Year: 2013

L’Espionnage américain en France.

Jacques Delacroix Current Events , , , , , , , , ,

C’est l’administration Obama qui est chargée de tout. Un mot du président et l’espionnage des alliés cessait. Complètement, sur les chapeaux de roue.

Ne me blâmez pas. Je vous avait prévenu avant même qu’il soit élu, alors que vous l’acclamiez bêtement: Barack (“la chance”) Obama n’est pas le gentil “Black” (en Français dans le texte) de vos rêves plus ou moins cinétiques. Nous somme nombreux ici à penser qu’il est simplement en train de saccager, de détruire la belle et forte Amérique de l’après deuxième guerre mondiale avec ses conneries sur tous les plans.

Les avis sont partagés cependant sur un point important. Certains opinent que c’est un malveillant gauchiste àl’ancienne mode. D’autre, dont moi, penchent plutôt vers l’idée que c’est un beau parleur fondamentalement incapable. Avant d’être élu à un poste ou un autre, il n’avait d’ailleurs jamais eu de vrai emploi de sa vie.

Thank You for Your Patience

Jacques Delacroix Books, Current Events

I am sorry that I am mostly absent from this blog these days. There are several jobs I want to do in connection with a number of important events in the world and of  ignorant comments on his blog.

I am not doing what needs to be done because putting the finishing touches to my manuscript, crossing the Ts, dotting the Ts, eliminating baroque hyphens is unbelievably time consuming.  I have done it before but I had forgotten.

It’s called : I Used to Be French: an Immature Autobiography

There are unpolished, faulty excerpts of this near-book on this blog.

I still don’t have a publisher. (I have not looked for one.) I listen to advice.

Thanks for your patience.

From the Comments: The four broad pillars of the market-based economy

Brandon Christensen Comments , , , , , , , , , , , ,

NEO’s response to my musings on decentralization in Africa is worth highlighting:

It strikes me , Brandon, that one of the impediments here, there may be others, I’m no expert, is that the nascent US was composed mostly of literate folks with a (at least somewhat) common outlook that specified above all honesty and a “government of laws, not men”. I would also state that this is a good bit of our problem now.

This is a great observation. An anthropologist by the name of Maya Mikdashi recently wrote an article on the effects of market-based reforms in the Middle East. She essentially argued that the market-based reforms assume that only a certain type of individual can successfully participate in the market economy (stay with me here): the rational, autonomous, freedom-seeking, and legally-protected-as-an-individual type. Over the past two decades, as more states have moved towards a market-based economy, we have seen the institutional and cultural rewards being reaped from this process. Instead of people who have known only poverty and want, the market-based economy has pushed individuals to seek to become more rational, autonomous, freedom-seeking, and legally protected as an individual.

Now, stay with me. The market-based economy, capitalism, has four broad institutional pillars that it needs to thrive: private property, individualism, the rule of law, and an internationalist spirit. From these pillars come the fountains of progress that the West has come to enjoy over the past 300 years. While I doubt she realizes it, Mikdashi is simply echoing the writings of the great classical liberal theorists of the past three centuries: institutions matter, and they matter a lot. A big point both Dr. Ayittey and myself have been trying to make is that the institutions necessary for progress and capitalism are already in place in the post-colonial world; when I was in Ghana doing research one of the things I always asked farmers is where they got their property titles and they answered “the chief.” I asked them why they didn’t go through more official routes to obtain their property titles (i.e. through the state), and I’m sure you can finish the Ghanaian farmer’s answer for him.

The fact that most, if not all, citizens of the new republic desired the rule of law is one that cannot be stressed enough, and it is definitely one of the reasons why we have grown so prosperous, and answers why we are in trouble today. However: Africans don’t desire the rule of law?

Around the Web

Brandon Christensen Current Events, Links , , , , , ,
  1. The Decline and Fall of France
  2. Rooked: The evolution of cheating in chess
  3. The decline of Europe’s military might
  4. Bodies in the desert
  5. Is antisemitism back in Europe? Did it really ever leave?
  6. The superiority of democracy over dictatorship is no reason to ignore the problem of political ignorance
  7. Why did men stop wearing high heels?

YAL member speaks at County Cannabis Regulatory Hearing

Video L. A. Repucci Liberty , , , , , , ,

On October 22, 2013, the Santa Cruz County Board of Supervisors convened to vote on re-regulating medical cannabis cultivation and distribution via local grow operations and a local dispensary. Unfortunately, while the public applauded my comments regarding the issue, the County Board were not swayed from moving forward a “regulatory scheme” as Board member John Leopold commented after the 3-2 vote to further restrict the liberty of free people.

