Legal System: Recent Episodes
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Search Legal System for articles on the application and operation of the legal codes or particular laws in both the US and elsewhere.
The DOJ claims that it has "protected" consumers by standing in the way of a partnership between JetBlue and American Airlines. The only thing the DOJ protected was higher-cost flying.
Original Article: "Flying into Foolishness: The DOJ "Saves" Consumers from Low-Cost Airlines"
In a free society, political crimes like treason and "seditious libel" are few and far between. Under despotic regimes, on the other hand, political crimes multiply.
Original Article: "Why Governments Love Political "Crimes" Like Treason and Sedition"
The regime has increasingly been consumed with paranoia over threats to itself—propagandistically termed "threats to democracy"—while real crime against private citizens is clearly not a priority at all.
Original Article: "The State Protects Itself While Crime against Ordinary People Surges"
The activists went from "We want to be left alone to live our lives" to "we want to control your lives too." Now the movement has state power on its side and bullies all opponents.
Original Article: "2SLGBTQ+IA and the Law"
Even under chattel slavery, inequality was still pervasive. Carpenters, sugar boilers, blacksmiths, cabinetmakers, and rum distillers constituted an elite core of slaves.
Original Article: "Even in Slave Economies, the Division of Labor Was Inescapable"
Some residents of St. Louis, fed up with the nonprotection from the city's police, have hired private security to deal with the problem. The egalitarian Left, of course, doesn't like that.
Original Article: "Egalitarianism as a Revolt against Safety"
Robbie "The Fire" Bernstein is a co-host with Dave Smith of the popular podcast Part of the Problem, as well as his own podcast Run Your Mouth. He joins Bob to walk through the shocking and hilarious moves by Biden officials to downplay recent allegations of corruption.
Find More from Robbie Including His Tour Dates: Mises.org/HAP404a $5.1M Payment to Biden Businesses: Mises.org/HAP404b Biden Attorneys on The Hunter WhatAspp Message: Mises.org/HAP404c
Join us in Nashville on September 23rd for a no-holds-barred discussion against the regime: Mises.org/Nashville23
Crime is increasing in American cities, but don't count on police to protect you. The Defund the Police movement has less to do with that than most people think.
Original Article: "You Can’t Depend on the State to Maintain Public Order"
Every day, more and more Americans are awakening to the reality that the institutions in control of this nation are failing them. From violence in the streets, inflation in our stores, increasing tyranny and censorship, and absolute buffoonery on public display in halls of political power. The ruling class is getting richer while most of us suffer, and new generations are becoming increasingly warped by the dangerous ideologies of the left.
Recorded at The Depot Craft Brewery & Distillery in Reno, Nevada on May 20th, 2023.
[This article is excerpted from Conceived in Liberty, volume 1, chapter 6, "The Social Structure of Virginia: Bondservants and Slaves". An MP3 audio file of this article, narrated by Floy Lilley, is available for download.]
Until the 1670s, the bulk of forced labor in Virginia was indentured service (largely white, but some Negro); Negro slavery was negligible. In 1683 there were 12,000 indentured servants in Virginia and only 3,000 slaves of a total population of 44,000. Masters generally preferred bondservants for two reasons. First, they could exploit the bondservants more ruthlessly because they did not own them permanently, as they did their slaves; on the other hand, the slaves were completely their owners’ capital and hence the masters were economically compelled to try to preserve the capital value of their human tools of production. Second, the bondservants, looking forward to their freedom, could be more productive laborers than the slaves, who were deprived of all hope for the future.
As the colony grew, the number of bondservants grew also, although as servants were repeatedly set free, their proportion to the population of Virginia declined. Since the service was temporary, a large new supply had to be continually furnished. There were seven sources of bondservice, two voluntary (initially) and five compulsory. The former consisted partly of “redemptioners” who bound themselves for four to seven years, in return for their passage money to America. It is estimated that seventy percent of all immigration in the colonies throughout the colonial era consisted of redemptioners. The other voluntary category consisted of apprentices, children of the English poor, who were bound out until the age of twenty-one. In the compulsory category were: (a) impoverished and orphaned English children shipped to the colonies by the English government; (b) colonists bound to service in lieu of imprisonment for debt (the universal punishment for all nonpayment in that period); (c) colonial criminals who were simply farmed out by the authorities to the mastership of private employers; (d) poor English children or adults kidnapped by professional “crimps”—one of whom boasted of seizing 500 children annually for a dozen years; and (e) British convicts choosing servitude in America for seven to fourteen years in lieu of all prison terms in England. The last were usually petty thieves or political prisoners—and Virginia absorbed a large portion of the transported criminals.
As an example of the grounds for deporting political prisoners into bondage, an English law in force in the mid-1660s banished to the colonies anyone convicted three times of attempting an unlawful meeting—a law aimed mostly at the Quakers. Hundreds of Scottish nationalist rebels, particularly after the Scottish uprising of 1679, were shipped to the colonies as political criminals. An act of 1670 banished to the colonies anyone with knowledge of illegal religious or political activity, who refused to turn informer for the government.
During his term of bondage, the indentured servant received no monetary payment. His hours and conditions of work were set absolutely by the will of his master who punished the servant at his own discretion. Flight from the master’s service was punishable by beating, or by doubling or tripling the term of indenture. The bondservants were frequently beaten, branded, chained to their work, and tortured. The frequent maltreatment of bondservants is so indicated in a corrective Virginia act of 1662: “The barbarous usage of some servants by cruel masters being so much scandal and infamy to the country... that people who would willingly adventure themselves hither, are through fears thereof diverted”—thus diminishing the needed supply of indentured servants.
Many of the oppressed servants were moved to the length of open resistance. The major form of resistance was flight, either individually or in groups; this spurred their employers to search for them by various means, including newspaper advertisements. Work stoppages were also employed as a method of struggle. But more vigorous rebellions also occurred especially in Virginia in 1659, 1661, 1663, and 1681. Rebellions of servants were particularly pressing in the 1660s because of the particularly large number of political prisoners taken in England during that decade. Independent and rebellious by nature, these men had been shipped to the colonies as bondservants. Stringent laws were passed in the 1660s against runaway servants striving to gain their freedom.
In all cases, the servant revolts for freedom were totally crushed and the leaders executed. Demands of the rebelling servants ranged from improved conditions and better food to outright freedom. The leading example was the servant uprising of 1661 in York County, Virginia, led by Isaac Friend and William Clutton. Friend had exhorted the other servants that “he would be the first and lead them and cry as they went along who would be for liberty and freed from bondage and that there would be enough come to them, and they would go through the country and kill those who made any opposition and that they would either be free or die for it.”Abbot E. Smith, Colonists in Bondage. The rebels were treated with surprising leniency by the county court, but this unwonted spirit quickly evaporated with another servant uprising in 1663.
This servant rebellion in York, Middlesex, and Gloucester counties was betrayed by a servant named Birkenhead, who was rewarded for his renegacy by the House of Burgesses with his freedom and 5,000 pounds of tobacco. The rebel leaders, however,—former soldiers under Cromwell—were ruthlessly treated; nine were indicted for high treason and four actually executed. In 1672 a servant plot to gain freedom was uncovered and a Katherine Nugent suffered thirty lashes for complicity. A law was passed forbidding servants from leaving home without special permits and meetings of servants were further repressed.
One of the first servant rebellions occurred in the neighboring Chesapeake tobacco colony of Maryland. In 1644 Edward Robinson and two brothers were convicted for armed rebellion for the purpose of liberating bondservants. Thirteen years later Robert Chessick, a recaptured runaway servant in Maryland, persuaded several servants of various masters to run away to the Swedish settlements on the Delaware River. Chessick and a dozen other servants seized a master’s boat, as well as arms for self-defense in case of attempted capture. But the men were captured and Chessick was given thirty lashes. As a special refinement, one of Chessick’s friends and abettors in the escape, John Beale, was forced to perform the whipping.
In 1663 the bondservants of Richard Preston of Maryland went on strike and refused to work in protest against the lack of meat. The Maryland court sentenced the six disobedient servants to thirty lashes each, with two of the most moderate rebels compelled to perform the whipping. Facing force majeure, all the servants abased themselves and begged forgiveness from their master and from the court, which suspended the sentence on good behavior.
In Virginia a servant rebellion against a master, Captain Sisbey, occurred as early as 1638; the lower Norfolk court ordered the enormous total of one hundred lashes on each rebel. In 1640 six servants of Captain William Pierce tried to escape to the Dutch settlements. The runaways were apprehended and brutally punished, lest this set “a dangerous precedent for the future time.” The prisoners were sentenced to be whipped and branded, to work in shackles, and to have their terms of bondage extended.
By the late seventeenth century the supply of bondservants began to dry up. While the opening of new colonies and wider settlements increased the demand for bondservants, the supply dwindled greatly as the English government finally cracked down on the organized practice of kidnapping and on the shipping of convicts to the colonies. And so the planters turned to the import and purchase of Negro slaves. In Virginia there had been 50 Negroes, the bulk of them slaves, out of a total population of 2,500 in 1630; 950 Negroes out of 27,000 in 1660; and 3,000 Negroes out of 44,000 in 1680—a steadily rising proportion, but still limited to less than seven percent of the population. But in ten years, by 1690, the proportion of Negroes had jumped to over 9,000 out of 53,000, approximately seventeen percent. And by 1700, the number was 16,000 out of a population of 58,000, approximately twenty-eight percent. And of the total labor force—the working population—this undoubtedly reflected a considerably higher proportion of Negroes.
How the Negro slaves were treated may be gauged by the diary of the aforementioned William Byrd II, who felt himself to be a kindly master and often inveighed against “brutes who mistreat their slaves.” Typical examples of this kindly treatment were entered in his diary:
2-8-09: Jenny and Eugene were whipped.
5-13-09: Mrs. Byrd whips the nurse.
6-10-09: Eugene (a child) was whipped for running away and had the bit put on him.
11-30-09: Jenny and Eugene were whipped.
12-16-09: Eugene was whipped for doing nothing yesterday.
4-17-10: Byrd helped to investigate slaves tried for “High Treason”; two were hanged.
7-1-10: The Negro woman ran away again with the bit in her mouth.
7-15-10: My wife, against my will, caused little Jenny to be burned with a hot iron.
8-22-10: I had a severe quarrel with little Jenny and beat her too much for which I was sorry.
1-22-11: A slave “pretends to be sick.” I put a branding iron on the place he claimed of and put the bit on him.
It is pointless to criticize such passages as only selected instances of cruel treatment, counterbalanced by acts of kindness by Byrd and other planters toward their slaves. For the point is not only that the slave system was one where such acts could take place; the point is that threats of brutality underlay the whole relationship. For the essence of slavery is that human beings, with their inherent freedom of will, with individual desires and convictions and purposes, are used as capital, as tools for the benefit of their master. The slave is therefore habitually forced into types and degrees of work that he would not have freely undertaken; by necessity, therefore, the bit and the lash become the motor of the slave system. The myth of the kindly master camouflages the inherent brutality and savagery of the slave system.
One historical myth holds that since the slaves were their masters’ capital, the masters’ economic self-interest dictated kindly treatment of their property. But again, the masters always had to make sure that the property was really theirs, and for this, systematic brutality was needed to turn labor from natural into coerced channels for the benefit of the master. And, second, what of property that had outlived its usefulness? Of capital that no longer promised a return to the master? Of slaves too old or too ill to continue earning their masters a return? What sort of treatment did the economic self-interest of the master dictate for slaves who could no longer repay the costs of their subsistence?
Slaves resisted their plight in many ways, ranging from such nonviolent methods as work slowdowns, feigning illness, and flight, to sabotage, arson, and outright insurrection. Insurrections were always doomed to failure, outnumbered as the slaves were in the population. And yet the slave revolts appeared and reappeared. There were considerable slave plots in Virginia in 1687, 1709–10, 1722–23, and 1730. A joint conspiracy of great numbers of Negro and Indian slaves in Surry and Isle of Wight counties was suppressed in 1709, and another Negro slave conspiracy crushed in Surry County the following year. The slave who betrayed his fellows was granted his freedom by the grateful master. The 1730 uprising occurred in five counties of Virginia, and centered on the town of Williamsburg. A few weeks before the insurrection, several suspected slaves were arrested and whipped. An insurrection was then planned for the future, but was betrayed and the leaders executed.
Joint flight by slaves and servants was also common during the seventeenth century, as well as joint participation in plots and uprisings. In 1663 Negro slaves and white indentured servants in Virginia plotted an extensive revolt, and a number of the rebels were executed. The colonists appointed the day as one of prayer and thanksgiving for being spared the revolt. Neither slave nor indentured servant was permitted to marry without the master’s consent; yet there is record of frequent cohabitation, despite prohibitory laws.
It has been maintained in mitigation of the brutality of the American slave system that the Negroes were purchased from African chieftains, who had enslaved them there. It is true that the slaves were also slaves in Africa, but it is also true that African slavery never envisioned the vast scope, the massive dragooning of forced labor that marked American plantation slavery. Furthermore, the existence of a ready white market for slaves greatly expanded the extent of slavery in Africa, as well as the intensity of the intertribal wars through which slavery came about. As is usually the case on the market, demand stimulated supply. Moreover, African slavery did not include transportation under such monstrous conditions that a large percentage could not survive, or the brutal “seasoning” process in a West Indies way station to make sure that only those fit for slave conditions survived, or the continual deliberate breaking up of slave families that prevailed in the colonies.
From the earliest opening of the New World, African slaves were imported as forced labor to make possible the working of large plantations, which, as we have seen, would have been uneconomic if they had had to rely, as did other producers, on free and voluntary labor. In Latin America, from the sixteenth century on, Negro slavery was used for large sugar plantations concentrated in the West Indies and on the north coast of South America. It has been estimated that a total of 900,000 Negro slaves were imported into the New World in the sixteenth century, and two and three-quarter million in the seventeenth century.Over the seventeenth and eighteenth centuries, only about one-fifteenth of the total Negro imports into the New World arrived in the territory of what is now the United States. That the slaves fared even worse in the Latin American colonies is seen by the far higher death rate there than in North America.
Negroes came into use as slaves instead of the indigenous American Indians because: (a) the Negroes proved more adaptable to the onerous working conditions of slavery—enslaved Indians tended, as in the Caribbean, to die out; (b) it was easier to buy existing slaves from African chieftains than to enslave a race anew; and (c) of the great moral and spiritual influence of Father Bartolome de Las Casas in Spanish America, who in the mid-sixteenth century inveighed against the enslavement of the American Indians. Spanish consciences were never agitated over Negro slavery as they were over Indian; even Las Casas himself owned several Negro slaves for many years. Indeed, early in his career, Las Casas advocated the introduction of Negro slaves to relieve the pressure on the Indians, but he eventually came to repudiate the slavery of both races. In the seventeenth century two Spanish Jesuits, Alonzo de Sandoval and Pedro Claver, were conspicuous in trying to help the Negro slaves, but neither attacked the institution of Negro slavery as un-Christian. Undoubtedly one reason for the different treatment of the two races was the general conviction among Europeans of the inherent inferiority of the Negro race. Thus, the same Montesquieu who had scoffed at those Spaniards who called the American Indians barbarians, suggested that the African Negro was the embodiment of Aristotle’s “natural slave.” And even the environmental determinist David Hume suspected “the Negroes to be naturally inferior to the whites. There scarcely ever was a civilized nation of that complexion, nor even an individual, eminent either in action or speculation. No ingenious manufacturers amongst them, no arts, no sciences. On the other hand, the most rude and barbarian of the whites... have still something eminent about them.... Such a uniform and constant difference could not happen, in so many countries and ages, if nature had not made an original distinction between these breeds of men.”
Contrary to the views of those writers who maintain that Negroes and whites enjoyed equal rights as indentured servants in Virginia until the 1660s, after which the Negroes were gradually enslaved, evidence seems clear that from the beginning many Negroes were slaves and were treated far more harshly than were white indentured servants.Cf. Winthrop D. Jordan, “Modern Tensions and the Origins of American Slavery,” Journal of Southern History (February 1962), pp. 17-30. No white man, for example, was ever enslaved unto perpetuity—lifetime service for the slave and for his descendants—in any English colony. The fact that there were no slave statutes in Virginia until the 1660s simply reflected the small number of Negroes in the colony before that date.Ibid. Jordan cites many evidences of Negro slavery—including court sentences, records of Negroes, executions of wills, comparative sale prices of Negro and white servants—dating from 1640, before which time the number of Negroes in Virginia was negligible. From a very early date, owned Negroes were worked as field hands, whereas white bondservants were spared this onerous labor. And also from an early date, Negroes, in particular, were denied any right to bear arms. An especially striking illustration of this racism pervading Virginia from the earliest days was the harsh prohibition against any sexual union of the races. As early as 1630 a Virginia court ordered “Hugh Davis to be soundly whipped, before an assembly of Negroes and others for abusing himself to the dishonor of God and shame of Christians by defiling his body in lying with a Negro.” By the early 1660s the colonial government outlawed miscegenation and interracial fornication. When Virginia prohibited all interracial unions in 1691, the Assembly bitterly denounced miscegenation as “that abominable mixture and spurious issue.”“Spurious” in colonial legislation meant not simply illegitimate, but specifically the children of interracial unions.
Other regulations dating from this period and a little later included one that forbade any slave from leaving a plantation without a pass from his master; another decreed that conversion to Christianity would not set a slave free, a fact which violated a European tradition that only heathens, not Christians, might be reduced to slavery.
By the end of the seventeenth century, the growing Virginia colony had emerged from its tiny and precarious beginnings with a definite social structure. This society may be termed partly feudal. On the one hand, Virginia, with its abundance of new land, was spared the complete feudal mold of the English homeland. The Virginia Company was interested in promoting settlement, and most grantees (such as individual settlers and former indentured servants) were interested in settling the land for themselves. As a result, there developed a multitude of independent yeomen settlers, particularly in the less choice up-country lands. Also, the feudal quitrent system never took hold in Virginia. The settlers were charged quitrents by the colony or by the large grantees who, instead of allowing settlers to own the land or selling the land to them, insisted on charging and trying to collect annual quitrents as overlords of the land area. But while Virginia was able to avoid many crucial features of feudalism, it introduced an important feudal feature into its method of distributing land, especially the granting of large tracts of choice tidewater river land to favorite and wealthy planters. These large land grants would have early dissolved into ownership by the individual settlers were it not for the regime of forced labor, which made the large tobacco plantations profitable. Furthermore, the original “settlers,” those who brought the new land into use, were in this case the slaves and bondservants themselves, so it might well be said that the planters were in an arbitrary quasi-feudal relation to their land even apart from the large grants.
Temporary indentured service, both “voluntary” and compulsory, and the more permanent Negro slavery formed the base of exploited labor upon which was erected a structure of oligarchic rule by the large tobacco planters. The continuance of the large land tracts was also buttressed by the totally feudal laws of entail and primogeniture, which obtained, at least formally, in Virginia and most of the other colonies. Primogeniture compelled the undivided passing-on of land to the eldest son, and entail prevented the land from being alienated (even voluntarily) from the family domain. However, primogeniture did not exert its fully restrictive effect, for the planters generally managed to elude it and to divide their estate among their younger children as well. Hence, Virginia land partly dissolved into its natural division as the population grew. Primogeniture and entail never really took hold in Virginia, because the abundance of cheap land made labor—and hence the coerced supply of slaves—the key factor in production. More land could always be acquired; hence there was no need to restrict inheritance to the eldest son. Furthermore, the rapid exhaustion of tobacco land by the current methods of cultivation required the planters to be mobile, and to be ready to strike out after new plantations. The need for such mobility militated against the fixity of landed estates that marked the rigid feudal system of land inheritance prevailing in England. Overall, the wealth and status of Virginia’s large planters was far more precarious and less entrenched that were those of their landowning counterparts in England.
[Originally from Joseph R. Peden and Fred R. Glahe, eds., The American Family and the State (San Francisco: Pacific Research Institute, 1986).]
While the "Progressive Era" used to be narrowly designated as the period 1900–1914, historians now realize that the period is really much broader, stretching from the latter decades of the nineteenth century into the early 1920s. The broader period marks an era in which the entire American polity—from economics to urban planning to medicine to social work to the licensing of professions to the ideology of intellectuals—was transformed from a roughly laissez-faire system based on individual rights to one of state planning and control. In the sphere of public policy issues closely related to the life of the family, most of the change took place, or at least began, in the latter decades of the nineteenth century. In this paper we shall use the analytic insights of the "new political history" to examine the ways in which the so-called progressives sought to shape and control selected aspects of American family life.
