Les pumas de grande-banlieue: histoires d’emigration

Originally posted on FACTS MATTER:

Un recueil étonnant par un immigrant de longue date qui n’a jamais oublié être élève de Diderot et de Voltaire (en plus du poète Jacques Prévert). Il y raconte la Californie en trois courtes nouvelles, trois micro-essais et une mini-autobiographie. On y trouvera: des pumas, bien sûr, une voisine infernale et casi-meutrrière, une cocasse leçon d’Anglais, une interrogation critique sur le lien possible entre francophonie et indifférence aux faits, une présentation insolite de la discrimination raciale, la pêche à la langouste, la bourride, le patriotisme, la vie dans un château d’eau en bois, la traversée des Etats-Unis an auto-stop, la débâcle du Marxisme, l’université Stanford, la transformation de vergers en Silicon Valley.

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Brazilian Elections 2014: Preview

Tomorrow, when Brazilians vote for President, the most likely outcome is that we’ll know the names of two candidates that made the cut for the second round of elections. And the incumbent Dilma Rousseff is likely to be one of them.

The candidates

Labour Party candidate and current President Rousseff is leading the polls, but in everyday conversation she’s arguably the least popular candidate. There’s nothing fresh in her platform, and it’s safe to assume a second Rousseff term would look pretty much the same as the first term: unimpressive.

Environmentalist Marina Silva, of the Socialist Party, has surprisingly defended a centrist and pragmatic economic agenda, a slight shift to the right, if compared to Rousseff’s platform. Amongst other things, Silva would push for the autonomy of Brazil’s Central Bank, along the lines of the Fed in the US.

Aécio Neves, a Social-Democrat, has a similar centrist agenda, but clothed in small-government rhetoric – again, out of pragmatism and in pursuit of more efficiency, and not necessarily out of principle. Pundits have analysed Neves’ debate performance and he seems to come across as the most well-prepared candidate in the field.

Compulsory Democracy

We’re to expect a large turnout, due to a peculiar arrangement in Brazilian law: voting is compulsory to all citizens, residents and non-residents alike, over the age of 18, with few exceptions.

In order to vote, it’s necessary to show a voter’s ‘permit.’ If a citizen fails to turn up to vote, that permit number will have a negative record. Citizens who can’t make it in time will have a deadline to turn up in electoral court to justify why they didn’t vote. If there’s a good reason, they get a stamp and a document clearing their voters ‘record’. If the absence isn’t ‘justified,’ then a fine is due.

Votes are cast electronically. Each voter will use a cabin with a machine where a candidate number must be entered. In case the number is incorrect, it’s possible to correct the vote. In case the number hasn’t been assigned to any candidate, the vote is ‘nullified’. Citizens also have the right to a blank vote. The transparency of this system has ben questioned on several occasions, not least because of the risk of tampering with the machines.

Final Sprint

Marina Silva’s campaign was a great surprise, since her party’s nominee died in a plane crash. She quickly rose in popularity and took the second place in the polls. Critics pointed out that Silva was one of the founders of the Labour Party – President Rousseff’s party, and then defected to the Green Party and later joined the Socialist Party, where she currently is. A key objection to her campaign was the similarity between her ideological background and that of the President’s.

Speaking of background, Aécio Neves’ family story was another factor emerging in this campaign. Neves was an unlikely nominee initially, because most of his party’s base and its inner circle are concentrated in São Paulo, whereas Neves made his political career in the neighbouring state of Minas Gerais. Neves’ grandfather was the first President elected after the end of military rule in Brazil (1985), but he died tragically before being sworn in. Since then, the name Neves has been associated to the many political ironies of Brazilian history.

For a few weeks, Silva sat comfortably in the second position. However, after a series of TV debates, it became clear that President Rousseff was struggling to get her points across, and that Neves was well-prepared and well-advised. The incumbent lost some points in the polls while Neves came to a surprising rise in the final sprint, overtaking Silva in the second place.

The common outcome of Brazilian presidential elections is a smaller question mark – from a pool of five or more candidates, the top most voted are generally selected for a second round, to take place a few weeks later. This is likely to happen again, but it’s hard to predict who will get the ticket to challenge Rousseff.

Blaming Finance, Ignoring Real Causes

The fall 2014 Cato Journal has an article, ‘The Financial Crisis: Why the Conventional Wisdom Has It All Wrong,” [pdf] by Richard Kovacevich, Chairman Emeritus of Wells Fargo. The author is correct in saying that the conventional wisdom is wrong in blaming the slow recovery on the “uniqueness of a financially led economic recession.” The US economy recovered from the severe 1980 recession within two years, while now the economy is creeping like a turtle.

The economic cause of recovery and growth is simple. Economic investment – the production of capital goods – drives the business cycle. Recessions are caused by a sharp fall in investment. Then, as the prices of raw materials fall, and as land rent drops, a depression reduces these costs of production, therefore increasing profits, so investment recovers. Government can boost the recovery by further reducing the costs of production, by decreasing the taxes and regulations it imposed previously. This is the “supply side” policy of increasing investment and production by reducing the costs of regulations and taxes.

But this time around, the federal government did the opposite. Costly regulations have magnified, with an anti-supply-side effect. Every year, there are thousands more regulations that hamper enterprise, and finally, regulations plus taxes have achieved the tipping point of making it too costly for enterprise to invest and hire labor.

After the Crash of 2008, the federal government had two basic policy options: it could help the economy recover with market-enhancing supply-side policies, or else the government could enact the welfare-state agenda of greatly increased governmental medical services. The government chose the latter option, which imposed even greater costs on enterprise and labor.

When the recession hit the economy in 2008, one of the responses was TARP, the Troubled Asset Relief Program. As the article states, one of the problems with TARP was that it did not focus on the troubled banks, but imposed the policy on all banks. The banks that were not troubled had to obtain the funds and then pay interest on them. TARP imposed the impression that all banks were in trouble, which destroyed confidence, and then Congress responded to the turmoil by imposing 25,000 pages of Dodd-Frank regulations.

None of the financial regulations, going back to the Great Depression, confront the causes of the boom and bust. The fundamental cause is massive subsidies to land values. The Cato article focused on the financial industry, but the more fundamental issue is government policy regarding real estate. The problems of the financial industry originate in their financing of real estate.

The history of the Americas has been that of grabbing land and enslaving labor. In the American colonies, the British government promoted European settlement to control land and to profit from trade. After the defeat of the French in 1763, the United Kingdom changed policy to avoid conflict with the people of Quebec and with the Indians, by restricting western speculation and migration. That annoyed the landed interests enough to declare independence, and to establish a constitution that would better extend and protect land speculation. Huge grants of land were given to railroads, veterans, colleges, and speculators.

After the public domain was disposed of, the government continued the subsidy of the large landed interests with implicit policies that are invisible to the public and to most economists. The provision of public works, welfare to the poor and elderly, and artificially cheap credit, all generate greater land rent and land value. This amounts to a vast redistribution of wealth from workers, tenants, and enterprise owners, to landowners, especially the concentrated owners of commercial and farm land.