From the Comments: Liberalization is about much more than just the economy

Brandon Christensen Comments, Liberty, Religion , , , , , , , ,

Andrew is skeptical of NAFTA’s achievements:

NAFTA isn’t the only major factor at play, although you’re right that it has provided Mexico with some huge economic benefits. This is especially true in the factory towns along the US border, which are able to absorb a much larger absolute amount of surplus labor from poorer, less developed parts of the country today than they could a generation ago. That said, I’m still ambivalent about NAFTA on account of the severe short-term economic and social dislocation it caused, e.g. to US factory workers who were undercut by Mexican competitors and to small Mexican farmers who were undercut by major US agribusinesses. It strikes me as a hastily and abruptly implemented policy change that caused a lot of needless collateral damage in the short term. Whether this damage was worthwhile in the long term depends a lot on one’s role in the North American economy at the time. On the whole, I’d say NAFTA has been a mixed bag.

This, I think, is in response to the 2003 academic paper (published by three economists) that I cited in defense of NAFTA’s success. It is a paper that only focuses on economic indicators (such as per capita income or total factor productivity). Here is what it found: NAFTA has not had a discernible effect on the US or Mexican economies. The displacement of US factory workers and Mexican farmers that Andrew mentions had been going on long before the implementation of NAFTA. Basically, NAFTA merely reduced the amount of paperwork associated with the changes in both economies. It has not hastened the changes.

Similarly, it appears that the growth of Mexican and American purchasing power parity are simply part of a hemisphere-wide trend that has also been going on for decades. In short, economists have found the economic effects of NAFTA to be negligible. So why do they continue to overwhelmingly support it?

My answer to this question can be found, I think, in Andrew’s keen perception of the changes in Mexican society:

Over the same time that NAFTA has been in place, Mexico has also become much more Protestant and nondenominational in religious affiliation, better educated, and, as I understand it, somewhat better governed and administered. Maybe I’m mistaken, but I have no reason to suspect that the religious shift had anything in particular to do with Mexico’s improving economy or trade liberalization. “Church-planting” missionaries of the sort that have evangelized Latin America don’t look for a particular economic or policy profile in a country before imposing themselves on it, although they do generally appreciate a certain amount of poverty and dysfunction, as long as they’re reasonably reasonably safe in country, since people in economically healthy, well-governed countries are less receptive to their pitches. This is a very cynical analysis, but the cravenness in “mission field” circles can be mindblowing.

What’s happened in much of Latin America in the last decade or so is that these evangelism programs have hit critical mass. They’re now self-sustaining operations being run mainly by Latin American evangelists pestering their own countrymen, or sometimes people in nearby countries. Gringo missionaries are still working in Latin America, but they’re no longer critical to the growth of evangelical churches there. (Besides, there’s much more street cred to be had in evangelizing a recently restive Muslim village in Northern Ghana, or, as my relatives and everybody at their church called it, Africa. I bless the rains….)

Liberalization is about much, much more than economic growth. The decline of Catholicism in Mexico, for example, is an incredibly good trend. This is not because Catholics suck, but because Mexican society is becoming more diverse. Liberalization means opening a state’s political, economic and social institutions to the world.

Undertaking liberalization thus exposes a society to changes. Sometimes societies may have a tough time with changes, especially if there are deeply entrenched political structures in place. Most often, though, these changes tend towards more political liberty (see “1994 Mexican Elections: Manifestation of a Divided Society?” and “Institutionalizing Mexico’s New Democracy,” both by Joseph Klesner, and be sure to read between the lines), more social diversity and, yes, more economic growth.

Of course, with new and overall positive changes come new challenges. The differences between the old challenges and the new, however, are cavernous. Politically, gridlock supplants revolution. Socially, vice replaces desperation. And economically, policy replaces cronyism.

Now, this is a broad view, but I think it is a concrete one nonetheless. There are two major objections to liberalization that I would like to briefly discuss.

The first is my assumption that diversity is, in and of itself, a good thing. Some people simply cannot stand diversity, whether it be of the ethnic and linguistic variety or of the intellectual variety. The former form of intolerance is often to be found among conservatives; the latter in Leftist circles. However, the fact that people I don’t like disapprove of diversity is not a good excuse for being a proponent of diversity.