ETHNORELIGIOUS CONFLICT AND THE PUBLIC SCHOOLSIn the last two decades, the advent of the "new political history" has transformed our understanding of the political party system and the basis of political conflict in nineteenth century America. In contrast to the party systems of the twentieth century (the "fourth" party system, 1896–1932, of Republican supremacy; the "fifth" party system, 1932–? of Democratic supremacy), the nineteenth century political parties were not bland coalitions of interests with virtually the same amorphous ideology, with each party blurring what is left of its image during campaigns to appeal to the large independent center. In the nineteenth century, each party offered a fiercely contrasting ideology, and political parties performed the function of imposing a common ideology on diverse sectional and economic interests. During campaigns, the ideology and the partisanship became fiercer and even more clearly demarcated, since the object was not to appeal to independent moderates—there were virtually none—but to bring out the vote of one's own partisans. Such partisanship and sharp alternatives marked the "second" American party system (Whig versus Democrat, approximately 1830 to the mid-1850s) and the "third" party system (closely fought Republican versus Democrat, mid-1850s to 1896).
Another important insight of the new political history is that the partisan passion devoted by rank-and-file Democrats and Republicans to national economic issues, stemmed from a similar passion devoted at the local and state level to what would now be called "social" issues. Furthermore, that political conflict, from the 1830s on, stemmed from a radical transformation that took place in American Protestantism as a result of the revival movement of the 1830s.
The new revival movement swept the Protestant churches, particularly in the North, like wildfire. In contrast to the old creedal Calvinist churches that stressed the importance of obeying God's law as expressed in the church creed, the new "pietism" was very different. The pietist doctrine was essentially as follows: Specific creeds of various churches or sects do not matter. Neither does obedience to the rituals or liturgies of the particular church. What counts for salvation is only each individual being "born again"—a direct confrontation between the individual and God, a mystical and emotional conversion in which the individual achieves salvation. The rite of baptism, to the pietist, therefore becomes secondary; of primary importance is his or her personal moment of conversion.
But if the specific church or creed becomes submerged in a vague Christian interdenominationalism, then the individual Christian is left on his own to grapple with the problems of salvation. Pietism, as it swept American Protestantism in the 1830s, took two very different forms in North and South, with very different political implications. The Southerners, at least until the 1890s, became "salvationist pietists," that is, they believed that the emotional experience of individual regeneration, of being born again, was enough to ensure salvation. Religion was a separate compartment of life, a vertical individual-God relation carrying no imperative to transform man-made culture and interhuman relations.
In contrast, the Northerners, particularly in the areas inhabited by "Yankees," adopted a far different form of pietism, "evangelical pietism." The evangelical pietists believed that man could achieve salvation by an act of free will. More particularly, they also believed that it was necessary to a person's own salvation—and not just a good idea—to try his best to ensure the salvation of everyone else in society:
"To spread holiness," to create that Christian commonwealth by bringing all men to Christ, was the divinely ordered duty of the "saved." Their mandate was "to transform the world into the image of Christ."The quotations are, respectively, from the Minutes of the Ohio Annual Conference of the Methodist Episcopal Church, 1875, p. 228; and the Minutes of the Annual Meeting of the Maine Baptist Missionary Convention. 1890. p. 13. Both are cited in Paul Kleppner, The Third Electoral System, 1853–1892: Parties. Voters. and Political Culture (Chapel Hill: University of North Carolina Press, 1979), p. 190. Professor Kleppner is the doyen of the "new political," also known as the "ethnocultural," historians See also his The Cross of Culture: A Social Analysis of Midwestern Politics, 1850–1900 (New York: The Free Press, 1970).
Since each individual is alone to wrestle with problems of sin and salvation, without creed or ritual of the church to sustain him, the evangelical duty must therefore be to use the state, the social arm of the integrated Christian community, to stamp out temptation and occasions for sin. Only in this way could one perform one's divinely mandated duty to maximize the salvation of others.In contrast to previous Christian groups, which were either amillennial (the return of Jesus will bring an end to human history) or premillennial (the return of Jesus will usher in a thousand-year reign of the Kingdom of God on earth), most evangelical pietists were postmillennialists. In short. whereas Catholics, Lutherans, and most Calvinists believed that the return of Jesus is independent of human actions, the postmillennialists held that Christians must establish a thousand-year reign of the Kingdom of God on earth as a necessary precondition of Jesus' return. In short, the evangelicals will have to take over the state and stamp out sin, so that Jesus can then return. And to the evangelical pietist, sin took on an extremely broad definition, placing the requirements for holiness far beyond that of other Christian groups. As one antipietist Christian put it, "They saw sin where God did not." In particular, sin was any and all forms of contact with liquor, and doing anything except praying and going to church on Sunday. Any forms of gambling, dancing, theater, reading of novels—in short, secular enjoyment of any kind—were considered sinful.
The forms of sin that particularly agitated the evangelicals were those they held to interfere with the theological free will of individuals, making them unable to achieve salvation. Liquor was sinful because, they alleged, it crippled the free will of the imbibers. Another particular source of sin was Roman Catholicism, in which priests and bishops, arms of the Pope (whom they identified as the Antichrist), ruled the minds and therefore crippled the theological freedom of will of members of the church.
Evangelical pietism particularly appealed to, and therefore took root among, the "Yankees," i.e., that cultural group that originated in (especially rural) New England and emigrated widely to populate northern and western New York, northern Ohio, northern Indiana, and northern Illinois. The Yankees were natural "cultural imperialists," people who were wont to impose their values and morality on other groups; as such, they took quite naturally to imposing their form of pietism through whatever means were available, including the use of the coercive power of the state.
In contrast to evangelical pietists were, in addition to small groups of old-fashioned Calvinists, two great Christian groups, the Catholics and the Lutherans (or at least, the high-church variety of Lutheran), who were "liturgicals" (or "ritualists") rather than pietists. The liturgicals saw the road to salvation in joining the particular church, obeying its rituals, and making use of its sacraments; the individual was not alone with only his emotions and the state to protect him. There was no particular need, then, for the state to take on the functions of the church. Furthermore, the liturgicals had a much more relaxed and rational view of what sin really was; for instance, excessive drinking might be sinful, but liquor per se surely was not.
The evangelical pietists, from the 1830s on, were the northern Protestants of British descent, as well as the Lutherans from Scandinavia and a minority of pietist German synods; the liturgicals were the Roman Catholics and the high-church Lutherans, largely German.
Very rapidly, the political parties reflected a virtually one-to-one correlation of this ethnoreligious division: the Whig, and later the Republican, party consisting chiefly of the pietists, and the Democratic party encompassing almost all the liturgicals. And for almost a century, on a state and local level, the Whig/Republican pietists tried desperately and determinedly to stamp out liquor and all Sunday activities except church (of course, drinking liquor on Sunday was a heinous double sin). As to the Catholic church, the pietists tried to restrict or abolish immigration, since people coming from Germany and Ireland, liturgicals, were outnumbering people from Britain and Scandinavia. Failing that and despairing of doing anything about adult Catholics poisoned by agents of the Vatican, the evangelical pietists decided to concentrate on saving Catholic and Lutheran youth by trying to eliminate the parochial schools, through which both religious groups transmitted their precious religious and social values to the young. The object, as many pietists put it, was to "Christianize the Catholics," to force Catholic and Lutheran children into public schools, which could then be used as an instrument of pietist Protestantization. Since the Yankees had early taken to the idea of imposing communal civic virtue and obedience through the public schools, they were particularly receptive to this new reason for aggrandizing public education.
To all of these continuing aggressions by what they termed "those fanatics," the liturgicals fought back with equal fervor. Particularly bewildered were the Germans who, Lutheran and Catholic alike, were accustomed to the entire family happily attending beer gardens together on Sundays after church and who now found the "fanatic" pietists trying desperately to outlaw this pleasurable and seemingly innocent activity. The pietist Protestant attacks on private and parochial schools fatally threatened the preservation and maintenance of the liturgicals' cultural and religious values; and since large numbers of the Catholics and Lutherans were immigrants, parochial schools also served to maintain group affinities in a new and often hostile world—especially the world of Anglo-Saxon pietism. In the case of the Germans, it also meant, for several decades, preserving parochial teaching in the beloved German language, as against fierce pressures for Anglicization.
In the last three decades of the nineteenth century, as Catholic immigration grew and the Democratic party moved slowly but surely toward a majority status, the Republican, and—more broadly—pietist pressures became more intense. The purpose of the public school, to the pietists, was "to unify and make homogeneous the society." There was no twentieth century concern for separating religion and the public school system. To the contrary, in most northern jurisdictions only pietist-Protestant church members were allowed to be teachers in the public schools. Daily reading of the Protestant Bible, daily Protestant prayers and Protestant hymns were common in the public schools, and school textbooks were rife with anti-Catholic propaganda. Thus, New York City school textbooks spoke broadly of "the deceitful Catholics," and pounded into their children, Catholic and Protestant alike, the message that "Catholics are necessarily, morally, intellectually, infallibly, a stupid race.”Cited in David B. Tyack, The One Best System: A History of American Urban Education (Cambridge: Harvard University Press, 1974), pp. 84–85.
Teachers delivered homilies on the evils of Popery, and also on deeply felt pietist theological values: the wickedness of alcohol (the "demon rum") and the importance of keeping the Sabbath. In the 1880s and 1890s, zealous pietists began working ardently for antialcohol instruction as a required part of the public-school curriculum; by 1901, every state in the Union required instruction in temperance.
Since most Catholic children went to public rather than parochial schools, the Catholic authorities were understandably anxious to purge the schools of Protestant requirements and ceremonies, and of anti-Catholic textbooks. To the pietists, these attempts to de-Protestantize the public schools were intolerable "Romish aggression." The whole point of the public schools was moral and religious homogenization, and here the Catholics were disrupting the attempt to make American society holy—to produce, through the public school and the Protestant gospel, "a morally and politically homogeneous people." As Kleppner writes:
When they [the pietists] spoke of "moral education," they had in mind principles of morality shared in common by the adherents of gospel religion, for in the public school all children, even those whose parents were enslaved by "Lutheran formalism or Romish supersitition," would be exposed to the Bible. That alone was cause for righteous optimism, for they believed the Bible to be "the agent in converting the soul," "the volume that makes human beings men."Kleppner, Third Electoral System, n. 1, p. 222.
In this way, "America [would] be Saved Through the Children.”Our Church Work (Madison, Wis.), July 17, 1890. Cited in ibid., p. 224.
The pietists were therefore incensed that the Catholics were attempting to block the salvation of America's children—and eventually of America itself—all at the orders of a "foreign potentate." Thus, the New Jersey Methodist Conference of 1870 lashed out with their deepest feelings against this Romish obstructionism:
Resolved, That we greatly deprecate the effort which is being made by "Haters of Light," and especially by an arrogant priesthood, to exclude the Bible from the Public Schools of our land; and that we will do all in our power to defeat the well-defined and wicked design of this "Mother of Harlots.”Minutes of the New Jersey Annual Conference of the Methodist Episcopal Church, 1870, p. 24. Cited in ibid., p. 230. Similar reactions can be found in the minutes of the Central Pennsylvania Methodists in 1875, the Maine Methodists in 1887, the New York Methodists of 1880, and the Wisconsin Congregationalists of 1890.
Throughout the nineteenth century, "nativist" attacks on "foreigners" and the foreign-born were really attacks on liturgical immigrants. Immigrants from Britain or Scandinavia, pietists all, were "good Americans" as soon as they got off the boat. It was the diverse culture of the other immigrants that had to be homogenized and molded into that of pietist America. Thus, the New England Methodist Conference of 1889 declared:
We are a nation of remnants, ravellings from the Old World. . . . The public school is one of the remedial agencies which work in our society to diminish this . . . and to hasten the compacting of these heterogeneous materials into a solid nature.Minutes of the Session of the New England Annual Conference of the Methodist Episcopal Church, 1889, p. 85. Cited in ibid., p. 223.
Or, as a leading citizen of Boston declared, "the only way to elevate the foreign population was to make Protestants of their children.”Tyack, n. 3, p. 84.
Since the cities of the North, in the late nineteenth century, were becoming increasingly filled with Catholic immigrants, pietist attacks on sinful cities and on immigrants both became aspects of the anti-liturgical struggle for a homogeneous Anglo-Saxon pietist culture. The Irish were particular butts of pietist scorn; a New York City textbook bitterly warned that continued immigration could make America "the common sewer of Ireland," filled with drunken and depraved Irishmen.Tyack, n. 3, p. 85.
The growing influx of immigrants from southern and eastern Europe toward the end of the nineteenth century seemed to pose even greater problems for the pietist progressives, but they did not shrink from the task. As Elwood P. Cubberley of Stanford University, the nation's outstanding progressive historian of education, declared, southern and eastern Europeans have served to dilute tremendously our national stock, and to corrupt our civil life. . . . Everywhere these people tend to settle in groups or settlements, and to set up here their national manners, customs, and observances. Our task is to break up these groups or settlements, to assimilate and amalgamate these people as a part of our American race and to implant in their children. . . the Anglo-Saxon conception of rightousness, law and order, and popular government. . . . Ellwood P. Cubberley. Changing Conceptions of Education in America (Boston: Houghton, Mifflin, 1909), pp. 15–16.
PROGRESSIVES, PUBLIC EDUCATION, AND THE FAMILY: THE CASE OF SAN FRANCISCOThe molding of children was of course the key to homogenization and the key in general to the progressive vision of tight social control over the individual via the instrument of the state. The eminent University of Wisconsin sociologist Edward Alsworth Ross, a favorite of Theodore Roosevelt and the veritable epitome of a progressive social scientist, summed it up thus: The role of the public official, and in particular of the public school teacher, is "to collect little plastic lumps of human dough from private households and shape them on the social kneadingboard."Edward Alsworth Ross, Social Control (New York, 1912). Cited in Paul C Violas, "Progressive Social Philosophy: Charles Horton Cooley and Edward Alsworth Ross," in C.J. Karier, P. C. Violas, and J. Spring. eds., Roots of Crisis: American Education in the 20th Century (Chicago: Rand McNally, 1973). Pp. 40–65.
The view of Ross and the other progressives was that the state must take up the task of control and inculcation of moral values once performed by parents and church. The conflict between middle and upper-class urban progressive Anglo-Saxon Protestants and largely working-class Catholics was sharply delineated in the battle over control of the San Francisco public school system during the second decade of the twentieth century. The highly popular Alfred Roncovieri, a French-Italian Catholic, was the elected school superintendent from 1906 on. Roncovieri was a traditionalist who believed that the function of schools was to teach the basics, and that teaching children about sex and morality should be the function of home and church. Hence, when the drive for sex hygiene courses in the public schools got under way, Roncovieri consulted with mothers' clubs and, in consequence, kept the program out of the schools.
By 1908, upper-class progressives launched a decade-long movement to oust Roncovieri and transform the nature of the San Francisco public school system. Instead of an elected superintendent responding to a school board elected by districts, the progressives wanted an all-powerful school superintendent, appointed by a rubber-stamp board that in turn would be appointed by the mayor. In other words, in the name of "taking the schools out of politics," they hoped to aggrandize the educational bureaucracy and maintain its power virtually unchecked by any popular or democratic control. The purpose was threefold: to push through the progressive program of social control, to impose upper-class control over a working-class population, and to impose pietist Protestant control over Catholic ethnics. The cities were already beginning to reach the point where class and ethnic divisions almost coincided, where, in other words, few working-class Anglo-Saxon Protestants resided in the cities.
The ethnoreligious struggle over the public schools in San Francisco was nothing new; it had been going on tumultuously since the middle of the nineteenth century.For an excellent study and analysis of the ethnoreligious struggle over the San Francisco public schools from the mid-nineteenth through the first three decades of the twentieth century, see the neglected work of Victor L. Shradar, "Ethnic Politics, Religion, and the Public Schools of San Francisco, 1849–1933" (Ph.D. dissertation. School of Education. Stanford University, 1974). In the last half of the nineteenth century, San Francisco was split into two parts. Ruling the city was a power elite of native-born old Americans, hailing from New England, including lawyers, businessmen, and pietist Protestant ministers. These comprised successively the Whig, Know-Nothing, Populist, and Republican parties in the city. On the other hand were the foreign-born, largely Catholic immigrants from Europe, Irish, Germans, French, and Italians, who comprised the Democratic party.
The Protestants early tried to use the public schools as a homogenizing and controlling force. The great theoretician and founder of the public school system in San Francisco, John Swett, "the Horace Mann of California," was a lifelong Republican and a Yankee who had taught school in New Hampshire before moving West. Moreover, the Board of Education was originally an all-New England show; consisting of emigrants from Vermont, New Hampshire, and Rhode Island. The mayor of San Francisco was a former mayor of Salem, Massachusetts, and every administrator and teacher in the public schools was a transplanted New Englander. The first superintendent of schools was not exactly a New Englander, but close: Thomas J. Nevins, a Yankee Whig lawyer from New York and an agent of the American Bible Society. And the first free public school in San Francisco was instituted in the basement of a small Baptist chapel.
Nevins, installed as superintendent of schools in 1851, promptly adopted the rule of the New York City schools: Every teacher was compelled to begin each day by a Protestant Bible reading and to conduct daily Protestant prayer sessions. And John Swett, elected as Republican state superintendent of public instruction during the 1860s, declared that California needed public schools because of its heterogeneous population: "Nothing can Americanize these chaotic elements, and breathe into them the spirit of our institutions," he warned, "except the public schools."Shradar, n. 13. p. 14.
Swett was keen enough to recognize that the pietist educational formula meant that the state takes over jurisdiction of the child from his parents, since "children arrived at the age of maturity belong, not to the parents, but to the State, to society, to the country."Rousas John Rushdoony, "John Swett: The Self-Preservation of the State," in The Messianic Character of American Education: Studies in the History of the Philosophy of Education (Nutley. N.J.: Craig Press, 1963). Pp 79–80.
A seesaw struggle between the Protestant Yankees and Catholic ethnics ensued in San Francisco during the 1850s. The state charter of San Francisco in 1855 made the schools far more responsive to the people, with school boards being elected from each of a dozen wards instead of at large, and the superintendent elected by the people instead of appointed by the board. The Democrats swept the Know-Nothings out of office in the city in 1856 and brought to power David Broderick, an Irish Catholic who controlled the San Francisco as well as the California Democratic party. But this gain was wiped out by the San Francisco Vigilance Movement, a private organization of merchants and New England-born Yankees, who, attacking the "Tammany" tactics of Broderick, installed themselves in power and illegally deported most of the Broderick organization, replacing it with a newly formed People's party.
The People's party ran San Francisco with an iron hand for ten years, from 1857 to 1867, making secret nominations for appointments and driving through huge slates of at-large nominees chosen at a single vote at a public meeting. No open nomination procedures, primaries, or ward divisions were allowed, in order to ensure election victories by "reputable" men. The People's party promptly reinstalled an all-Yankee school board, and the administrators and teachers in schools were again firmly Protestant and militantly anti-Catholic. The People's party itself continually attacked the Irish, denouncing them as "micks" and "rank Pats." George Tait, the People's party-installed superintendent of schools in the 1860s, lamented, however, that some teachers were failing to read the Protestant Bible in the schools, and were thus casting "a slur on the religion and character of the community."
By the 1870s, however, the foreign-born residents outnumbered the native-born, and the Democratic party rose to power in San Francisco, the People's party declining and joining the Republicans. The Board of Education ended the practice of Protestant devotions in the schools, and Irish and Germans began to pour into administrative and teaching posts in the public school system.
Another rollback began, however, in 1874, when the Republican state legislature abolished ward elections for the San Francisco school board, and insisted that all board members be elected at large. This meant that only the wealthy, which usually meant well-to-do Protestants, were likely to be able to run successfully for election. Accordingly, whereas in 1873, 58 percent of the San Francisco school board was foreign-born, the percentage was down to 8 percent in the following year. And while the Irish were approximately 25 percent of the electorate and the Germans about 13 percent, the Irish were not able to fill more than one or two of the twelve at-large seats, and the Germans virtually none.