With a fixed supply of land, much of the gains from an economic expansion is captured by higher land rent and land value, which then attracts speculation that carries real estate prices to unsustainable heights. When land values crash, they bring down with them the financial system that provided the loans. None of the financial regulations touch this basic cause, and land-value seeking is so deeply ingrained in American culture that people favor it even at the price of high taxes, high unemployment, and the destruction of liberty.

Ask a typical American, “Would you favor a tax reform that eliminates taxes on your wages, on interest from your financial assets, and on buildings, replaced by a tax only on land values?” The answer is, “No! I would rather suffer unemployment, insecurity, crime, poverty, and loss of liberty, than have my precious land taxed!”

“OK, then, would you favor the complete replacement of government’s public goods with private, contractual, provision that eliminates the subsidy to land values?” “No! We need government to provide these things!”

Then you ask, “So why do you want the word ‘liberty’ put on our coins?” The answer is, “I want liberty so long as it is not put into practice!”

And that is why government deals with the superficial financial appearances, and not the implicit reality that causes the booms and busts.

Expanding the Liberty Canon: Marsilius of Padua on the Defence of civic Peace

There is a leap of more than a millenium from  my last post on Seneca to Marsilius (originally Marsiglio) of Padua (c. 1275 to c. 1342). I am not saying that no one wrote any texts advancing liberty during that time, but the major texts of late antiquity and the Middle Ages up to the thirteenth century concerning political ideas lean towards the desirability, or at least unavoidability, of law making and governmental powers centralised in a monarchical figure, rather than constraints on power,  or a positive vision of individual autonomy.

One might argue that the spread of Christian monotheism enhanced the value placed on individuality, and that the codification of Roman law in Constantinople in the sixth century CE (commanded by the Emperor Justinian) advanced the idea of liberty under law. Even if we take a very positive view of those developments, and they are certainly deeply important, they can be no more than elements in the creation of laws and institutions that promote liberty.

There must be more to social and political liberty than a belief in an inner soul and the institutionalisation  of the law outside the individual. The importance of the individual and the rule of law at least require some further articulation in how to form a political community that recognises the merits of individual liberty in every sense.

There were great thinkers who addressed political questions  during the time between the early Roman Empire (Seneca) and the late Middle Ages (Marsilius of Padua), most obviously Augustine of Hippo (354-430), Al-Farabi (872-950), and Thomas Aquinas (1225-1274), but in my judgement they lean too far towards emphasising the sovereign power, assumed to be be ideally a monarch, who can enforce law and religiously inflected notions of virtue, to be regarded as promoters of liberty, even if much of what they wrote is of value from a liberty advocating point of view.

Others may disagree, Murray Rothbard for example thought of Aquinas as very close to his own individualist anarchist point of view, which however does not strike me as the strongest point in his writings. My argument is that Marsilius made a decisive step in turning a rich tradition of writing on virtue, civil law, natural law, and sovereignty, towards  a concern with individual diversity and the right for everyone to play some part in determining the laws that one is obliged to obey.

In this, he was maybe anticipated by Florentine humanist and republican thinking, but not by any great historical distance, and there is lack of readily obtained in print or online texts in English from that time in Florentine history, though I hope to return to this in a  future post.

The historical background to Marsilius’ thought includes the political life of medieval north Italian city states, little republics often known as communes. Conflict between the Papacy and German Emperors gave them the opportunity to maintain independence through playing off the great medieval political powers against each other.

Their independence, like that of the ancient Greek city states, ,involved a good deal of conflict with each other about boundaries and alliances, and internally with regard to governmental power. This of course was a violent process, but there was violence elsewhere with less productive results for liberty.

Some background on  the Papacy and the Empire is necessary here, as general background, and with regard to the life of Marsilius, who was very much part of the struggle between the two. The Roman Empire was revived, in name anyway, in 800 for Charlemagne, the ruler of what is now France, Germany, Austria and neighbouring territories, including northern Italy.

Charlemagne was crowned by the Pope in Rome in a move the emphasised separation from the continuing eastern Empire in Constantinople and a strong ally for the power of a Roman centred Catholic church in the west. By the time of Marsilius, the title of Emperor had disappeared, revised, and evolved in its meaning.

The stage reached was the the Emperor was elected by major German princes and was known as the Emperor of Germany, though also as Holy Roman Emperor, or Emperor of the Romans, in recognition of his preeminence in Catholic Europe, and apparent role of providing secular partnership to the divinely ordained role of the Papacy.

The Emperor’s power over most of Germany, outside the hereditary lands of the prince elected, was very limited, so that Germany was essentially a patchwork of a very large number of very varied kinds of sovereign entity (city republics, bishoprics, monasteries, domains of a margrave, duke, knight, etc) under a grand  but weak monarch, who had some claim to universal monarchy within the Catholic world but only at the level of symbolism .

The Emperors had continuing claims in northern Italy, which brought them into conflict with the political ambitions of Popes to dominate the region, and generally the supposed partnership of throne and alter led to violent conflict about how to share the power.

It was also a time of growing commercial life in Europe, with northern Italy as part of the vanguard. The erosion of traditional forms of authority and loyalty which accompanied increasing commerce, combined with an intensification of conflicts between Emperor and Pope, along with competing candidates to be Emperor or Pope.

Marsilius was in the middle of this, born in northern Italy, in the city of Padua as his name indicates. He trained as a doctor, after a period as an Imperial solider and became Rector of the University of Paris, then engaging in work on theology and politics which led to conflict with the Papacy. He was sheltered by the German Emperor at his base in Munich.

The major result of this was the large book, The Defender of the Peace, often known by its Latin title of Defensor Pacis. It contains three discourses, the first of which is less than half the book, but contains his thought on the nature of politics, civil law, and the state. This might be seen as a defence of the role of the Emperor as defender of the peace, who the right to autonomy from the Pope with regard to worldly matters.

However, there is much about the First Discourse, which challenges the role of princes. That Marsilius was able to do so while relying on the Emperor for protection from accusations of heresy, is suggestive of the value of the papacy-empire and church-state splits in medieval Europe along with competition between states and the the contestation of Church doctrine by ‘heretical’ groups, in fostering liberty in a Europe, which lacked any absolute overarching political or religious power centre.

As is normal with medieval philosophy, Marsilius writes with regard to the text of the Bible and even more with regard to the writings of Aristotle, which in this case means mostly the Politics and the politically oriented parts of the Nicomachean Ethics. As normal, there is also reference to the Commentator, that is Ibn Rushd, known in Latin as Averroes (1126-1198), a Muslim philosopher who like Seneca was born in Cordoba, Spain. His commentaries on Aristotle transformed Medieval philosophy, Christian and Jewish, as well as Muslim.