So what follows is my concise defense of diversity. Diversity opens individuals up to higher degrees of tolerance. It gives individuals more choices. Its very nature makes people smarter by exposing them to more points of view. Added together, these benefits are a recipe for wealth and stability and peace.

There is a tendency, however, for diverse organizations (including societies) to have more conflict. It is this conflict that conservatives and Leftists alike point to as proof that diversity is an undesirable plague. Yet, under the right framework, conflict from diversity produces immeasurable amounts of wealth (see also this paper by economists Quamrul Ashraf and Oded Galor). This framework revolves largely around well-protected property rights and the protection of a handful of other rights (free speech, free press, etc.).

It is this framework that, conveniently enough, allows me to segue into the next most common objection to liberalization: that it doesn’t work and often makes things worse for a society. The data in this regard is not much clearer than the data on NAFTA’s effects on Mexico. That is to say, there is not enough evidence to prove conclusively that trade liberalization leads to economic growth. However, data over the past 30 years or so does suggest that states which undergo liberalization efforts tend to have economies that grow steadier, polities that oppress less and societies that adapt to cultural change more easily. If you can find evidence that you think may refute my argument (“that the rough overall trend of liberalization is beneficial to mankind”), you know where the ‘comments’ section is.

What Ails You, Economy?

henrymoore Economics , , , , , , , , , , ,

The Keynesian is ever mistaking economic activity for economic growth, credit expansion for wealth creation, profligacy for progress. Growth, wealth, progress. He uses his own definitions of each to reinforce his definitions of the others. And they are all fallacious.

When the Austrian tells the Keynesian that the printing and spending of mere pieces of paper cannot lead to more wealth in society, the Keynesian retorts that it is undeniable that credit expansion and stimulus lead to more economic activity. In this he is technically correct. Printing more dollars and handing them out to those who would consume and invest them, does indeed lead to “activity,” even more perhaps than there otherwise would have been.

But our Keynesian assumes, or assumes that his audience will assume, that mere economic activity is growth, is wealth, is progress. Presumably this includes even that activity which our Austrian rightly considers overinvestment (more properly, malinvestment), overconsumption, and/or the proverbial breaking of windows, each of these a common side-effect of the Keynesian witchdoctor’s remedies (often intended to cure ailments caused by earlier interventions, some Keynesian, some not).

If the Keynesian’s definition of economic activity doesn’t (oh, but it does!) include these things then the burden of proof is on him to show that his prescriptions lead to more real growth than would their absence on an unhampered market. And that his incantations lead, on the whole, to economic health rather than disease. A free market is largely unencumbered by the ailments mentioned above so in order to do this it would need to be shown that the sicknesses that do affect it are somehow worse than those caused by intervention.

And to be sure, pure economic freedom isn’t perfect. It has its own share of maladies. But these are all coughs and sneezes by comparison. Cures, if they are needed at all, come from the market itself. The economic meddlers and potion peddlers only serve to make things worse.

We must admit that not even on the most unfettered of markets does all economic activity lead to growth. For human actors err, and the market punishes their errors. How much more is all this the case under a centrally-planned expansionary-monetary/stimulatory-fiscal regime? And how much more severe will be the punishment?

A Warm Welcome

Brandon Christensen Current Events , , ,

Ladies and germs, may I present to you our newest member here at the consortium: Audrey Redford!

Audrey is currently a second year Ph.D. student in the Department of Agricultural and Applied Economics at Texas Tech University. She also works as a Graduate Research Assistant for the Free Market Institute at Texas Tech University. Audrey graduated from James Madison University in 2012 with a B.B.A. in Economics with a concentration in Political Economy.  Her research interests include Austrian economics & political economy, particularly their applications to analysis of the War on Drugs in the United States. She hails from Richmond, Virginia.

Her debut post can be found here. I’m extremely excited about having Audrey on board.

Criminalizing Innovation

Fred Foldvary Economics, Liberty , ,

By Fred Foldvary

The U.S. government has attacked an entrepreneur and his new product, as another episode of the federal government’s war on enterprise. In this case, the entrepreneur CEO is Craig Zucker, the company was Maxfield & Oberton, and the product was Buckyballs.

Buckyballs were small magnetic spheres made of neodymium, a rare-earth element that is a powerful magnet. As they stick together, the balls can be assembled into shapes such as pyramids. They were named “Buckyballs” after Buckminster Fuller, an American architect, inventor of the geodesic dome, and futurist visionary. His friends called him “Bucky,” and the neodymium spheres were somewhat like Bucky’s domes.

