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…
Economist Joseph Stiglitz has an op-ed out in Project Syndicate lamenting bad policies for the current economic stagnation of the West. This response comes from economist Peter Boettke, and I think it is an important and woefully neglected one:
Since 2008, and before, [Stiglitz] has been constantly complaining about neo-liberal policy and how its lack of attention to the appropriate regulatory framework and disregard for fundamental policy priorities has produced the mess we are in. In fact, he made the argument very simply even while he was in positions of tremendous political power in the Clinton administration and at the World Bank — if only the world would listen to me, and engage in the appropriate interventions then the mess would be avoided. But who were the so-called neo-liberals that weren’t listening to him? What neo-liberal thinker had the same powerful positions that he held? Did F. A. Hayek or Milton Friedman actually come back from the grave to serve as head of the CEA or as Chief Economist at the World Bank? Or did all this disruptive inequality and global imbalance happen on the watch of other thinkers.
I think Boettke is right, but I also think both economists are wrong in a sense, too. First of all, global poverty over the past twenty years or so has been halved thanks to the very neoliberal policies that both economists are disagreeing about, and that both economists have more or less endorsed. With this important, praiseworthy accomplishment in mind, why would these guys want to spend so much time pointing fingers at each other?
I know why they are pointing fingers (because of the terrible shape that Western economies are in), but I am a little baffled at the audacity of Stiglitz and other Keynesians who have held the levers of power for sixty years to point the finger at something other than themselves.
Really quickly: Some of might ask why Boettke and Stiglitz agree on neoliberalism abroad and disagree on policy at home. My short answer would be because the West already has the institutions (property rights, other individual rights, etc.) that economists have identified as necessary for a market order, so their debates about policy occur within the same theoretical framework. Post-colonial states (“developing states”) have virtually none of the institutions that the West, and so it easy for economists with different theoretical paradigms to agree on generalities concerning these developing countries (“they need to open up to world trade and focus on property rights before they do much else”). Does this make sense?
In the conventional wisdom, as you become older, you tend to like order more and more. That is, with age, one is supposed to become more “conservative” in the traditional sense of the term. Personally, I have escaped the curse. Instead, I find myself resenting more and more the growing imposition of petty rules by public entities.
It began a few years back when the city of Santa Cruz banned sleeping. OK, let’s be honest, you may still sleep legally in your bed. The city made it illegal to sleep in public. It’s true that the homeless are a plague here. Many are in a near-constant state of NDUI (not driving under the influence). Many are poor lost souls who are a danger to themselves and occasionally to others. Thus, three or four years ago, a local shopkeeper walking to work was knifed to death in broad daylight. Her killer had spent the previous 48 hours in a shelter muttering about and to his Bible. No one reported him,of course because he had not done anything illegal until then. Next!
The ban on sleeping made me acutely uncomfortable at the time. First, it was plainly inhumane. Second, if you prevent human being from doing what their human nature demands, they will find another way to do it. So, informal camps proliferate in the wooded areas juxtaposing the town. Here, in Central California, we are in a period of prolonged drought. Do we need unattended campfires and campfires attended by people who don’t play with a full deck?
A petty use of power, municipal power, applied in a search for orderliness led to greater and far more dangerous disorder.
I don’t even know if there are enough night shelters for everyone who wants one. I know that there will always be sane but houseless people who don’t want to be in a shelter, by choice. A sizable part of me respects their choice. You may not force people in places where they don’t want to be without due process. The Constitution is completely clear on this. And, I am not in favor of more shelters anyway because I believe they attract the economically feeble to Santa Cruz thus aggravating the problem.
You don’t have to be a “soft” to want the Constitution respected.
Now, since then, there as been a multiplication of city rules. This happens while the crime rate plunges. The fewer crimes the more rules. The crime rate is tanking all over the country; Santa Cruz city rules can hardly take the credit. What am I to think?
Here is a quiz: The Santa Cruz City Council is dominated by:
a Republicans;
b Democrats;
c Leftists to the left of the Democratic Party
Not far is the independent harbor. I used to admire the Santa Cruz (Small Yacht) Harbor. It was the only government and quasi-government organization I knew that stayed clear of reliance on taxes. Harbor users -in their many guises- supported the maintenance of the harbor. They included boat slip renters like me, of course, but also beach goers whose coffee paid for the rent the coffee shop paid to the harbor in return for an excellent commercial location. Harbor users also included patrons of the good restaurant that dominates the harbor entrance with its million dollar view. The restaurant goers gladly paid solid parking fees, of course, and a portion is remitted to the harbor.
