Law

A review in n parts: Polystate, part 1

Rick Weber Books, Law , , , , , , ,

Zach Weinersmith of SMBC comics just published Polystate: A Thought Experiment in Distributed Government. I’ve started reading it and immediately needed to start commenting. Before I get into the review, let me say that SMBC comics is an excellent web comic that everyone should read.

The basic idea ZW introduces is the polystate, a system of government comprised of anthrostates. An anthrostate is “a set of laws and institutions that govern the behavior of individuals, but which do not govern a behavior within geographic borders.” It is essentially government that individuals get to choose in the same manner that they get to choose their insurance company; so to neighbors can live under a different set of laws and any disputes between them are a matter for their anthrostates to sort out. At this point you should be thinking: Nozick did it. The idea of a polystate is essentially Nozick’s Utopia of Utopias.

He contrasts poly/anthrostates with geostates, the geographically defined monopolies on the use of force we are used to today. Does it need to be thus?

Why should we suppose that a person who likes hot dogs, is familiar with a two-party electoral system, and believes Abraham Lincoln was a great man is necessarily someone who should live in a temperate climate in the Western hemisphere?… This is not to deny that history and culture and the choices of individuals matter, but rather to assert that many of the “essential” qualities of nationhood are not, in the long run, meaningful ones.

I’ll agree and disagree. These qualities are relevant to some sense of cultural identity, but are not essential for defining the boundaries of a state. This cultural identity is part of the environment of informal institutions, which are part of a broader polycentric order. This is the underpinning of law (the way Hayek characterized it) which is much broader than legislation.

ZW approaches the problem like a mathematician and sets himself up with a hard sell, by assuming there will be a huge need for technological advances to overcome transaction costs. His argument rests largely on technological possibility and is highly concerned with interaction at the anthrostate level.

A polystate would likely increase the complexity of business and legal transaction. In a world with only 200 or so geostates, most commerce is not interstate and even if it were, geometry tells us that the number of possible two-state transactions is given by n(n-1)/2.

Nobody thinks the distribution of such transactions is uniform, and in real life we see a large proportion of international transactions go through countries that specialize in trade. Hong Kong would surely have an anthrostate analog. In fact, there are historical antecedents. He foresees rules being designed at the polystate level to simplify interactions but, “whatever rules were put in place, the results would be too burdensome to exist without a large bureaucracy or some sort of computational way to arbitrate these many interactions.”

The basic flaw in ZW’s approach is that institutions and laws are provided from the state, and so technology is the answer to transaction costs problems. In fact, the issue is that ZW (though he’s not alone on this) wants a change in institutions that will require a new order to emerge. His book will help to peacefully guide the process of societal change towards that new order. Technology will surely play an important role as well.

That gets us through the first four chapters. I will continue with more tomorrow evening.

In response to a comment

Rick Weber Books, Comments, Law, Liberty ,

In response to a comment, here’s an excerpt from The Moon is a Harsh Mistress.

“But–Professor, what *are* your political beliefs?”
“I’m a rational anarchist.”
“I don’t know that brand. Anarchist individualist, anarchist Communist, Christian anarchist, philosophical anarchist, syndicalist, libertarian–those I know. But what’s this? Randite?”
“I can get along with a Randite. A rational anarchist believe that concepts such as ‘state’ and ‘society’ and ‘government’ have no existence save as physically exemplified in the acts of self-responsible individuals. He believes that it is impossible to shift blame, share blame, distribute blame…as blame, guilt, responsibility are matters taking place inside human beings singly and *nowhere else*. But being rational, he knows that not all individuals hold his evaluations, so
he tries to live perfectly in an imperfect world…aware that his effort will be less than perfect yet undismayed by self-knowledge of self-failure.”
“Hear, hear!” I said. “‘Less than perfect.’ What I’ve been aiming for all my life.”
“You’ve achieved it,” said Wyoh. “Professor, your words sound good but there is something slippery about them. Too much power in the hands of individuals–surely you would not want…well, H-missiles for example–to be controlled by one irresponsible person?”
“My point is that one person *is* responsible. Always. If H-bombs exist–and they do–some *man* controls them. In terms of morals *there is no such thing as ‘state.’* Just men. Individuals. Each responsible for his own acts.”
…
Wyoh plowed doggedly into Prof, certain she had all answers.But Prof was interested in questions rather than answers, which baffled her. Finally she said “Professor, I can’t understand you. I don’t insist that you call it ‘government’–I just want you to state what rules you think are necessary to ensure equal freedom for all.”
“Dear lady, I’ll happily accept your rules.”
“But you don’t seem to want *any* rules.”
“True, but I will accept any rules *you* feel necessary to *your* freedom. *I* am free no matter what rules surround me. If I find them tolerable, I tolerate them; if I find them too obnoxious, I break them. I am free because I know that I *alone* am morally responsible for everything I do.”
“You would not abide by a law that the majority felt was necessary?”
“Tell me what law, dear lady, and I will tell you whether I will obey it.”
…

Prof bowed and left, Stu and I followed him. Once in an otherwise empty capsule I tackled him. “Prof, I liked much that you said…but about taxation aren’t you going to pay for all this spending we’re doing?”
He was silent long moments, then said, “Manuel, my only ambition is to reach the day when I can stop pretending to be a chief executive.”
“Is no answer!”
“You have put your finger on the dilemma of all government–and the reason I am an anarchist. The power to tax, once conceded, has no limits; it contains until it destroys. I was not joking when I told them to dig into their own pouches. It may not be possible to do away with government–sometimes I think that government is an inescapable disease of human beings. But it may be possible to keep it small and starved and inoffensive-and can you think of a better way than by
requiring the governors themselves to pay the costs of their antisocial hobby?”
“Still doesn’t say how to pay for what we are doing now.”
“‘How,’ Manuel? You *know* how we are doing it. We’re *stealing* it. I’m neither proud of it nor ashamed; it’s the means we have. If they ever catch on, they may eliminate us–and that I am prepared to face. At least, in stealing, we have not created the villainous precedent of taxation.”
“Prof, I hate to say this–”
“Then why say it?”
“Because, damn it, I’m in it as deeply as you are…and want to see that money paid back! Hate to say it but what you just said sounds like hypocrisy.”
He chuckled. “Dear Manuel! Has it taken you all these years to decide that I am a hypocrite?”
“Then you admit it?”
“No. But if it makes you feel better to think that I am one, you are welcome to use me as your scapegoat. But I am not a hypocrite to myself because I was aware the day we declared the Revolution that we would need much money and would have to steal it. It did not trouble me because I considered it better than food riots six years hence, cannibalism in eight. I made my choice and have no regrets.”

Another example of double-speak: This is what happens when Time Warner Cable is forced to compete

Adam Magoon Current Events, Economics, Law, Liberty , , , , , , , , ,

This is what happens when Time Warner Cable is forced to compete

Such a laughable headline when government regulations are what caused the cable/telecom monopolies in the first place.