Marsilius builds up his political ideas taking Aristotle as the major philosophical source, which raises questions about the correctness of his view of Aristotle. I won’t go into that issue any further and will just note that since Marsilius, one way of taking Aristotle has been as a proponent of republicanism with a democratic emphasis. The ‘republican’ thinking is not about abolishing monarchs, and strictly speaking republican political thought has always been about how to share power between all citizens, or some significant part of the citizen body, rather than the abolition of all monarchical titles. This is why Marsilius can be both a republican and support the power of the Emperor, at least in relation to the Pope.

The argument is built up through reading of Aristotle, which emphasises the merits of elective monarchy, so turning the monarch into an elected for life president. If that life time tenure rests on the will of citizens, then at least some possibility is raised on ending that tenure early should the monarch prove unsatisfactory.

Of course the German Emperor was elected by a few princes, but Marsilius is very clear that he is referring to a broader electorate of all citizens. He contests readings of Aristotle, according to which Aristotle only allows for the election of a king by a small aristocracy of those citizens supposed to be very best. Marsilius both denies this is what Aristotle supports and makes his own arguments for saying that the wisdom of all citizens collectively is greater than that of a few privileged citizens taken to be particularly wise.

The wisdom of a few, however intellectually accomplished, cannot match the wisdom of all citizens as that collective wisdom contains all the knowledge there is of the society concerned. Social knowledge comes from the many thousands and even millions of individual perspectives on experienced reality, not the distanced theoretical wisdom of a few. Therefore the wisdom to elected the best candidate as monarch must come from all citizens, and they must all have the right to participate in the vote.

A decision resting on such a multitude also creates a strength and endurance in the state, with regard to external enemies, but more importably with reference to the capacity of the state to sustain itself and allow a ‘sufficient’ life for citizens. That is a sufficient life of fully developed human faculties, not just pure physical survival which might take place without laws, but only in conditions of insecurity and with little hope of a ‘sufficient’ life.

The laws which allow sufficient life are more a matter of codifying the wisdom and experience of history, in forms which are acceptable to all citizens, than the kind of innovations in state power we have come to associated with new law in more recent times. The citizen body which participates in electing the head of the government must also participate in making laws since the same arguments invoked for electing a leader must apply to the laws. Laws, which Marsilius understands as what has the  consent of of all, or close enough, rather than the imposition of the views of a narrow temporary majority on everyone.

He does not make explicit barriers to majoritarian abuse of power, but does not need to since law clearly means to him what is acceptable to the community as a whole with regard to its collective wisdom and the historical experience of laws. The ‘monarch’ or ‘prince’ is clearly expected to apply those laws and to exercise no further powers beyond what defends the existence of the community from lawlessness and external aggression.

Marsilius emphasises the viability and sustainability of the community as a community of sufficient life rather than as a deduction of law making sovereignty from individual rights. His approach, grounded in antique political and legal thought, might sound less respectful of individual liberty than the deduction from individual rights, but the modern tradition of such deductions, these days forming the major part of ‘normative’ political theory/analytic political philosophy, have not proved at all immune to statist ideas, while individual rights to pursue ‘sufficiency’ are so deeply embedded in Marsilius’ assumptions as what is natural to an individual and to a sustainable community, that it does not need articulation in the form of pure abstract rights detached from the necessary conditions of lived communities.

How democratic Marsilius is, by our standards, can be debated on at least two counts. One count is that at this time, and right into the nineteenth century, ‘democratic’ politics might might still exclude ‘dependent’ individuals from political rights, that is those who were thought to be lacking in the economic independence and self-dependence, which would supposedly allow for free and considered judgement .

Those excluded included those making a living from employment by someone else rather than through property, self-employment as a skilled worker, or membership of some legally recognised corporation of individuals with equal rights (like a university or a trade guild).  Farm labourers, employees of urban enterprises,  vagrants, and domestic servants were likely to be excluded along with women, religious minorities, and those still  carrying the vestiges of medieval serfdom in their legal status.

The second count is that Marsilius offers little indication of how his democratic ideas could be applied in practice, though he was presumably relying on memories of Italian communed, still leaving a huge gap on how to apply such principles to a political community as large as the German Empire, leaving the suspicion that he was mainly arguing for the power of the Emperor on the basis of pretended democracy, and a supposed rule by laws rather by any individual.

There is neverthless more than enough in Defensor Pacis overall to stimulate considerable creative thinking about what it is to create the laws and government best suited to liberty. His criticisms of the supposed wisdom of  few at the top, are very powerful and necessary now with regard to the pretences of state planning and regulation. His understanding of how wisdom arises from the multiple experiences of the multitude, with regard to the limited   goals of government and legislation, have great application to the role of markets and voluntary co-operation in a society of free individuals.

“The Lack of Competition/Diversity”: One objection to world government that shouldn’t be made

I have recently come across an old blog post by Ilya Somin at Volokh Conspiracy arguing against world government. Somin’s argument echoed Michelangelo’s here at the consortium, and in particular one aspect of their argument stands out for being especially short-sighted: That of a lack of competition or “diversity in governance” would be the inevitable result of a world government.

Now, a libertarian world government would be federal in nature, so if Somin and Michelangelo are arguing against a different kind of world government they may have a point (I don’t know of many arguments in favor of world government that are not federal in nature, and it wouldn’t be worth my time to read up on any such ludicrous proposals), but when addressing arguments in favor of world government from a libertarian perspective opponents must realize that it is federation they are skeptical of.

Here is how I address the opposition to a world government because competition (and, thus, diversity) would become diminished:

Libertarians generally argue that federalism is the best option we, as humans, have because it allows for competition between administrative units. This competition is enhanced and respected by the people it affects because of the rules set in place and enforced by a federal authority. So, for example, everyone in the US federation generally has their individual rights protected (there are always exceptions, of course, including blacks, Natives, felons, immigrants, and religious minorities), including freedom of movement. Under this general framework different administrative units come up with different policies concerning taxes, education, transportation, etc. This competitive framework makes policies better overall, in all 50 states, without having to resort to a central, one-size-fits-all policy.

It is true that the US could be better, and it is true that federal democracy may be inferior to anarchy, but it is also true that we live in a world of second bests, and comparatively speaking, the US has one of the highest standards of living in the world so I don’t see why this should not be taken as a sort of rough estimate for where libertarians should be aiming.

Is everybody in agreement that federalism is the least worst workable option largely because of the competition it allows for?

Okay then. It somehow follows, for opponents of world federalism, that if the US federal system were to add every administrative unit in the world into its system that competition would suddenly cease.


Okay, I am being a jerk about this line of reasoning. It actually goes something like this: Because the US and Russia have different systems of governance, they are competing with each other. Fair enough, but it does not follow that this competition is a good thing. If I recall correctly, there are good kinds of competition and there are bad kinds of competition. Walmart versus Target is good competition. Lobbying for political favors is good competition (consider the alternatives, i.e. Russia). Building up military capabilities is bad competition. Pitting human rights-abusing regimes against liberal democracies is bad competition, too, but this last scenario is precisely what opponents of world federalism argue is desirable about the status quo.

World government wouldn’t eliminate competition, it would enhance it by focusing governmental duties on policy issues and standardizing a regime of rights protection based on the notion of the free and sovereign individual.