The company imported the balls from China and started selling them in 2009. They became a popular office toy. But the Buckyballs were banned in July 2012 by the federal Consumer Product Safety Commission, which is now seeking to prosecute Zucker for having sold the balls.

In 2012 the Commission also sent letter to retailers warning of the risks to consumers of using Buckyballs and asking them to stop selling them. That was effective in stopping the sales. The Commission stated that the balls were a hazard for young children who swallowed them.

The company had developed the Buckyballs in collaboration with the Consumer Product Safety Commission, and after the action by the Commission, the firm provided it with a corrective-action plan. Buckyballs were sold with a warning against access by children, and they were not sold in toy stores. But the Commission pursued a lawsuit against the firm even before examining the corrective plan. As pointed out by the Wall Street Journal article (cited below) on that case, there are many potentially dangerous products being sold, such as cleaning chemicals, knives, and balloons. Buckyballs were intended and marketed for adults, and, according to the WSJ article, no deaths have been associated with the Buckyballs.

The Commission declared, as a justification for the ban, that Buckyballs have “low utility” and are unnecessary, despite purchases by 2.5 million adults who spent $30 each. The principle established by the Commission is that government determines which products are desirable, not consumers. Any product could be banned by the standards of the Commission.

The company then engaged in a publicity campaign regarding the actions by the Commission. In the end, the government was too powerful to resist, and the company was terminated in December 2012. However, in February 2013, the Commission charged Zucker as being personally liable for the costs of a recall costing $57 million if the Buckyballs are judged to be defective.

The federal government has by this action abolished limited personal liability under U.S. law for corporations as well as partnerships. From now on, the executives of a firm will be vulnerable for the liabilities of the firms. Any entrepreneur will now risk losing all that he owns if he engages in the production or distribution of any product. The effect of this government action is to strangle American entrepreneurship.

In the case of United States v. Park in 1975, the Supreme Court ruled that the CEO of a food company was criminally liable for a rodent infestation. This ruling was based on the federal Food and Drug Act. But another case, Meyer v. Holley in 2003 ruled that ordinary liability applies unless there is a clear Congressional intent to hold corporate officers personally liable. The relevant law in the Buckyballs case is Section 15 of the Consumer Product Safety Act, which regulates corporate persons, not individual persons.

The WSJ article says that since Zucker did not commit any criminal violation, the Commission’s continuing prosecution of Zucker “raises the question of retaliation for his public campaign against the commission.” If the Commission achieves its goal, personal-injury lawyers will take advantage of personal liability to go after CEOs and other company personae.

This action by Congress, the Courts, and the Commission has to be seen in the perspective of a broad war by government on private enterprise and consumer choice, using taxes, restrictions, mandates, and prosecutions, ultimately resulting in an economy that is nominally private but substantially controlled by governmental chiefs. The name for that system is “fascism.”

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Reference: Sohrab Ahmari, “What Happens When a Man Takes on the Feds,” Wall Street Journal, August 31-September 1, 2013, p. A11.

Breaking Bad Policy of Drug Prohibition (spoiler alert).

Audrey Redford Current Events, Economics, Law , , , , ,

I would argue that the only positive thing that has come out of the War on Drugs is awesome TV. From The Wire to Breaking Bad, illegal drug markets have brought us entertaining and groundbreaking television, but at what cost? As Breaking Bad has sadly come to an end, I would like to look at how things might have been different for Walter White and friends in a world without the drug prohibition. While I loved the adrenaline rush I experienced watching every episode, the violence and death highlighted in the show is indicative of a major problem.

Let’s assume for a moment that prior to the creation of the show, the U.S. government ended drug prohibition. Unlike what many paternalistic politicians would like you to think, the world would not descend into utter chaos or come to a grinding halt. How would this effect the show? Well, first and foremost, there would be no DEA (high five, hell yes)… thus Walter would have never gone on the ride-along that ultimately led him to a reunion with Jesse Pinkman. It is also likely that Walt would never consider drug manufacturing as a means to solving his money problem for cancer treatment. Why do I say this? The profit margin of the caliber in the show would not likely exist in a world outside of drug prohibition. In the illegal markets, the cost and risk associated with engaging in illegal activity and possibly getting caught serve as very costly barriers to entry. There are also sizable costs associated with self-regulation in illegal markets because the court system is not an available outlet for settling disputes. This drastically limits the number of producers willing to participate in the market.