“This report admits that in the days when cable was challenging airwave broadcasters, regulators “did not hesitate to grant exclusive franchises to cable operators”4. It speaks specifically of a long history of successful regulatory lobbying by the cable industry. This report claims that lobbying of regulators resulted in a variety of tactics to deter competition (p. 35). It claims that regulators protected and favored cable incumbents for years. Licensing policies have directly or effectively barred competition in many local markets (p. 44). Such practices are no longer official, but cable companies still succeed in enlisting the help of regulators to bar direct competition (p. 44). Incumbent cable companies have also gotten regulators to use “level playing field laws” to increase the costs of entering the cable market (p. 45). Cable companies have also saddled new competitors with disproportionate shares of subsidies for public education and government programming (p. 45). The cable industry has also succeeded in getting the FCC to quash new competitors with prices for leased access no competitor “could pay and remain commercially viable” (p. 47).”

Much like the drug law argument I talked about last week this is another example of people lauding governments for solving problems that the government itself is responsible for.  We need to look beyond the double-speak and identify the underlying issues at hand.  In this case government privilege granted to favored corporations.

Obama: “I can do what I want”

Adam Magoon Current Events, History, Law, Liberty, Politics ,

Obama: “I can do what I want”

Let us contrast this to the president that the founding fathers of America intended.   As Alexis de Tocqueville put it in the early 19th century, the president “has but little power, little wealth, and little glory to share among his friends; and his influence in the state is too small for the success or ruin of a faction to depend upon his elevation to power.”

How far we have come…

California’s Environmental Mal-Litigation

Fred Foldvary Current Events, Economics, Law , , , , , ,

The worst intervention by governments, aside from aggressive war, is excessive litigation. Taxes are burdensome, but they are predictable. The reason that enterprises are not entirely crushed by taxation is that much of the tax burden is at the expense of land rent, so it ends up destroying the economy’s surplus, but not totally wreaking the economy. Regulations act as a tax to impose costs on enterprise, and much of the cost is passed on to workers and the public, so they make us poorer but don’t totally stifle the economy. Subsidies create distortions that generate inequality and the boom-bust cycle, but subsidies is what politics is all about. The worst intervention, that does the most to crush enterprise and employment, is vicious litigation.

A prime example of litigative intervention is the California Environmental Quality Act. CEQA is codified at the Public Resources Code Section 21000 et seq. As California’s web site for CEQA states, “Most proposals for physical development in California are subject to the provisions of CEQA.” The “frequently asked questions” web section explains that “CEQA is a self-executing statute.” That means that “its provisions are enforced, as necessary, by the public through litigation and the threat thereof.” Past court cases can be seen on the web site of the California Natural Resources Agency.

As described by a “Schumpeter” blog article in the 25 January 2014 Economist, “The not so Golden State,” this law “has mutated into a monster.” Anybody in California may file a CEQA lawsuit against any project using environmental protection as an excuse. The plaintiffs win half the cases. If someone sues a company and loses, the defendant still has to cover his legal expenses. Many of the lawsuits under CEQA are also against governmental development projects and against permits by local governments to enable private development.

Suppose a developer seeks to build an industrial park. If he hires non-union workers, the union attacks with a CEQA lawsuit. So the builder hires expensive union labor. Suppose someone owns a gasoline station, and a competitor wants to set up a station nearby. The station owner stops the potential competitor by filing a CEQA case. In 2011, there were 254 “California disinvestment events,” in which companies employing more than one hundred workers either left the state or expanded in another state rather than in California. This is estimated to have gotten worse in 2012 and 2013.

The litigations and regulations of California fall hardest on manufacturing. California’s high sales tax and low property tax also induces cities to favor retail stores over manufacturing. Hostile policies in California are largely responsible for the flight of manufacturing to other states and to foreign countries. As noted by the Economist article, electronic devices are designed in “Silicon Valley,” the region from San Francisco to San Jose, but manufactured in Asia. Some environmentalists realize that CEQA does little to protect the environment, but attempts to reform the law have stalled. The frivolous lawsuits reward lawyers, unions, companies seeking to stifle competition, and “not in my backyard” opponents of development.

Litigation is the worst way to handle social problems. Lawsuits impose unpredictable and expensive costs on enterprise. Such laws let opportunists exploit legitimate job-creating industries. Excessive litigation is further rewarded by making the winning defendants of lawsuits have to pay their legal costs. We then get excessive malpractice suits that force doctors to buy expensive insurance. Federal and state laws that enable litigation for job and housing discrimination and environmental protection end up enriching lawyers who get much of the gains.

The best ways to handle environmental destruction is with covenants and easements, along with a liability rule for damages. If some development harms the natural environment, then the government assesses the damage, and the polluter pays for the damage, either as a one-time charge or as periodic payments for on-going pollution. Developers know in advance that they are liable for damage, and so they would have the incentive to prevent the payment by doing their own environmental assessment. The issue would be between the developer and the state, without involving attorneys and court costs.

Economic theory has recognized for the past hundred years that the optimal policy for pollution is a charge paid by the polluters, passed on to the customers, fully compensating society for the damage. That can be done by a pollution tax.

English common law traditionally provided law-suit protection against potential negative effects and damages to one’s property. Litigation can be a useful enforcement and restitution tool, but it has to be within a sensible legal system. In the English tort system, if a plaintiff loses a law suit, the loser has to pay the legal costs of the winner. So if a company sues another firm just to stifle competition, using the environment as an excuse, and that company loses the lawsuit, then that company has to pay the legal costs of the winning competitor. That would stop frivolous or phony law suits. And that is why the lawyer lobby will stop such a legal reform in the USA.

Risks Of Regulation

Adam Magoon Current Events, Economics, History, Law, Liberty, Politics , , , , , , , ,

A bit dated but still very relevant.

Regulation; the four letter word of the business world.  Many people see regulation as a protective shield from the ‘dangers’ of the businessman; a way to protect people, property and the environment.  The oil industry is one of the most heavily regulated enterprises in the United States.  Despite being intended to protect us; these regulations failed catastrophically on April 20th, 2010 when the Deep Water Horizon oil rig suffered a mechanical failure resulting in an explosion which sank the rig two days later(1).  Yet, when the disaster happened, we were met with pleas for more government oversight and more red tape.  The regulations on that industry, both in the Gulf Mexico and throughout the country, helped cause the Deepwater Horizon disaster and removing them would help prevent similar disasters in the future.