The seesaw continued, however, as the Democrats came back in 1883, under the aegis of the master politician, the Irish Catholic Christopher "Blind Boss" Buckley. In the Buckley regime, the post-1874 school board dominated totally by wealthy native-born, Yankee businessmen and professionals, was replaced by an ethnically balanced ticket with a high proportion of working-class and foreign-born. Furthermore, a high proportion of Irish Catholic teachers, most of them single women, entered the San Francisco schools during the Buckley era, reaching 50 percent by the turn of the century.
In the late 1880s, however, the stridently anti-Catholic and anti-Irish American party became strong in San Francisco and the rest of the state, and Republican leaders were happy to join them in denouncing the "immigrant peril." The American party managed to oust the Irish Catholic Joseph O'Connor, principal and deputy superintendent, from his high post as "religiously unacceptable.” This victory heralded a progressive Republican "reform” comeback in 1891, when none other than John Swett was installed as superintendent of schools in San Francisco. Swett battled for the full reform program: to make everything, even the mayoralty, an appointive rather than an elective office. Part of the goal was achieved by the state's new San Francisco charter in 1900, which replaced the twelve-man elected Board of Education by a four-member board appointed by the mayor.
The full goal of total appointment was still blocked, however, by the existence of an elective superintendent of schools who, since 1907, was the popular Catholic Alfred Roncovieri. The pietist progressives were also thwarted for two decades by the fact that San Francisco was ruled, for most of the years between 1901 and 1911, by a new Union Labor party, which won on an ethnically and occupationally balanced ticket, and which elected the German-Irish Catholic Eugene Schmitz, a member of the musician's union, as mayor. And for eighteen years after 1911, San Francisco was governed by its most popular mayor before or since, "Sunny Jim" Rolph, an Episcopalian friendly to Catholics and ethnics, who was pro-Roncovieri and who presided over an ethnically pluralistic regime.
It is instructive to examine the makeup of the progressive reform movement that eventually got its way and overthrew Roncovieri. It consisted of the standard progressive coalition of business and professional elites, and nativist and anti-Catholic organizations, who called for the purging of Catholics from the schools. Particular inspiration came from Stanford educationist Elwood P. Cubberley, who energized the California branch of the Association of Collegiate Alumnae (later the American Association of University Women), led by the wealthy Mrs. Jesse H. Steinhart, whose husband was later to be a leader in the Progressive party. Mrs. Steinhart got Mrs. Agnes De Lima, a New York City progressive educator, to make a survey of the San Francisco schools for the association. The report, presented in 1914, made the expected case for an "efficient," business-like, school system run solely by appointed educators. Mrs. Steinhart also organized the Public Education Society of San Francisco to agitate for progressive school reform; in this she was aided by the San Francisco Chamber of Commerce.
Also backing progressive reform, and anxious to oust Roncovieri, were other elite groups in the city, including the League of Women Voters, and the prestigious Commonwealth Club of California.
At the behest of Mrs. Steinhart and the San Francisco Chamber of Commerce, which contributed the funds, Philander Claxton of the U.S. Office of Education weighed in with his report in December 1917. The report, which endorsed the Association of Collegiate Alumnae study and was extremely critical of the San Francisco school system, called for all power over the system to go to an appointed superintendent of schools. Claxton also attacked the teaching of foreign languages in the schools, which San Francisco had been doing, and insisted on a comprehensive "Americanization" to break down ethnic settlements.
The Claxton Report was the signal for the Chamber of Commerce to swing into action, and it proceeded to draft a comprehensive progressive referendum for the November 1918 ballot, calling for an appointed superintendent and an appointed school board. This initiative, Amendment 37, was backed by most of the prominent business and professional groups in the city. In addition to the ones named above, there were the Real Estate Board, elite women's organizations such as the Federation of Women's Clubs, wealthy neighborhood improvement clubs, and the San Francisco Examiner. Amendment 37 lost, however, by two to one, since it had little support in working-class neighborhoods or among the teachers.
Two years later, however, Amendment 37 passed, aided by a resurgence of pietism and virulent anti-Catholicism in postwar America. Prohibition was now triumphant, and the Ku Klux Klan experienced a nationwide revival as a pietist, anti-Catholic organization. The KKK had as many as 3,500 members in the San Francisco Bay Area in the early 1920s. The anti-Catholic American Protective Association also enjoyed a revival, led in California by a British small businessman, the anti-Irish Grand Master Colonel J. Arthur Petersen.
In opposing Amendment 37 in the 1920 elections, Father Peter C. Yorke, a prominent priest and Irish immigrant, perceptively summed up the fundamental cleavage: "The modern school system," he declared, "is not satisfied with teaching children the 3 Rs . . . it reaches out and takes possession of their whole lives."
Amendment 37 passed in 1920 by the narrow margin of 69,200 to 66,700. It passed in every middle- and upper-class Assembly District, and lost in every working-class district. The higher the concentration of foreign-born voters in any district, the greater the vote against. In the Italian precincts 1 to 17 of the 33rd A.D., the Amendment was beaten by 3 to 1; in the Irish precincts, it was defeated by 3 to 1 as well. The more Protestant a working-class district, the more it supported the Amendment.
The bulk of the lobbying for the Amendment was performed by the ad hoc Educational Conference. After the victory, the conference happily presented a list of nominees to the school board, which now consisted of seven members appointed by the mayor, and which in turn appointed the superintendent. The proposed board consisted entirely of businessmen, of whom only one was a conservative Irish Catholic. The mayor surrendered to the pressure, and hence, after 1921, cultural pluralism in the San Francisco school system gave way to unitary progressive rule. The board began by threatening to dock any teacher who dared to be absent from school on St. Patrick's Day (a San Francisco tradition since the 1870s), and proceeded to override the wishes of particular neighborhoods in the interest of a centralized city.
The superintendent of schools in the new regime, Dr. Joseph Marr Gwinn, fit the new dispensation to a tee. A professional "scientist" of public administration, his avowed aim was unitary control. The entire package of typical progressive educational nostrums was installed, including a department of education and various experimental programs. Traditional basic education was scorned, and the edict came down that children should not be "forced" to learn the 3 Rs if they didn't feel the need. Traditional teachers, who were continually attacked for being old-fashioned and "unprofessional," were not promoted.
Despite continued opposition by teachers, parents, neighborhoods, ethnic groups, and the ousted Roncovieri, all attempts to repeal Amendment 37 were unsuccessful. The modern dispensation of progressivism had conquered San Francisco. The removal of the Board of Education and school superintendent from direct and periodic control by the electorate had effectively deprived parents of any significant control over the educational policies of public schools. At last, as John Swett had asserted nearly sixty years earlier, schoolchildren belonged "not to the parents, but to the State, to society, to the country."
ETHNORELIGIOUS CONFLICT AND THE RISE OF FEMINISMWomen's Suffrage
By the 1890s, the liturgically oriented Democracy was slowly but surely winning the national battle of the political parties. Culminating the battle was the Democratic congressional victory in 1890 and the Grover Cleveland landslide in the presidential election of 1892, in which Cleveland carried both Houses of Congress along with him (an unusual feat for that era). The Democrats were in way of becoming the majority party of the country, and the root was demographic: the fact that most of the immigrants were Catholic and the Catholic birthrate was higher than that of the pietist Protestants. Even though British and Scandinavian immigration had reached new highs during the 1880s, their numbers were far exceeded by German and Irish immigration, the latter being the highest since the famous post-potato-famine influx that started in the late 1840s. Furthermore, the "new immigration" from southern and eastern Europe, almost all Catholic—and especially Italian—began to make its mark during the same decade.
The pietists became increasingly embittered, stepping up their attacks on foreigners in general and Catholics in particular. Thus, the Reverend T.W. Cuyler, President of the National Temperance Society, intemperately exclaimed in the summer of 1891: "How much longer [will] the Republic . . . consent to have her soil a dumping ground for all Hungarian ruffians, Bohemian bruisers, and Italian cutthroats of every description?"
The first concrete political response by the pietists to the rising Catholic tide was to try to restrict immigration. Republicans successfully managed to pass laws partially cutting immigration, but President Cleveland vetoed a bill to impose a literacy test on all immigrants. The Republicans also managed to curtail voting by immigrants, by getting most states to disallow voting by aliens, thereby reversing the traditional custom of allowing alien voting. They also urged the lengthening of the statutory waiting period for naturalization.
The successful restricting of immigration and of immigrant voting was still not enough to matter, and immigration would not really be foreclosed until the 1920s. But if voting could not be restricted sharply enough, perhaps it could be expanded—in the proper pietist direction.
Specifically, it was clear to the pietists that the role of women in the liturgical "ethnic" family was very different from what it was in the pietist Protestant family. One of the reasons impelling pietists and Republicans toward prohibition was the fact that, culturally, the lives of urban male Catholics—nd the cities of the Northeast were becoming increasingly Catholic—evolved around the neighborhood saloon. The men would repair at night to the saloon for chitchat, discussions, and argument—nd they would generally take their political views from the saloonkeeper, who thus became the political powerhouse in his particular ward. Therefore, prohibition meant breaking the political power of the urban liturgical machines in the Democratic party.
But while the social lives of liturgical males revolved around the saloon, their wives stayed at home. While pietist women were increasingly independent and politically active, the lives of liturgical women revolved solely about home and hearth. Politics was strictly an avocation for husbands and sons. Perceiving this, the pietists began to push for women's suffrage, realizing that far more pietist than liturgical women would take advantage of the power to vote.
As a result, the women's suffrage movement was heavily pietist from the very beginning. Ultrapietist third parties like the Greenback and the Prohibition parties, which scorned the Republicans for being untrustworthy moderates on social issues, supported women's suffrage throughout, and the Populists tended in that direction. The Progressive party of 1912 was strongly in favor of women's suffrage; theirs was the first major national convention to permit women delegates. The first woman elector, Helen J. Scott of Wisconsin, was chosen by the Progressive party.
Perhaps the major single organization in the women's suffrage movement was the Women's Christian Temperance Union, founded in 1874 and reaching an enormous membership of 300,000 by 1900. That the WCTU was also involved in agitating for curfew, antigambling, antismoking, and antisex laws—ll actions lauded by the women's suffrage movement—s clear from the official history of women's suffrage in the nineteenth century:
[The WCTU] has been a chief factor in State campaigns for statutory prohibition, constitutional amendment, reform laws in general and those for the protection of women and children in particular, and in securing anti-gambling and anti-cigarette laws. It has been instrumental in raising the "age of protection" for girls in many States, and in obtaining curfew laws in 400 towns and cities. . . . The association [WCTU] protests against the legalization of all crimes, especially those of prostitution and liquor selling.Susan B. Anthony and Ida H. Harper. The History of Woman Suffrage. Vol. 4 (Rochester: Susan B. Anthony, 1902), pp. 1046–47.
Not only did Susan B. Anthony begin her career as a professional prohibitionist, but her two successors as president of the leading women's suffrage organization, the National American Woman Suffrage Association—Mrs. Carrie Chapman Catt and Dr. Anna Howard Shaw—also began their professional careers as prohibitionists. The leading spirit of the WCTU, Frances E. Willard, was prototypically born of New England-stock parents who had moved westward to study at Oberlin College, then the nation's center of aggressive, evangelical pietism, and had later settled in Wisconsin. Guided by Miss Willard, the WCTU began its prosuffrage activities by demanding that women vote in local option referendums on prohibition. As Miss Willard put it, the WCTU wanted women to vote on this issue because "majorities of women are against the liquor traffic. . . .”Cited in Eleanor Flexner, Century of Struggle: The Woman's Rights Movement in the United States (New York: Atheneum, 1970), p. 183.
Conversely, whenever there was a voters' referendum on women's suffrage, the liturgicals and the foreign-born, responding to immigrant culture and reacting against the pietist-feminist support of prohibition, consistently opposed women's suffrage. In Iowa, the Germans voted against women's suffrage, as did the Chinese in California. The women's suffrage amendment in 1896 in California was heavily supported by the bitterly anti-Catholic American Protective Association. The cities, where Catholics abounded, tended to be opposed to women's suffrage, while pietist rural areas tended to favor it. Thus, the Oregon referendum of 1900 lost largely because of opposition in the Catholic "slums" of Portland and Astoria.
A revealing religious breakdown of votes on an 1877 women's suffrage referendum was presented in a report by a Colorado feminist. She explained that the Methodists (the most strongly pietistic) were "for us," the (less pietistic) Presbyterians and Episcopalians "fairly so," while the Roman Catholics "were not all against us"—clearly they were expected to be.Anthony and Harper, n 15, Vol. 3, p. 724. And, testifying before the U.S. Senate Judiciary Committee in favor of women's suffrage in 1880, Susan B. Anthony presented her own explanation of the Colorado vote:
In Colorado . . . 6,666 men vote "Yes." Now, I am going to describe the men who voted "Yes." They were native-born men, temperance men, cultivated, broad, generous, just men, men who think. On the other hand, 16,007 voted "No." Now, I am going to describe that class of voters. In the southern part of that State are Mexicans, who speak the Spanish language. . . . The vast population of Colorado is made up of that class of people. I was sent out to speak in a voting precinct having 200 voters; 150 of those voters were Mexican greasers, 40 of them foreign-born citizens, and just 10 of them were born in this country; and I was supposed to be competent to convert those men to let me have so much right in this Government as they had. . . Quoted in Alan P. Grimes, The Puritan Ethic and Woman Suffrage (New York: Oxford University Press, 1967), p. 87.
A laboratory test of which women would turn out to vote occurred; in Massachusetts, where women were given the power to vote in school board elections from 1879 on. In 1888, large numbers of Protestant women in Boston turned out to drive Catholics off the school board. In contrast, Catholic women scarcely voted, "thereby validating the, nativist tendencies of suffragists who believed that extension of full suffrage to women would provide a barrier against further Catholic influence.”Jane Jerome Camhie "Women Against Women: American Antisuffragism, 1880–1920" (Ph.D. dissertation in history, Tufts University, 1973), p. 198. See also James J, Kenneally, "Catholicism and Woman Suffrage in Massachusetts," Catholic Historical Review 53 (April 1967): 253. Joining in the demand that only Protestants be elected to the Boston school board were, in addition to British-American clubs and numbers of Protestant ministers, the WCTU, the Loyal Women of American Liberty, the National Women's League, and the League of Independent Women Voters. See Kleppner. Third Electoral System. n 1, p. 350. See also Tyack. n. 3, pp 105–6: and Lois Bannister Merk, "Boston's Historic Public School Crisis," New England Quarterly 31 (June 1958): 172–99. During the last two decades of the nineteenth century "the more hierarchical the church organization and the more formal the ritual, the greater was its opposition to women suffrage, while the democratically organized churches with little dogma tended to be more receptive.”Camhi, n. 20, p. 200. Hierarchically organized pietist churches, like the Methodist or the Scandinavian Lutheran, were no less receptive to women's suffrage than the others.
Four mountain states adopted women's suffrage in the early and mid-1890s. Two, Wyoming and Utah, were simply ratifying, as new states, a practice they had long adopted as territories: Wyoming in 1869 and Utah in 1870. Utah had adopted women's suffrage as a conscious policy by the pietistic Mormons to weight political control in favor of their polygamous members, who contrasted to the Gentiles, largely miners and settlers who were either single men or who had left their wives back East. Wyoming had adopted women's suffrage in an effort to increase the political power of its settled householders, in contrast to the transient, mobile, and often lawless single men who peopled that frontier region.
No sooner had Wyoming Territory adopted women's suffrage, than it became evident that the change had benefited the Republicans, particularly since women had mobilized against Democratic attempts to repeal Wyoming's Sunday prohibition law. In 1871, both houses of the Wyoming legislature, led by its Democratic members, voted to repeal women's suffrage, but the bill was vetoed by the Republican territorial governor.
Two additional states adopting women's suffrage in the 1890s were Idaho and Colorado. In Idaho the drive, adopted by referendum in 1896, was led by the ultrapietistic Populists and by the Mormons, who were dominant in the southern part of the state. The Populist counties of Colorado gave a majority of 6,800 for women's suffrage, while the Republican and Democratic counties voted a majority of 500 against.Furthermore, in the Colorado legislature that submitted the women's suffrage amendment to the voters in 1893, the party breakdown of voting was as follows: Republicans, 19 for women's suffrage and 25 against; Democrats, 1 in favor and 8 against; Populists, 34 in favor and 4 against. See Grimes, n. 19, p. 96 and passim.
It may be thought paradoxical that a movement—women's suffrage—born and centered in the East should have had its earliest victories in the remote frontier states of the Mountain West. But the paradox begins to clear when we realize the pietist-Anglo-Saxon-Protestant nature of the frontiersmen, many of them Yankees hailing originally from that birthplace of American pietism, New England. As the historian Frederick Jackson Turner, that great celebrant of frontier ideals, lyrically observed:
In the arid West these pioneers [from New England] have halted and have turned to perceive an altered nation and changed social ideals. . . . If we follow back the line of march of the Puritan farmer, we shall see how responsive he has always been to isms. . . . He is the Prohibitionist of Iowa and Wisconsin, crying out against German customs as an invasion of his traditional ideals. He is the Granger of Wisconsin, passing restrictive railroad legislation. He is the Abolitionist, the Anti-mason, the Millerite, the Woman Suffragist, the Spiritualist, the Mormon, of Western New York.Frederick Jackson Turner, "Dominant Forces in Western Life," in The Frontier in American History (New York: Holt. Rinehart & Winston, 1962), pp. 239–40. Quoted in Grimes, n. 19, pp. 97–98.
Eugenics and Birth Control
Thus the women's suffrage movement, dominated by pietist progressives, was not directed solely to achieving some abstract principle of electoral equality between males and females. This was more a means to another end: the creation of electoral majorities for pietist measures of direct social control over the lives of American families. They wished to determine by state intervention what those families drank and when and where they drank, how they spent their Sabbath day, and how their children should be educated.
One way of correcting the increasingly pro-Catholic demographics was to restrict immigration; another to promote women's suffrage. A third way, often promoted in the name of "science," was eugenics, an increasingly popular doctrine of the progressive movement. Broadly, eugenics may be defined as encouraging the breeding of the "fit" and discouraging the breeding of the "unfit," the criteria of "fitness" often coinciding with the cleavage between native, white Protestants and the foreign born or Catholics—or the white-black cleavage. In extreme cases, the unfit were to be coercively sterilized.
To the founder of the American eugenics movement, the distinguished biologist Charles Benedict Davenport, a New Yorker of eminent New England background, the rising feminist movement was beneficent provided that the number of biologically superior persons was sustained and the number of the unfit diminished. The biologist Harry H. Laughlin, aide to Davenport, associate editor of the Eugenical News, and highly influential in the immigration restriction policy of the 1920s as eugenics expert for the House Committee on Immigration and Naturalization, stressed the great importance of cutting the immigration of the biologically "inferior" southern Europeans. For in that way, the biological superiority of Anglo-Saxon women would be protected.
Harry Laughlin's report to the House Committee, printed in 1923, helped formulate the 1924 immigration law, which, in addition to drastically limiting total immigration to the United States, imposed national origin quotas based on the 1910 census, so as to weight the sources of immigration as much as possible in favor of northern Europeans. Laughlin later emphasized that American women must keep the nation's blood pure by not marrying what he called the "colored races," in which he included southern Europeans as well as blacks: for if "men with a small fraction of colored blood could readily find mates among the white women, the gates would be thrown open to a final radical race mixture of the whole population." To Laughlin the moral was clear: "The perpetuity of the American race and consequently of American institutions depends upon the virtue and fecundity of American women.”Cited in Donald K. Pickens. Eugenics and the Progressives (Nashville, Tenn.: Vanderbilt University Press, 1968), p. 67.
But the problem was that the fecund women were not the pietist progressives but the Catholics. For, in addition to immigration, another source of demographic alarm to the pietists was the far higher birthrate among Catholic women. If only they could be induced to adopt birth control! Hence, the birth control movement became part of the pietist armamentarium in their systemic struggle with the Catholics and other liturgicals.
Thus, the distinguished University of California eugenicist, Samuel J. Holmes, lamented that "the trouble with birth control is that it is practiced least where it should be practiced most." In the Birth Control Review, leading organ of the birth control movement, Annie G. Porritt was more specific, attacking "the folly of closing our gates to aliens from abroad, while having them wide open to the overwhelming progeny of the least desirable elements of our city and slum population.”Annie G. Porritt. "lmmigration and Birth Control, an Editorial," The Birth Control Review 7 (Sept. 1923): 219. Cited in Pickens. n. 24, p. 73. In short, the birth controllers were saying that if one's goal is to restrict sharply the total number of Catholics, "colored" southern European or no, then there is no point in only limiting immigration while the domestic population continues to increase.