Consider the circumstances surrounding the murder of Combo (Jesse’s friend that was shot by that young kid for selling on the wrong turf). There was an implicit contract that highlighted who could sell where, and at the urging of Jesse’s quest to build his empire, Combo started selling in neighborhoods that “belonged” to a rival drug gang. In illegal markets, how do you set an example that your turf cannot be taken? You resort to violence to make an example of what will happen to anyone who tries to disregard your jurisdiction. Furthermore, the legal recourse in a murder associated with other illegal activity is complicated. Jesse could not simply go to the police and explain that Combo’s death was a result of a drug turf dispute without implicating himself in a slue of crimes. However, if the drug prohibition component was absent from this equation, the rival gang would have not have used murder in order to solve the problem. For example, do you hear of a CVS owner shooting a new-to-the-area Walgreen’s owner for opening a new location? But even in the unlikely event that this happens, because there is not any illegal activity taking place outside of the act of murder, all parties involved can provide the necessary authorities (ideally private policing companies… but that is a blog post for a later time) the information needed to bring the murderers to justice without fear of being punished. This would allow Jesse to use the court system to punish the rival drug gang members rather attempting to murder them himself (and successfully killing them thanks to Walt’s fatherly instinct and his Pontiac Aztek).

Absent that extensive (but not exhaustive) list of costs brought on by the nature of illegal markets, many potential drug producers can move into enter the market. This forces the price of the goods sold to decrease, lessening the profits available to each drug producer. Thus, the sizable profit margin that led Walt down the road of methamphetamine production would not be as high in a world with legal production (at least on the scale of production consisting of Walt and Jesse in a trailer… However, if he started his own pharmaceutical company specializing in meth, that would be a different story… one that I hope to elaborate on soon, highlighting how ending the War on Drugs is only part of the battle).

Another situation that could have been avoided was the virtual enslavement of Walt and Jesse by Gus Fring. Once again, the hold that Gus had over Walt and Jesse (knowledge and proof of their involvement in countless felony-crimes) would be a non-issue outside of a prohibition state. The same could be said about the situation when Tuco initially refused to pay Jesse for his product. Breaking Bad is full of the issues associated with the limited ability for individuals to establish, execute, and enforce contracts. With substantially better defined property rights and access to a court system to settle disputes without fear of being punished, drug producers would not need to engage in violence to settle these disputes.

So where does this leave us? Well, it would leave us with a rather boring TV show where the most exhilarating dilemma is which daycare Skyler & Walt will choose for baby Holly. No more train heists, no more wheelchair bombs, and no more car trunk machine guns. Though I do love my fellow Richmonder’s directorial and writing brilliance (Vince Gilligan, you are the man), I would be willing to trade it any day for a freer state devoid of the devastating effects inflicted on all of our lives (directly or indirectly) by the War on Drugs.

Brandon’s Bad Numbers

Brandon Christensen Comments

Hi all,

I was alerted to the fact that I confused the miles/kilometers calculations in my latest post on India and macro institutions. It’s been updated accordingly.

Was I too Rash on Juries and Nullification?

henrymoore Comments, Law , , , , , , , ,

I made a certain statement (a status update, not a comment) on Facebook, and in retrospect maybe it would have been better to have made it more intelligible (okay, and less harsh as well). Now instead I must go through the statement line by line and clarify and defend it. I don’t know if it is good blogging etiquette or not to drag Facebook into it, but this started out as a clarification for the Facebook crowd and transformed into something to big to post there. We’ll see, I guess. Here is the statement I made:

Idiots (to speak kindly) who call others cowards for trying to get out of jury duty, thereby eliminating the less than 0.00001% chance that that person might have to actually “help their fellow man” are perhaps no less dull and collectivist-minded than the feverish nationalist buffoons who make similar statements about “serving” overseas. The purpose of today’s “defense” system is to murder innocents abroad. The purpose of today’s “justice” system is to incarcerate innocents at home. Any person who wants no part in this is not only not a coward, that person is a hero. Anyone who says otherwise should put their money where their big, loud mouths are. How brave and principled are you really, huh tough guy? Quit yer bitchin’ and show me! Get the hell off of Facebook and the comments sections of blogs and put your own life and livelihood on the line.

This all started when a Facebook friend (a very well-known person in certain circles, but I guess I won’t bring up his name) mentioned he had been “conscripted” for jury duty. This interested me at the time because it was just days after I had sent in my own paperwork for jury duty (this would be the second time, click here for my thoughts on the first). As is usually the case with this particular person’s statuses, the comments section was on fire. But the debate was at least a little more civil than the one that took place in the comments section of a blog post that someone linked to in this Facebook thread. It was an article by the estimable Douglas French of  Laissez-Faire Books and the Mises Institute recounting how he had gotten out of jury duty by telling the lawyers in the voir dire process, and later the judge, that, if made a juror, even if he thought the defendant guilty, he would not convict. That even if he was the only such person, he would hang the jury and nullify a bad law.