Comparing the US to, say, Gabon or China is not competition. It is an injustice, and one that ignores the plight of billions of people living under despotic regimes. Competition is not what happens when 5 million people live in a liberal democracy and 5 million more live in a one party socialist state. Competition is what happens when all 10 million people are free to worship the Flying Spaghetti Monster whenever and wherever they please, but only half of them pay a sales tax (the other half have banned plastic bags through plebiscite, of course).

Even if my competition-is-enhanced-by-federalism argument does not convince the opponent of world government, the fact that his own argument for more competition, through state sovereignty, should.

Consider the following scenario in regards to competition and world federalism: The state of Durango, in the United States of Mexico, is fed up with Mexico City’s corruption and inefficiency. The leaders of Durango, and a significant population of Durango (say, 60-65%), all would be thrilled to leave the Mexican federation. However, Durango knows that independence would be much worse than federation, so it continues to stay within the Mexican federation and simmers with despair and loathing.

Under the status quo – competition through state sovereignty – Duranguense have no options whatsoever, except to keep electing reformers to political office at the federal level and hope for a reform bloc to coalesce. How is this competitive?

Now, consider the scenario outlined above again. The federation of 50 American states has adopted a statute that allows for disgruntled administrative units elsewhere in the world to apply for admission into the union. Duranguense suddenly have an option. Not only that, but Mexico City suddenly has competition, and little of it can be snuffed out through repressive domestic policies.

Does this make sense? Am I knocking down a straw man? If so, please don’t hesitate to take me to task in the ‘comments’ threads!

Stephen Cox Reviews Delacroix’s New Book

From the pages of Liberty:

Another book that I’ve enjoyed, and I don’t want other people to miss, is a work by Jacques Delacroix, who has contributed frequently to [Liberty's] pages. In this case, you can tell a book by its cover, because the cover of Delacroix’s book bears the title I Used to Be French. Here is the cultural biography — cultural in the broadest sense — of a man who became an American, and an American of the classic kind: ingenuous, daring, engaging, funny, and again, curious about everything in the world. Whether the author began with these characteristics, I don’t know, but he has them now; and what you see in the book is someone learning, as he moves from France to America and from mid-century to the present, that “American” is the best name for his own best qualities.

It takes literary skill to project a many-sided personality; and the strange thing is that it takes even more skill to project the differences we all feel between American culture (bad or good) and French — or any other European — culture (bad or good). We feel those differences, but when we try to describe them we usually get ourselves lost in generalizations. Delacroix doesn’t. He has a taste for the pungent episode, the memorable anecdote. He also displays two of the best qualities of which a good author, American or French, can ever be possessed: an exact knowledge of formal language and an intimate and loving acquaintance with the colloquial tongue.

Sampling Delacroix’s topics, one finds authoritarianism, Catholicism, Catholic iconography, the Cold War, communism, diving, driving, the end of the Middle Ages, existentialism, food, French borrowings from English, the French navy (being in it), getting arrested, grunion, jazz, Levis, lovemaking, Muslims, the People’s Republic of Santa Cruz, political correctness, the Third World in its many forms. . . . Most (even grunion) are topics that a lesser author would inevitably get himself stuck to, but Delacroix romps through them all. If you want a loftier metaphor, you can say that they (even the grunion) are jewels strung on the book’s central story, as sketched in the summary on the back cover: “A boy grows up in the distant, half-imaginary continent of post-World War II France. Bad behavior and good luck will eventually carry him to California where he will find redemption.” And a lot of fun, for both the reader and himself.

Dr Cox is a Professor of Literature at UC San Diego. Be sure to check out Peter Miller’s review of Delacroix’s book as well (Dr Miller is also a sociologist and artist). EDIT (10/2/14): You can order I Used to Be French… from Dr J himself by sending an email to iusedtobefrench@gmail.com.

I just worked my last day as a day laborer for a stone mason crew in Utah today. I’ll be on the road again, headed more or less toward Seattle, but will be contributing to the blog a bit more often (unless I can convince my co-bloggers to start producing much more material, which would make me more than content to sit back and troll the ‘comments’ threads).

PS: Did anybody see the UCLA-Arizona State game? Wow. Pac-12 football at its finest baby! It will be unfortunate if the championship game does not have a west coast representative. The country deserves better, although I think the new playoff system will ensure that the brutal Pac-12 season doesn’t eliminate the best teams simply because they have all lost one game to another championship contender. The west coast isn’t the SEC. We play hard games, week in week out.

A New Chicago School?

Consider America’s transportation system. I like to imagine that it ought to be a certain way. I imagine a world where a lot of freight travels competitive rail lines. And occasionally a transport truck traverses the country side, maybe to serve a new or small market without a rail road. I imagine a truck entering a town, passing some sort of device that alerts the local police that a vehicle has entered the town without the appropriate toll-paying transponder. Since this is the first time this has happened, the officer hands the trucker an application and signs him up on the spot. Oh! And there aren’t major freeways all over the place. Just a lattice work of efficient highways skirting the edges of towns and winding byways trailing through the country side. Perfect motorcycling roads and beautiful markets all in one.

My perfect world wouldn’t have much room for the fast modern engines we’re used to cars having. Planes and trains are fast enough for long distances and for shorter distances we simply don’t need to go so fast. The technology in those modern engines is malinvestment. That capital exists because interference with markets has skewed the relative financial benefits of different research (e.g. at the expense of investment in technology necessary for seamless and efficient toll-roads). This skewed capital structure also indirectly subsidizes fast-food while implicitly taxing the experience of traveling through, rather than past, small towns.

But what would actually keep it that way? It’s all a bit too good to be true. Am I being Utopian? Yes, but I think there might be some merit in that. My utopia can be thought of a limiting case; one of many possible best-case scenarios. We might conceive of a yard stick akin to Pareto Optimality but in a dynamic setting.

The world can be dynamically-Pareto optimal and have economic profits, but only those that arise as a result of productive entrepreneurship. Actions that create net value should be the only ones that generate profit. And externalities (whether pollution or politics) should be resolved by property rights and liability law. At least in the long run.

Such a world would serve as a benchmark in exactly the same way as Perfect Competition, and I would name it similarly. Perfect Markets (I’m open to suggestions) would be those that are simply too perfect to exist in the real world, but would offer a limiting case against which differing scenarios might be considered.

I suspect that something like this has already been offered but I’m only slowly working my way through one work and it will be a while before I get to another notable work. That first (from the Austrians) I suspect would be (justifiably) critical of what I’m discussing and perhaps it is a project best suited for applied mathematicians. It would certainly allow a good deal of theorem proving and other apparent mental master–… mastery (yes… mastery…). For some time there might be little apparent use or scientific merit in this. But number theory only became valuable with the advent of computers centuries after mathematicians started thinking about the minutiae of numbers. It’s not always for us to say that something doesn’t have a use just because we don’t see it yet. It’s a good idea to let some curious mathematical tinkerers doddle away at problems; they might turn out to have offered a valuable and useful gift to future generations.