The birth control and the eugenics movement therefore went hand in hand, not the least in the views of the well-known leader of the birth control movement in the United States: Mrs. Margaret Higgins Sanger, prolific author, founder and long-time editor of the Birth Control Review. Echoing many of the various strains of progressivism, Mrs. Sanger hailed the emancipation of women through birth control as the latest in applied science and "efficiency." As she put it in her Autobiography:
In an age which has developed science and industry and economic efficiency to their highest points, so little thought has been given to the development of a science of parenthood, a science of maternity which could prevent this appalling and unestimated waste of womankind and maternal effort.Quoted in Pickens. n. 24, p. 80.
To Mrs. Sanger, “science" also meant stopping the breeding of the unfit. A devoted eugenicist and follower of C.B. Davenport, she in fact chided the eugenics movement for not sufficiently emphasizing this crucial point:
The eugenists wanted to shift the birth control emphasis from less children for the poor to more children for the rich. We went back of that and sought first to stop the multiplication of the unfit. This appeared the most important and greatest step toward race betterrnent.Ibid., p. 83.
GATHERED TOGETHER: PROGRESSIVISM AS A POLITICAL PARTYProgressivism was, to a great extent, the culmination of the pietist Protestant political impulse, the urge to regulate every aspect of American life, economic and moral—even the most intimate and crucial aspects of family life. But it was also a curious alliance of a technocratic drive for government regulation, the supposed expression of "value-free science," and the pietist religious impulse to save America—and the world—by state coercion. Often both pietistic and scientific arguments would be used, sometimes by the same people, to achieve the old pietist goals. Thus, prohibition would be argued for on religious as well as on alleged scientific or medicinal grounds. In many cases, leading progressive intellectuals at the turn of the twentieth century were former pietists who went to college and then transferred to the political arena, their zeal for making over mankind, as a "salvation by science." And then the Social Gospel movement managed to combine political collectivism and pietist Christianity in the same package. All of these were strongly interwoven elements in the progressive movement.
All these trends reached their apogee in the Progressive party and its national convention of 1912. The assemblage was a gathering of businessmen, intellectuals, academics, technocrats, efficiency experts and social engineers, writers, economists, social scientists, and leading representatives of the new profession of social work. The Progressive leaders were middle and upper class, almost all urban, highly educated, and almost all white Anglo-Saxon Protestants of either past or present pietist concerns.
From the social work leaders came upper-class ladies bringing the blessings of statism to the masses: Lillian D. Wald, Mary Kingsbury Simkhovitch, and above all, Jane Addams. Miss Addams, one of the great leaders of progressivism, was born in rural Illinois to a father, John, who was a state legislator and a devout nondenominational evangelical Protestant. Miss Addams was distressed at the southern and eastern European immigration, people who were "primitive" and "credulous," and who posed the danger of unrestrained individualism. Their different ethnic background disrupted the unity of American culture. However, the problem, according to Miss Addams, could be easily remedied. The public school could reshape the immigrant, strip him of his cultural foundations, and transform him into a building block of a new and greater American community.See Paul C Violas. "Jane Addams and the New Liberalism," in Karier et al., eds. Roots of Crisis, n. 11, pp. 66–83.
In addition to writers and professional technocrats at the Progressive party convention, there were professional pietists galore. Social Gospel leaders Lyman Abbott, the Reverend R. Heber Newton, and the Reverend Washington Gladden were Progressive party notables, and the Progressive candidate for governor of Vermont was the Reverend Fraser Metzger, leader of the Inter-Church Federation of Vermont. In fact, the Progressive party proclaimed itself as the "recrudescence of the religious spirit in American political life."
Many observers, indeed, reported in wonder at the strongly religious tone of the Progressive party convention. Theodore Roosevelt's acceptance address was significantly entitled, "A Confession of Faith," and his words were punctuated by "amens" and by a continual singing of Christian hymns by the assembled delegates. They sang "Onward, Christian Soldiers," "The Battle Hymn of the Republic," and finally the revivalist hymn, "Follow, Follow, We Will Follow Jesus," except that "Roosevelt" replaced the word "Jesus" at every turn.
The New York Times of August 6, 1912, summed up the unusual experience by calling the Progressive assemblage "a convention of fanatics." And, "It was not a convention at all. It was an assemblage of religious enthusiasts. It was such a convention as Peter the Hermit held. It was a Methodist camp following done over into political terms.”Cited in John Allen Gable, The Bull Moose Years: Theodore Roosevelt and the Progressive Party (Port Washington, N.Y.: Kennikat Press, 1978), p. 75.
Thus the foundations of today's massive state intervention in the internal life of the American family were laid in the so-called "progressive era" from the 1870s to the 1920s. Pietists and "progressives" united to control the material and sexual choices of the rest of the American people, their drinking habits, and their recreational preferences. Their values, the very nurture and education of their children, were to be determined by their betters. The spiritual, biological, political, intellectual, and moral elite would govern, through state power, the character and quality of American family life.
SIGNIFICANCEIt has been known for decades that the Progressive Era was marked by a radical growth in the extension and dominance of government in America's economic, social, and cultural life. For decades, this great leap into statism was naively interpreted by historians as a simple response to the greater need for planning and regulation of an increasingly complex economy. In recent years, however, historians have come to see that increasing statism on a federal and state level can be better interpreted as a profitable alliance between certain business and industrial interests, looking for government to cartelize their industry after private efforts for cartels and monopoly had failed, and intellectuals, academics, and technocrats seeking jobs to help regulate and plan the economy as well as restriction of entry into their professions. In short, the Progressive Era re-created the age-old alliance between Big Government, large business firms, and opinion-molding intellectuals—an alliance that had most recently been embodied in the mercantilist system of the sixteenth through eighteenth centuries.
Other historians uncovered a similar process at the local level, especially that of urban government beginning with the Progressive Era. Using the influence of media and opinion leaders, upper-income and business groups in the cities systematically took political power away from the masses and centralized this power in the hands of urban government responsive to progressive demands. Elected officials, and decentralized ward representation, were systematically replaced either by appointed bureaucrats and civil servants, or by centralized at-large districts where large-scale funding was needed to finance election races. In this way, power was shifted out of the hands of the masses and into the hands of a minority elite of technocrats and upper-income businessmen. One result was an increase of government contracts to business, a shift from "Tammany" type charity by the political parties to a taxpayer-financed welfare state, and the imposition of higher taxes on suburban residents to finance bond issues and redevelopment schemes accruing to downtown financial interests.
During the last two decades, educational historians have described a similar process at work in public, especially urban, school systems. The scope of the public school was greatly expanded, compulsory attendance spread outside of New England and other "Yankee" areas during the Progressive Era, and a powerful movement developed to try to ban private schools and to force everyone into the public school system.
From the work of educational historians, it was clear that the leap into comprehensive state control over the individual and over social life was not confined, during the Progressive and indeed post-Progressive eras, to government and the economy. A far more comprehensive process was at work. The expansion of compulsory public schooling stemmed from the growth of collectivist and anti-individualist ideology among intellectuals and educationists. The individual, these "progressives" believed, must be molded by the educational process to conform to the group, which in practice meant the dictates of the power elite speaking in the group's name. Historians have long been aware of this process.For further discussion of education, see Robert B. Everhart. ed., The Public School Monopoly: A Critical Analysis of Education and the State in American Society (San Francisco: Pacific Institute for Public Policy Research, 1982). But the accruing insight into progressivism as a business cartelizing device led historians who had abandoned the easy equation of "businessmen" with "laissez faire" to see that all the facets of progressivism—the economic and the ideological and educational—were part of an integrated whole. The new ideology among business groups was cartelist and collectivist rather than individualist and laissez faire, and the social control over the individual exerted by progressivism was neatly paralleled in the ideology and practice of progressive education. Another parallel to the economic realm, of course, was the increased power and income accruing to the technocratic intellectuals controlling the school system and the economy.
If the action of business and intellectual elites in turning toward progressivism was now explained, there was still a large gap in the historical explanation and understanding of progressivism and therefore of the leap into statism beginning in the early twentieth century. There was still a need to explain mass voting behavior and the ideology and programs of the political parties in the American electoral system. This chapter applies the illuminating findings of recent "ethnoreligious historians" to significant changes that took place during the Progressive Era in the power of government over the family. In particular, we discuss the movement to expand the power of the public school and the educationist elite over the family, as well as the women's suffrage and eugenics movement, all important features of the Progressive movement. In every case, we see the vital link between these intrusions into the family and the aggressive drive by Anglo-Saxon Protestant "pietists" to use the state to "make America holy," to stamp out sin and thereby assure their own salvation by maximizing the salvation of others. In particular, all of these measures were part and parcel of the long-standing crusade by these pietists to reduce if not eliminate the role of "liturgicals," largely Roman Catholics and high-church Lutherans, from American political life. The drive to stamp out liquor and secular activities on Sundays had long run into successful Catholic and high-church Lutheran resistance. Compulsory public schooling was soon seen as an indispensable weapon in the task of "Christianizing the Catholics," of saving the souls of Catholic children by using the public schools as a Protestantizing weapon. The neglected example of San Francisco politics was urged as a case study of this ethnoreligious political battle over the schools and hence over the right of Catholic parents to transmit their own values to their children without suffering Anglo-Saxon Protestant obstruction. Women's suffrage was seized upon as a means of increasing Anglo-Saxon Protestant voting power, and immigration restriction as well as eugenics was a method of reducing the growing demographic challenge of Catholic voters.
In sum, recent insights into the cartelizing drive of various business interests have provided an important explanation of the rapid growth of statism in the twentieth century. Ethnoreligious history provides an explanation of mass voting behavior and political party programs that neatly complement the cartelizing explanation of the actions of business elites.
Washington elites and especially their media have denounced what they once praised: leaking of official documents that show the government has been lying.
Original Article: "Arbitrary Use of Power: Punishing Those Who Expose Not-So-Secret Government Secrets"
Donald Trump legally pays hush money and prosecutors try to fashion a crime from it. However, if a president lies and thousands of people die, it is called foreign policy.
Original Article: "Presidents Are Legally Immune for Their Most Dangerous Crimes"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Scalia: Rise to Greatness, 1936–1986by James RosenRegnery Publishing, 2023496 pages
James Rosen, who has written biographies of John Mitchell and Dick Cheney, and was for many years a reporter for Fox News, is a neoconservative and Reagan Republican. He has found an ideal biographical subject in Antonin Scalia, a Reagan Republican, who served for thirty years on the Supreme Court. The volume under review, the first of two, covers the time from Scalia’s birth to his appointment to the court; it concludes with Scalia’s installation ceremony. Rosen has made much more extensive use of Scalia’s papers than two previous biographers, as he never ceases to remind us; and it is easy to see why he has been granted this access. His attitude toward Scalia falls little short of adulation.
The book also conveys, though, a fact about Scalia that one doubts Rosen had in mind in writing the book. Although Scalia made many effective criticisms of the excesses of the Left, in particular of the use of the “living Constitution” doctrine to promote judicial usurpation of power, he was not someone who saw the need for fundamental change in the system by which America is governed. Instead, he wanted to succeed within that system. In this respect, his career contrasts sharply with that of Ron Paul, who although a member of Congress for many years, was always an outsider. Their attitudes toward congressional investigation of the Central Intelligence Agency (CIA) and other intelligence agencies, to be discussed below, illustrate these different political approaches.
In Scalia’s years as a student at Harvard Law School, beginning in 1957, the faculty emphasized judicial restraint. In 1959, when Herbert Wechsler, a professor at Columbia Law School and one of the most influential legal theorists of the time, delivered the Oliver Wendell Holmes Lecture at Harvard, Scalia was attracted to his view that the law consists of a strict body of procedural rules from which judges should not deviate in efforts to achieve various social ends. “In his address, entitled ‘Toward Neutral Principles of Constitutional Law,’ Wechsler argued the benefits of the legal process’s ‘transcending the immediate result that is achieved.’ He asked the audience to consider whether Brown v. Board of Education (1954), the landmark Supreme Court ruling that struck down separate-but-equal treatment in public education for black students, reflected such a process. ‘For me, assuming equal facilities, the question posed by state-enforced segregation is not one of discrimination at all,’ Wechsler said.” (There is some doubt whether Scalia attended the lecture, but it generated great attention and was later published.)
Given his acceptance of judicial restraint and strict adherence to procedure, Scalia viewed with alarm the radical departures from precedent of the Warren court. The “living Constitution” of Justice William Brennan was abhorrent to him. At his confirmation hearing for Supreme Court justice in 1986, in answer to then senator Joseph Biden, Scalia said, “The Constitution is obviously not meant to be evolvable so easily that, in effect, a court of nine judges can treat it as though it is a bring-along-with-me statute and can fill it up with whatever content the current times seem to require. To a large degree, it is intended to be an insulation against the current times, against the positions of the moment that may cause individual liberties to be disregarded, and it has served that function valuably very often. So I would never use the phrase ‘living Constitution.’”
Scalia was much more committed to procedure and restraint than to individual liberty, and this led him to accept many of the incursions of the Leviathan state. One of the chief means by which our freedoms have been trampled on is administrative law, in which unconstitutionally broad legislation delegates to administrative agencies such as the Fair Trade Commission and the Food and Drug Administration the power to enact binding regulations that have the force of law. Scalia was not altogether blind to abuses of delegation, but his primary emphasis in this area was that courts must accept the procedures these agencies use to reach their decisions. Thus, “judicial restraint” became an instrument of judicial tyranny. In one instance, he praised an opinion by the Supreme Court that “rebuked the D.C. Circuit, one rung below the Supreme Court, for having ‘improperly intruded into the agency’s decision-making process.’”
The opinion of the foremost authority on administrative law, Philip Hamburger of Columbia Law School, was entirely different: “In sum, the conventional understanding of administrative law is utterly mistaken. It is wrong on the history and oblivious to the danger. That danger is absolutism: extra-legal, supra-legal, and consolidated power. And the danger matters because administrative power revives this absolutism. The Constitution carefully barred this threat, but constitutional doctrine has since legitimized this dangerous sort of power. It therefore is necessary to go back to basics. Among other things, we should no longer settle for some vague notion of ‘rule of law,’ understood as something that allows the delegation of legislative and judicial powers to administrative agencies. We should demand rule through law and rule under law. Even more fundamentally, we need to reclaim the vocabulary of law: Rather than speak of administrative law, we should speak of administrative power—indeed, of absolute power or more concretely of extra-legal, supra-legal, and consolidated power. Then we at least can begin to recognize the danger.”
There is an even more glaring instance in which Scalia’s views were at odds with individual freedom. He supported the CIA and other spy agencies after the Vietnam War, when revelations of abuses led to demands for congressional oversight and investigation. More generally, he favored a “strong” foreign policy, viewing this area as under the jurisdiction of the executive branch. Nor were his views merely a matter of academic interest. In the period under consideration, Scalia worked for the Office of Legal Counsel in the Justice Department and had a major impact in drafting the presidential responses to congressional efforts to limit executive discretion.
Scalia was especially concerned to counter attempts by Congress and members of the public to use the Freedom of Information Act to ferret out abuses of power. Defending Scalia, Rosen endeavors to counter those “who thought that every proposal that expanded the obligations of the federal government to release the records of the executive branch, no matter how voluminous or highly classified, was . . . wise and urgent, a bulwark against what Arthur Schlesinger, Jr., the former Kennedy adviser, called ‘the imperial presidency.’”
Never mind the abuses: for Scalia, at stake were historical tradition and the separation of powers. “As ‘the president’s lawyer’s lawyer’ at the dawn of an accidental presidency [Gerald Ford’s], it fell to Scalia to defend traditional executive authority precisely when Congress, the courts, and the news media made it the least fashionable. Scalia also thought the CIA was justified in engaging in illegal operations abroad: this too was a matter for the executive branch to decide, though not without some vague limits. For him, the CIA and FBI were not power-mad rogue agencies, but defenders of America.”
Ron Paul, a true champion of freedom, has a different opinion. He wrote last December in protest against the FBI’s use of Twitter to silence dissent: “As we learn more and more from the ‘Twitter Files,’ it is becoming all too obvious that Federal agencies such as the FBI viewed the First Amendment of our Constitution as an annoyance and an impediment.”
Despite his mistakes, Scalia was an impressive figure who showed himself more than a match for the left-wing elites who dominate the major law schools. The intelligence and wit manifest in his opinions made him one of the major jurists in the history of the Supreme Court, and if we must sometimes dissent from this great dissenter, we should not lightly dismiss him.
When the Boeing 737 MAX had two crashes, the usual suspects called for more regulation. It turns out that the crashes were due more to regulatory failure than anything else.
Original Article: "Boeing 737 MAX Disasters' Root Cause Was Government Regulation"
This Audio Mises Wire is generously sponsored by Christopher Condon.
We can be sure that the "natural elites" of which Hans Hoppe wrote are not among the Davos crowd. That group of "elites" has an agenda, and it is not liberty and free markets.
Original Article: "The Attack of the Subversive Elites"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Can private markets only be regulated by government? Hindenburg Research's successes against corporate corruption suggest otherwise.
Original Article: "How Markets Are Better than Government Regulators at Fighting Corporate Corruption"
This Audio Mises Wire is generously sponsored by Christopher Condon.
The government can't return the SS money it stole in the past. It's impossible. That money's gone. Taxing today's workers to "pay back" pensioners is just creating a new group of tax victims.
Original Article: "Social Security Taxes Aren't "Your" Money"
This Audio Mises Wire is generously sponsored by Christopher Condon.
China has created a crackdown cycle that is hurting the entrepreneurial spirit.
Original Article: "The Chinese Communist Party Is Creating a Crackdown Economy"
This Audio Mises Wire is generously sponsored by Christopher Condon.
The similar challenges facing America and Brazil, including concerns about the state of their democracies, is worthy of exploration, as is the global response to the protest and what that response means for those opposed to the current “neoliberal” international order.
Original Article: "America, Brazil, and the Illegitimacy of Weaponized Democracy"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Because police protection of students is inadequate, Temple University of Philadelphia has hired private police to help keep students safer from crime.
Original Article: "Police Failures in Philadelphia Have Made Private Policing More Attractive"
This Audio Mises Wire is generously sponsored by Christopher Condon.
"The object aimed at in the punishment of vices is to deprive every man of his natural right and liberty to pursue his own happiness under the guidance of his own judgment and by the use of his own property."
Narrated by Michael Stack.
Both the title and the substance of "Vices are not Crimes" highlight the unique role that morality and moral principle had for Spooner among the anarchists and libertarians of his day. For Spooner was the last of the great natural-rights theorists among anarchists, classical liberals, or moral theorists generally; the doughty old heir of the natural law-natural rights tradition of the 17th and 18th centuries was fighting a rearguard battle against the collapse of the idea of a scientific or rational morality, or of the science of justice or of individual right.
Narrated by Michael Stack.
State regulation of marriage—and the ensuing secularization of marriage that followed—is a historical development that was part of the larger trend toward the expansion of state power.
Original Article: "How the State Seized Control of Marriage"
This Audio Mises Wire is generously sponsored by Christopher Condon.
On this episode of Radio Rothbard, Ryan McMaken and Tho Bishop look at the Alex Jones verdict and the weaponization of defamation law. Now that Twitter is under Elon Musk's control, will the regime increasingly turn to the court system to crack down on the "dangers" posed by "misinformation"?
Use promo code ROTHPOD for a 20% discount on Ryan McMaken's new book Breaking Away: The Case for Secession, Radical Decentralization, and Smaller Polities: Mises.org/RR_105_Book
Recommended Reading "The Alex Jones Verdict Shows the Danger of Defamation Laws" by Ryan McMaken: Mises.org/RR_105_A
"Modern Information Control: State Intervention and Mistakes to Avoid by Kelly Offield: Mises.org/RR_105_B
"Florida's Social Media Anticensorship Law and the Court's Tortured Legal Logic" by Tate Fegley: Mises.org/RR_105_C
Be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
The Bible the ancient Israelites were warned about the dangers of having a government that would tax them heavily and oppress them. They didn't listen.