To my surprise he was accused in several comments of being a hypocrite and a coward because he chose not to perjure himself in order to get on the jury so that he might actually nullify, rather than do as he had done by merely telling off the judge and the attorneys. Sure, some of these commenters concocted clever ways whereby Mr. French could have (hindsight is 20/20) spoken ambiguously in order to get on the jury and then nullify without technically committing perjury but doing this would have required not only premeditation, but also that the person (in this case a humble economist) perfectly answer any objection brought up by the two (three, if you count the judge) cross-examining lawyers in the voir dire process. This would be like expecting the Oakland Raiders to beat the New York Yankees. In Yankee Stadium. Playing baseball. That’s nothing if not an “undue hardship.” Despite having this explained to them (on both the blog and on Facebook) there were those that persisted in their stupidity and their rudeness. Their argument at the end of it all amounted to, “so what, you’re still a coward.”

Now let me explain what I meant by my original statement, line by line:

Idiots (to speak kindly) who call others cowards for trying to get out of jury duty…

These specific people really are idiots in my estimation. Not because they think jury duty might be a good way to help your fellow man, but because they readily abuse others who don’t think it is all it’s cracked up to be, and because, even after the latter view point has been soundly defended, still won’t make room for the fact that other people might have more important obligations (or even trivial druthers) than being at some magistrate’s beck and call all week, pressured into agreeing with 11 other people on something that might be worth disagreeing on.

…thereby eliminating the less than 0.00001% chance that that person might have to actually “help their fellow man”…

I am referring here not to pronouncing a “not guilty” verdict on falsely or mistakenly accused innocents (which is why juries ever came about in the first place, I believe, and is a very admirable thing to do), but specifically to hanging a jury thereby nullifying bad law. In order to even get on a jury to do this you basically have to lie in voir dire, which is perjury. The 0.00001% may or may not be exaggerated, but you don’t exactly hear about jury nullification every day so I bet it’s not too far from the mark. If I had been talking about mere “not guilty” verdicts this would be way off. That number is probably more like 50%.

…are perhaps no less dull and collectivist-minded than the feverish nationalist buffoons…

These jury-shamers I am talking about appear to be primarily libertarians, a group of people who seem to pride themselves on being bright and individualist-minded, so comparing them to those they despise the most (basically various shades of Neoconservatism, but in a pinch, Democrats who think Obama deserved his Nobel Peace Prize will do nicely) is the ultimate dig.

…who make similar statements about “serving” overseas.

The kinds of statements I am referring to in my comparison of jury-shamers to Neocons/Obama-Peacers are analogous to jury nullification, not analogous to “not guilty” verdicts. So maybe I’m talking about a person who admits in some cases that innocent people die even in the United States’ wars, but for the most part it’s just the bad guys. And then maybe, as if that didn’t make them look foolish enough, they make some statement to the effect of, “You can disobey immoral/unethical orders without being accused of insubordination, then court-martialed and punished.”

Note that these immoral/unjust orders might still somehow be lawful, or that even if they are unlawful, there is still pressure from command and your peers to carry them out. But let’s not be coy: just because something is done by the book does not mean it is right or correct or even excusable. Having rules of engagement may be better than having no rules, but they are no substitute for not invading and occupying in the first place.

The purpose of today’s “defense” system is to murder innocents abroad.

Collateral damage is murder, so even if these wars are motivated by good intentions, that’s what’s going on. However, I don’t think we should give the same exact Powers That Be that we accuse of being malevolent at home the benefit of the doubt by assuming that they are somehow benevolent abroad.

The purpose of today’s “justice” system is to incarcerate innocents at home.

This is somewhat different than saying that the “defense” system’s purpose is to murder innocents abroad. While there may be collateral damage of sorts, that is not what I am talking about. Here, I am talking about bad law. You may be “guilty” of breaking the law, so in that sense the purpose of the “justice” system is to incarcerate the “guilty”, and not as I said, the innocent. But this assumes that the laws in question are all good.