Regulations in the Gulf of Mexico begin with the Minerals Management Service (MMS).  Created in 1982 due to the Federal Oil and Gas Royalty Management Act the MMS “both regulates the [gulf oil drilling] industry and collects billions[of dollars] in royalties from it”(2, 3).  The MMS’s responsibility to regulate includes monthly inspections, issuing safety documentation, and issuing safety citations(3).  Royalty collection is based on number of barrels of oil removed and varies from well to well.  The MMA also provides  “royalty relief“ to a number of rigs based on previous legislation. Until November of 2000 the royalty relief was issued based on the Outer Continental Shelf Deep Water Royalty Relief Act of 1995, better known as DWRRA.  This act “relieves eligible leases from paying royalties on defined amount of deep-water production”.  At depths over 2,526 feet oil companies did not have to pay the United States royalties on 87.5 million barrels of oil, between 1,312 and 2,625 feet the relief was 52.5 million barrels and between 656 and 1,312 feet the relief was only 17.5 million barrels.  While this act expired in the year 2000 it was replaced by an incentive program that allowed royalty relief to be “specified at the discretion of the MMS”(4).  This incentive program provides more relief if a drilling site is “more expensive to access” even if it is at the same water depth as another rig receiving less relief (2).  The royalty relief system provides incentives for Oil Rigs to operate in deep waters, especially those classified as “Ultra-Deepwater” by reducing the royalties paid on those sites(5).

While not specific to the gulf, there are a variety of moratoria on drilling throughout the country.  These moratoria take two forms.  The first set, known as “leasing moratoria” are general bans on drilling in select areas , the second set are temporary bans due to specific incidents.  Since   the fiscal year 1982 congress has denied funds to the MMS to “conduct leasing for the specified Outer Continental Shelf areas”.  Currently there is a “blanket moritorium” on leasing in effect “through 2012” that covers a large portion of both the East and West coasts( 2).  One of the largest bans on drilling however exists in the Arctic National Wildlife Refuge(ANWR).  Located in the “northeast corner” of Alaska over ten million acres of land are off limits to drilling.  In this wildnerness it is estimated that there exists “between ten billion and sixteen trillion barrels of oil” that could supply twenty percent of U.S. demand for nearly thirty years(6).  The most recent temporary bans have been a result of the Deepwater Horizon disaster.  A “30-day pause in offshore drilling” followed the sinking of the Horizon rig(11).  This did not only cover BP’s rigs but all offshore drilling “based on water depth”(7).  That ban was removed by a federal court, but was replaced with a revised ban that will be in effect until November, 2010(7).

Beyond physical limitations on drilling there are also economic regulations.  There are a number of federal subsidies and tax breaks for the drilling industry.  David Kocieniewski says that “examination of the American tax code indicates that oil production is among the most heavily subsidized businesses”.  These tax breaks occur for a number of reasons.  Many are simply to lure oil companies to American shores, others were “born of international politics” or “date back nearly a century”(8).  Beyond that the United States government has put “Liability Limits” on drilling operations.  The Oil Pollution Act of 1990 limits an oil companies liability for damages to only $75 million dollars.  Any remaining damages, up to $1 billion, are payed through the Oil Spill Liability Trust Fund.  This fund is “financed primarily through a fee on imported oil”(1).  Senator Robert Menendez from New Jersey recently introduced bill, S. 3305 which would raise that cap to $10 billion(9).

All of these laws and regulations have one thing in common.  They increased the probability of a catastrophic oil spill in the Gulf of Mexico.  Each regulation increased the risk of such a spill in some way and when combined they resulted in the disaster that is causing massive destruction in the Gulf today.  The Minerals Management service was organized to be the overarching regulatory body for the Oil Industry.  Why did it fail in its duty?  Why did “spills from offshore oil rigs…in U.S. waters more than quadrupled this decade” despite the MMS’s oversight(10)?  This question was answered by economist Walter Block in his book The Privatization of Roads & Highways (12).  Quoting Cecil Mackey, former Assistant secretary of transportation, he says:

“As the more obvious regulatory actions are taken; as the process becomes more institutionalized; as new leaders on both sides  replace ones who were so personally involved as adversaries in  the initial phases, those who regulate will gradually come to reflect,     in large measure, points of view similar to those whom they regulate.”

Quite simply, the MMS adopted the views of the Oil Industry completely negating their ability to regulate it.  Congressman Nick J. Rahall confirms this saying “MMS has been asleep at the switch in terms of policing offshore rigs”.  Using numbers supplied by the MMS in the prior 64 months before the incident “25 percent of monthly inspections were not performed”(3).  Are we to believe another agency would be any more efficient?  Bureaucracy and corruption are not the only things to blame however; legislation played a vital role in this disaster as well.  DWRRA, for example, incentivized the risk to drill in deep waters.  Under DWRRA the greater the depth being drilled the greater the royalty relief amount.  These waters are inherently less safe to drill in.   It is easy to compare the difficulties in dealing with a site 5000 feet below the ocean against one 500 feet below the surface.  These incentives were made worse when DWRRA expired.  Under the new program “the most economically risky projects would receive the most relief”, safer projects on the other hand would receive “little or no relief”(4).

While acts like DWRRA incentivize the risk of deepwater drilling the greater incentive to drill in the Gulf of Mexico is simply that there are so few places to drill in the continental United States.  The United States Exclusive Economic Zone extends “200 nautical miles” from all of it’s shores(2).  Yet, much of this area is off limits to drilling.  The “blanket moratorium” issued by former President George H.W. Bush in 1990  restricts drilling in “all unleased areas offshore Northern and Central California, Southern California except for 87 tracts, Washington, Oregon, the North Atlantic coast, and the Eastern Gulf of Mexico coast”.  The Gulf of Mexico is the only economically viable offshore area left for them to drill.  This of course pales in comparison to the Arctic National Wildlife Refuge.  Most of the 10-million-acre area is not even adjacent to the ocean, surely drilling on land or in shallow water is much safer than drilling 5000 feet under the ocean(6).  Beyond helping to cause the spill in the first place the government is increasing the risk of future disasters.  The temporary ban issued in response to the Horizon spill “neither improves safety nor mitigates risk”(11).  By forcing drilling to stop you immediately cause a number of problems.  Reentering a location is as dangerous, if not more so, than the original drilling operation.  Experienced workers have been fired, laid off, or relocated and will need to be replaced with less experienced ones.  Equipment in worse quality will be all that remains when the moratorium ends(11).

The economic regulations were the proverbial straw that broke the camel’s back.  A single tax break for the Deepwater Horizon oil rig covered “70 percent of the rent” or “$225,000 a day”.  Or, as policy analyst Sima J Gandhi describes it “We’re giving tax breaks to highly profitable companies to do what they would be doing anyway”(8).  These breaks are not only an unfair advantage, they incite these companies to make riskier choices.  If the potential cost of the Deepwater Horizon rig wasn’t offset by these breaks it may not have been economically viable to drill in such a dangerous location.  On top of the lower cost of the initial operation; the Liability Caps ensured that any potential risk was marginalized by the government.  The $75 million limit that has been in effect since 1990 was a message to the industry to attempt increasingly risky drills(1).

The oil companies should be liable for the full cost of any damages done by their rigs.  The worry that “operators and nonoperators in the U.S. Gulf of Mexico will be unable to obtain adequate protection from insurance” is totally unjustified (1).  If the site is not economically viable then there is no reason to drill there.  If BP and Transocean knew they would have been liable for all damages they would not have received a citation for “not conducting well control drills as required and not performing ‘all operations in a safe and workmanlike manner'”(3).  There would have been an incentive to spend money on safety, training and equipment instead of the incentive to take risks knowing they would be protected.  Or as one lawyer explained the situation “arbitrary liability caps are just not reasonable.  You cannot decide the expense of a disaster before it happens.  Liability caps allow companies like BP to avoid bearing the responsibility for the full cost of the damage they inflict”(9).