Original Article: "An Ancient Warning: Criminal Trespass Is the State’s Essential Feature"
This Audio Mises Wire is generously sponsored by Christopher Condon. '
The surge of "progressive" prosecutors, many funded by George Soros, has been followed by increases in violent crime.
Original Article: "Are "Progressive" Prosecutors Real Reformers or Leftists Acting in Bad Faith?"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Jordan Peterson has linked identity politics to socialism. Instead, socialism is about empowering the state.
Original Article: "Socialism Is Not Groupthink, but Statethink: A Brief Comment on Jordan Peterson"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Monarchs created Europe's modern states but lost the ability to control them. Then, having grown beyond the tools that helped monarchs turn themselves into absolute rulers, "the state acquired a life of its own."
Original Article: "How Monarchs Became Servants of the State"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Vaccine mandates imposed by governments violate individual rights and further the coercive powers of the state. They also violate Kantian ethical norms, turning people into vehicles to accomplish the ends of governing elites.
Original Article: "Mandatory Vaccines vs. Logic and Kantian Ethics"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Economists often deplore the corruption in developing countries, but when institutions are corrupt, don't expect people to have the incentive to be honest.
Original Article: "When Honesty Is Disincentivized, Don't Be Surprised That Trickery Abounds"
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The optics of the event were likely the idea of a proud Biden staffer leaning into the “Dark Brandon” aesthetic that has become popular among regime loyalists on Twitter. To Americans outside of this Very Online echo chamber, the imagery drew connotations of sinister authoritarian regimes.
Original Article: "Biden Declares "MAGA Republicans" Enemies of the State"
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Not satisfied with putting thousands of people out of work with its infamous AB 5 legislation, California lawmakers now are going after fast-food businesses.
Original Article: "AB 257: Another Antieconomic California Boondoggle"
This Audio Mises Wire is generously sponsored by Christopher Condon.
The recent raid on Donald Trump's Florida home is one more event in Democrats and Never Trumpers' never-ending attempt to have Trump arrested, convicted, and imprisoned. Our political classes are unleashing something that cannot be contained.
Original Article: "The Attempt to Prosecute Donald Trump Is Unleashing More Than Our Political System Can Handle"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Global elites have a "wonderful" plan for the rest of us, even if they don't intend to live within its strictures.
Original Article: "Why the "New World Order" Is Impossible to Implement without Creating Mass Chaos"
This Audio Mises Wire is generously sponsored by Christopher Condon.
The government of the United Kingdom is using coercive means to promote its dubious goals of "diversity and inclusion." In the end, freedom recedes while state power increases.
Original Article: "How British Efforts to Enforce Equality Have Led to a Woke Totalitarianism"
This Audio Mises Wire is generously sponsored by Christopher Condon.
As you might suspect, I don’t think so, but the philosopher Gregory Salmieri is decidedly of a different opinion, and in this week’s article, I’d like to examine some of his arguments on this topic in his thoughtful essay “Objectivism,” published in The Routledge Companion to Libertarianism (pp. 82–101).
Salmieri agrees with anarcho-capitalists that “organizing a society around the principle of individual rights requires ‘the barring of physical force from social relationships’ so that individuals may deal with one another ‘only by means of reason, by discussion, persuasion and voluntary uncoerced agreement’” (p. 93, quoting Ayn Rand).
The use or threat of force not only permits retaliatory force, but in his view demands it. But the use of retaliatory force itself raises a problem:
But even retaliatory uses of force often violate the rights of others. If someone is mistaken about whether a crime was committed against him or about who committed it, his attempts at retaliation may themselves be initiations of force. A retaliator who judges correctly that a certain person initiated force against her may nonetheless violate the rights of the person against whom she’s retaliating if she retaliates in a disproportionate manner (p. 93)
So far, so good, but Salmieri proceeds to a new point that strikes me as bizarre. He thinks that even if you correctly judge that someone has violated your rights and respond proportionately, you still violate everyone’s rights because of your unilateral use of force. He says,
Moreover, when one person unilaterally retaliates against another, it is not only the second person whose rights may be violated, for the retaliator is effectively threatening everyone else in the vicinity with like treatment if he comes to think they have wronged him…. However rational a unilateral retaliator may be in his judgment about the crime and the justice of the punishment, the action remains arbitrary from the perspective of his neighbors unless the case for the use of force has been proven to them (or to someone representing them) and unless they can be confident that the force would not be exercised if the case for it wasn’t proven to their satisfaction. (p. 92, emphasis in original)
To bring out what is odd about Salmieri’s comment, let’s consider this example. I steal Salmieri’s copy of the first edition of Atlas Shrugged, and he responds by retrieving the volume from me, using force to do so. People in the vicinity might reasonably think that if they were to steal from Salmieri, he might respond by using force against them, but in what way does this violate their rights? Is it that Salmieri might mistakenly think theft has taken place and respond with a wrongful use of force? But in that case, wouldn’t the relevant issue be whether he is liable to err in such matters?
Salmieri would, I think, respond that this is to miss his point. Even if he is in fact quite reliable in his judgments, this has not been proven to everyone’s satisfaction. For all people in the vicinity know, he might, to the contrary, be an unreliable person, frequently apt to seize others’ property. Isn’t he a threat to them?
This is an odd jump in reasoning. How does it follow from “I don’t know whether A is reliable” that “I may in that case take it as given that A is unreliable, or at least likely to be so?” This mistaken inference explains Salmieri’s remark that “the action remains arbitrary,” where “arbitrary” has the sense of “without sufficient basis.”
Suppose, though, that we put this point aside and grant that because Salmieri has unilaterally used force, his action should be taken as arbitrary. In what way would he be threatening everyone? It might be that they would conclude that he bears watching, but it is hard to fathom why a mere chance that he may act wrongly constitutes a threat to everyone now. “Look what he did to David! It hasn’t been proven to me that he acted reasonably. Thus, I can take him to be acting unreasonably, and I can reasonably assume that he may act unreasonably toward me as well. He’s therefore a threat to me. There’s logic for you!”
There is yet another problem with Salmieri’s argument. Suppose that in my example, Salmieri set forward his evidence that I had purloined his precious volume, and people in the vicinity found the case convincing. Should those people still regard him as a threat, owing to his failure to make his case in the “objective” fashion Salmieri sets forward—i.e., by presenting it to the government’s impartial arbiters? To say that they should is blatantly to beg the question. Even better, suppose that people saw me abscond with the book, which they had excellent reason to think belonged to Salmieri—perhaps there had been a widely circulated news story that he had purchased the book. Would they even here have good reason to consider Salmieri threatening?
Suppose, though, that one accepts Salmieri’s argument against the private use of retaliatory force and agrees that retaliation must take place according to the terms of an objective law code as interpreted by impartial judges. Would this rule out an anarcho-capitalist society that accepts an objective law code but allows private agencies to compete in offering protection and enforcement services in a territory? Salmieri thinks that it would indeed do so: “Anarcho-capitalists contend that objectivity and rule of law can be achieved in the absence of a single monopoly government by market mechanisms that would ensure that the demand for law and order is fulfilled…. However, the idea of defense agencies competing on a ‘free market’ for retaliatory force is incoherent, for a free market is one from which force has been effectively banned” (p. 95, emphasis in original). A footnote to the passage avers that “the idea of a ‘free market’ for the exercise of retaliatory force commits what is called the fallacy of concept stealing” (p. 98n31).
Salmieri is right that for a free market to function properly, most people in it must respect rights, but it’s going too far to say that force is “effectively banned” in a free market—if this means that almost no violations of rights occur. If that is a requirement for a free market, Salmieri’s claim proves too much, as the free market could not exist even in the limited government Salmieri supports so long as there were a substantial number of people who violate rights. And why would there not be? Does Salmieri think that almost all the criminals would just go away in the system he wants?
It may well be, though, that Salmieri intends something else by “effectively banned”—namely, that an objective law code administered by a monopoly government is in place. If this is what he intends, he has merely reasserted his claim that an objective law code requires a monopoly government and precludes competition, even if all the competing agencies accept the objective law code.
Why does Salmieri think this? His most direct response to the anarcho-capitalists who accept an objective law code is this:
But the sort of competition that occurs under anarchy is not free-market competition but war and realpolitik. If somehow these forces were to give rise to a way of objectively adjudicating disputes over the use of force, part of what it would mean for the way to be objective is that it would place the decision in the hands of an arbiter who is not just neutral between any two disputing parties, but equally answerable to (and representative of) everyone in the society whose rights are potentially infringed by this use of force, and that this arbiter would decide by uniform rules promulgated in advance and applicable to all. But this amounts to saying that the arbiter (or the system in which the arbiter is embedded) has a monopoly on force, which would make it a government (however eclectic in form.) (pp. 95–96)
How the last sentence is supposed to follow from the sentences preceding it I cannot fathom, and I strongly suspect that Salmieri’s conclusion rests on no more than repeated reiteration.
The recent school shootings have led many people to want to restrict or deny altogether our right to own guns, and in these troubled times, it is all the more essential to bear in mind the reasons for that right. To that end, I’d like in this week’s column to discuss the excellent essay by the philosopher Lester H. Hunt “Guns and Self-Defense,” which has just been published in The Routledge Companion to Libertarianism. (It’s a nice touch to have someone named Hunt defending gun ownership.)
Hunt points out that from a libertarian point of view, the case that we have a right to own guns is straightforward, and, perhaps to one’s surprise, this case does not depend on the right of self-defense, though the right of self-defense is of course relevant to when you may shoot others. Rather, we have a right to do whatever does not involve violence or the threat of violence against others, and the mere ownership of a gun passes this test.
What then are the proper limits to state interference with the ownership and use of such weapons? On the basis of the libertarian version of Lockean natural rights theory, the answer would seem to be fairly straightforward. Merely having a gun in one’s possession is not what Nozick called a “boundary crossing.”… it does not involve a physical invasion of any territory over which others have legitimate rights. Even shooting somebody is no violation, providing that the victim is an aggressor and the shooting is a reasonably necessary act of self-defense…. There is nothing about being a civilian that makes one, per se, a violator of the rights of others. To use the coercive powers of the state to deprive people of access to weapons, apart from any evidence that they will use them for criminal purposes, is an illegitimate use of state coercion against the innocent.
(Hunt is in the article writing from a minimal state rather than an anarchist position, but the issue can be readily reframed to cover the latter view. The question would become “Does the libertarian law code allow a ban on, or restriction of, gun ownership?)
The case seems closed, but, as Hunt notes, most people are not libertarians. Can the right to gun ownership be defended on nonlibertarian grounds, in a way that will have wider appeal than arguments from libertarian premises? Here the right to self-defense assumes primary importance, as most people will acknowledge this right, although sometimes in an attenuated way. You might be inclined to object to Hunt’s procedure in this way. Shouldn’t we support our views from what we take to be the correct premises, rather than assume other premises for the purposes of persuasion? Hunt could reply to this that the premise from which he starts, the right of self-defense, is one that libertarians accept, so he is not open to objection on this score.
If, as the morality of common sense suggests, we have a right to self-defense, how can it be denied that we have the right to own and use guns? Guns are a very effective means of self-defense. “Since a gun is the one instrumentality for self-defense that comes closest to being an effective means, the right of self-defense brings with it the right to acquire and use a gun.” One answer, given by the philosopher Jeff McMahan, is that this argument looks at the right to self-defense in the wrong way. It is not, as McMahan takes it, a right in itself but a mere means to safety. As Hunt explains, McMahan “maintains that a gun ban is, quite simply, good for everyone. The right of self-defense is a mere means to increasing one’s safety, and since a gun ban achieves that result for everyone, it does not violate that right.”
Hunt objects that this argument misconceives the nature of the right of self-defense, taking it to be a right to be in a certain state, “safety,” rather than an “option right” to defend oneself. McMahan’s argument
only works if one makes a certain assumption: that the right of self-defense is a right to be in a certain state: namely, that of having the probability of bad future events (injury, property loss, death, and so forth) reduced … the conception of the right of self-defense that is typically assumed by these [restrictionist] arguments is not the one found in common-sense morality and is highly counterintuitive. The self-defense right that is recognized by common-sense morality is clearly … an option right, to do or not do something. It is a right to defend oneself…. By itself, this does not mean that these restrictionists are wrong, but it does seem to mean that there is a burden of proof that has not yet been shouldered by them: how might they justify this sharp departure from ordinary morality?
One might object to Hunt in this way. “Aren’t arguments about whether the right to self-defense is an ‘option’ or a ‘welfare’ right a matter of interest only to philosophers? How can you claim that the answer you want is part of ‘common-sense’ morality? Common-sense morality is not concerned with this issue.”
Hunt has a convincing response to this objection. The welfare rights view is not just a different way of looking at the right of self-defense but abolishes that right altogether, and that is indeed something of great concern to commonsense morality. “This self-defense welfare-right is not a right of self-defense at all since it implies … that if some other agency has put you in the right state—namely, safety—you have no further rights to do anything in the matter.”
Readers will, I am sure, have taken note of a simpler objection to McMahan’s argument; it does not work on its own terms. His argument is that if there is a total gun ban, then we are all “safe.” If that is true, why would anyone need a gun? But of course it isn’t true. McMahan is making the risible assumption that the ban is totally effective, but it is much more likely that criminals will disobey the ban than that ordinary people will, as Hunt does not fail to mention. We would not all be safe with a gun ban; far from it.
Further, even if the ban on guns were totally effective, this would not make people safe, and this point is different from that of safety against government aggression, which Hunt doesn’t deal with in his article. People would not be safe from physical assault that doesn’t use guns, and strong, aggressive people in a society without guns would have a great advantage over the weak.
If you are hunting for good arguments in favor of our right to own and use guns, I highly recommend Hunt’s outstanding article.
Americans are looking at a grim energy future, thanks to government.
Original Article: "The Biden Administration's Ignorant Energy Policies: Higher Gas Prices Are Only the Beginning"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Inflation is at a forty-year high, fuel prices are wreaking havoc, and there's no end in sight. Time for Biden to tell us how good we have it.
Original Article: "Will Punch-Drunk Biden Take America Down with Him?"
This Audio Mises Wire is generously sponsored by Christopher Condon.
The Great Reset usually is framed as the reestablishment of democratic social principles. In reality, it's an attempt to do away with the last vestiges of classical liberalism.
Original Article: "The Backstory of the Great Reset, or How to Destroy Classical Liberalism"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Thirty-nine people were killed in school shootings in 2018 (one of the worst years). In the same period, 900 children drowned, and 1,800 were murdered via child abuse.
Original Article: "Just How Common Are School Shootings?"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Police stood around outside the Uvalde, Texas, school while a gunman shot children inside. Meanwhile, gun control advocates tell us we should just trust the cops to keep us safe.
Original Article: "Police Botched the Uvalde Standoff. Now Gun Controllers Want to Give Police More Power."
This Audio Mises Wire is generously sponsored by Christopher Condon.
In this episode of Radio Rothbard, Mises Graduate Program Provost and Constitutional law attorney Joe Becker joins Tho Bishop to break down the leaked opinion on the Dobbs case, potentially overturning Roe v. Wade. Joe provides a thorough breakdown of the logic behind the Alito opinion, and the two look at the impact this could have on American institutions broadly.
Recommended Reading Leaked draft decision, Dobbs v. Jackson Women's Health Organization (PDF): Mises.org/RR_80_A
"End Roe v. Wade: It's Time to Defederalize Abortion Policy" by Ryan McMaken: Mises.org/RR_80_B
"Why Social Issues Dominate" by Jeff Deist: Mises.org/RR_80_C
"Before Roe v. Wade, Abortion Had Always Been a State and Local Matter" by Ryan McMaken: Mises.org/RR_80_D
Mises Institute Graduate Program: Mises.org/edu
Be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
A libertarian view of the law by definition means that there can be no immunity from legal consequences. Anything else perverts the very meaning of law.
Original Article: "Sovereign Immunity Is Antilaw: The State Must Make Restitution to Its Victims"
This Audio Mises Wire is generously sponsored by Christopher Condon.
Recorded at the Mises Institute in Auburn, Alabama, on 19 July 2021. Includes an introduction by Jeff Deist.
In June 2021, Missouri passed a new law stating it would not assist in the enforcement of federal gun laws. Tho and Ryan discuss how states can use strategies like this to resist federal laws within the states. Marijuana legalization and opposition to the Fugitive Slave Acts provide compelling historical examples.
Articles Mentioned in this Episode "Missouri Tells the Feds: We Won't Enforce Your Gun Laws" by Ryan McMaken: Mises.org/RR_58_01
"When Nullification Works, and When it Doesn’t" by Ryan McMaken: Mises.org/RR_58_02
"The Feds Collect Most of the Taxes in America—So They Have Most of the Power" by Ryan McMaken: Mises.org/RR_58_03
"Nebraska and Oklahoma Sue Colorado Over Legal Cannabis" by Ryan McMaken: Mises.org/RR_58_04
"Nullification Works: Congress Ends Federal Ban on Medical Marijuana" by Ryan McMaken: Mises.org/RR_58_05
Be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
Mises.org editor Ryan McMaken joins the show to tackle some of the toughest and most controversial chapters of Rothbard's groundbreaking treatise The Ethics of Liberty. McMaken and Jeff Deist cover abortion, the rights of children, defamation, and all the "what-ifs" contained in lifeboat situations. They also move into part III of the book, where Rothbard pulls no punches concerning the nature of the state, its internal contradictions, its anarchic relationship to other states, and its inescapable role as predator and parasite. This is a can't-miss episode for anyone who questions the role of government in society.
Mentioned in the Episode and Other Links of Interest: Rothbard's The Ethics of LibertyJeff Deist: "A Tort Law Approach to Fight Big Tech?"Ryan McMaken: How Defamation Suits are Used to Stifle Free Speech
We're beginning to see some early attempts by private firms to provide simple, affordable private security beyond wealthy or corporate clients.
Original Article: "Private Security Apps May Be the Future of Neighborhood Policing"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
ABSTRACT: The libertarian nonaggression principle (NAP) enjoins us from messing with other people or their property. This means that theft (removing owned items from the control of their proper owners) is not acceptable. Major libertarian writers (Murray Rothbard, Walter Block) have however opined that if an item is currently held by someone other than the proper owner, then it is permissible to grab the item (i.e. stealing from a thief). This paper argues against this position.
Keywords: nonaggression principle, theft, murray rothbard, walter block, libertarianism
Sven N. Thommesen (thommsn@auburn.edu) taught economics and finance at Auburn University from 1999 to 2018.
THE QUESTION The libertarian nonaggression principle (NAP) forbids aggression against other persons or their property, which means theft is not allowed. That is, appropriating property from its rightful owner is frowned upon. But what if the property you are appropriating is not in the hands of the rightful owner because the current possessor has himself stolen it from the rightful owner? What then? Is it morally acceptable to steal from a thief? (We are asking here about the appropriateness of re-stealing previously stolen property—not about stealing other property properly belonging to the thief.)
WALTER BLOCK’S ANSWER In recent blog entries Walter Block has posted a couple of exchanges that he has had with students regarding the moral status of appropriating items from individuals who have already stolen those same items from their rightful owners (See Block 2018a and 2018b).
The discussions veer into more complex issues, such as what to do if the original thief is the government, and how to bring the stolen items back to their rightful owners when much time (possibly generations) has passed since the original theft, but they also touch on simple cases of individuals stealing from each other. One correspondent formulates his understanding of libertarian theory as, “[O]nce the original theft happens, you’re not really committing violations of the NAP by ‘stealing’ from the thief.” (Block 2018b) Another quotes Block as saying that “stealing from a thief is good since it’s not his legitimate property,” and Block does not correct him. Instead he says that the case of “liberating” a confiscated truck from a government impound lot would not be theft, since “you can only steal from the rightful owner” (Block 2018a).
This second correspondent demurs, however: “I believe you CAN steal from a thief. Just because the thief stole from an innocent person does not give me, an unaffected third party, a right to steal from the thief, since he didn’t take anything that was rightly mine” (Block 2018a).
Block’s response was surprising.He states that if he ‘liberates’ my truck from the police impound lot, and then is required to give the truck to me, that would make the NAP a “suicide pact”! My intuition is to hold with the latter sentiment! (And, on a matter of terminology, if it is morally right to appropriate stolen items from a thief, this secondary action should probably be referred to by a different word than “stealing.”)