Rent Control: a Case Study

“Rent control” is better called the “rental-recipient control,” because government cannot directly control housing rentals. We can understand “rent control” by dividing the rental paid to landlords into the rent of the land and the rental of the building and management services.

The rent of a plot of land is an economic fact that cannot be directly changed by a governmental law, just as government cannot change the real price of gold. Suppose the world price of gold is $1200, and a government imposes a gold-price control of $1000. A seller would receive $1000, but the buyer is still getting $1200 worth of gold, so in effect the buyer gets a $200 subsidy.

Similarly, if an apartment would be rented for $2000 per month in an unhampered market, but government decrees a maximum rental of $1500, the tenant is getting $2000 worth of housing, and is implicitly receiving $500 of the rental per month. The law controls who receives the rental, rather than directly setting the rental.

By setting the legal rental below the market rate, the rental-recipient control creates a shortage, as the quantity of housing demanded is greater than the quantity supplied at that legal rental. The shortage then has several economic effects. Landlords do not maintain the property as well, since there is a waiting list for tenants, and the Cambridge Rent Control Board typically did not allow rental increases for property improvements. An underground market arises, with brokers who arrange to provide an apartment for a fee shared with landlords. Property values fall, and the construction of apartments is reduced. If allowed, dwelling units get converted to condominiums, further decreasing the supply of rental housing.

When the rental-recipient control is eliminated, property values rise back up. This was shown empirically in a Cato Institute research report of September 3, 2014, “Housing Market Spillovers: Evidence from the End of Rent Control in Cambridge, Massachusetts” [pdf] by David H. Autor, Christopher J. Palmer and Parag A. Pathak, based on their article of the same title in the Journal of Political Economy 122 (3) (June 2014), pp. 661–717.

From 1970 through 1994, rentals in Cambridge for units built prior to 1969 were price-controlled, and the law restricted the removal of units from the rental market. Controlled units rented for 40 percent lower than non-controlled apartments. In 1994, Massachusetts voters eliminated the rental-recipient control. That change provided a test case for what happens when rental control is abolished.

The termination of rental control raised the property values in Cambridge by $2 billion. Since the wages of labor services of rental management did not decrease, and since the costs of construction did not decrease, the rise of property values constituted an increase in the total land rent received by the landlords of the city. In part, this increase was a shift of the rent distribution from tenants, who had been implicitly receiving some of this rent, back to landlords.

But most of the increase of the land rent was a real rise due to a better market for dwellings. The property owners increased their property maintenance and renovation, and the increase in the quality and appearance of houses and neighborhoods raised both the value of the buildings and also the land rent, as measured by the increase in the land rent of the units that had not been price-controlled. As stated by the authors, the “rent-control removal spurred overall gains in neighborhood desirability.”

The political purpose of rental-recipient control is to make housing more affordable to low-income tenants. But this price control only treats the effects of unafordability, rather than curing the cause. The housing market is distorted by governmental interventions, as taxes on wages, along with other costs imposed on employers, push down the net wage level, while subsidies to real estate get capitalized into higher land rent and purchase prices.

Subsidies to real estate include artificially cheap loan rates, pushed down by the monetary policy of the Federal Reserve. The fiscal subsidies include depreciation deductions from income taxes, as well as deductions of property taxes and mortgage interest, plus the ability to sell properties with no capital gains tax if a similar property is bought around the same time. The biggest subsidy to land values is the creation of higher rentals and land values from the public goods provided by government, paid for mostly from taxes on, or at the expense of, wages.

So government pushes down wages and pulls up the rental cost of housing. That is why housing is unaffordable. The remedy is the eliminate the cause, to stop the pushing and pulling. Shift all taxes to land values, eliminating taxes on wages, goods, enterprise profits, and interest. With wages high and land values low, dwellings become affordable.

Most advocates of reform call for higher minimum wages, rent controls, and other taxes and subsidies, rather than the fundamental reform that would make these effects treatments unnecessary. The puzzle is why most of the reformers keep seeking to only treat the effects, and seldom seek to cure the causes of our social problems, even when the economics is explained to them. They reply that rental controls and higher minimum wages are politically feasible, while basic reforms are resisted, but that response then become self-reinforcing.

Expanding the Liberty Canon: Seneca on Mercy and on Anger

Lucius Annaeus Seneca the Younger (4-65 CE) was born in the Roman Spanish city of Cordoba. Southern Spain was one of the most Romanised parts of the Roman Empire outside Italy , so it is not surprising that Seneca made his way to Rome where he became a writer and it seems a money lender. He was also tutor to and then adviser to the Emperor Nero. He had previously been in conflict with the Emperor Claudius, for own known reasons, and was exiled to Corsica for a while as a consequence.

Seneca’s writing career covered philosophical essays, tragedies, and letters which amounted to an exploration of his philosophical interests. He followed the Stoic school of philosophy, which goes back to the Greek philosopher Zeno of Citium (334-226BCE), and was influential on the Roman upper classes. So much so that the Emperor Marcus Aurelius (121-180CE) wrote his Meditations with regard to Stoic thinking on character and ways of living. It was written in Greek, indicating how far Roman thought on ethics, politics, and other topics was continuous with, or at least engaged with, ancient Greek thought.

Seneca’s relations with Nero turned out to be even more destructive than those with Claudius. Seneca tried to educate and advise Nero to be honest, just, and restrained in the use of power. However, Nero turned out to be one of the most infamously cruel, paranoiac, and violent Emperors. These negative tendencies were turned on Seneca, so that even after Seneca had retired to the countryside to avoid the bad atmosphere round Nero, he was forced to commit suicide on suspicion of complicity with a conspiracy to assassinate Nero. Nero himself was overthrown and pressured to commit suicide thee years later. Suicide was a relatively honourable form of death for Romans, and it was a privilege to allowed to commit suicide rather than face execution, nevertheless Seneca and Nero can be said to have both met sorry ends as a result of political turmoil initiated by Nero.

Nero’s behaviour was really the direct opposite of that recommended to rulers by Seneca  the essays on anger and on mercy, and was a painful failure for Seneca who had tried to educate him from childhood for a moderate self-restrained use of power. Seneca’s approach to politics is to advise an absolute ruler in the use of power, so he might seem a bit paradoxical as part of a series on liberty. However, Seneca was considered as a major supporter of republics, of government based on individual liberty in the early modern period, so that Thomas Hobbes, the authoritarian minded philosopher and political thinker, considered his thought a danger to sovereign state power.

Seneca’s thought certainly did mark the death of the Roman Republic, which was essentially abolished in substance (after a historical phase of hollowing out) by Julius Caesar in his period of absolute power from 49BCE until his assassination in 44BCE. The failure of the assassins to restore the republic led to the absolute power of Augustus and the inauguration of the autocratic  emperor system.

Seneca refers unfavourably to those who use the Greek idea of ‘parrhesia’, that is free and critical public speaking, to excess, going against what had been taken as central to the liberty of citizens. The reason Seneca can be placed in the liberty tradition is that even when criticising excess in free speech, he praises a Macedonian-Greek king on the receiving end for the restraint of his reaction. Living in an age of absolute rulers, Seneca’s main concern is that they rule as the foundation of individual rights rather than as a source of arbitrary power over citizens.

