appalling human rights record in another. It is a red herring in any event, and each policy should be examined on its merits before we take an account of the whole Israeli political apparatus. We ought not to proceed from a negative assessment of the system and then judge its parts, but begin with its parts, and from there form an image of the whole.

To be clear, pinkwashing can refer to any sort of apologetics for Israel that follows these lines: “We have a great policy on X, don’t you agree? So why do you keep hammering us on policy Y?” Such an example can be found in the above-quoted speech Mr. Netanyahu gave to the American Israel Political Action Committee (AIPAC). I quote: “I visited an Israeli army field hospital in the Golan Heights. Now, that field hospital wasn’t set up for Israelis. It was set up for Syrians. Israelis treated nearly a thousand wounded Syrians — men, women and a lot of children. They come to our border fence bleeding and desperate. Often they’re near death. And on my visit I met two such Syrians, a shellshocked father and his badly wounded 5-year-old boy. A few days earlier the man’s wife and baby daughter were blown to bits by Iranian bombs dropped by Assad’s air force. Now the grieving father was holding his little boy in his arms, and Israeli doctors were struggling to save the boy’s life.”

It seems clear that such lines are expressly designed to deflect charges that Israel terror bombs civilians in Gaza – which it most certainly does. Be that as it may, charging this as pinkwashing ignores the fact that, even if it does have rather nefarious intentions, nonetheless it has a good result.

California Times Six

I live in California. It’s a great state. Too great.

A proposition to split California into six states may be on the ballot in 2016. “Six Californias” has announced that it has collected sufficient signatures. Why six? California’s population of over 38 million is six times lager than the US state average. The ruling powers may find a way to block the proposal, as some opponents claim that the signature gathering was unlawful. If “Six Californias” does get on the 2016 ballot, in my judgment, this will be a rare chance for fundamental reforms.

Many Californians have said that the state is too big to govern effectively. But the governance problem is not size, but structure. After the property-tax limiting Proposition 13 was adopted in 1978, taxes and political power shifted from the counties and cities to the state government. California could be governed well if decentralized, but the concentration of fiscal power to the state has made the state among the highest taxed and worst regulated in the USA.

There have been many attempts to reform the lengthy California constitution, but they have all failed. Attempts to replace the Proposition 13 have gone nowhere. The best option is to start over. Creating new states would provide six fresh starts.

Critics of the six-state plan say that the wealth of the new Californias would be unequal. The Silicon Valley state would include the high-tech wealthy counties of San Francisco, San Mateo, and Santa Clara, among others. The promoter of this initiative, Timothy Drapers, happens to be a Silicon Valley entrepreneur.

But the current 50 US states are also unequal in wealth. The income inequality problem is a national and global problem. Income can become more equal without hurting production by collecting the land rent and distributing it equally among the population. Since the critics of Six Californias are not proposing or even discussing this most effective way to equalize income, their complaints should be dismissed as irrelevant, immaterial, and incompetent.

US states have been split in the past. Maine was split off from Massachusetts in 1820, and West Virginia was carved out of Virginia in 1863.

If the initiative passes, a board of commissioners would draw up a plan to divide the state’s assets and liabilities among the six new states. A good way to do this would be to divide the value of the assets by population, but to divide the liabilities (including both the official debt and the unfunded liabilities such as promised pensions) by the wealth of each state. That would go a ways to deal with the inequality problem.

California’s complex water rights could be simplified by eliminating subsidies, instead charging all users the market price of water. There could continue to be a unified water system with a water commission with representatives from the six state.

If this measure is approved by the voters and by Congress, each state will design a constitution. The new constitutions should be brief, like the US Constitution, in contrast to the lengthy current California constitution that contains many provisions best left to statute law.

The new constitutions should retain the declaration of rights in the current state constitution, including Article I, Section 24: “This declaration of rights may not be construed to impair or deny others retained by the people.” This wording, similar to the US 9th Amendment, recognizes the existence of natural and common-law rights. This text should be strengthened with something like this: “These rights of the people include the natural right to do anything which does not coercively invade the properties and bodies of others, notwithstanding any state interest or police power.”

These new constitutions will be an opportunity to replace California’s market-hampering tax system with economy-enhancing levies on pollution and land value. There should be a parallel initiative stating that if Six Californias passes, the states will collect all the land rent within their jurisdictions and distribute the rent to all six states based on their populations. A tax on land value is by itself market enhancing, better than neutral, because it promotes an efficient use of land, it reduces housing costs for lower-income folks, and eliminates real-estate bubbles. Combined with the elimination of taxes on wages, business profits, and goods, the prosperity tax shift would raise wages and make California the best place in the world for labor and business.

This is all a dream, but the past dreams of abolishing slavery, having equal rights for women, and eliminating forced segregation all came true. This proposition will at least provide a platform for discussing such fundamental reforms.
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This article was first published at http://www.progress.org/views/editorials/california-times-six/