MURRAY ROTHBARD’S ANSWER As it turns out, Block is not the only libertarian to take the position that it is morally acceptable (and hence not a violation of the NAP) to steal from a thief. Here is what Rothbard (1969) wrote:
Suppose, for example, that A steals B’s horse. Then C comes along and takes the horse from A. Can C be called a thief? Certainly not, for we cannot call a man a criminal for stealing goods from a thief. [Any goods, or just previously stolen goods?] On the contrary, C is performing a virtuous act of confiscation, for he is depriving thief A of the fruits of his crime of aggression, and he is at least returning the horse to the innocent “private” sector and out of the “criminal” sector. C has done a noble act and should be applauded. Of course, it would be still better if he returned the horse to B, the original victim. But even if he does not, the horse is far more justly in C’s hands than it is in the hands of A, the thief and criminal.
Rothbard really doubles down on the you-can’t-steal-from-a-thief position, calling subsequent thefts “virtuous.” Now, when Rothbard refers to the “private sector” and the “criminal sector,” it can be surmised that he really has in mind a discussion of what to do with government-held property. But his chosen example is focused on individuals stealing from other individuals, and in this case it is difficult to agree with his position. I am at a loss to understand Rothbard’s notion that there are degrees of “justly holding” property that is not in fact in the hands of the rightful owner!
THE NAP AND PROPERTY In order to sort out what the NAP might have to say about variations on the notion of theft, a basic theory of property is needed. An attempt will be made to provide various categories of property, in order to help clarify our applications of NAP.
Step 1. All existing entities in the universe can be sorted into two broad categories:
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(Potential) property owners
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(Potential) property
In the first category, we put human beings. That may be a fairly “speciesist” thing to do and, in galactic terms, possibly imperialistic. But, for now, as a first cut, the category of potential property owners includes only living earthly entities that are sapient, sentient, and lacking in instincts for how to survive in the wild.The reader will recognize these as Ayn Rand’s criteria for granting individual rights. She assigns rights to humans for being potentially sapient and sentient, without denying rights for human individuals who are neither at the moment. See her articles “The Objectivist Ethics” and “Man’s Rights” in Rand (1964). Should it be discovered that other earthly species fit this description, rights might have to be extended to them.As Edwin Locke humorously noted in a talk on animal rights many years ago, “Animals will be granted rights when they come ask for them.” And, of course, if aliens in spaceships were to drop in for tea one day, they would presumably also belong to this category. But for now, human beings it is.
That leaves everything else in the category of potential property.
Note that in this categorization, potential property owners are not also included in the category of potential property, thus ruling out chattel slavery by definitional fiat! I also note that this way of dividing all existents on Earth into two categories accords well with the Christian view that God gave over the rest of Creation for Man to manage.
Step 2. All the items in the potential property category can be further subdivided in accordance with how they are owned (seen from each potential property owner’s subjective point of view):
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Property owned by me
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Property owned by others
a. Property owned by individuals
b. Property owned by groups or organizations
- Potential property owned by nobody
So, what does the NAP say that an individual is entitled to do with items from those three categories?
Regarding property that is unowned, all is clear: it can be used in whatever manner an individual wishes, as long as nobody complains or disputes his use. Or an individual can put down stakes and “mix his labor with the land” to make it his in an act of Lockean homesteading. As an example, if the woods near my house are unowned, I can take Sunday walks there along with others without necessarily wanting to fence off part of the forest for myself.
Regarding property owned by me, all is also clear: an individual can do whatever he wishes with stuff that he owns. That includes using it, giving it away, bartering it or selling it, renting it out, trashing it, or leaving it fallow and unused. Anything at all, as long as the individual does not violate the rights of others in the process.
It should be noted that in libertarian theory an individual is the rightful owner of property if he has homesteaded previously unowned property, if he has created the property himself out of resources he owned, or if he received the property from a previous rightful owner as a gift, a bequest, or through a sale or act of barter.
Now, getting to the stealing-from-thieves question, what can a person legitimately do with property that is owned by someone else? Here the NAP is clear: he cannot legitimately do ANYTHING with such property. The basic rule is: do not mess with other people’s stuff!
So, in Rothbard’s example, the fact that the horse now being ridden by A actually belongs to B is of no consequence: since the horse is not mine, I have no legitimate claim to it. For me to appropriate the horse from A is no more or less defensible than if I had stolen it directly from B.
Let us not forget that a major point of having a rule such as the NAP is to reduce interpersonal conflict as much as possible.4 To say that the minute a piece of property is no longer in the hands of its rightful owner it is legally and morally up for grabs is to invite a melee of thieves stealing from each other! Not exactly a peaceful solution.
RESTORING STOLEN PROPERTY Under a libertarian theory of justice, following an act of theft the justice system has two key tasks: to restore the stolen property to its rightful owner and to punish the perpetrator. The only person who has a right to “steal from the thief” is the rightful owner, who is entitled to recover his stolen property. This he can do himself, or the government (in a Randian world) or his designated agents (in a Rothbardian world) can do it for him.
In Rothbard’s horse thief example, an unrelated third party who knows who owns the horse, and realizes that the current rider must have stolen it, could (acting on his own) decide to “liberate” the stolen horse from the thief with the intention of returning it to its rightful owner. But if on the way that person encounters the police or a defense agency while riding the stolen horse, he is likely to become their prime suspect, and he would have to talk fast indeed to get out of the jam he has put himself in!
What happens to the third party in such a case is one of the many questions which the NAP does not directly address, and which therefore would be handled differently in different societies or jurisdictions. The third party’s knowledge (did he know the horse was stolen, and if so, from whom?) and intentions (did he plan to return the horse to its owner, or was he going to sell it) will play a role.
It follows, then, that contra Rothbard, it is neither acceptable nor virtuous to “steal from the thief.” If someone recognizes that an item must be stolen, and he knows the rightful owner, the neighborly thing for him to do is call the owner, his agent, or the police and let them know what he has observed. (Though the NAP itself, being concerned solely with negative rights, does not require him to do so.)
If a stolen item is found in the possession of the original thief, providing justice is straightforward: the stolen item is returned to its proper owner, and the thief is made to pay compensation to the owner for violating his ownership rights and for any direct expenses incurred by him as a consequence of the stolen item being unavailable for his use. However, if the stolen item is now in the possession of a person other than the original thief, things become more complicated. The stolen item needs to be returned to the owner, of course, to the detriment of the current possessor. But the defense agency or police then need to unravel the chain of custody of the stolen item, from the current possessor back to the original thief, in order to determine who needs to be punished and/or made to pay restitution. The knowledge and intentions of each party will be important.
GROUP OWNERSHIP In the division of owned things above, a distinction was made between things owned by individuals and things owned by organizations or groups. This was done only because some people may wish to dispute whether groups (your chess club, your personally held firm, a corporation) can own property at all, and if so whether the rules for such group-owned property differ from the rules for property held by individuals.
At a minimum, groups that own property need to have their own internal rules for who among their members or employees are entitled to use the property and in what manner; also, the group needs to make clear which individuals are to be held responsible (i.e., legally liable) if such property is used in a manner that causes harm to others.
As for myself, the previously stated rule applies: if a piece of property is not mine, I should leave it alone. This applies to property owned by groups of which I am not a member as well.
GOVERNMENT OWNERSHIP There is one type of organization which has a special status in libertarian theory, namely governments. These claim all manner of authority vis–à–vis their citizens, and they own property (according to their own laws of property). In a Rothbardian world, of course, governments would not exist, and in a Randian world they would be limited to their “proper” functions only (defense of individual rights). But this leads to the need to add an additional category of ownership in the list above:
Step 3. Further potential property
2c. Property owned by a government
Now, Rothbardians would have it that (in the current state of affairs) a government is simply not a legitimate owner of any property since all their funds are stolen funds to begin with.
Some might quibble with this: the claim is not necessarily completely true, since a Randian government that supports itself entirely by voluntary means (contributions, lotteries, etc.) would in fact be operating with non-stolen funds! The fact that this government may illegitimately (from a Rothbardian point of view) claim a monopoly on the use of force in some circumstances does not mean that voluntarily donated funds are tainted. But, as many have pointed out, the likelihood that a “proper” Randian limited government will ever be observed in the wild is vanishingly small.
Instead, what does exist are governments that steal people’s stuff via civil forfeiture, condemnation proceedings, eminent domain, and innumerable taxes and fees. Voluntary contributions to contemporary governments are small enough to be irrelevant for purposes of this discussion.
RECOVERING PROPERTY TODAY Then the question, as raised by both Rothbard and Block, becomes: If property currently held by entities calling themselves “government” is not to be considered theirs because it is stolen (or was purchased with stolen funds), is it acceptable for random citizens to “liberate” such government property for their own use?
Block and Rothbard both answer this question in the affirmative, putting the government in the role of the original horse thief. Stealing from the government becomes a virtuous act in this view.
In the alternative view put forth above, the answer would have to be no. Stealing from a thief is not acceptable under the NAP, and it certainly is not virtuous. Under a reasonable interpretation of the NAP, the only acceptable actions would be for original owners to recover stolen property directly from the thief, either by themselves or via designated agents.
So, no, random citizens cannot enter city hall and appropriate for themselves whatever office supplies they might find there. Let us not forget that the point of the NAP is to limit conflict—and such action on the part of random citizens would certainly cause conflict! (Uniformed men with guns would appear in short order….)
The same reasoning applies to taxes in general, in that the funds all go into a big pot and the individual taxpayer cannot disentangle his money from other people’s money (since money is fungible).
On the other hand, if someone’s car has been seized under “civil forfeiture” in a roadside stop, he would be justified under the NAP in recovering his vehicle from the police impound lot. Whether attempting to do so at present would be a wise move is another question! (And, contra Block, I maintain that if I were to “liberate” your stolen vehicle from the impound lot, I would be morally obligated to give it back to you as the rightful owner.)
RECOVERING PROPERTY ON LIQUIDATION OR DEFAULT A special case arises if a government entity is going out of business (being liquidated). In such a case, the governing principle would be to return all stolen property to its original rightful owners. For specific items (such as cars in the police impound lot) or pieces of real estate held for failure to pay property taxes, this should be straightforward. But what of bank accounts holding general tax receipts, or real estate and other assets purchased with tax funds?
It is not clear that the NAP alone gives us the answer. I would say, liquidate the organization the way you would any other defunct firm: sell off all general assets, pay off all debts (though some libertarians would say to repudiate all debt), and then distribute any remaining funds among the taxpayer-citizens according to some reasonable, acceptable scheme.
FACTS AND BELIEFS There is sometimes a difference between what a person believes to be true, and what is actually the case. Nobody is omniscient! But everyone has to act, and so each person acts on what he believes to be true, which opens the possibility that someone may end up violating the rights of others without intending to. As Walter Block points out, mens rea matters. What is important in this discussion of crime is not just what is actually true, but also what the suspected criminal thought he was doing. So, to the above “metaphysical” categories of ownership, at least two “epistemological” categories need to be added:
Step 4. Potential property
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Property whose status is unknown in that I do not know whether it is owned or unowned
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Property whose status is uncertain in that I do not know if the person currently using or possessing the item is its rightful owner
In the first case, a person might tentatively act on the assumption that the property is unowned and proceed to use it or even to homestead it. But, if the actual owner shows up, the current user must be ready to vacate the premises immediately. And he may possibly need to pay restitution for his uninvited use, if the owner should wish to press charges. To what extent the nonowner’s belief, or lack of knowledge, regarding the ownership status of the property is taken into account at a trial is one of those factors that will be specific to the local justice system. To me, the safest rule would seem to be to leave alone any property that I do not know for certain is currently unowned.
The second case bears on the horse thief situation. Does Rothbard’s evaluation of the virtuousness of C’s actions change depending on what C thought he was doing? On the one hand, if C knows for a fact that the horse belongs to B and that A must have stolen it, that is one thing—he may be justified in grabbing the horse from A in order to give it back to B. But what if he does not know this, and is only stealing the horse from what he believes to be the legitimate owner? In the latter case, is he still virtuous? Even from a Rothbardian point of view, it could only be so if we take a God’s-eye view of things (As in, “C is doing a good thing, even though he did not know it and in fact had no intention of doing so.”).
The situation (second case) also leaves open the possibility that C has simply misunderstood the situation: perhaps A is riding the horse with B’s permission, so that no theft has occurred. In this case, C’s theft of the horse from A cannot be counted as virtuous, no matter what he believed. As the rightful owner, B would surely have a case against C.
As a final comment on Rothbard’s position, I would claim that the stolen horse is not brought back into the “innocent private sector” when re-stolen by C. That only happens when the horse is restored to its proper owner, B. Until then, the horse is in the “criminal sector,” whether currently in the possession of A or C, and regardless of any misunderstandings or misidentifications by either.
In conclusion, the conflict-reducing and justice-preserving solution in accordance with the NAP would be for everyone to follow the rule that one leaves alone any property that one does not own oneself, no matter what one may believe about who actually owns it. Stealing can never be virtuous.
APPENDIX Here is a summary of the categories of property used in this paper:
All existing entities in the universe can be sorted into two broad categories:
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(Potential) property owners
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(Potential) property
All the items in the potential property category can be further subdivided in accordance with how they are owned (as seen from each agent’s subjective point of view):
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Property owned by me
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Property owned by others
a. Property owned by individuals
b. Property owned by (private) groups or organizations
c. Property owned by a government
- Potential property owned by nobody
Property with uncertain status:
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Property whose status is unknown in that I do not know whether it is owned or unowned
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Property whose status is uncertain in that I do not know if the person currently using or possessing the item is its rightful owner
Lawyer and legal theorist Stephan Kinsella joins the show as we dive into Part II of Rothbard's The Ethics of Liberty, grappling with the foundational issues of crime, proportionality, and contract. When is property justly held? When may injuries to a person or property be addressed with force, and how much force? How do we deal with one another contractually, in terms of promises and expectation? How do we resolve disputes privately? Rothbard presents a remarkable exposition of a theory of liberty, a normative justification for laissez-faire which was sorely lacking. Kinsella does a remarkable job of explaining Rothbard's concepts with force and clarity, so you won't want to miss this episode!
Mentioned in the Episode and Other Links of Interest: Rothbard's The Ethics of LibertyRothbard on the “Original Sin” in Land Titles: 1969 vs. 1974 (Nov. 5, 2014)KOL146 | Interview of Williamson Evers on the Title-Transfer Theory of ContractA Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability, Journal of Libertarian Studies 17, no. 2 (Spring 2003): 11-37A Libertarian Theory of Punishment and Rights, 30 Loy. L.A. L. Rev. 607-45 (1997)Fraud, Restitution, and Retaliation: The Libertarian ApproachKOL197 | Tom Woods Show: The Central Rothbard Contribution I Overlooked, and Why It Matters: The Rothbard-Evers Title-Transfer Theory of ContractJustice and Property Rights: Rothbard on Scarcity, Property, Contracts…KOL004 | Interview with Walter Block on Voluntary Slavery
ABSTRACT: This essay develops a model to analyze jury independence. Jury independence can be seen as a game between elites and the citizens who make up the jury. This essay first presents a historical look at jury independence by looking at jury nullification. Then using the model developed, the evolution of jury independence is analyzed as well as how juries and the elites operate today. The essay finds that jury independence has changed due to changes in the philosophical/moral understanding of the law, which has resulted in the movement from law order to lawyer order.
KEYWORDS: jury nullification, elites, jury independence, Blackstonian view of law, Darwinian view of law
Feler Bose (bosef@iue.edu) is an Associate Professor of Economics and Finance at the School of Business and Economics at Indiana University East.
“Only the checks put upon magistrates make nations free; and only the want of such checks makes them slaves. They are free, where their magistrates are confined within certain bounds set them by the people … And they are slaves, where the magistrates choose their own rules, and follow their lust and humours … those nations only who bridle their governors do not wear chains.” – John Trenchard, 1722
“If we could eliminate the jury, we would save a lot of time. You can try a case without a jury in one day that would take you a week or two weeks with a jury.” – Chief Justice Warren Earl Burger, Time Magazine, June 20, 1969
INTRODUCTION There have been different theories as to the development of law and the relationship between the elites and the people in the West and the United States in particular. One such theory is that the development of American law was the product of conflict between economic interests. In this conflict, the commercial interests benefitted at the expense of the less powerful groups such as farmers, workers, and consumers. The commercial and industrial interests sought more efficient debt collection, restricted the state in areas of “fair dealing,” and sought low-cost economic development, among other reforms (Horwitz 1975). An example is the law of contributory negligence which was pushed by the business interests as they influenced the courts (Burns 2017, 2). Another perspective comes from the idea that the revival of Roman law with the discovery of Corpus iuris civilis resulted in a move from the medieval “enumerative” approach to law to a more mathematical/scientific deductive approach to law. Hence, Roman law was elitist, as it was only accessible to a few who could understand and apply the details (Hoeflich 1986). Although these theories provide insight into the development of the law in the US, the approach presented in this paper will seek an explanation using the jury system and the philosophy underpinning the understanding of the law. This explanation provides a complementary explanation for the development of law in the US by focusing on jury independence.
The development of the independence of the jury has a long history mainly situated in the English-speaking world. The hypothesis to be tested in this paper is that when the jury and the elite have a Blackstonian understanding of the origins of the law, there is minimal conflict between them, resulting in law order; however, when the understanding of the law becomes Darwinian, elites seek to have control of the law and its development, resulting in lawyer order and conflict between elites and juries. The Blackstonian-Darwinian distinction is not new, and a similar distinction has been suggested before by Chafee (1947), who uses the terms Blackstonian and Austinian (after John Austin, a legal scholar from the 1800s). Austin believed that judges make law as opposed to discovering law (as William Blackstone believed); however, Chafee’s understanding of the nineteenth-century changes in the understanding of law is not complete. He believes that the changes are as natural as a pendulum swinging back and forth between the Blackstonian and Austinian understanding of law over hundreds of years (1947, 420), but he does not provide much evidence for this repeating pattern and further his understanding of the Blackstonian view needs further development.
If there is one theme that runs through the works of Horwitz (1975), Hoeflich (1986), and Chafee (1947), it is that the law has become elitist, leaving the common person with minimal input. This article arrives at the same outcome, but the explanation comes from moral/philosophical changes.
This article will mainly focus on the role of juries in criminal cases in the US but will also look at juries in civil cases. Jury nullification is
when a criminal trial jury decides not to enforce a law because they believe it would be unjust or misguided to convict. This allows average citizens, in deliberative bodies, to limit the scope of the criminal sanction, so that acts not broadly condemned are not widely punished. History shows juries have taken this enormous power very seriously, and have used it responsibly (Conrad 2003, xix).
The article is organized as follows. First, a brief historical overview of the development of the jury system is provided. A model is then developed as a framework for analyzing the jury system. The model is then used to analyze jury nullification over time by highlighting the philosophical underpinnings and also discusses possibilities for reform. The final section concludes.
INITIAL DEVELOPMENT OF JURY INDEPENDENCE This section focuses on the early development of juries and the development of jury independence. Although many historians begin with jury development in England, one in fact must go further back in history to the Hebrews.
The Ancient Hebrew Court
The ancient Hebrew courts had four levels of appellate courts. The court at the top was the Great Sanhedrin of seventy-one elders located in Jerusalem. The Small Sanhedrin of twenty-three eldersSimilar in size to the common law grand jury. were the next level, located in the other major cities. The third level was the Bench of Twelve,Similar in size to the common law trial jury. and each synagogue had one of these bodies. Below that was the Authorized Bench, composed of experienced men. Finally, there was the Unauthorized Bench, or the Bench of Idiots. The Unauthorized Bench was so named because it was not authorized by the Great Sanhedrin and ιδιος (idios), meaning unique, one of a kind, indicating that this unauthorized bench met for a particular case only, “bringing to bear the idios-syncracies of the conscience of each juror”(Winters 2008, 461) resulting in independence from the influence of elite preferences. This model of the Hebrews was also adopted by the early church, especially the Unauthorized Bench, even when under Roman civil law. Paul encouraged the church to use the “least esteemed” to judge the small matters, i.e., not those who held offices in the church (Winters 2008).See 1 Cor. 6:1ff. (Authorized [King James] Version). The Unauthorized Bench model followed by the early church diffuses and disperses judicial power from the professional class.