The essays on mercy and anger bring together the fields of person virtue and the best ways of governing. Virtue for Seneca, as was normal for ancient thinkers, was deeply embedded in ideas of self-restraint and moderation. From this point of view anger damages the angry person, as an example of self-harming extreme behaviour. Anger is a negative painful state of mind and to act under its influence leads to great harm.

Seneca is not simply saying that a ruler should follow general moral virtue in the manner of ruling. He places a particular responsibility on the ruler to resist anger and show mercy. The individual may harbour resentment against some enemy who caused harm, but the ruler must avoid such resentment. The ruler who publishes and executes all those regarded with suspicion as present or future enemies harms the state and the public good. Harsh treatment of individuals by rulers leads to those individuals becoming angry with the ruler so conspiring against that person. Executions will only stimulate further rebellion by those who were closest to the executed and leads to an increasingly violent period of rule. All the violence and revenge has negative consequences for the public good as well as for those persecuted.

The ruler should regard all individuals as part of the state, which he should be trying to manage responsibly. The state is harmed if any individual within the state is harmed, as the state exists to promote the public good. The ruler who cannot restrain desires for cruelty and who ignores the rights of individuals is suffering from a self-harming weakness of character and is likely to suffer violent revenge. Seneca mentions the third Roman Emperor, Caligula, in this context,  who was assassinated in 41CE, four years after succeeding Tiberius.

The best thing the ruler can do is show mercy. Those who receive mercy, even after plotting assassination, are likely to start supporting the ruler, and even work for the ruler. It is better to forgive and try to integrate a conspirator than kill the conspirator so that others will wish to avenge that murder. The ruler should obey laws as much as ordinary citizens, and should be mild in applying laws. Everyone is guilty of some fault, of some minor breach of law, at some time, so that punishing all wrong-doers will lead to the destruction of a society, as nearly all inhabitants of the territory of the state disappear.

While Seneca assumes that political power rests with one person, he argues that the continuing exercise of the power rests both on reliable justice with regard to the execution of laws and restraint from the most extreme or obsessive punishment. The powers of the state are understood as different from those of an individual, and as what must be much more limited in use than the power of citizens. The rights and welfare of citizens depends on a ruler who follows law and assumes less power than individuals, which makes a worthy contribution to thought about liberty.

Some ramblings on intellectual diversity (in universities and in libertarianism)

I’ve been reading through the ‘comments’ threads this weekend and especially my dialogues with Dr Amburgey (he’s at the University of Toronto’s prestigious business school). Amburgey describes himself as a “pragmatist” or a “centrist” but nevertheless has been a fairly stalwart defender of the Obama administration (except on its egregious violations of our civil liberties) and a blistering critic of the GOP’s right-wing. Reading through our dialogues (something I wish more readers would get involved in), I believe I have found the Left’s glaring weakness in today’s world: It’s de facto intellectual monopoly in Western universities today. Aside from wanting to gratefully thank him for his support and encouragement in our project via the ‘comments’ threads, I thought I would elaborate a bit upon this notion of a lack of diversity within academia.

Intellectual diversity is almost entirely absent in the US academy today. A Georgetown University Law Professor, Nick Rosenkrantz, pointed this out as far as law schools go, but is this dearth of diversity a bad thing? I would argue that ‘no’ it’s not if you’re on the Right, and ‘yes’ it is if you’re on the Left.

Universities have long been a bastion of Leftist thought (I note that this is not necessarily a bad thing, especially if diversity is important to you, for reasons I hope to explain below). Universities are also amongst the most conservative organization in societies (think of what it takes to navigate through the labyrinth of requirements in order to become a member of the professoriate). This is not a coincidence. Leftist thought has, since the advent of socialism in the 18th century, been characterized by it’s conservatism (especially its paternalism). It’s rhetoriticians just disguise it as progressive.

At any rate, Rosenkrantz points out that the Supreme Court of the US (SCOTUS) has five conservative judges and four Leftists, which is extremely unreflective of the law school professoriate. The point made by Rosenkrantz is that law students may not be getting an education that accurately reflects how the real world works.

In essence, law students are getting straw man arguments when it comes to conservatives and libertarians instead of actual conservative and libertarian arguments. This is true, and it’s reflective of the social sciences and of business schools as well. Such an arrangement has served the American Right extremely well over the past three decades, too.

Consider this: If your organization is dedicated to teaching students about this or that, and you only give them half the story, who or what is going to explain the other half? What I’ve found is that nonconformist students (conservatives and libertarians) are very good at taking in the lessons that are taught by Leftists (including their straw men) and supplementing them with their own readings on conservative and libertarian thought. Now contrast this with the conforming student. The one who eats up everything the professor teaches and takes it as more or less the Truth.

Outside of academia, where the battlefield of ideas is much less focused, and has much more money at stake, which student do you think is likely to have an edge intellectually-speaking? The student who read all he was supposed to and then some extra to account for different perspectives, or the student who read all he was supposed to and took it as more or less the Truth?

Many universities have been slow to catch up with other organizations that have recognized the benefits of not only cultural diversity but of intellectual diversity as well.  If the Left wants to mount any sort of counter-attack in the near- or medium-term future, it would do well to open up to the idea of having more actual, intellectual diversity on its faculties.

Leftists often claim that they are losing the battle of ideas because of money (or lack thereof) but this is absurd on its face, and the longer Leftists try to win by this line of reasoning, the deeper will be the hole out of which they will inevitably have to climb.

There is also the argument that Leftists don’t really have an argument. They simply have reactions to new ideas being created and put forth by libertarians (and to a lesser extent, conservatives here in the US, who are heavily influenced by libertarian ideas).

While there is no diversity in academia there is obviously plenty of it outside. I think this shows a healthy “macro” picture, to be honest.

Universities were once independent (from state influence) organizations and that independence helped contribute to a culture that has given the West what it has today. If universities – with their rules and regulations and traditions – lose their place as bastions of Left-wing ideology, what would take their place? Think about it: The university, because of its extremely conservative traditions, actually tempers the thought of socialists, and if they come under assault then hardcore Leftism will simply find another way to manifest itself. Left-wing literature professors are one thing. Left-wing demagogues are quite another.

This ties in quite well with my other observation, in ‘comments’ threads not found here at NOL, that libertarians tend to be anti-education. Many of them justify this reactionary stance because of the de facto monopoly the Left has, but I think this reactionary stance has more to with the broader libertarian movement’s own intolerance of intellectual diversity.

The recently launched liberty.me community is a good example of this. I think about libertarianism’s recent reactionary nature in this way: Libertarianism got hot after Ron Paul’s 2008 presidential run. It got so hot that a small but very visible movement was sparked. After the initial success, though, the movement inevitably fell back into one of cliques, clichés, and group-think mentality for a great number of people excited by Paul’s message. Most people who became involved in libertarianism read one or two books recommended Paul and his acolytes. This process further entrenched them, but from there on out this large segment of the libertarian quadrant simply stopped exploring ideas and engaging in dialogue with intellectual adversaries. ‘Statist’ became a derisive term.