I also liked the way the harbor administration put to work underused resources such as the large general parking lot reserved for boat owners that tends to stand more than half empty after four pm. The harbor had an agreement with the self- same restaurant to hold musical barbecues once a summer week evening on the beach it, the harbor, administers. The restaurant got its profits from the sale of barbecued food and the harbor pocketed full parking fees from those not holding slip stickers. The arrangement drew crowds. It was all a little bit untidy but not much. Twice, on such a barbecue evening, I leaned spontaneously out of my truck to congratulate the officer directing parking and to assure him, unsolicited, that this particular slip owner, me, was not (NOT) inconvenienced at all.
And then, someone retired and there was a new sheriff in town. Under the new harbormaster, several things that were allowed became forbidden overnight. The harbor hired a full-time parking enforcer, like the town next door. Suddenly, the one harbor employee the average harbor user interacted with was the parking enforcement officer. This necessarily hostile and heartless functionary supplanted the traditional harbor officers who save boats, and sometimes lives, every weekend. The mood changed and not for the better. I am not speaking for bitterness about parking fines here; with my slip rental goes a permanent parking sticker permit.
Maintaining a stricter order often requires stricter rules that make most people unhappy. Eve if it’s only a little bit unhappy, the bad feeling accumulates.
Then, stand-up surfboards had to be segregated from boats. Boats are limited to 5 m/h inside the harbor anyway. Some boats under sail inside the harbor regularly exceed the speed limit. Those are steered by aces. How bad can a collision be under these conditions, really? Has there been a single collision involving a standup board? Did a boat owner complain about stand-up boards being in the way? Maybe. Did ten complain? I doubt it. (I have not asked; I don’t trust I would get a valid answer I could cite.) My point is that one can always find a complainer or two. If you handed out free ice cream to poor children and cleaned carefully afterward, there would be some curmudgeons to object. I am sure there are boat-owning slip renters who complain even about the ocean swells. But everyone knows that good harbors are bustling with activity. Those who detest the corresponding moderate disorderliness have no business in a harbor at all. They should be reminded of the fact that there is a long waiting list for their slips instead of listened to.
The art of civilized administration requires that complaints be ignored up to a point. It also includes remembering the second most important American maxim: “If it ain’t broke, don’t fix it until it is.”
Then, there are the new signs that shout at you that fishing from docks is “prohibited.” For as long as I remember, 20 year-plus, children fished from the docks. It was an excellent, healthy, commendable form of leisure for kids, including poor kids, if you ask me. Were there ever any accident as a result, even one? I don’t think so. The signs affirm further and vengefully that the prohibition is: “strictly enforced.” No joking with serious matters here! We are not kidding. Don’t even think of enjoying yourselves!
The posted “minimum” fine is $174. Think about it: Your otherwise well-behaved 12-year old gives you the slip to try to catch a sardine or two. He gets caught. You are into it for about twenty hours of minimum wage. This comes close to a violation of the Eighth Amendment, prohibiting cruel and unusual punishment, I think. There may also be here a subtle breach of contract involved here. When I first rented a slip in the harbor, fishing from the docks was common practice. The locked dock that was part of the rental gave me special access to a pleasant fishing spot. Then, after twenty years, the contract becomes unilaterally modified to my detriment. The harbor did not bother to re-negotiate the contract.
I agree that this is a very small kind of tyranny but it’s tyranny all the same. The habit of being oppressed nearly always begins small in democratic countries. Our tiny liberties are eroded slowly until we don’t even remember we ever had them.
In the same period, I have heard the crew of one of the few remaining commercial fishing boats left in the harbor complain that they are made to feel unwelcome. I have no proof that their allegation is correct but, I wonder, why would they make it up? It jibes with the other forms of turning of the screw I mention. There is no doubt that the harbor would be neater without fishing boats. Fish smells and the rushed commercial fishermen drop the occasional dead fish into the harbor water. And, well, it’s a yacht harbor, after all. And, by the way, if slips only went to middle-aged nuns who work as librarians, the harbor would be even neater.
Occasionally, I take my grand-daughter to buy live crabs directly from a boat. It’s an expedition for her. It’s unforgettable. It shows her that some food does not come from the supermarket. But who am I to lay claim to such privilege? And who the hell are the commercial fishermen to insist on making a living from a harbor originally created by the Army Corps of Engineers with tax money?