England
Prior to the Magna Carta, the criminal justice system in England had three types of trials. The first was trial by compurgation, the second was trial by ordeal, and the third was trial by battle (Levy 1999, 4). Only the trial by compurgation seems to be non–elite based, as it entailed wider involvement from the people. The trial by ordeal required the accused person to undergo a physical test such as putting their hand in hot water, drinking poison, walking through fire, etc. If one was injured, then one was guilty. The trial by ordeal was practiced by some in Europe but was opposed by the church and others such as the Norman kings of England. The trial by ordeal was based on the belief that nature is normative and determines one’s innocence or guilt (Rushdoony 1973, 606). The trial by battle gained ascent when the trial by ordeal was abolished. Here the idea was that the winner was the one who was right. This method of trial gradually disappeared in the Middle Ages (Conrad 1998, 16). The trial by compurgation required an accused person to prove their innocence and provide several witnesses to take an oath attesting to the accused person’s innocence. This method was like the jury trial in that it involved nonelites, and some defendants preferred this method to the jury trial, as one could select one’s own compurgators or oath hurlers. This method was outlawed in England only in 1833 (Conrad 1998, 16).
The root of the modern jury system began in 1164, “the Constitutions of Clarendon prescribed the use of a recognition by twelve sworn men to decide any dispute between laymen and clergy on the question whether land was subject to lay or clerical tenure” (Levy 1999, 11). The Assize of Clarendon in 1166 further encouraged the growth of what would become known as the jury trial (Levy 1999, 11).
In 1215, at the time of the Magna Carta, the trial by jury was established for civil cases but not criminal cases. The Fourth Lateran Council of 1215 forbade the clergy from being involved in the use of ordeals, which reduced the approved methods of trial in criminal trials (Levy 1999, 16). Over the decades the trial by jury replaced the other methods for criminal trials (Levy 1999, 16ff.). Further, the jury could be moved by “whim, mercy, sympathy, or pigheadedness, refused to convict against all law and evidence, the prisoner was freed, and that was that” (Levy 1999, 46). If the jury made a prejudicial judgment against a prisoner, the judge could request that the king pardon the prisoner. The unanimity ruleThis meant that everyone in the jury had to agree on a verdict. for criminal trials seems to have been settled in the late fourteenth century.
Juries that did not return verdicts pleasing the Star ChamberAlthough the Star Chamber started out as a court for elites, who might not be easily brought to justice in the lower courts, it eventually became a tool of the king to oppress his enemies through arbitrary justice. Encyclopaedia Britannica Online, s.v. “Star Chamber,” Apr. 9, 2019, https://www.britannica.com/topic/Star-Chamber. could be punished; however, their verdicts were honored in criminal trials. It was only in 1670 that it was finally established that a jury could not be punished if it returned a verdict not in line with the evidence or the direction the court desired (Levy 1999, 49).
The jury system was transplanted to the American colonies. In 1606, the charter for the Virginia Company provided for jury trials. The other colonies also introduced jury trials (see table 1 for dates). An early case of interest occurred in New York, where a printer, Peter Zenger, was charged with being a “seditious person” for criticizing the royal governor. In the defense, his lawyer stated that Zenger did print the articles but that they were the truth. The chief justice said that truth could not be used as a defense. The jurors were instructed that “it was their duty to decide the case as stated in the indictment, namely, whether Zenger had published the articles” (Vidmar and Hans 2007, 46). The jury declared him not guilty.
Table 1: Dates of official recognition of jury trials in colonial America. Note that jury trials were common in many of these colonies prior to the official recognition (Vidmar and Hans 2007, 47).
One of the effects of the Zenger trial and other earlier trials was the issue of whether English law and precedent could be directly applied in America, which had different religious, cultural, economic, and social conditions. Out of this difference developed the idea of double jeopardy, the mistrust of lawyers who might try to find loopholes, the use of juries extensively, etc., (Vidmar and Hans 2007, 49). During colonial times, common law was based on natural justice, and in many cases, judges did not provide any instructions to the jury on the law and at times might even provide contradictory instructions. This allowed the jury to decide the law and the facts in the various cases they confronted (Vidmar and Hans 2007, 49ff.).
After independence, many states guaranteed jury trials through the Constitution for civil and criminal trials. However, although the federal government allowed for jury trial for criminal cases (in Article III“The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed.” U.S. Const. art. III. and the Sixth Amendment“In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district where in the crime shall have been committed, which district shall have been previously ascertained by law.” U.S. Const. amend. VI.), the right to a civil jury trial was limited via the Seventh Amendment“In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.” U.S. Const., amend VII. to those trials tied to common law actions (Vidmar and Hans 2007, 54).
MODELING THE RELATIONSHIP BETWEEN THE ELITE AND JURIES Juries can be seen as councils since their advice is valuable for judges/elitesAlthough elites are primarily judges, prosecutors, public defenders, legal think tanks, and legislators, in other contexts they could also be large firms and interest groups. to hear in reaching a just decision. Further, juries improve the decisions made. The Condorcet jury theorem suggests that the median opinion tends to be accurate over extreme opinions (Mueller 2003, 128). On the issue of whether laws are just or not, if the majority of juries rule against a law, for example, the information coming from juries is that the law is unjust.
Figure 1: Matrix indicating the role of juries resulting in different orders based on whether juries have anything to say regarding the validity of the law and whether they have access to relevant facts.
Figure 1 shows the scope of juries. On one axis is the validity of the law: Is the jury allowed to discern the validity of the law? On the other axis is the truth of the facts: Does the jury have access to relevant facts to make a determination of the truth? If the jury has access to the relevant facts to apply the law and is allowed to discern validity of the law, there is law order (quadrant I). The jury is truly independent in this scenario. If the jury has access to the relevant facts but is not allowed to discern the validity of the law, there is lawyer order under common law (quadrant II). If the jury is not authorized to discern the validity of the law nor has access to relevant facts, this also is lawyer order (quadrant III). In this quadrant the jury is for intents and purposes eliminated. If the jury is authorized to discern the validity of the law but does not have access to the relevant facts, this is also lawyer order (quadrant IV).
EROSION OF THE RIGHT TO JURY INDEPENDENCE This section provides a concise overview of the erosion of jury independence in the US and the status of jury independence today. Further, this section uses the model to analyze the conflict between elites and the people in the area of jury independence. Finally, this section also discusses how changes in the philosophical underpinnings of the understanding of the law have affected jury independence.
Phase 1: The Blackstonian View of the Law and the Era of Law Order
During phase I, the view of law was that it was based on natural justice (Vidmar and Hans 2007, 49). This era is the Blackstonian era because during this time Blackstone’s Commentaries on the law was the most popular textbook; “most students, and no doubt most bar examiners, felt that a mastery of Blackstone was an adequate preparation for the practice of the law … it may safely be assumed that practically all lawyers in the United States prior to 1900, at one time or another, read all or part of the Commentaries” (Lockmiller 1938). The Blackstonian era was the time of law order, as the elites and juries had much in common and juries judged both law and facts.
As Blackstone’s work suggests, under the common law, judges were basically managers and juries were the superintendents (Stacey 2008). Moreover, the origin of common law is based on two sources: scripture and natural law.“The true principles of natural religion are part of the common law; the essential principles of revealed religion are part of the common law; so that a person vilifying, subverting or ridiculing them may be prosecuted at common law.” Updegraph v. Commonwealth, 11 Serg. & Rawle 393, 401 (Penn. 1824). In the Church of Holy Trinity v. United States, the Supreme Court subsequently validated the decision of the Pennsylvania court. Church of Holy Trinity v. United States, 143 U.S. 457, 470–71 (1892). As Blackstone (who is one of the most-cited thinkers in the American founding era [Lutz 1984, 194]) states:
Man, considered as a creature, must necessarily be subject to the laws of his Creator, for he is entirely a dependent being…. And consequently, as man depends absolutely upon his Maker for everything, it is necessary that he should in all points conform to his Maker's will. This will of his Maker is called the law of nature…. This law of nature, being coeval with mankind and dictated by God himself, is of course superior in obligation to any other. It is binding over all the globe, in all countries, and at all times: no human laws are of any validity, if contrary to this. . . The doctrines thus delivered we call the revealed or divine law and they are to be found only in the Holy Scriptures. These precepts, when revealed, are found upon comparison to be really a part of the original law of nature…. Upon these two foundations, the law of nature and the law of revelation, depend all human laws; that is to say, no human laws should be suffered to contradict these. (Blackstone [1753] 1893, 2:39, 2:41-42)
For this reason, Blackstone believed that if a bad law is overturned, then it was not law in the first place. “For if it be found that the former decision is manifestly absurd or unjust, it is declared, not that such a sentence was bad law; but that it was not law” (Blackstone [1753] 1893, 2:69–70, italics in original).
With this understanding of the law and with people at this time carrying their Bibles and Blackstone Commentaries with them, John Adams could write in his diary that the “general Rules of Law and common Regulations of Society” were “well enough known to ordinary Jurors,” and that the “Great Principles of the Constitution, are intimately known” by every Briton, such that “it is scarcely extravagant to say, they are drawn in and imbibed with the Nurses Milk and first Air” ([1771] 2007). Further, the Protestant Reformation had emphasized universal schooling as a means to read the Bible (Becker and Woessmann 2009). Therefore, it made sense that during this period many judges gave the jury no instructions on the law, as the jury was to discover the lawJust as the laws of physics are discovered, similarly laws ordering human society were to be discovered. Natural law presupposes preexisting “‘eternal’ principles of law discoverable by men (Hoeflich 1986, 104). from scripture and natural law, or that judges would give differing instructions regarding the law, which then gave the jury a wide latitude to interpret the law and facts (Vidmar and Hans 2007, 49). In fact, the framers of the Constitution saw “judges as equals to laymen with regard to knowledge of the Law” and juries as playing the role of “spoiler in the judicial branch, protecting local citizens against arbitrary acts of government power” (Roots 2011, 5, 13). Hence, under common law, justice was administered by amateurs who acted based on a “Christian sense of justice and the legal tradition of the community” (Rushdoony 1984, 88).
In this era, both the jury and elites understood what the “rule of law” meant, and the elites and juries did not have much conflict, hence being in quadrant 1 (a law order). Further, since the law was understood by all, the hurdle to practice law was low. One just had to pass the bar exam, and this could be done with only a high school diploma. Many individuals used apprenticeships with judges or lawyers as a pathway to study for the bar (Stacey 2008, 97–99; Hoeflich 1986, 118) while others attended a preparatory school to get the necessary training (Lind 2004, 96). However, conflicts with the juries arose when the elites tried to impose English imperial laws and taxes on the colonies, which resulted in juries ruling against the elite by refusing to convict those who violated English law (Vidmar and Hans 2007, 52).
Finally, in the Supreme Court decision in Georgia v. Brailsford,Georgia v. Brailsford, 3 U.S. 1 (1794). Chief Justice John Jay states that juries have the right “to determine the law as well as the fact in controversy” solidifying the juries’ role as credible veto players and being in quadrant 1. There was to be no asymmetrical informational relationship between juries and judges.
Phase 2: The Darwinian View of the Law and the Rise of Lawyer Order
In the 1800s, the older Blackstonian view of law was slowly being replaced with the “scientific” approach to law. This resulted in more conflict between the elites and juries, and juries lost their power to decide civil cases in Massachusetts in the early part of the nineteenth century. This was partly due to the desire of industrial interests to have more uniform laws instead of a patchwork of local laws. Further, instead of having many judges in a courtroom as in the past, only one judge would now be there to explain what the law meant. Virginia, on the other hand, took a longer time in curbing the power of juries (Vidmar and Hans 2007, 54).
However, in criminal cases the efforts by judges to control the juries met with resistance. This conflict resulted in the voters of Indiana (1851) getting passed into the Indiana Constitution the right by the jury to decide law as well as fact.“In all criminal cases whatever, the jury shall have the right to determine the law and the facts” article 1, section 19. However, the same year, the Supreme Court of Indiana ruled that juries should limit themselves to understanding the law as determined by the judge. Other states continued to struggle with the role of juries in determining the law and facts, and nearly all state courts have come in favor of limiting juries to determining fact, even if some of the state constitutions provide for the jury to determine law and fact (Vidmar and Hans 2007, 55). This limiting of the juries results in less trust of the judge (Marder 2017).
The federal courts also worked to limit the right of the jury to decide the law as well as fact. This culminated in Sparf et. al. v. United States, where the court ruled 5–4 that the federal judges did not have to inform the jurors of their inherent right to decide the law.Sparf et. al. v. United States, 156 U.S. 51 (1895).
The Philosophical/Moral Change
Much of this shift toward elite control and direction of law occurred when the Blackstonian type of understanding of the origin of law was replaced by a Darwinian understanding of law. The Darwinian idea of evolution through natural selection had an impact beyond the biological sciences. Charles Darwin’s successors brought the Darwinian method into the social sciences and the law.
[T]here proceeded during the 19th century, under the influence of the evolutionary concept, a thoroughgoing transformation of older studies like History, Law and Political Economy; and the creation of new ones like Anthropology, Social Psychology, Comparative Religion, Criminology, Social Geography. (Branford 1949, 912)
The Darwinian method was developed in 1870 by Christopher Columbus Langdell, the dean of Harvard Law School. Although Langdell developed this method, there were many antecedents (Hoeflich 1986).
The doctrine of evolution had been anticipated in the eighteenth century, and insofar as its implications for the social sciences meant the rejection of the notion of fixed and unchangeable laws…. [w]hat shattered that traditional world was science which … substituted the operation of the laws of evolution for the laws of God. (Commager 1978, 1005–06)
Langdell introduced the case study method (Lind 2004). Whereas Blackstone saw law as derived from the divine and natural law, Langdell focused on law as derived from man’s experience (through cases) and sought to divorce legal education from natural law.
Law, considered as a science, consists of certain principles or doctrines…. Each of these doctrines has arrived at its present state by slow degrees;…. This growth is to be traced in the main through a series of cases; and much the shortest and best, if not the only way of mastering the doctrine effectively, is by studying the case in which it is embodied (Langdell 1871, vi).
Further, professional experts (e.g., university professors) were now needed to identify the cases (fossils) to make up the curriculum.
This evolutionary progress must be made by experts and not through passive adaptation via jury cases. Experts must use foresight and calculation to achieve the ends. The superiority of expert-directed adaptation over passive adaption via jury trials is that it reduces enormous waste (e.g., dead-end mutations and extinct species) and increases efficiency (Ward 1883, 73–74).
These ideas were further developed by Oliver Wendell Holmes Jr.,Holmes was an associate justice of the Supreme Court and a Harvard Law professor, among other things. who believed that laws could change fast and that nothing is self-evident:
We do not realize how large a part of our law is open to reconsideration upon a slight change in the habit of the public mind. No concrete proposition is self evident no matter how ready we may be to accept it (Holmes 1897, 9).
This legal revolution turned upside down the Blackstonian view of law. An additional major innovation occurred with Louis Brandeis’s introduction of what is now known as the Brandeis brief in a Supreme Court case (Muller v. Oregon).Muller v. Oregon, 208 U.S. 412 (1908). Brandeis argued not just legal theory, but also used empirical studies. The Brandeis brief naturally flows from the idea that experts should direct the evolution of law, and it made social science the foundation of law. Therefore, when social science changes through statistical analysis, the law also must change. “If laws of social events could be statistically formulated, they could be used for scientific lawmaking” (Ward 1915, 46).
With this legal revolution, the law became professionalized such that only the elite could understand and explicate it; juries had to follow the instruction of judges and experts, as they were not capable of understanding the law. The notion of “rule of law” now meant only what the elites understood the law to be and, hence, there was a move away from law order to a lawyer order (from quadrant I to quadrant II). Further, to train in law now required attending law school (Lind 2004, 96).Other explanations for the professionalization of the legal system, such as war and the industrial revolution, do not satisfactorily explain the changes in the legal system. The motivation and justification for “curtailing the power of the jury to decide questions of law was a desire for greater certainty and consistency in the application of law” (Lahn 2009, 574), hence the Darwinian perspective allowed for the law to be seen as an endeavor directed by experts. Independent nullifying juries would introduce an unpredictableness (harmful mutations) that could not be tolerated.
Additionally, the developments in quantum physicsQuantum physics introduces uncertainty (one cannot know both the position and momentum of a particle, elementary particles behave both like waves and particles, energy is discrete, not continuous, etc.). in the 1920s also provided the impetus to the notion that laws are not fixed but are evolving. As a former Harvard Law School’s dean states:
Nothing has been so upsetting to political and juristic thinking as the growth of the idea of contingency in physics. It has taken away the analogy from which philosophers had reached the very idea of law. It has deprived political and juristic thought of the pattern to which they had conceived of government and law as set up. Physics had been the rock on which they had built. When physicists began to play with the idea of chance, when they began to entertain an idea of jumps and breaks … [it] uprooted the faith in discovered eternal and immutable laws (Pound 1940, 34).
The Twentieth Century
The twentieth century saw the rise of controversy over civil juries awarding large tort awards. Much of this change came with the rise of the Industrial Revolution and product liability. Costs were applied to those who could diffuse them, i.e., manufacturers of the product. Further, trial by jury was declining at the federal and state levels as elites shifted disputes out of the courts. Much of this was due to the rise of alternative dispute resolution with mediators and negotiators, which kept many cases out of the courts (Vidmar and Hans 2007, 61ff.). Moreover, nontrial dispositions (“e.g. settlement, plea agreement, summary judgement”) continued the decline in jury trials (Bornstein and Greene 2017, 8). Under summary judgments the judge now weighs the evidence and not the jury, especially in civil trials. Although this is done in the name of efficiency, it denies the role of the jury as a check on state power and minimizes it as an effective veto player (Steagall 2009, 470–73). The jury is not to take part in the development or discovery of the law, which means that it is functioning in quadrant-III (lawyer order).
Another innovation that favored the elites was the rise of administrative law. Harold Berman saw the West losing its liberties in the twentieth century with the rise of administrative law:
In the United States, for example, fields of administrative law such as taxation, labor management relations, securities regulation, public housing, social security, environmental protection, and a dozen others, which hardly existed before the Great Depression of the early 1930s, have now achieved predominance. (Berman 1983, 34)
The rise of administrative law means that the ability of the jury to access relevant facts and discern the validity of the law is eliminated. All laws/rules are written by bureaucrats and interpreted by lawyers, bureaucrats, and judges, i.e., the elites. This is the ultimate expression of lawyer order, quadrant III in the model elaborated here. Further, private law, such as contract law, tort law, and property law, has been so heavily influenced by legislation and bureaucracy, that governmental permission is needed, for example, to work on your own property (Berman 1983, 35). This revolution, as Berman pointed out, is a threat to the liberty of the West, as instead of emphasizing the individualism of traditional law through “private property and freedom of contract,” law now emphasizes collectivism on “state and social property, regulation of contractual freedom in the interest of society” (Berman 1983, 36). Blackstone also foresaw this threat when he stated that “[e]very new tribunal, erected for the decision of facts, without the intervention of a jury … is a step towards establishing aristocracy, the most oppressive of absolute governments” (Blackstone [1753] 1893, 1:380).
One change that has helped juries is the abandoning of the key man system. The key man system is when “jury commissioners or court clerks asked prominent members of the community to supply names of potential jurors” (Knack 1993, 100). It was established in colonial times as a check against an abusive judiciary, particularly the royally appointed justices. Even after independence, when judges rode circuit, judges might not always be familiar with the local customs and sense of justice. The jury commissioner’s job “was to identify ‘key men’ who would represent the interests and values of the community when deciding cases” (Hannaford-Agor and Waters 2010, 49). This was especially useful in small communities. This system worked well under the Blackstonian era, when everyone had a general understanding of the law and the law was simple to understand (law order); however, in the Darwinian era, this method could skew the results toward the elites as the system moved toward a lawyer order. For example, in some states key men preferred white jurors over black jurors either intentionally or simply because of divisions in communities where key people may not have interacted with minorities (Fukurai, Butler, and Krooth 1991; Hannaford-Agor and Waters 2010, 49). But in the 1960s, states and the federal governmentThe federal law was the Jury Selection and Service Act of 1968. started using voter registration lists (some states also used driver’s license lists) to select jurors in order to obtain a wider jury pool (Vidmar and Hans 2007, 76). This innovation protected the common person against the elite in the lawyer order era.