These new online communities have been created for the libertarian who seeks comfort in the presence of others like him, whereas consortiums like NOL (and those found on our blog roll) are a place for us to continue the pursuit for truth and the battle for hearts and minds in an open and competitive environment. As a libertarian I think these circle-jerks that crop up serve a useful social function, but I have to wonder aloud how much learning actually occurs in those places.

Part Two of Capitalism for the Intelligent Ignorant: the Actors

Originally posted on FACTS MATTER:

This is a little complicated. Part One of this series listed the main constraints on pure capitalism. Then, I took a detour – which was NOT Part Two – on the subject of money which is a quite specialized topic. Below is Part Two of Capitalism for the Intelligent and Ignorant. It describes the main actors of capitalism, of real capitalism, of capitalism such as it exists. with an emphasis on the American instance.

As have stated forcefully in Part One the government is a the biggest economic actor in all developed countries. Although it’s nowhere constitutionally required, at any one time, the government has most or almost most of the money in its hands. This fact alone requires it to do some investing. It’s also the biggest buyer of many things because of the sheer size of government agencies, including the armed forces. It’s also a major seller of…

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Local Citizenship

In his latest blog over in Openborders.info, my usual stamping grounds, Nathan Smith discusses the need for citizenship to be voluntary. I agree with Nathan Smith wholeheartedly here. What value is citizenship if a man is forced to have it? A fellow citizen is someone you should be willing to share a meal with during the bests of time. A fellow citizen is someone you should be willing to trust in the trenches during times of war. A meal is never pleasant when your company is forced to be there, and I for one wouldn’t want to fight alongside an unwilling ally.

If citizenship is to be voluntary however the offer of citizenship should also be voluntary.  That is to say that a polity should be able to decide who it wishes to offer citizenship to. United States immigration law currently adds new citizens without much consultation to current citizens on whether they wish to accept newcomers. This is a plain violation of the right to free association.

It is for this reason that I disagree on granting US citizenship to its current illegal alien population. It is true that on occasion a majority of the US public favors granting a pathway to citizenship to the illegal alien population, but even during the best of times a substantial portion are opposed to it. I cannot see a justification to force someone to associate with another in political union when alternatives exist. To be fair, I also oppose granting citizenship to newborn babies regardless of whether their parents are recent Pakistani migrants or from Nebraska.

I favor instead replacing national citizenship in the United States with local citizenship. Cities are small enough that disgruntled minorities can easily move to somewhere more favorable to their views. City formation is also fluid enough that they can be broken up much more easily than their larger counterparts.

By no means is my proposal to radically change citizenship. The concept of citizenship was born in the Greek polis, and carried into the modern era through the Italian city-states and, to a lesser extent, the Swiss cantons and the Hanseatic League cities. Movement towards local citizenship would be the return to tradition, not a departure from it.

It was only after the French Revolution that we saw the rise of national citizenship as an idea in the western world. Arguably in the United States local citizenship was important up till the passage of the 14th amendment, which allowed the federal government to effectively nationalize citizenship.

We can already see early signs of local citizenship regaining popularity. In my home city of Los Angeles local citizenship is offered to residents who can prove they have a ‘stake’ in the future of the city. Stakeholder status is independent of migrant status and allows one to both vote and run in local elections. Stakeholder status can be achieved by showing that one lives, works, or owns property in Los Angeles.

Article 9, Section 906 of the Los Angeles City Charter readers:

“(2) neighborhood council membership will be open to everyone who lives, works or owns property in the area (stakeholders);”

In New York State there is a proposed bill, ‘The New York is Home Act’, that would grant New York state citizenship to those who have paid state taxes, have no substantial criminal record, and lived in the state for a certain number of years. This proposal is independent of one’s federal migration status.

The European Union also offers a model on how local citizenship can exist in union with federal citizenship. I favor this model the least as the EU regulates the obligations of member states towards federal citizens so heavily that the difference between local citizenships are becoming increasingly marginal. I fear that the ultimate outcome will be that, as in the United States, federal citizenship in Europe will simply become national citizenship.

My ideal world is composed of three pillars (1) local citizenship, (2) open borders, and (3) a common market. Cities could elect who they wish to grant the privilege of being involved in political life, and individuals themselves would be free to decide which city, if any, they would wish to join. There would still be those who felt they were being forced to politically associate but, an open borders regime coupled with fluid city formation and a common market, should allow this number to be minimized.

In his latest blog post on world government Brandon Christensen implicitly discusses world citizenship. I have previously aired my disagreement with Christensen on the issue of world government, but feel obliged to point out that the matter of citizenship is also one of the areas that leave me skeptical of world government. Namely my concerns are that:

(1) World citizenship would force all of humanity to associate politically, even if we rather not.

(2) World citizenship would create free rider problems among political actors. Why should one forgo the costs of becoming informed on political issues if their marginal effect on world issues is close to nill? Meanwhile larger governments, even if initially federal in nature, have a nasty tendency to increasingly take over local affairs. We need only look at the progression of transportation and education in the United States from being local affairs to federal ones.

On my to do list is to explore what the optimal amount of citizens is and a more detailed response to Christensen on the issue of world government. On the off chance that I should die before I can write the latter response, let me state for the record that I am actually quite supportive of international agreements such as NAFTA that bring us closer to a common market. I am even in favor of formalizing the loose federation that composes the western world. Where I stray is that I prefer an international order where powers like the Chinese and Russian spheres are strong enough to compete with the west.

P.P.S. I offer apologies if I drop off here and there. I lurk the consortium daily, and if I don’t reply it is because I’ve not yet mastered time management as well as others.

Finding Books in Cuba

Guillermo’s recent post has inspired me. Here:

I spent the next couple of days walking the streets of Havana, not only looking for Yoss’ bookseller friend but also finding other antiquarian bookstores and book stands that might have copies of de Rojas’s Espiral, Una leyenda del futuro, and El año 200. I could only put my hands on an old copy of the second one. I called Yoss again and asked for help. I also invited him out again, this time to the hotel’s tourist bar.

Cuba has two economies with their own currencies; one is for its citizens, the majority of whom live quite modestly, and the other is for tourists. Cubans aren’t welcome in the tourist establishments unless someone brings them in.

That was Yoss’s case. The bouncers at the hotel door stopped him flat, saying wearing a vest without a shirt wasn’t appropriate. I needed to go find him and say he was my guest. The bouncers complied.

It was on this occasion when Yoss gave me details about the Cuban Sci-Fi tradition. He told me it dated back to before the Communist regime but that it had flourished in the seventies as a result of the cultural exchange the country had with Russia and the Soviet Bloc.