The oil has stopped flowing from the bottom of the Gulf; for now.  The question remains: How can we prevent this from happening again?  There, of course, is no easy answer.  Accidents, mistakes, and disasters can never be guarded against completely.  We can however mitigate the risk involved in those dangerous operations that are needed for the sake of humanity.  The best way to increase the safety of the oil industry is to remove the regulations that incentivize the risks involved in their industry.  Preventing drilling in safer areas, tax breaks, royalty reductions, liability limits; all these things make an already dangerous prospect that much more perilous.  We need to neither help nor hinder these companies, they must succeed or fail on their own merits.

Sources available upon request.

Some quick thoughts about political entrepreneurship

Brandon Christensen Law , , , , , ,

The Wall Street Journal has a weekend interview feature with an entrepreneur who founded Airbnb, a company that has been getting rich by exploiting the so-called “sharing economy.” Overall it’s an interesting read (I think the term “sharing economy” is misleading, but it is a stroke of marketing genius; “I’m not making money: I’m helping people share stuff!”).

However, after reading Rick’s recent thoughts on entrepreneurship and re-reading my own musings on how democracy works, this passage stood out to me like a sore thumb:

By year’s end, Airbnb says it will have booked more overnight stays than the Hilton and InterContinental hotel chains.

As might be expected, hoteliers and hospitality-industry regulators are suspicious of the Airbnb model. In October, New York state sued the company for violating a law passed in 2010—just when Airbnb was picking up steam—barring private citizens from renting an entire apartment for less than 30 days.

Why on earth would New York state undertake such a ridiculous ban? Ostensibly for safety reasons, right? Or maybe to better ensure that labor regulations remain up to par?

The law that hotel chains used to sue its competition strikes me as the perfect example of how cronyism works. The hotel chains are losing some of their market share to innovative competitors, but instead of improving upon their own models they turn to the political process, which (at least in the US) provides guaranteed access to any faction who would like to use it.

Just like in the marketplace, though, guaranteed access does not mean guaranteed results. Enter the entrepreneurial spirit. Except instead of finding ways to make money, the political entrepreneur is finding ways to prevent competition. This second type of entrepreneurship is also driven by self-interest. Libertarians, I think, recognize the dual nature of self-interest (in markets: good; in government: bad), but I cannot think of any literature off the top of my head that deals with this topic.

What I can note is that many people get the nature of self-interest completely wrong. In the minds of many, if not most, people, self-interest is something that only occurs in the marketplace. From this mindset springs many of the fallacies about government regulations and taxes that we often read about in the press. Whether this mindset is a product of genuine or willful ignorance is a topic that I think deserves further scrutiny.

Why is it, for example, that many people do not see that self-interest drives the political process itself? I know that the discipline of ‘political economy’ deals with self-interest in the political process, but even here I see a tendency to treat political entrepreneurs as more noble than the entrepreneur of the marketplace (with a few exceptions, of course). Support for higher taxes on corporations, or support for more stringent government regulations, is often very prominent among the general public and among elites. The general public thinks it is supporting itself against “big corporations” when it supports these policies, as do elites, but in reality these regulations and taxes are driven by an entrepreneurial process that desires to favor one faction over all others.

Am I missing anything? I know I’m missing a bunch of stuff.

Законы, вступившие в силу в России в 2014 году

Evgenii Grigorev Law

С 1 января 2014 года в России вступили в силу сразу несколько законов, которые должны оказать влияние на нашу страну.

1. Безвизовый режим с Южной Кореей – теперь туристы из России могут находиться в этой стране до 60 дней. Хотя Южная Корея в принципе не является такой уж популярной страной для туризма. К сожалению, подавляющее большинство русских предпочитает отдыхать на популярных курортах типа Египта и Турции, где само понятие “русский турист” уже давно окрашено негативными цветами по причине крайне плохого поведения определенной категории российских граждан… Это отдельная история.

2. Запрет на продажу SIM-карт для мобильных телефонов с рук. Данный закон, в принципе, и комментировать особо не стоит, так как он направлен на противодействие весьма распространенному в России мошенничеству с мобильными телефонами, когда услуги сотовой связи предоставляются покупателям, не имеющим при заключении контрактов удостоверения личности. Думаю в цивилизованных странах (я имею в виду, более развитых, чем Россия) такой проблемы нет.

3. Дополнительный налог на автомобили дороже 3.000.000 рублей (1 доллар США = 33 рубля). Этот закон чем-то напоминает налог на роскошь, который недавно ввели во Франции, и из-за которого популярный актер Жерар Депардье отказался от гражданства Франции и получил гражданство Российской Федерации. В России очень велика имущественная разница между различными слоями населения, и этот налог призван в некоторой степени “сгладить углы” противоречий…

4. Людям, уклоняющимся от службы в армии запрещено поступать на государственную службу. Этот закон призван поднять престиж российской армии. Думаю не для кого не секрет, что русскую армию боятся не только гипотетические “враги России” (не буду углубляться в эту тему, думаю многие знают, о каких странах я говорю, хотя сам позицию большинства по этому вопросу не разделяю), но и сами военнослужащие. В интернете довольно часто всплывают скандалы на тему русской армии: неуставные отношения, издевательства над солдатами и всякое такое… Наверняка это проблема не только наших гарнизонов. Другое дело, что по этой причине многие молодые люди боятся идти в армию и вынуждены скрываться от разыскивающих их военных комиссаров с 18 до 27 лет (по закону все граждане старше 27 лет автоматически переводятся в запас и не подлежат призыву на военную службу в мирное время). По идее, этот закон должен как-то поднять престиж армии, но я сомневаюсь, что эта инициатива окажется успешной.

5. Закон об обязательном оповещении клиентов об операциях по их банковским картам. Ну тут все понятно. То, к чему во всем мире пришли 10 лет назад, докатилось до России только сейчас. Очередной закон против мошенников…

6. Повышение минимального размера оплаты труда и материнского капитала. Первое понятие – это минимальная заработная плата, ниже которой работодатель не имеет права платить. Реально, она просто смехотворна, и прожить на нее крайне сложно. Она составляет примерно 180 долларов США. Но этот закон как бы намекает гражданам, что “уровень жизни повысился”… Стыдно! Материнский капитал – это единовременная выплата семье, в которой родился ребенок. Также реверанс в сторону повышения уровня жизни.

Помимо этих законов, с 1 января 2014 года действует еще ряд поправок к уже существующим законам типа не целевого использования государственных земель и всякого такого прочего, но эти поправки не стоят того, чтобы я тратил на них ваше время.

What’s Up with New Zealand?