On 2/3/14, coming out of a restaurant, my family and I were treated to a wonderful geyser-like spout of water reaching much higher than a three storied building. No, it was not a whale; the scene was a couple of miles inland, on a busy commercial artery, at a street intersection. We watched in utter fascination for more than fifteen minutes. (I posted a still picture of the event on my Facebook. Look for it.) I am obviously no expert, but I believe that while I looked on several hundreds of thousands of toilet flush- equivalents of city water were lost forever. I know, I know, accidents happen; no system is perfect. But why did it take so long to cap the leak? There is a fire station five or six blocks away.
I almost forgot to tell you: At the very same time, the same evening, there was an important meeting of the Santa Cruz Water Commission to make recommendations about water rationing to the City Council in view of the current drought.
Would I make this up? Would I dare? Do I have the talent?
In my immediate surroundings, the only rule or law I have seen abolished in the past twenty years or so concerns dogs. They used to be prohibited on the main commercial drag of Santa Cruz, Pacific Avenue. The prohibition has been rescinded. Dog owners are numerous and determined. Their victory renews my faith a little in democracy. I wish I could cite more examples though.
Sometimes, the ugly thought crosses my mind that public entities are increasingly run for the benefit of their nominal employees. Karl Marx was almost right about classes, maybe . (See, on this topic: “Karl Marx Was Right (Pretty Much)“)
More on local government action: “Coyotes: How Government Bureaucrats Think“
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.
This old posting is suddenly relevant again. Go to indented paragraph directly if you are in a hurry.
You may have heard recently that the appropriate federal agency declared the Keystone pipeline would pose no significant dangers to the environment. I doubt this will stop the green fanatics. Nor is the probability that oil no refined and used in this country will be mostly exported to China where environmental laws are lax and not often enforced. Rationality is not their forte, as a rule.
It appears that there may be a chance to influence the decision to build or not via an on-line petition. I don’t know what is the probability of its working is but the cost seems so low it would be a pity not to try a click. Besides, enough signatures may make Mr Obama squirm a little irrespective of the decision he makes.
Go to: buildKXLnow.com [it’s actually buildKXLnow.org – bc]
Go to: “Go to Make Your Voice Heard,” [it’s actually the ‘Take Action Now’ tab that you’ll want to click on – bc]
A simple sign-up box will appear.
Nevertheless it is important not to fall into the delusion that President Obama presents the greatest danger to the culture of liberty. A historian looking back a hundred years from now is likely to group the Reagan, Bush I, and Clinton presidencies together as an era when the state receded or at least did not grow, as measured by regulatory and fiscal burdens on our lives. But Bush II relentlessly increased domestic spending and created more government involvement in health care with the Medicare D program for prescription drugs. It was President Bush who initiated many of the NSA programs.
In short, there are more similarities between Bush II and Obama than their supporters or detractors care to acknowledge. And almost all of the similarities suggest that the risks to our liberty today transcend the actions of any particular politician.
From John McGinnis. Read the rest.
I’m a dedicated libertarian but my first allegiance is to accuracy. It pains me when I see libertarians making arguments that are inaccurate, irrelevant, or just plain wrong. When they do so, they do themselves and our movement a big dis-service. I list seven such arguments here. More could be added.
The Fed is privately owned. This is true only superficially. Member banks own shares of stock in one of twelve district Federal Reserve Banks and they receive dividends on those shares. But they have little in the way of genuine ownership privileges. They cannot sell their stock and their voting rights are very limited. The President of the United States appoints the Board of Governors. Just because a legal arrangement is given labels that suggest private ownership, that doesn’t make it so.
The Bureau of Labor Statistics disguises the true unemployment situation by excluding workers who are “discouraged,” i.e., not seeking jobs. This is true of the U-3 unemployment figure which is the most widely cited figure, and the one the Fed says it is targeting. That figure is currently about 6.5%. The BLS also publishes its U-6 figure, which includes discouraged workers and currently stands at around 13%, down from about 17% at the height of the Great Recession. The BLS is not covering up anything here, although politicians may certainly choose to emphasize one figure or the other depending on what ax they’re grinding. Which is the “true” unemployment rate? There’s no such thing. The figures are what they are and observers can make of them what they will.
The Consumer Price Index is politically manipulated by excluding food and energy. There are many versions of the CPI. One of them excludes food and energy because those prices are usually very volatile. That figure may be useful to economists who want to filter out volatile effects and focus on secular trends. Again, the figures are what they are, and politicians or for that matter we bloggers can use or misuse them as we wish.
“Banksters” control the U.S. government. There is a grain of truth in this one. The big banks are both victims and beneficiaries of government dominance of banking and finance. The reality of government regulation is that regulated firms employ many very smart and very well paid individuals who are constantly finding ways to manipulate or sidestep the regulations to which they are subject. The fact is that the regulators and the regulated are very thick. Banking and finance are controlled by a cabal of government and Wall Street firms and individuals. It’s a mistake to say that either group totally dominates the other.