Read the rest. It’s by Ilan Stavans, a Professor of Latin American and Latino Culture at Amherst College. It comes as no surprise to readers here, I’m sure, that books are hard to find in Cuba (and science fiction books at that!). I have just three comments. First, notice that cultural exchange was responsible for the introduction of something new. Second, be sure to check out the photos of Yoss. He sports a t-shirt with the Batman logo in one pic, and a t-shirt with the Punisher logo in another. (The Punisher is a bad ass Marvel Comics character.) Lastly, the author could not help but insult US culture (of which he is a part of).

La escasez habanera

La escasez habanera es única en el mundo. Se evidencia en que carecen de la amargura para vivir frustrados llorando la causalidad ante-bajo-de-desde-en-entre-hacia-para-sobre-tras el sistema económico global. Porque la escasez de las conversaciones habaneras carece de la auto complacencia que pulula ante-bajo-con-de-en-entre-por-tras aquellas sociedades donde la moda actúa como el soma en las mentes de la juventud. Porque la escasez de-desde-en-entre-por-según-tras sus cuerpos se expresa en los escasos músculos que no mueven cuando bailan al ritmo de la salsa en las casas, calles y avenidas de la ciudad. Porque la escasez de-desde-en-entre-por-según-sobre-tras sus memorias se refleja en las mentes soñadoras de una juventud que crece sin memorizar historias de treguas y derrotas ante el imperialismo que derrotó a cada uno de los países vecinos.

Y es que, tal parece, solo afuera de La Habana es la escasez definida por los diccionarios como una causa-efecto negativos ante-con-de-desde-en-entre-hacia-por-según-tras las relaciones humanas.

Libertarians and World Government, Part 3

I have briefly blogged about the problem libertarians face when confronted with world government and the inherent internationalism of their creed before (here and here), but none of those musings were as deep as I’d have liked them to be. I think I have a better understanding of this puzzle now, and therefore you’re gonna get a longer than usual post.

First up is the task of confronting the skepticism of all government that comes from most American libertarians. This is a skepticism that becomes all the more hostile as the level of government rises. So, for example, many libertarians are contemptuous of local government but don’t mind it all that much. This contemptuousness rises a little when the next level of government is involved: that of the administrative unit (in the US this is known as a “state” for reasons I hope to explain a little further below; elsewhere the administrative unit is usually known as a “province”). When the federal government is involved, in US politics, the libertarian becomes deeply suspicious and hostile to its intents and actions. Much of this is warranted, of course, and the American libertarian usually allows the federal level of government room to maneuver in matters of foreign policy and the courts (the two legitimate functions of the state).

When a level of governance rises up any further than that, though, to the regional level (NAFTA, CAFTA, etc.) or the supranational level (the UN, World Bank, EU, etc.), the animosity displayed towards government is vicious and reactionary rather than thoughtful and penetrating. Again, much of this is warranted, as these levels of governance usually act beyond the scope of democracy and seem only to serve the interests of those who belong to the regional and supranational organizations (unelected – i.e. politically appointed – bureaucrats). The nature of these “higher levels” of government is the main reason the patron saints of modern-day libertarians – the interwar economist Ludwig von Mises and the legal philosopher FA Hayek chief among them – were highly critical of the creation of these organizations (as well as the short-lived League of Nations).

It does not follow, however, that the inter- and post-war libertarians disavowed the earlier writings of classical liberals on world government. Indeed, Ludwig von Mises himself, in his 1927 book Liberalism (pdf), observed:

Just as, in the eyes of the liberal, the state is not the highest ideal, so it is also not the best apparatus of compulsion. The metaphysical theory of the state declares—approaching, in this respect, the vanity and presumption of the absolute monarchs—that each individual state is sovereign, i.e., that it represents the last and highest court of appeals. But, for the liberal, the world does not end at the borders of the state. In his eyes, whatever significance national boundaries have is only incidental and subordinate. His political thinking encompasses the whole of mankind. The starting-point of his entire political philosophy is the conviction that the division of labor is international and not merely national. He realizes from the very first that it is not sufficient to establish peace within each country, that it is much more important that all nations live at peace with one another. The liberal therefore demands that the political organization of society be extended until it reaches its culmination in a world state that unites all nations on an equal basis. For this reason he sees the law of each nation as subordinate to international law, and that is why he demands supranational tribunals and administrative authorities to assure peace among nations in the same way that the judicial and executive organs of each country are charged with the maintenance of peace within its own territory.

For a long time the demand for the establishment of such a supranational world organization was confined to a few thinkers who were considered utopians and went unheeded. To be sure, after the end of the Napoleonic Wars, the world repeatedly witnessed the spectacle of the statesmen of the leading powers gathered around the conference table to arrive at a common accord, and after the middle of the nineteenth century, an increasing number of supranational institutions were established, the most widely noted of which are the Red Cross and the International Postal Union. Yet all of this was still a very far cry from the creation of a genuine supranational organization. Even the Hague Peace Conference signified hardly any progress in this respect. It was only the horrors of the World War that first made it possible to win widespread support for the idea of an organization of all nations that would be in a position to prevent future conflicts. (147-148)

What Mises and other interwar liberals missed in regards to establishing a supranational state is the very nature of the US constitution. Interwar liberals were more interested in pointing out the blatant inconsistencies of the multilateral institutions being erected after the war than they were with elaborating upon the idea of a world state. My guess is that they viewed the world state as too far out of reach for their goals at the time, and thus fell back on the ‘balance of power’ option (pdf) that was still popular among liberals at the time. The US constitution is, at its core, a pact between sovereign states to join together politically for the mutual self-interests of foreign affairs and legal standardization (a standardization that is very minimal, as it allows for plenty of flexibility and competition).

This pact, aside from explaining why US administrative units are known as ‘states’ rather than ‘provinces,’ is the key to slowly building a world state that is both representative and liberal (in that it exists to protect the rights of individuals first and foremost).

One of the biggest weaknesses of the US constitution to date is its inability to expand upon the notion that it is a legal charter outlining the duties of a supranational organization. Creating a mechanism that allows for the recognition of foreign provinces  as US member states by incorporating them into the federal apparatus would be a step in the right direction. This mechanism would obviously have to be slowed down in some way. It would have to be approved, for example, by two-thirds of all state legislatures (Utah and California say ‘Yes’ while Georgia says ‘No’) as well as two-thirds of both legislative bodies in the federal government (67% ‘Yes’ vote from both the House and the Senate).

There would also have to be a mechanism allowing for states in the federal union to exit if they so pleased (again in a way that is slow and deliberate so that as many factions as possible could have their voices heard). Contra to some musings by paleolibertarians here in the US, the constitution and the Bill of Rights actually has a sophisticated method of dealing with intrastate conflict within its sphere of jurisdiction; secession is allowed between states, as is the merging of two or more states, although secession from the federal government is so far prohibited (this failing would also have to be addressed before a world state could be contemplated).

It seems to me that the US has practiced unpolished versions of my argument in the past. Texas, for example, seceded from Mexico before becoming a US “state” through annexation.

Does any of this make sense, or do I just sound like a mad man?

Spontaneous thoughts on a humble creed


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