Brandon Christensen History, Law , , , , , , , , , , ,

Economist Scott Sumner’s 2010 piece on the unacknowledged success of neoliberalism (which I linked to yesterday and you should definitely read or reread) poses an interesting question:

There are two obvious outliers [to aggressive neoliberal reforms]. Norway, the highest-income country, is much richer than other countries with similar levels of economic freedom, and New Zealand, at 80 on the economic freedom scale and only $27,260 in per capita income (US PPP dollars), is somewhat poorer than expected […] Perhaps New Zealand’s disappointing performance is due to its remote location and its comparative advantage in agriculture holding it back in an increasingly globalized economy in which many governments subsidize farming.

Rather than challenge Sumner’s thoughts as to why New Zealand is much poorer (I think his guess explains a lot), I think I can add to it: The Maori.

The Maori are the indigenous inhabitants of New Zealand, and can be compared – socially – to the Native Americans of the New World or the aborigines of Australia. Unfortunately I know next to nothing about the Maori (or other South Pacific cultures), but I do know how to draw rough inferences about things by using data!

The Maori comprise about 15% of New Zealand’s population, whereas in other states settled by Anglo colonies the population of the natives relative to the overall population of the country is minute (aborigines in Australia comprise 3% of the population, for example, and in Canada and the US the indigenous make up about 2%).

The relatively large percentage of indigenous citizens in New Zealand can better explain why New Zealand is an outlier among rich countries, but I also think it’s important to ask why the Maori (and other indigenous populations in Anglo-settled colonies) have failed to match the demographic trends of their European and Asian counterparts.

Institutions are, to me, the obvious answer, but I’m curious as to what the rest of you think. I’d also like to add that I don’t think enough of us think about the issue of land (as in ‘land, labor and capital’ when we discuss the huge demographic gaps found between – for lack of better terms – settlers and natives in Anglo-American countries).

IP Anyone?

Tibor Machan Current Events, Law , , , , , ,

There is a debate afoot now about whether one ever owns the likes of a novel, poem, computer game, song, arrangement or similar “intellectual” items. Some argue, to quote the skeptic, Professor Tom Bell of Chapman University’s School of Law, “Copyrights and patents function as a federal welfare program of sorts of creators,” while others, such as James V. DeLong of the Competitive Enterprise Institute, hold that “It is difficult to see why intellectual property should be regarded as fundamentally different from physical property.” I want to suggest a way to come to terms with this dispute in this brief essay and offer a possible resolution.

A major issue that faces one who wishes to reach a sensible understanding of intellectual property is just what “intellectual” serves to distinguish among what surrounds us in the world and how that contrasts with other kinds and types of possible property. What quality does “intellectual” point to about something? In my list, above, I am assuming that whatever is an invention or creation of the human mind amounts to potential IP, while others would argue that nothing intellectual in fact can constitute property, let alone private property. But this is merely to start things off, in need of clarification and analysis.

Some have proposed that the major element distinguishing intellectual from other property is that it is supposed to be intangible. So, for example, home or car or land parcels are tangible, capable of being brought into contact with our senses. However, a musical score or arrangement or a romance novel is supposed to be intangible – such a thing cannot be touched, felt or otherwise brought into contact with our sensory organs. Yet an immediate problem this attempt to distinguish intellectual property is that there are tangible aspects to inventions, and there are intangible aspects to these other items that are supposedly all tangible. A home is not just some raw stuff but a building that is the result of a combination of ideas, some of them inventions. Even land isn’t own exactly as it occurs in the wild but is configured by the more or less elaborate design work of landscapers. The same with whatever so called tangible items that function is property. A watch is not just some metal, mineral, glass and such assembled randomly but some assembly of such materials designed to show time and otherwise be appealing as well. In turn, a novel, song or computer game is also a combination of tangible and intangible stuff – the paper, typewriter or pen and the lead or ink with which the novel is written – only the author, and only for a little while, encounters the novel in intangible form after which the novel becomes an often very tangible manuscript.

The tangible/intangible distinction is not a good one for what can and cannot be owned and, thus, treated as distinctive enough to be related to owners. Indeed, the distinction seems to derive from a more fundamental one, in the realm of philosophy and its basic branch, metaphysics. In a dualist world reality would come in either a material or a spiritual rendition. Our bodies, for example, are material objects, whereas our minds or souls are spiritual or at least immaterial ones.

This goes back to Plato’s division of reality into the two realms, actual and ideal, although in Plato particular instances of poems or novels belong to the actual realm. A less sophisticated version of dualism, however, suggests the kind of division that’s hinted at through the tangible-intangible distinction. In nature we may have physical things as well as stuff that lacks any physical component, say our minds or ideas. Yet much that isn’t strictly and simply physical is intimately connected with what is, such as our minds (to our brains) and ideas (to the medium in which they are expressed).

So, the tangible versus intangible distinction does not seem to enable us to capture the distinguishing aspect of intellectual property. What other candidates might there be?

One candidate is that unless government or some other force bearing agency bans the supply of some item of intellectual property, there is never any scarcity in that supply.

There is certainly something at least initially plausible about this view. What is tangible is more subject to delimitation and capable of being controlled by an owner than something that is intangible. A car or dresser is such a tangible item of property, whereas a novel or musical composition tends to be fuzzy or less than distinct. One cannot grab a hold of a portion of a novel, such as one of its characters, as one can of a portion of a house, say a dresser.

Yet intellectual property isn’t entirely intangible, either. Consider that a musical composition, on its face, fits the bill of being intangible, yet as it appears, mainly in a performance or on a recording, it takes on tangible form. Consider, also, a design, say of a Fossil watch. It is manifest as the watch’s shape, color, and so on. Or, again, how about a poem or musical arrangement? Both usually make their appearance in tangible form, such as the marks in a book or the distinctive style of the sounds made by a band. These may be different from a rock, dresser, top soil or building but they aren’t exactly ghosts or spirits, either.

It might also appear that the theological division between the natural and supernatural mirrors the tangible-intangible division but that, too, is misleading since no one who embraces that division would classify a poem or novel as supernatural. Thus it seems that there isn’t much hope in the distinction some critics of intellectual property invoke. The tangible-intangible distinction seems to be independent of the usual types of ontological dualism and so the case against intellectual property, then, seems unfounded. If there is such a distinction, between ordinary and intellectual property, it would need to be made in terms of distinctions that occur in nature, without recourse to anything like the supernatural realm. Supposedly, then, in nature itself there are two fundamentally different types of beings, tangible and intangible ones. Is this right?

Again, it may seem at first inspection that it is. We have, say, a brick, on the one hand, and a poem, on the other. But we also have something very unlike a brick, for example, smoke or vapor or clouds. In either case it’s not a problem to identify and control the former, while the latter tend to be diffused and allusive. We also have liquids, which are not so easy to identify and control as bricks but more so than gases. Indeed, it seems that there is a continuum of kinds of beings, from the very dense ones to the more and more diffused ones, leading all the way to what appear to be pure ideas, such as poems or theater set designs.