Global warming is a myth and a scam. Ron Paul, whom I admire very much, blotted his copy book when he said on Fox News, “The greatest hoax I think that has been around for many, many years if not hundreds of years has been this hoax on […] global warming.” A few basic facts are beyond dispute: (a) carbon dioxide is a greenhouse gas, (b) CO2 levels are at an all time high, and (c) human activity is the primary cause of the increase. Beyond that, the evidence starts to get sketchy and incomplete. We do seem to have melting polar ice caps, record high temperatures in some places, droughts, etc. But overall there has been almost no temperature increase during the last ten years or so. Projections of rising temperatures and rising sea levels appear to be too pessimistic. This is a very complex issue and one where biases can overwhelm us if we aren’t careful. Statists are prone to accept the global warming thesis because they see it as a way to increase state power. Libertarians want the issue to go away for the same reason. This would be a great time for all parties to step back an exercise some epistemic humility. There’s a great deal about this issue that we just don’t know.
Let’s get rid of the state entirely, and all will be well. Given the present primitive degree of evolution of our species, a new state will pop up wherever an existing one is overthrown. The key to peace and prosperity is not anything so simple as abolition of the state, but to convince enough people, thoroughly enough, of the advantages of long-term cooperation. Good institutions will follow.
“Duck Dynasty and the Secular Theocracy.”
For more on David’s argument about secular theocracy, start here.
I would think so, especially after reading this:
The movement toward free trade agreements and globalization during the past 60 years has enormously reduced the economic advantages of having a larger domestic market to sell goods ands services. Small countries can sell their goods to other countries, both large and small, almost as easily as large countries can sell in their own domestic markets. For example, during the past 30 years the small country of Chile has had the fastest growing economy of Latin America, larger than Brazil and Mexico, the two largest nations of this region. This would not have been possible without the access of Chilean companies to markets in other countries, both in South America and elsewhere. As a result, Chile now exports around 40% of its GDP, compared to a ratio of exports to GDP in the United States of about 13%.
[…]
Small countries can do well with small domestic markets by taking advantage of a globalized economy by selling large fractions of its production to consumers and companies in other countries. That is why smaller countries usually export a considerably larger fraction of its production, and import a much bigger share of its consumption, than do larger countries. Size of country was much more important in the past when many countries had high tariffs, and transportation costs were much more important.
Political interest groups tend to be less able in smaller countries in distorting political decision in their favor. This is partly because smaller countries are more homogeneous, so it is harder for one group to exploit another group since the groups are similar. In addition, since smaller nations have less monopoly power in world markets, it is less efficent for them to subsidize domestic companies in order to give these companies an advantage over imports. The greater profits to domestic companies from these subsidies come at the expense of much larger declines in consumer well being.
The growth in the competitiveness of small countries on the global market is in good part responsible at a deeper level for the remarkable growth in the number of countries since 1950 from a little over 100 to almost 200 countries now. And the number of independent countries is still growing.
OMG! He has been reading us! How could he not be? Check out our thoughts on secession, decentralization, and devolution and tell me I’m wrong. Do it!
Heck, if we’re writing about the same stuff as a Nobel Laureate, and you’re reading us, what does that tell you about you? About us?
I’m curious. I also know Dr Becker doesn’t really read us. However, does the fact that we write about the same concepts and events as a Nobel Laureate have more to do with intelligence or ideological bias? Do prominent Left-wing scholars write about secession and globalization in the same way that we do?
From what I can tell, the answer to my second question is ‘no’ (the answer to my first is further below). Generally speaking, libertarians view more countries, more decentralization and more economic integration as a great thing, and we’ve got the data (increases in income, and longevity of life, and literacy rates, and…) to back it up. We’re the optimists.
Leftists and conservatives argue that all the good libertarian things happening in the world are bad, and they have some data to back it up (like Gross National Happiness). Leftists and conservatives are the pessimists.
Is this disagreement over globalization really a matter of intelligence? Of ideology? I think it’s probably a mixture of both, and also that intelligence levels affect ideological bias. You don’t hear many stupid people advocating for a more globalized world, much less for decentralized power structures and economic integration. It’s also hard to find smart people that will shun internationalism at the cultural or political level. The fact that many smart people, especially on the Left, shun economic internationalism is not so much troubling as it is amusing.
Watching intelligent people attempt to squirm out of answering questions about economic internationalism (“globalization”) can be quite the treat.