That is quite an assumption to make about the government of the supposed freest nation on earth that happens to have the highest incarceration rates in the world. The elephant in the room here is the Drug War. Most of us can agree that drugs are generally bad news, and that the violence associated with drugs is even worse news, but far too few seem to realize that this is just the natural result of prohibition. Surprise! It didn’t work with alcohol, which, according to some metrics, is FAR MORE DANGEROUS than certain hard drugs, but somehow these people thought it was going to work with pot and heroin? In a post-1960s world?! What were they smoking?

Any person who wants no part in this is not only not a coward, that person is a hero.

Freedom of conscience. That’s all this is. Would we want to live in a world where people are led to believe that exercising this right somehow makes them spineless (again, we can all agree on something, that just having your conscience tell you something doesn’t make that something right)? Well then, just open your eyes. Look out the window. Turn on the TV (the only channel immune to this might be the Weather Channel). People with an actual conscience or actual principles are laughing stocks. They are the ultimate fools in the eyes of the world. And for that, yes, even the ones I disagree with, they have my respect.

Anyone who says otherwise should put their money where their big, loud mouths are.

Here I’m only applying the same standards to the accusers that the accusers are applying to the accused. Judge not, that ye be not judged…Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother’s eye…Therefore, all things whatsoever ye would that men should do to you, do ye even so to them…Physician, heal thyself…He that is without sin among you, let him first cast a stone.

How brave and principled are you really, huh tough guy? Quit yer bitchin’ and show me! Get the hell off of Facebook and the comments sections of blogs…

Well, it sounded good at the time. But as a wise guy once told me, “vulgarity is no substitute for wit.”

…and put your own life and livelihood on the line.

In the case of “defense” and the military, especially in time of war, your life is on the line. No one disputes that. In the case of jury duty, especially when you perjure yourself in order to nullify bad law, it could very well be your livelihood that is threatened. But even where there is no perjury or nullification going on, there is still a case to be made that your livelihood is in danger.

I understand it is the situation in probably most states that your employer cannot fire you (and may even be made to remunerate you in some way) for taking time off for jury duty. Were it not for this law (which places burdens on employers that arguably shouldn’t be there), there’s at least the possibility that you would not be retained/paid for this “time off”, especially if your employer was not particularly fond of the unjust and immoral incursions of the government into everyday life. And why shouldn’t your employer be able to look out for his own best interests, even if it means firing your sorry behind? Does he “owe” you your job, indefinitely, no matter what? If it wasn’t for our crummy system and you were to be fired or lose pay because of jury duty, would your instinct really be to blame your employer? Not the people who conscripted you for jury duty in the first place? Or not the people who made life so miserable for some so-called criminal that you felt it was your duty to aid that person by nullifying the bad law he was being tried for breaking?

Additionally, since jury duty, unlike the military (these days at least) is something the state compels people to do (ultimately backing up their threats with actual guns, prisons, and larceny), telling these loud mouth accusers to put their livelihood on the line needn’t mean they have to serve on a jury (something they cannot do unless called upon). It could very well mean instead that they go out and agitate through means of civil disobedience: resisting arrest, harassing magistrates and LEOs, and so forth. Don’t act so surprised by these seemingly bizarre suggestions; we are talking about libertarians here, after all. And civil disobedience, though not quite so much as actual violent acts (only justified in self-defense, need I remind you?), can very well land you in the slammer and/or ruin your reputation as a good cog in the machine. If that doesn’t threaten your livelihood, I don’t know what does.

Why is India so poor? A macro approach

Brandon Christensen Liberty , , , , , , , ,

India’s total area, in square kilometers, is 1,222,559 3,166,414.

The total area of France, Germany, the UK, Ireland, the Netherlands, Belgium, Luxembourg, Denmark, Sweden, Iceland, Norway, Finland, Switzerland, Austria, Italy, the Czech Republic and Slovakia (or “the West”), in square kilometers, is 1,223,543 3,106,585.

Think of this comparison in terms of regions: one region is India, the other is the West. Both regions are densely populated. Both regions have a number of languages and an even greater number of regional dialects. Yet one region is wealthy, and the other is poor.

One way to look at this phenomenon would be to glance at the macro institutional structures in place in these two regions. India is one country. The West is composed of 6 17 countries. That’s six seventeen centers of power, as opposed to one, within territorial spaces that are roughly equivalent in size.

If we think about these macro institutions and incorporate them into other institutional arguments that focus on the micro institutions, then India actually has a lot of hope. The West saw numerous wars before it finally came to the arrangements it now has (six seventeen independent centers of power and a free trade zone binding them together), so India has a great blueprint for improving its macro institutions.