So, when we consider the matter apart from some alleged basic distinction between tangible and intangible stuff, one that seems to rest on certain problematic philosophical theories, there does not appear to be any good reason to divide the world into tangible versus intangible things. Differentiation seems to be possible in numerous ways, on a continuum, not into two exclusive categories. Nor, again, does it seem to be the case that there is anything particularly intellectual about, say, cigarette smoke or pollutants, albeit they are very difficult to identify and control. They are, in other words, not intellectual beings, whatever those may be, yet neither are they straightforwardly tangible.

I would like to explore the possibility of a very different distinction, namely, one between what is untouched by human meaning and whatever is subject to it. For example, there would be no poems without intentions, decisions, deliberations and so forth. There would, however, be trees, rocks, fish or lakes. Is it the point of those who deny that intellectual property is possible that when people produce their intentional or deliberate objects, such as poems, novels, names, screenplays, designs, compositions, or arrangements, these things cannot be owned? But this is quite paradoxical.

The very idea of the right to private property is tied, in at least the classical liberal tradition – starting with William of Ockham, to John Locke and Ayn Rand – to human intention. It is the decision to mix one’s labor with nature that serves for Locke as the basis for just acquisition. In the case of such current champions of this basic individual right, such as James Sadowsky and Israel Kirzner, it is the first judgment made by someone to invest something with value that serves to make something an item of private property.

However all of this comes out in the end, one thing is certain: the status of something as property appears to hinge on it’s being in significant measure an intentional object. But then it would seem that so called intellectual stuff is a far better candidate for qualifying as private property than is, say, a tree or mountain. Both of the latter are only remotely related to human intentions, whereas a poem or novel cannot have their essential identity without having been intended (mentally created) by human beings.

Of course, in becoming owned, a tree and mountain does become subject to intentionality, as when someone decides to make use of such a thing for his or her purposes. And, conversely, even in the case of a poem, there are words that are as it were pre-existing and only their particular concatenation is a matter of intention.

I am not certain what the outcome should be from these and related reflections. They do suggest something that is part of both the ordinary and the so called “intellectual” property traditions, namely, that when human beings are agents of creation, when they make something on their own initiative – when they invest the world with their distinctive effort, they gain just possession of what they have produced. And if there is anything that they produce more completely than such items as poems or computer games, I do not know what it might be.

For me, then, the issue is this: When one designs and produces something novel that one has thought up, some gadget or machine or such, does one then own this design/product? And if someone else copies it, did they take something from the former against his or her will? If the answer is yes to the former, then I think the answer must be yes to the latter.

Whether the protection of one’s property occurs via this or that legal device — patent, contract, trademark, what have you — seems a secondary issue and detail. The first is ownership. Also, what one’s owning something one conceives and makes may mean for others who may be thinking up the same thing later is irrelevant, no less so than if one finds a piece of land and appropriates it and then later others, too, find it and would like to appropriate it but now may not.

Those, by the way, who complain that governments enforce patents and copyright laws, should realize that governments also enforce property rights in societies with governments. Governments in such societies are akin to body or security guards. Certainly, taxing others for this enforcement is unjust but that isn’t the essential idea behind the enforcement, not if one understands that copyright and patents could be protected without government, as well, just as other private property can be protected without government. But until it is government that protects — not establishes but protects — rights, it will also protect the right to intellectual property, if there be such a distinct thing in the first place. Taxation for such protection is irrelevant since taxation for the protection of other types of property is also beside the point.

Finally, that patents run out may be compared to the fact that ownership can cease with death, too. Of course, patents or trademarks or copyrights could all be reassigned from one to another owner, just as property in anything can be reassigned upon voluntary exchange or transfer. There is nothing necessarily odd about this, simply because the matter hasn’t developed very smoothly and consistently.

At “Somewhat Reasonable”: Laws versus Regulations

Tibor Machan Law, Links

Laws versus Regulations

Obama’s Utilitarian Foibles

Tibor Machan Law, Liberty, Philosophy , , , , , , ,

The utilitarian insists that the morally right way to act is to promote the greatest good for the greatest number (of people but perhaps of all sentient beings). This goes for public policy as well! The goal overrides any individual rights, so if to secure it some people’s rights to life, liberty and/or property need to be violated, so be it!

For example, if to provide health insurance for elderly folks it is necessary to coerce young people to purchase health insurance, then coerce them! Never mind their right to liberty and property. Those are irrelevant, even though they are supposed to be unalienable rights no one may violate, not in the American political tradition.

Here, then, is a clear example of how the Obama regime departs significantly, in its political philosophy and program, from the uniquely American framework. This framework supports securing the protection of individual rights as the primary job of government. Read the Declaration of Independence and see for yourself. That is indeed the central feature of the American Revolution, with its Bill of Rights and its Constitution.

Not only does that render the country one that’s free – under which all citizens may live as they choose provided they do not violate anyone’s rights – but is responsible for the great prosperity of the country, its freedom from arbitrary government intervention in people’s lives. Even the public good or interest does not permit it. While this may appear to be a restriction that stops the country from achieving utilitarian objectives, the very opposite is the result! That’s because free men and women make the most productive use of their liberty.

The idea is that human beings are by their very nature proactive. They think of ideas that they will implement and these are usually good ideas, ideas their fellows can make good use of. This is the essence of entrepreneurship. They don’t just daydream but think purposefully, which is to say their ideas can be marketed to others. Out of this process arises the bustling economy of a country and, indeed, of the world.

So long as men and women are free to think creatively and productively, they will make sure their work will have payoffs, either economic or personal or even charitable. This is how a free society works, creates products and services, and leads to high employment to boot.

But the likes of Obama & Co. want to step in and regiment how free men and women act and they believe or pretend to know what others should do to be productive. And that means, usually, that they misguide the economy. (The most notorious recent example of this was all those five-year plans Stalin and his gang unleashed upon Russia and its satellite states, which brought the Soviet Socialist system to its knees!)

But Mr. Obama & Co. fail or refuse to grasp any of this. Shame on them!

Gun control: Centralized vs. Dispersed

Rick Weber Law, Politics , , , , , , ,

Hayek made the point that the debate of whether to have central planning was not over whether or not there would be planning, but over who would plan for whom. This point has an analog in the debate over gun control. The option is not between reason and chaos, but between centralized (and therefore bureaucratic) control and decentralized control.

Just because you (i.e. your ideals as embodied in the Democratic National Convention) aren’t in control, doesn’t mean that nobody is. A decentralized gun control regime is one where individual gun owners are responsible for securing their weapons and criminals are responsible for crimes they commit. Will mistakes be made? In the imperfect world we live in that’s almost a certainty. Will the results be worse than one with government gun control? That’s an empirical question. Political gun control will raise the cost of getting guns, but it will also raise the relative criminal effectiveness of guns. It will save some lives but will also cost some. There will probably be fewer accidental deaths and suicides, maybe fewer crime-of-passion murders, but likely more “kill the witness” murders. If the penalty for using a gun in a crime is high, then the relative cost of killing a witness is low (for example, adding a life sentence for murder on top of a 30 year sentence for armed robbery is like getting a 30-year off coupon on that life sentence).