I think facts are squarely on the libertarian’s side, and that the main obstacle to attaining a more globalized, a more economically integrated, and a more politically decentralized world is rhetoric (and sheer numbers, of course). The benefits of globalization are usually seen by intelligent people very quickly (though not always thanks to clever rhetoric), but there are simply not that many intelligent people in the world (if there were, wouldn’t intelligence be rendered useless or morph into something else?).
I guess what I’m trying to say is that working towards a more libertarian world (thousands of political units with one world market) should be easy, so why isn’t it? I think the answer is ‘factions’. Farm subsidies in the West, for example, are unnecessary and can actually lead to hunger in poorer parts of the world. Getting rid of such subsidies would be a great benefit to mankind, but these subsidies persist. Why? Because of the political power of farm lobbies. If a politician representing a farm district in the West votes to eliminate subsidies, he’s gone in the next election. So unless the representatives of Western farmers somehow band together in defiance of their own interests and vote to eliminate farm subsidies, poor people will go hungry and Western citizens will pay too much for food.
Here is the real conundrum, though. If some factions gain political leverage over other factions, it does not necessarily follow that arbitrarily ending the hard-won privileges of the rent-capturing factions is the best option to take. In fact, it is often the worst option to take because of the dangers associated with arbitrary rule.
Think about it this way: Suppose a bunch of farmers in a democratic state band together and form a lobby for the purpose of protecting their interests. They gain influence (“capturing the rent”) and eventually become a nuisance to their countrymen but not a problem. Unfortunately, they are more than a nuisance to people in poor countries, but these poor people are unable to form a lobby that counters the lobbying efforts of the farmers.
The farm lobby in the rich country has followed all the rules. It has achieved its status as rent-capturer fairly, democratically and legally. What gives the government the right to suddenly change the rules on the farm lobby? Absolutely nothing. Furthermore, if the democratic government starts to ban lobbies it deems to be nuisances, it relinquishes its democratic moniker (and, more importantly, introduces arbitrary rule). Do you see the problem of ‘factions’?
Unfortunately, factions are built in to the policy-making process itself. One of the strengths of democracies is that they tend to give factions more of a voice than autocracies. In the United States, for example, Madison sought to combat the problem of factions by restricting the scope of the state to certain duties, and his system has done an excellent job (all things considered).
So I’ve got two questions I hope to be able to think about in the near term: 1) how can we make the Madisonian system better here in the United States, and 2) how can we “export” (for lack of a better term) Madisonian democracy abroad in a non-coercive manner?
There is going to be talk of inequality for three straight years. It’s the Obama administration’s strategy to help voters forget the horrors of the implementation of Obamacare. (It’s not optimistic about the rest of the plan either, it seems.) Of course, the word “inequality” resonates well with young people who have been impoverished by the administration’s bad policies since the current economic crisis (which it did inherit). When you can’t get a job, nearly everyone is better off than you are, and inequality is concrete.
Besides, you can always find inequality somewhere by cherry picking: Since 1990, the top ten per cent have increased their share from X to Z while the bottom 17% have seen their share decrease by W; since 2001, the top twenty percent have grown their share from M to P while the bottom 50%, blah, blah, blah. See what I mean? The only situation where you cannot find inequality is when everyone one, every person, every household has exactly the same as every other. This would be hard to achieve if you tried, because people would become unequal again at one end (on the one hand) before you had finished at the other end (on the other hand).
Yet, it turns out, it’s not difficult to do something concrete and decisive about inequality of income and/ or of wealth on an individual basis, through personal initiative. (Inequality of looks is a tougher proposition.). I advise how below.
First, if you are rich, you can easily dispose of your share of the social burden of economic equality. Just give away your money until you reach a median position or below. If you can’t help but earn more money, just keep giving it away. Problem solved.
Second, if you are poor, just decide to become Steve Jobs, or Bill Gates, both multi-billionaires who started from nothing. If that’s not your cup of tea, just become a millionaire athlete or actor. If that won’t work, and speaking of tea, start a Starbucks for teas. Hurry up, Starbucks itself is doing it right now. Don’t blame anyone: You had more than twenty years to take the initiative.
In general, the healthy poor in American have a lot of explaining to do. Go ahead, explain.
If you fear you don’t have the talent, or the education, or anything to help you qualify to do any of the above, here is a plan:
In every developed country including the US, there is a chronic shortage of plumbers, has been for at least forty years. One plumber I employed about ten years ago was grossing $60/hour. That was although his phobia prevented him for working in dark confined places. (Would I make this up?)