On the downside, of course, is the fact that many factions won’t really care if India becomes freer and more prosperous, so long as they get theirs. Along with the standard public choice explanation, the path dependency argument also suggests that India has a tough road ahead.

Sometimes being a libertarian sucks.

Update: Dr Gibson was kind enough to point out that I had initially calculated India’s size in square miles rather than square kilometers. I have taken that into account and updated it accordingly. Conceptually, my argument actually grows in strength with the corrected size. 

Around the Web

Brandon Christensen Current Events, Links , , , , , , , , , , ,
  1. Ken White has the best post of the year (so far) on free speech
  2. Angelo Codevilla on the US’s god-awful intelligence apparatus
  3. Reclaiming fairness as a precept of commerce. Bart Wilson argues that we’ve been a-travelin’ down the wrong path.
  4. Contra Dr Delacroix‘s thoughtful argument, Jon Harrison thinks the GOP is terminally stupid
  5. Imagining a remapped Middle East: Robin Wright muses about how 5 countries could become 14 (and a map for context)
  6. A ‘comments’ thread on a libertarian blog in which a lone libertarian takes on some of the neo-reactionary elements that Andrew has been blogging about.

FATCA closes Americans’ Foreign Bank Accounts

Fred Foldvary Economics , , , ,

by Fred Foldvary

When the USA adopted the 16th Amendment to the Constitution a century ago, did the people understand that this would deprive Americans world-wide of foreign banking services? Americans thought that the income tax would just grab the money from the rich, but they did not understand that the income tax would tax everybody else more. All that is needed to equalize wealth without damage to the economy is to stop government subsidies, but this requires an economic sophistication that so far has eluded most people.

Inherently, an income tax yields an incentive to cheat, as the government depends on reporting. So the Internal Revenue Service has to monitor financial accounts to prevent tax evasion. Gradually, the IRS has extended its reach into accounts, first within the USA, and now into the foreign accounts held by American citizens.

No other country has imposed such costs and mandates on foreign accounts as the USA. So ironically the “land of the free” has the least economic freedom for its citizens abroad. The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 requires foreign financial institutions to make reports on American accounts. Foreign financial institutions with American customers are required obtain a Global Intermediary Identification Number. FATCA requires foreign financial firms to identify their U.S. account holders, to disclose the account holders’ names, social security or other tax IDs, addresses, and the accounts’ balances, receipts, and withdrawals. For some accounts, the foreign bank is required to withhold some of the interest paid to the account, and send it straight to the IRS. This US law overrides the privacy laws of the foreign countries.

US law is thus legislating not only within US territory but throughout the whole world. If a financial firm does not comply, the IRS will tax 30 percent of its US-sourced income. The IRS is also busy laying out the legal infrastructure for enforcing this law with agreements with foreign governments for data sharing. Governments world-wide are signing on, because they too face the problem of tax evasion when they tax income that can hide.

FATCA does not just affect fat cats. Many foreign banks are now refusing to provide Americans with bank accounts and are closing the accounts of Americans, who are now also unable to obtain mortgages and insurance abroad. Americans are increasingly giving up their US citizenship in order to be able to work or retire abroad.

The US economy depends on international trade and global finance, with many Americans working abroad for US and foreign firms. Six million Americans live outside the territory of the USA. If Americans can no longer have foreign bank accounts, because the costs to the banks are too high, they will be so hampered that fewer Americans will be willing to live abroad, and this will hurt American enterprise.

Since the US government cannot directly impose laws on foreign lands, many foreign firms will sell their US affiliates and stop holding assets within the USA, thus putting themselves beyond the control of the US government. The overall cost to the US economy of FATCA may be much greater than the increase in tax revenue from reduced tax evasion. Also, those who seek to evade income taxes will find other ways. High taxes induce tax evasion, and enforcement drives evasion into other channels. How successful are US drug laws in stopping the smuggling in of drugs, and how successful have US immigration restrictions been at preventing illegal immigration?

Another consequence of greater reporting of American accounts is the increased risk of identity theft and theft of money from accounts. The greater the reporting, the greater the revelation of data that can be stolen.

It is no use seeking to repeal FATCA. The regulation of accounts, no matter how costly, follows from the income tax being, as Henry George put it, a tax on honesty. The taxation of wealth that can hide and flee requires strict and costly reporting and enforcement. The only effective remedy is to tax something that will not flee, hide, or shrink when taxed. A tax on land value cannot be evaded, and if that were the only tax, there would be no need to impose costs on finances.