With 3D printed guns on the horizon (to say nothing of the “dangerous” lack of regulation of machining tools!) an effective political gun control regime would have to expand to all manner of regulation. This regulation would cost a lot! But, one might object, mere money is not worth as much as the lives that might be saved. But it’s not embossed portraits of dead white men that’s at stake. I don’t think we should let economists play God, but I think there is something to economists’ activity of considering what we might be willing to give up for a life.

Money is a medium of exchange; it’s not the end, just a tool we use to make life easier. The cost of regulation is real human well-being, time, and effort foregone. Taking someone’s money prevents them from spending it on what they otherwise would have. It also discourages them from investing further effort into producing something valued by others. Regulation also takes people’s (irreplaceable!) time; saving someone’s (irreplaceable) life provides some moral justification for this, but the cost must be acknowledged.

If (if!) there is a benefit to political gun control (that is if we judge the lives lost under a decentralized regime as morally superior to those lost under a political regime), then we should still consider the cost. In any case, we should all stop using the term “gun control” when we mean “political gun control.” A problem defined is a problem half solved, and the blanket term “gun control” mis-defines the problem.

The Meaning of Social Science: Ideology, Private Life, and the Internet

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

[Note: This is a guest essay by Dr Peter Miller, who is a sociologist (PhD, Berkeley), a longtime resident of Japan, a non-participant observer of the American scene, and (since 1991) one of the world’s few practitioners of original photogravure etching, whose semi-abstract Japan-influenced prints are in private and museum collections in Japan, Europe, Russia, and the United States. His websites can be found here & here]

Social-science expertise has been missing from current discussions of government-led spying on private citizens and the proper role of government in general. Ideologies, which is to say gut reactions, have corrupted the public debate; but there is nevertheless a role for sociological analysis of these phenomena.

Social science in its modern form started as a mostly European effort to explain the origins of the horrible totalitarianism that engulfed Europe, and to deduce the structure of institutions that would prevent it from arising again. The Nazi, Soviet, and Fascist systems were all characterized by total State-control of all aspects of life, including the most private aspects of life. Whether the ostensible purpose was re-casting human nature into the ‘new Soviet man’ or an embodiment of the German ‘volk’, they quickly evolved into an apparatus for murdering large numbers of their citizenry. Of course the prospective victims had to be identified before they could be murdered. For this purpose a State apparatus of domestic spying and information-gathering was devised. Primitive by today’s standards, the forced wearing of Jewish stars and the forced confessions by purported enemies of the State were crudely effective in generating large numbers of victims. Social scientists asked ‘How did this happen? What can be done to prevent its recurrence?’

The essential answer to the first question, distilled from reams of scholarship, is: De-legitimization of private life. All the social space traditionally separating individuals from the State was systematically removed. Private enterprise was abolished. All universities and schools in Nazi Germany and the Soviet Union were taken over by government, run by political appointees, and staffed exclusively by those who would do their bidding. The same for the media, the churches (co-opted in Germany, eliminated in the Soviet Union), youth groups (Hitler Youth, Young Pioneers), and welfare organizations. All intermediary organizations that had previously functioned autonomously were either taken over by government, co-opted, intimidated into conformity, or forced out of existence. The sequence from privacy-deflation to total State control to mass murder progressed in roughly 15 years in the Soviet Union. In Nazi Germany, with more intensive propaganda and ‘education’, this sequence took only five years.

From this historical record, social scientists deduced that properly functioning democracies require lively intermediary organizations — churches, labor unions, 4-H clubs, PTAs, bowling clubs, whatever. Re-reading Tocqueville and Madison, social scientists re-discovered with these sages a high regard for such humble institutions (not that there were bowling clubs in Madison’s day, but you get the idea). The Austrian School (Hayek et al) added private enterprise to this list of freedom-enhancing entities. And from Vienna also came Lazarsfeld who posited ‘cross-pressures’ — conflicting loyalties — as the essential building-blocks of democracy. His big idea was that a healthy democracy needed unpredictability, where a person’s ethnicity, race, religion, education, or social class did not necessarily determine his voting preferences or consumer choices.

Since the 1970s, American and Western European societies have tolerated and even encouraged a progressive tribalization of their societies. Race, ethnicity, and sexual-identity have become increasingly salient in the distribution of government largesse, and consequently in the determination of political and consumer choices. Both public and private universities rely increasingly on government funding, and thus take their orders from the State, in research priorities, curricula, staffing, and extra-curricular activities. With some exceptions and counter-trends, the period since the 1970s has witnessed a progressive weakening of the autonomous mediating organizations that sociologists identified as essential to the working of democracy.

Separately, the growth of the Internet has deflated the private sphere, at first due in large part to the apparently voluntary choices of Internet users themselves. Only a few years ago the fad of the moment was 24/7 live webcams turned on oneself for the world to see. Now security cameras that do the same thing outdoors are all-pervasive. The collective mantra, highly promoted by the giant Internet companies, is ‘If you have nothing to hide, why be concerned?’ This is the tradeoff for ‘serving you better’. Mobile phones with geo-tracking are surely a great improvement in the quality of life, as is the proliferation of answers to life’s unanswered questions, and the blessings of instant communication. In return for all that, what does the loss of privacy matter?

I always doubted the business model of Internet-tracking. It never seemed plausible to me that a teen-ager with zits who happens to be in a drugstore is any more likely to buy zit-off after getting zapped with an ad on his geo-tracked mobile at that moment than if he weren’t zapped. The whole business of click-tracking, Web-tracking, and the like never made commercial sense to me. It was always hype — good for securing VC funding and not much else. But investors in these large-scale personal-data-gathering companies were not stupid. Behind our backs, these companies were getting paid by governments to sell users’ data. Their business model was not based on the supposed commercial utility of precise ad-targeting, but on secret NSA demands for indiscriminate personal data. Governments, under the banner of fighting terror, and shielded from Congressional or public scrutiny, have unlimited taxpayer funds to finance these transactions.

With the Snowden revelations, we now have a better understanding of the extent of Internet and telecom surveillance. Of course, this cannot have been a complete surprise. Nevertheless the near-universal scale of the surveillance, plus the technological capacity to sort and search the data, make for a real game-changer. As one security expert said in a recent interview:

The most shocking aspects of Edward Snowden’s courageous revelations is the scale of surveillance. Every one of us involved in this field, I think it’s fair to say, has not been surprised by what is possible but had assumed perhaps out of hope or fear that they were limited in what they did and were proportionate, and that although we didn’t believe they would just stick to terrorism they would not try to reach for everything.

But every single document, speech and slideshow shows that a bunch of juvenile lunatics have taken over the asylum and are drunk and exuberant on their capabilities to spy on everything all the time and that is what they want to do. They have lost every sort of moral compass and respect for civic values.

The problem is that many European countries, notably Britain but not exclusively Britain, have been complicit in these activities as a result of favours, trade or encouragement. Basically the NSA has, over years with Britain’s assistance, essentially tried to subvert companies and governments into a surveillance empire which is almost a supranational enterprise of their own.