My suggestion is that you should apprentice yourself to a plumber for a year or so. After that span of time – which you might finance through a loan, don’t be shy, go right ahead – go into business for yourself. Plan for thirty hours a week of actual work because you need time to relax and a little time to get organized and to do the billing. Take a French-style one month vacation each year. Charge as much as I was willing to pay the phobic ten years ago, $60/hr.
You should gross about $85,000 a year. Count $15,000 for taxes and other deductions if you insist on keeping books. You are left with $70,000 to spend. According to the Census bureau, the gross household US median income was under $52,000 in 2011. It’s probably not much higher now. Since we are comparing net to gross, these elementary calculations put you actually well ahead of the average. And, remember, we are comparing your projected income to the median household income. So, under my plan, your spouse need not be gainfully employed.
With this kind of income, if you are that kind of person, you should be able to salt away in savings $5,000 each year. Placing the savings at a safe 3%, you re likely to be able to give your children something like $140,000 after only twenty years. Nice down payment on a house in California, nice house in Arkansas, even with inflation. Yet, more choice!
If you end up finding your superior plumber’s income distasteful because it violates your belief in equality, see above. Or you might just decide to work less each week or to take longer vacations.
On inequality, see also: “Equality and Fairness“.
Any questions?
In California, the voters are able to put proposed laws on the ballot if they gather enough signatures. This process is called an “initiative.” The legislature may also place propositions on the ballot, a process called a “referendum”.
One of the ballot propositions for 2014 is “The Neighborhood Legislature Reform Act,” which would decentralize the election of representatives in order to reduce the political power of special interests such as corporations, labor unions, and trial lawyers. This reform would shift political power to the people of California. (For the text of the initiative, see this.)
Like the US Congress, the California legislature has two houses, a Senate with 40 members and an Assembly with 80 members. The population of California is 38 million. The districts for the California Senate now have 950,000 persons, a greater number than for Congressional districts, while about 475,000 people live in each assembly district. It now takes a million dollars to win a California Senate seat.
The Neighborhood initiative would instead create Senate districts of 10,000 persons and Assembly districts of 5000. These neighborhood districts would form a greater association of 100 neighborhood districts within the current districts. The association council would elect a representative to the state legislature, thus keeping the same number of representatives in the state legislature. However, the final approval of a law would require a vote by all the neighborhood district representatives. That vote could be done on an Internet web site, as corporations now do for their elections of board members and propositions.
The Neighborhood Legislature proposition was initiated by John H. Cox, who has been a lawyer, real-estate management executive, and local office holder. The aim is to have the measure on the November 2014 ballot. That will require over 800,000 valid signatures, 8 percent of the votes cast for governor in the last election, by May 19. That is a high hurtle, which usually requires several million dollars to pay for signature gatherers. This initiative has already made a splash, with articles in the Wall Street Journal, Washington Post, The Los Angeles Times, and other media.
I have been writing for years on reforming democracy with tiny voting districts in a bottom-up structure. Back in 2007, I wrote an article, “Democracy Needs Reforming”, proposing that the political body be divided into cells of 1000 persons, each with a neighborhood council. A group of these would then elect a broader-area council, and so on up to the national congress or parliament. The state legislature would then only need one house, rather than a bicameral legislature that mimics the US Congress and British parliament. This “cellular democracy” would eliminate the inherent demand for campaign funds of mass democracy.
The Neighborhood Legislature Reform Act would not be quite as thorough a reform as a cellular democracy based on tiny districts, but it has the same basic concepts: smaller voting groups, and bottom-up multi-level representation. This initiative would indeed greatly reduce the demand for campaign funds that are needed in today’s huge California electoral districts.
It will be a great challenge to obtain the needed signatures. It could happen if the media provide editorial support and coverage. At any rate, the fact that this initiative is taking place will go a long ways to publicizing the gross corruption of democracy that is taking place, and the only effective remedy to the inherent dysfunction of mass democracy. Many reforms are needed in today’s governments, reforms in taxation, pensions, environmental protection, transit, criminal law, and economic deprivation. The main reason that useful reforms are not taking place is the subsidy-seeking and reform-blocking induced by mass democracy. The initiative process in California and other states is a way to circumvent the corrupt legislature, but in a large state like California, that process itself requires big money.
It will be interesting to watch the progress of the Neighborhood Legislature initiative, and to watch the special interests jump in with misleading negative ads. If this goes on the ballot and wins, it will be a victory for the people and a defeat for the moneyed special interests.
(Note: this article first appeared in The Progress Report)
Daniel McCarthy, the editor of The American Conservative, has a post up on the current “liberal” (Leftist) misreadings of how politics actually works:
Politics is just magic to [Leftists]. (Some of this comes of drawing the wrong lessons from Alinsky and Gramsci—wrong lessons the activist right is now busy committing to memory.)
The “lessons from Alinksy and Gramsci” that the Right is currently incorporating into its political program are none other than the tactics Leftists used during the heyday of communism to gain political power in the West.
Unfortunately, I think the Right is making a big mistake by copying a program that has failed the Left. Has it failed the Left? Or is communism an inevitable failure and tactics had nothing to do with it?
Governance is affected by movements. Does the Right want to be the new authoritarians? They’ve always been less authoritarian than the Left, but I see this changing especially if the Right continues to borrow tactics and ideas from the communist Left.
What is interesting is to watch how this all plays out. The Left’s playbook consists of delegitimizing people rather ideas or institutions. This leads to misdirected anger and makes it easier for opposition movements to seize the levers of power. It worked in the Anglo-American world, to a large extent (look at our educational systems, for example; they’re run by Marxists), but never more than superficially. Everybody knows, for example, which institutions have been captured by the Left. They know which institutions are Left-wing and which ones are not.
Why Rightists would want to copy this failed tactic is beyond me. The strength of classical liberalism has always been the resounding truth within its creed. It is truth that we march into battle with, not cheap tricks or ploys from the gutter.
It seems to me that the Right’s embrace of communist tactics comes mostly from one influential group of people in the US: conservative intellectuals with cultural ties to the Catholic or Mormon churches. To me I find this very weird, and while weirdness is definitely something I appreciate in my personal life I truly hope these tactics don’t trickle into the intellectual wing of the libertarian quadrant.
The spectacle of conservative intellectuals mimicking their Cold War adversaries two decades after winning – outright – the war of ideas is pathetic. You know where the ‘comments’ section is!
[Editor’s note: the following is a short essay by Payam Ghorbanian. Payam was born in Tehran, Iran. He got his bachelor of science in Engineering from Zanjan University in Zanjan, Iran. He has been participating in liberal political activities and he was involved with some think tanks in Iran. He is doing research in the field of international relations and Iran’s foreign policy as an independent activist. He is now living in San Jose, California.
I cannot endorse this essay, but I am excited to post it because of its potential as a conduit for intercultural dialogue and exchange. I have left his essay largely intact, but did break up some of his longer paragraphs for clarity’s sake. Thanks to Payam for taking the time to write this.]
On November 24, Iran and the P5+1 group have reached to a historical deal on Tehran’s nuclear program at talks in Geneva, Switzerland. We might have difficulty to understand this process, the process which turns out the agreement to be real, so we must particularly take a look around to the real position of this group of countries plus Iran. It’s one of the Iranian’s attitude and way of thinking to say what they wanted to get and what they really ended up to.
In Iran, Hassan Rouhani was elected as a president on Jun 15, 2013. He is also known as one of the three people who talked to McFarlane in the Iran-Contra affair in 1985 about buying weapons during war between Iran & Iraq. During campaign for presidency, he said an extremely hopeful statement about nuclear program. He said: “It is good for nuclear centrifuges to operate, but it is also important that the country operates as well and the wheels of industry are turning.”
After he got elected, he put his faith in the right person and chose Mr. Mohammad Javad Zarif to be the minister of foreign affairs with the complete authority in action. Mr. Zarif was the permanent representative of Iran to the United Nations from 2002 to 2007. He is really familiar with the international policy regulations and the United States’ policy. Therefore, he was chosen to precede Iran’s nuclear negotiations and it was decided that the entire process would be carried out solely within his team.
It was one of the toughest situations for Iranian policy even though the middle class, especially the people who are living in the large cities, are incredibly united and hopeful for solving this nuclear issue; however, the extremists criticized any approach to any kind of agreement. For several years people of Iran have been feeling how sanctions can really cripple their destiny, economy, and their society structure. As a result of these effects, the rates of unemployment, bankruptcy, addiction, divorce, and prostitution have increased without any official and governmental justification. Therefore, we can consider the November 24th, 2013 as a distinguished and remarkable day in Iran’s modern history.
With the above introduction, let’s go through the text of the agreement for some details. It has been said:
“ … from the existing uranium enriched to 20%, retain half as working stock of 20% oxide for fabrication of fuel for the TRR. Dilute the remaining 20% UF6 to no more than 5%. No reconversion line…Iran announces that it will not enrich uranium over 5% for the duration of the 6 months.”