The question is, to what end? As we know in sociology, not everything is what it seems. Just as the indiscriminate sweeping-up of personal data lacked a plausible commercial basis, though it still made business sense if the data were sold to government spy agencies, it is likewise implausible that all that data has much utility in fighting terror. What then is it good for?

I think that question has yet to be answered; that the answer will depend on what use the new owners of that data make of it. The meaning of the massive loss of privacy that has occurred is immanent, it will emerge as further events unfold. As far as I am aware, the central-conspiracy model does not fit the case. What we have is a set of disparate elements that as yet have not coalesced into any coherent order. Among these elements are the increasing tribalization of society, de-legitimizing of autonomous intermediary organizations, and deflation of the private sphere. These are exactly the conditions that gave rise to the totalitarian horrors of the mid-20th century. It does not appear that any current Western leader has it in him to become another Hitler or Stalin. But the elements are there, awaiting a moment — perhaps another terrorist attack or financial crisis — that will call forth a charismatic savior.

Yet one must be especially careful with historical analogies to avoid the ‘generals-fighting-the-last-war’ syndrome. Things are very different now, compared with analogous conditions 80 years ago. The greatly expanded human freedom, communication, and educational prospects empowered by the Internet may overwhelm the efforts of governments to use it as an instrument of State control. This will be a titanic struggle, with the outcome still unclear. And that’s where I’ll leave it for now, pending further sociological inquiry into what-all this may portend.

From the Comments: Populism, Big Banks and the Tyranny of Ambiguity

Brandon Christensen Comments, Current Events, Law, Politics , , , , , , , , , , , , , , ,

Andrew takes time to elaborate upon his support for Senator Elizabeth Warren, a Native American law professor from Harvard who often pines for the “little guy” in public forums. I loathe populism/fascism precisely because it is short on specifics and very, very long on generalities and emotional appeal. This ambiguity is precisely why fascist/populist movements lead societies down the road to cultural, economic and political stagnation. Andrew begins his defense of populism/fascism with this:

For example, I still have more trust in Warren than in almost anyone else in Congress to hold banks accountable to the rule of law.

Banks have been following the rule of law. This is the problem libertarians have been trying to point out for hundreds of years. See Dr Gibson on bank regulations and Dr Gibson again, along with Dr Foldvary, on alternatives. This is why you see so few bankers in jail. Libertarians point to institutional barriers that are put in place by legislators at the behest of a myriad of lobbying groups. Populists/fascists decry the results of the legislation and seek a faction to blame.

If you wanted to be thought of as an open-minded, fairly intelligent individual, which framework would you present to those who you wished to impress: the institutional one that libertarians identify as the culprit for the 2008 financial crisis or the ambiguous one that the populists wield?

And populism=fascism=nationalism is a daft oversimplification. I’ll grant that there’s often overlap between the three, but it’s far from total or inevitable overlap. Populists target their own countries’ elites all the time.

Sometimes oversimplification is a good thing, especially if it helps to clarify something (see, for example, Dr Delacroix’s work on free trade and the Law of Comparative Advantage). One of the hallmarks of fascism is its anti-elitism. Fascists tend to target elites in their own countries because they are a) easy and highly visible targets, b) usually employed in professions that require a great amount of technical know-how or traditional education and c) very open to foreign cultures and as such are often perceived as being connected to elites of foreign societies.

The anti-elitism of fascists/populists is something that libertarians don’t think about enough. Anti-elitism is by its very nature anti-individualistic, anti-education and anti-cooperative. You can tell it is all of these “antis” not because of the historical results that populism/fascism has bred, but because of its ambiguous arguments. Ambiguity, of course, is a populist’s greatest weapon. There is never any substance to be found in the arguments of the populist. No details. No clarity. Only easily identifiable problems (at best) or ad hominem attacks (at worst). Senator Warren is telling in this regard. She is known for her very public attacks on banks and the rich, but when pressed for details she never elaborates. And why should she? To do so would expose her public attacks to argument. It would create a spectacle out of the sacred. For example, Andrew writes:

Still, I’d rather have people like Warren establish a fuzzy and imperfect starting point for reform than let courtiers to the wealthy and affluent dictate policy because there’s no remotely viable counterpoint to their stances […] These doctrinaire free-market orthodoxies are where the libertarian movement loses me. There are just too many untrustworthy characters attached to that ship for me to jump on board.

Ambiguity is a better alternative than plainly stated and publicly published goals simply because there are “untrustworthy characters” associated with the latter? Why not seek plainly stated and publicly published alternatives rather than “fuzzy and imperfect starting points for reform”?

Andrew quotes a man in the street that happens to be made entirely of straw:

“Social Security has gone into the red, but instead of increasing the contribution ceiling and thoughtfully trimming benefits, let’s privatize the whole thing and encourage people to invest in my company’s private retirement accounts.”

Does the libertarian really argue that phasing out a government program implemented in the 1930s is good because it would force people to invest in his company’s private retirement accounts? I’ve never heard of such an example, but I may just be reading all the wrong stuff. Andrew could prove me wrong with a lead or two. There is more:

This ilk of concern trolls (think Megan McArdle: somewhat different emphasis, same general worldview) is one that I find thoroughly disgusting and untrustworthy and that I want absolutely no part in engaging in civil debate. Their positions are just too corrupt and outlandish to dignify with direct responses; I consider it better to marginalize them and instead engage adversaries who aren’t pushing the Overton Window to extremes that I consider bizarre and self-serving. They’re often operating from premises that a supermajority of Americans would find absurd or unconscionable, so I see no point to inviting shills and nutters into a debate […].

Megan McArdle is so “disgusting and untrustworthy” that her arguments are not even worth discussing? Her name is worth bringing up, of course, but her arguments are not? Ambiguity is the weapon of the majority’s tyranny, and our readers deserve better. They are not idiots (our readership is still too small!), and I think they deserve an explanation for why McArdle is not worthy of their time (aside from being a shill for the rich, of course).

I think populism/fascism is often attractive to dissatisfied and otherwise intelligent individuals largely because its ambiguous nature seems to provide people with answers to tough questions that they cannot (or will not) answer themselves. Elizabeth Warren’s own tough questions, on the Senate Banking Committee, revolve around pestering banks for supposedly (supposedly) laundering money to drug lords and terrorists:

“What does it take, how many billions of dollars do you have to launder from drug lords and how many economic sanctions do you have to violate before someone will consider shutting down a financial institution?” Warren asked at a Banking Committee hearing on money laundering.

Notice how the populist/fascist simply takes the laws in place for granted (so long as they serve her desires)? The libertarian would ask not if the banks were doing something illegally, but why there are laws in place that prohibit individuals and organizations from making monetary transactions in the first place.

Senator Warren’s assumptions highlight well the difference between the ideologies of populism/fascism and libertarianism: One ideology thinks bludgeoning unpopular factions is perfectly acceptable. The other would defend an unpopular faction as if it were its own; indeed, as if its own freedom were tied up to the freedom of the faction under attack.