Although Mr. Zarif announced that according to the agreement, enriching uranium under the 5% is now acceptable and claimed it as a big win for Iran, the majority of the people in Iran really do not care about this subject. They expect the removal of all sanctions and this was the reason that they were following the negotiations and they remained awake up until the agreement came out, which at that time was really late at local time in Iran.
After all these trials and tribulations, now you can find out how hope for the future can make our nation more united. The people clearly understand that it is not the end of the negotiations and it is just the start of long way and they are looking forward to the next 6 month. For the people, it is not just about nuclear program; it is more about their life and their children’s future. President Rouhani is now in the right place and with the supports of Iranians. We hope his social policy would be more flexible as well and we can see more freedom in the society.
We are not going to discuss here the Europe United’s policy during this long term negotiation with Iran. They always want to reserve the important positions for themselves; however, they usually get to every negotiation which others have already accepted. For the people of Iran, the Europeans are best known as those trying to prolong every issue.
On the other hand The Europeans always push the solution to the curb and then try to get back to the first step and ultimately get to the agreement and to take one step further. With flopping back and forth, the conclusion usually would never come out. People of Iran had been disappointed of this kind of policy. From Iranian’s point of view, France should be responsible for the last unsuccessful talks on November 9th. Unfortunately they are unreliable partner for this region.
After all these, it is now time to shift our focus to the president Obama’s foreign policy about Middle East during the last year. Not that far ago, Syria used chemical weapons and crossed the red line, which was mentioned by president Obama before. Moreover, United Nation confirmed that there was no doubt of such use of chemical weapon from Syrians regime. However, instead of taking military action, president Obama decided to follow Russians in this crisis and he still tries to solve this issue through the UN. As a fact, it is clear that in order to go through the UN path to solve this crisis, United States has to deal with Russians and Chinese, since they have the authority to block international actions through the Security Council.
It is a fact that the Syrian’s people have been killed during the last three years. However, it seems that this fact is going to be ignored and denied. On the other side, Obama’s policy in this case would let the conservative countries like Qatar or Saudi Arabia to take part in this eternal disaster. They can easily get rid of their extremist religious groups by allowing them to attend in this catastrophic war in Syria. Also due to the fact of this important unsolved problem in Syria, the pressure of human rights activities and other internal problems in their countries would be neglected. With this aspect of Syria’s crisis and also the failing of Arab spring, having an agreement with Iran is essential for Obama’s policy to get through these consecutive unsuccessful affairs. However, Israel’s prime minister tries to call this agreement as a historical mistake.
Great Britain has recently announced that they are concerned about total failure in Iran because of sanctions. After Great Britain evacuated all embassy staff from Iran in November 2011, now it seems that they are going to open relations with Iran following the election of President Rouhani. Undoubtedly they know the Middle East region much better than anyone else. They know this failure can affect Afghanistan, Iraq and the entire Middle East region. As a result, Britain has consecutively tried to help Iran and U.S. to approach to the final steps of negotiations.
On the other side, China is known as fatal mistake in economic partnership for Iranians during the last 10 years. Chinese took advantage of unjust situation of Iran and also destroyed industries in Iran are caused by importing cheap Chinese products. They have initially accepted the UN sanctions and have blocked about 50 billion dollars of Iran’s money in their banks; however, they ultimately should be happy of this agreement which definitely will moderate oil price and open up the gate of Iran’s market for Chinese investments.
Clearly with their foreign policy being so close to Iran, it is just a pose for Chinese in order to help them to precede their policy in southeast Asia using Iran’s threat for pushing away Chinese threat. Couple weeks ago they extended “air defense identification zones” which it seems will be accepted by United States. There is a common trend for all nations which can be written in this way that you are not going to consider as a powerful country if you just want to please yourself.
Finally, Russia should be indeed considered as the biggest winner of this agreement as well as the Middle East situation. Moreover, with the intent of being leader of the entire world, they forced other countries to accept their decisions on Syria’s crisis and by having this virtual confidence, now they really have plans to ruin all aspects of the free world. On September 12th, President Putin decisively took an issue with president Obama. His article was about United States people and he mentioned: “It is extremely dangerous to encourage people to see themselves as exceptional.”
However, president Obama decided to ignore this article and show respect to the new Russia. I believe working with Russia about Syria’s crisis and choosing non-interventionism for Ukraine crises would be one of the Obama’s failures in the U.S. foreign policy. Now this agreement would help Russia and obviously president Putin to take the rein of power more and more. At the end if Russia and China find out that there are not any obstacles around, they will never ever conceal their ambitious points.
Notes On Liberty 