Another innovation by the elites which has complicated matters, is vague laws that make it easy for any individual to become the target of a federal prosecution (Silverglate 2011). Through jury suppressions, vague laws used by clever prosecutors can result in many innocents being targeted. Malleable law gives elites the ability to manipulate juries into seeing the law as the elites see it due to asymmetric information. Further, multicount indictments, whose goal is for some charge to stick on the defendant, is a tool for elites to overwhelm juries into finding the defendant guilty (Roots 2013).
In the area of sex laws, the elite in the American Law Institutes (ALI) developed the Model Penal Code (MPC) to replace much of the common law provisions protecting women and children. Much of the MPC is written in a way that suppresses the power of juries to judge and increases the power of experts through their testimonies to direct which subclassification and penalty is applied. Richard Kuh, a prosecutor from New York succinctly states this problem:
If the draftsmen [ALI/MPC] wish to force trial judges to stop and puzzle over abstruse wording, that discipline can do no harm. But the trouble is that the draftsmen are here engaged in linguistic embroidery to which lay jurors would inevitably be exposed. This worries me…. But awkward phrases and shrouded concepts bother me; for instructions in the law—jury charges—are delivered to jurors orally, and may go on for hours. Furthermore, they may contain a variety of precepts with which the jurors have never before had to deal, and concerning which, if a verdict is to be reached, the jurors must all end up as of one mind, convinced beyond a reasonable doubt. (Kuh 1963, 622)
Further, even when there is a jury trial, the jury is not always informed about its power to judge the law. Even in the three states whose constitutions allow for juries to judge the law, the courts “in these jurisdictions have eviscerated any literal translation of these constitutional provisions” resulting in lawyer order (Parmenter 2006, 391). Moreover, even in the vast majority of criminal cases the jury trial has been eliminated through the use of plea bargaining and is only used when defendants can be sentenced to more than six months in prison (Roots 2011, 4), again resulting in lawyer order (quadrant III).
Current Trends
The advent of high-profile jury nullification in the 1990s such as those of Jack Kevorkian and O. J. Simpson resulted in a visceral reaction from the elites. The courts have:
(1) begun removing any juror who is aware of their nullification power; (2) interfered with jury deliberations by investigating jurors who may intend to nullify; (3) removed jurors who seem poised to nullify, even after the start of deliberations; (4) interfered with the discretion of trial judges to render jury instructions or admit evidence which might allow a jury to consider jury nullification; and (5) arrested and jailed jury nullification advocates. (Parmenter 2006, 411)
This clampdown by the elites has not, it seems, resulted in any reduction in the jury nullification rate (Hannaford-Agor et al. 2002, 2). Further, when there is a hung, or acquittal, jury, it does not mean that jury nullification is the cause (Hannaford-Agor and Hans 2003, 1276). However, people have reacted to the clampdown on juries in unanticipated ways. Much of this has been assisted by the internet. Organizations such as the Fully Informed Jury Association have used the internet to educate citizens of their right to judge the law and to use jury nullification to battle the elites. Some of this effort seems to be providing dividends. In 2012, New Hampshire passed a law (HB 146) that allowed defense attorneys to inform the jurors of their right to judge the law and possibly nullify it.
One case that seems to highlight the quadrant-IV lawyer order scenario in our model is the Bundy case in Las Vegas. This was a highly politicized case in which the government prosecutors sought a certain outcome. “The prosecution exploited every possible advantage, winning rulings from the judge which barred the defendants from even mentioning most of their possible defenses” (Roots 2018). In other words, the relevant facts were not accessible to the jury. The defense lawyers ended up making no closing arguments due to the stifling of the judge. However, the jury did nullify the case on most counts, indicating that they found the law as applied unjust and the tactics used unjust.
Will major reform be possible? This is unlikely in the near future, since the change that has to occur is for the elites to recognize the common person/juror as one who can understand and interpret the laws. For this to occur, a major shift toward a Blackstonian understanding of the law is required. This would require a deprofessionalization of the legal system and a giving-up of power by the elites. Moreover, the laws should not be vague. The internet as a tool to convey information widely certainly helps with educating jurors about their ability to strike down laws that do not comport with notions of justice.
CONCLUSION The understanding of law has changed from the Blackstonian view to the Darwinian view, and this has minimized the power of the juries. Further this philosophical change has resulted in a movement in the US from a law order to a lawyer order. “Power and discretion have shifted away from the jury and more and more now is in the hands of the judge. To put it another way, the long-term historical development is to shift decision making from amateurs to professionals” (Friedman 2004, 10).
This article has provided a framework to study the interaction of elites and juries. This interaction had different outcomes in the different phases of US history. Although juries still have a lot of power in certain areas, they are currently not informed of that power. In other areas of law, such as administrative law, juries have no power. The only way for juries to be relevant again as a check to judicial/elite power is through a Blackstonian/organic understanding of the law, where the “law of the lawyers ha[s] to justify itself in the eyes of the community through its proxy the jury, a space of ethical action in which lay people ha[ve] the power and the right to determine the rules of decision in a given case” (Lahn 2009, 572).
Representative democracy cannot subsist if a great part of the voters are on the government payroll. If elected officials no longer consider themselves servants of the taxpayers but deputies of those receiving salaries, doles, and subsidies, democracy is done for.
Original Article: "The Bureaucrat as a Voter"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Jeff Deist comments on the latest Democrat agenda of increasing the number of judges in SCOTUS.
Does the expansion bill stand any chance in the house? How can conservatives be forward-looking instead of being reactionary all the time? Should we expect a scandal involving Ron DeSantis? What can we learn from Ludwig von Mises about the bureaucratic and working classes in our society?
Find more from David Gornoski on A Neighbor's Choice.
If we’re going to ask ourselves what might have caused such an unusually large rise in homicide, we ought to look for very unusual events. Covid lockdowns certainly fit the bill.
Original Article: "Homicides Are Way Up in 2020, and Covid Lockdowns Are a Likely Cause"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
By embedding victim-centered justice in law, lack of due process will become institutionalized. The burden of this will fall on men, and in particular black men.
Original Article: "Victim-Centered Justice Throws Black Men under the Bus"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
US government agencies like the FBI remain incapable of bringing foreign online scammers to justice. Fortunately, in their place, internet “vigilantes” have answered the call to action.
Original Article: "Scam Baiters Take an Active and Entertaining Role in Fighting Cybercrime'"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Bob discusses three separate items all related to nonviolence: (1) Gene Sharp’s work, (2) Bob’s old dream of how to topple a tyrant, and (3) the winners of the Louis CK contest.
Mentioned in the Episode and Other Links of Interest: Gene Sharp’s book, From Dictatorship to DemocracyThe trailer for the documentary “How to Start a Revolution”Sharp’s list of 198 methods of nonviolent actionThe original Louis CK clip that inspired Bob’s contest For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Stitcher, Spotify, and via RSS.
The latest impeachment saga simply confirms Thomas Paine’s adage: “The trade of governing has always been monopolized by the most ignorant and the most rascally individuals of mankind.” Score another victory for the Swamp.
Original Article: "The Biggest Lies of the Impeachment Saga"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Not only will these amendments reduce the abuse of emergency declarations, but they will also help to decentralize power within Pennsylvania. While COVID-19 has allowed the executive branch to run wild, Pennsylvania is actually structured in a way that makes the decentralization of power easier.
Original Article: "Pennsylvanians May Amend Constitution to Stop Endless Lockdowns"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
President Joe Biden has vowed to put a “quick end” to the Trump administration’s Title IX regulations and return to Obama-era ones at universities. If this happens, there will be no due process for those accused of sexual misconduct.
Original Article: "Title IX Will Become a Vehicle of More Injustice"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Dr. Mark Thornton joins the show to discuss what might just be Murray Rothbard's best book on money and banking: The Case Against the Fed. Written not long before his untimely death, this work is nothing less than a master class on the history of money: the sordid players and interests behind the creation of the Federal Reserve bank; the workings of demand deposits and fractional reserve, inflationism, and the monetary mechanics behind it all. The final pages of the short and penetrating book are especially fascinating, as Rothbard lays out a process for unwinding the Fed and paying off its liabilities using the federal government physical gold holding. End the Fed starts with understanding the Fed, and this book is vital for any lay reader.
Find the online version of the book at Mises.org/RothbardFed
A guilty-until-proven-innocent mentality is winning at many colleges where a “believe the women” ideology dominates. Now these trends are making inroads into criminal justice even off-campus.
Original Article: "Victim-Centered" Justice Is a Threat to Due Process"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Ideally, political elites would like nothing more than state-sponsored ethnic conflict. Having multiple groups pitted against each other in petty political squabbles makes effective opposition against the managerial class virtually impossible.
Original Article: "California Voters Defeated Affirmative Action and the Left Was Very Surprised"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Machiavelli asserts that civil society can best flourish in the absence of government intrusion.
Original Article: "Feudalism and Cronyism in Machiavelli’s Italy"
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
The Puzzle of Prison Order: Why Life Behind Bars Varies Around the Worldby David SkarbekNew York: Oxford University Press, 2020240 pp.
Christopher Calton (caltonc@ufl.edu) is a Ph.D. student in history at the University of Florida.
In The Puzzle of Prison Order, David Skarbek builds upon his governance theory of prison social order, which posits that in cases in which the official governance institutions are inadequate, prisoners will form their own institutions to secure property rights, facilitate market exchange, adjudicate disputes, and mitigate violence. Skarbek’s work rests at the intersection two interesting subjects of inquiry. Most obviously, he is contributing to the rapidly growing body of literature on carceral systems.“Carceral systems” refers broadly to penitentiaries, asylums, schools for juvenile delinquents, and similar institutions designed for involuntary surveillance and containment. Although The Puzzle of Prison Order is not a work of history, Skarbek answers historian Mary Gibson’s (2011) call for a more global approach to prison studies, which remains predominantly centered on the United States and the West. Skarbek also builds on a less prevalent body of work carried largely by George Mason-trained economists such as Edward Stringham and Peter Leeson: studies of private governance. Like Leeson’s The Invisible Hook (2009), which looks at the social order of pirates, Skarbek studies the people who seem least likely to establish functional systems of governance—criminals—to show how informal governance institutions form and operate.
Although Skarbek leans heavily on his previous work, there is a great deal of new insight even for those who are already familiar with his research. The focus of Skarbek’s analysis centers on the relationship between official and informal institutions—the foundation of his governance theory of prison social order—but the book is organized into two parts that respectively illustrate two newly developed features of his theory. By comparing prison governance across various systems, Skarbek categorizes the governance regimes in his study into four ideal types: official governance, co-governance, self-governance, and minimal governance regimes. These ideal types structure Part I of The Puzzle of Prison Order (chapters 2–4). In Part II (chapters 5–7), he considers the conditions that lead prisoners to develop either centralized or decentralized mechanisms of governance. Skarbek’s previous work on the San Quentin and San Pedro prisons (Skarbek 2010, 2014) involves only regimes that qualify as centralized systems of self-governance, according to his new taxonomy. His new book, therefore, offers a far more dynamic analysis than anything he has previously produced.
Each chapter is designed to highlight a specific element of his classificatory scheme by focusing on a representative example, but the strengths and weaknesses of the book are most embodied in the chapters on Nordic prisons and Civil War prisons, respectively. The Nordic system highlights the importance of comparative analysis by providing a de facto control group—a prison system that is largely successful in providing a high-quality system of official governance. Skarbek’s governance theory posits that prisoners will form their own institutions on the condition of failure from the official system of governance. The Nordic example provides some empirical substantiation of this claim that Skarbek’s previous studies have largely accepted as merely abstractly intuitive. The Nordic prison also challenges Skarbek to explain the lack of an informal market economy—he describes a system of sharing—which leads to new considerations about the conditions upon which market prices develop in a limited underground economy. While the Nordic system provides the most valuable contrast to the other systems Skarbek describes, it underscores the value that the comparative analysis offers across all chapters, in contrast to in-depth but isolated studies.
The chapter on the Confederacy’s Andersonville prison camp during the Civil War highlights the weakest points of The Puzzle of Prison Order. Andersonville is Skarbek’s example of a prison that lacks both official and informal governance institutions, presenting the greatest challenge to the governance theory of prison order. Skarbek acknowledges that “it is actually somewhat surprising that so little governance emerges” in Andersonville, since “the prison camp is full of soldiers, not criminal offenders,” who faced an “utter failure of official governance” (p. 63). He explains away this challenge to his theory by suggesting that “extreme restrictions on their freedom...smother[ed] collective action” (p. 64). Skarbek’s analysis of Andersonville demonstrates a focus on the operative variables of his governance theory to the neglect of other potentially relevant determinants of whether and how prisoners form institutions. These omissions stem largely from the problem of Andersonville being both Skarbek’s only historical and only wartime case. In one odd claim, Skarbek states that the prisoners “made choices—often shortsighted because of the mistaken belief that prisoner exchanges would soon free them” (p. 73), but this “mistaken belief” only relates to what the prisoners viewed as a lengthy incarceration at the time—when penitentiaries were still virtually non-existent and prisoners of war had traditionally, even early in the Civil War, been allowed probationary freedom. Relative to the other prisons in the book, their belief in a short term in prison was not mistaken—Andersonville was only constructed a year before the war’s end. The question Skarbek neglects, in using Andersonville as a comparative example, is how quickly governance institutions developed elsewhere? If the answer is anything longer than one year, Andersonville becomes a moot example for Skarbek’s theory. Additionally, when describing the failures of official governance, Skarbek describes a contaminated creek that flowed through the camp, which “was so filthy... that prisoners would later throw thieves into it as a punishment” (p. 67). Is this not an informal governance mechanism? Skarbek does not appear to recognize it as such, only citing this practice to illustrate the extent of filth the prisoners suffered without (apparently) establishing governance institutions.
The Andersonville chapter also illustrates both the broadest problem and greatest opportunity for his research: the contrast of prisoner governance institutions with those of society outside the prison. Andersonville highlights this oversight because of how many of the problems Skarbek describes in the prison were not unique to prison life, as his exposition implies. By not considering the state of the Confederacy in 1864, Skarbek makes it seem as if the lack of market exchange and the prevalence of raiders, for example, related uniquely to prison camps. In fact, the conditions at Andersonville are arguably more reflective of the broader society at the time than any other prison Skarbek studies. Wartime destruction and Confederate state socialism had destroyed market exchange in the Confederacy well before Andersonville was built, and raiders harassed civilians in much the same way Skarbek describes in the prison. By neglecting to consider the society in which the prison exists, he ignores significant external variables that relate to his analysis.
This neglect of comparison to the wider society immediately outside the prison overhangs all of Skarbek’s research, not merely his analysis of Andersonville. While he rightly highlights the importance of comparative institutional analysis when stating the contributions of The Puzzle of Prison Order, he fails to account for the variety of comparisons relevant to his inquiry. In his first book, The Social Order of the Underworld, Skarbek implicitly compares the institutions of prison governance within a single prison, San Quentin, over time. In his most recent book, he explicitly compares governance institutions across various prisons. What all of his studies lack is any analysis of how the governance institutions that develop within a prison compare in their operations and effect to the governance institutions within the society that contains the prison. With regards to the efficacy of prisoner institutions, this comparison may be the most important. When he qualifies his description of San Pedro’s extensive system of self-governance to acknowledge that extreme cases of violence do occur, the point seems empty without any contrast to the degree of violent crime in Bolivian cities more generally; we cannot judge the efficacy of prisoner self-governance in mitigating violence by comparing it to the violence in other prisons that house prisoners from different cultures. As Skarbek continues his research, this is a consideration he would do well to address.
These critiques notwithstanding, Skarbek continues to produce important and original work that raises questions no other scholar is asking, even as carceral studies receive unprecedented levels of interest across disciplines. Although The Puzzle of Prison Order does not match the quality and depth of analysis of The Social Order of the Underworld (which remains one of the best prison studies I have yet read), Skarbek offers useful insights and expands on his theories. While many scholars have the unfortunate tendency to rehash their early scholarship and offer stagnant contributions to their fields, readers can rest easy that The Puzzle of Prison Order raises new questions, offers novel ideas, and moves Skarbek’s governance theory of prison social order forward in important and innovative ways.
Election 2020 is the same as every other election, only the state’s mask of legitimacy is slipping.
Original Article: "Election 2020: Choking on the Political Red and Blue Pills".
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
At best, police data shows four in ten murders in America are never resolved and no suspect is convicted. Lesser crimes have even fewer resolutions. And if we look more closely, things look even worse.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Original Article: "Despite Big Budgets, Police Are Catching Very Few Real Criminals".
[From the 2020 Supporters Summit, presented at the historic Jekyll Island Club Resort on Jekyll Island, Georgia, on October 9, 2020.]
At breakfast, I ran into Ed Griffin who wrote that wonderful book The Creature from Jekyll Island, the greatest book written about the monstrosity that was created 110 years ago and he said, “I heard you’re talking this afternoon. What are you going to talk about?” I said, well the title of my talk is the Constitution and Central Banking. He said, “Oh, you’re going to go for about thirty seconds,” because there’s nothing in the Constitution about central banking whatsoever. But there is, of course, a history that brought us to where we are now and my job, with deference to the great speakers who have appeared before me, is to try and tie a lot of this together by telling you about the history and telling you about how the Constitution has been tortured and twisted even as we speak in an effort to allow big government to control our lives. And then I have a little surprise for you at the end of my talk. Don’t let me forget the surprise. I’ve revealed it to one person, Professor Newman, I know he’s going to remind me to reveal the surprise.
So, when we were colonists and the king was looking for ingenious ways to raise money, one of those ingenious ways was the Stamp Act. This required that every adult in the colonies—not in Great Britain; it would have fomented a revolution there—but every adult in the colonies have in their possession, on every piece of paper in their home, every book, every pamphlet, every financial document, every letter, a stamp issued by the British government. So, you went to a British government—you think the post office is bad today—you went to a British government post office here in the colonies and purchased these stamps to put them on the papers in your home. Question: How did the King and the Parliament three thousand miles away know if you had the stamps on the papers in your house here? The answer, the Writs of Assistance Act. The Writs of Assistance Act permitted British agents—see if this sounds familiar—to go to a secret court in London and ask the secret court for a search warrant to search wherever they wished and seize whatever they found which was evidence of any lawbreaking by not having the stamps on your papers. So, it would not be uncommon for you to hear a knock on the door, and it was a British soldier very politely showing you the writ of assistance and telling you, We have the right to come in your household—ostensibly to look for the stamps. Of course, he might be looking for alcohol that you couldn’t prove you had paid tax on; he might be looking for furniture that you had imported from the island that you couldn’t prove you paid tax on. He might even be looking to expel you from the house so that he could take it over for himself and his buddies, which is why we have the Third Amendment written ten years later.
This all happened in 1765. The Stamp Act was so unpopular that Parliament eventually rescinded it, but before Parliament rescinded it, a group of students at the College of New Jersey, now called Princeton, did some quick math and concluded it cost the government more to enforce the Stamp Act than was generated by the sale of the stamps. Now that’s a headscratcher. We all know that George III was an idiot, but was he that stupid that he would enact that tax that cost more to enforce it than was generated and collected by it? Unless the purpose of the Stamp Act was not to collect money, but to remind the colonists that the king was still the king and he could enter their homes at his whim. One of the Princeton students who wrote the report was a 5’4” kid from Virginia by the name of James Madison, known then and throughout his life to his colleagues as Little Jimmy. I hope when I go to heaven I get to stand next to Little Jimmy, because I’ll look like Shaquille O’Neal by comparison.
We fought a revolution; we won the Revolution. Jefferson wrote that “We are endowed by our creator with certain inalienable rights.” Tom Woods explained them: they are life, liberty, and the pursuit of happiness, and they come from our humanity, they don’t come from the government. And because they are natural rights, the government can’t take them away, whether it’s by edict under the name of science, whether it’s by edict under the name of power, whether it’s by a majority of votes, whether it’s by the vote of everyone but one. These rights belong to us and they are ours to exercise as we see fit.
That is, at least, the theory of the Declaration of Independence; the rights that Jefferson calls inalienable we also refer to as natural. Most judges are too secular to use the word natural, so they’ll call those rights fundamental, but they basically mean rights that preexist the government. After we won the Revolution and we wrote the Constitution, Little Jimmy is the scrivener in Pennsylvania. He’s the one collecting the notes; he’s the one refining the language. We all know that that constitution would never have been adopted, but for the promise of the addition of a bill of rights. We also know that that constitution would not have been adopted but for a bribe. The bribe was an agreement by the new federal government to assume the debts of the state governments that they had incurred in the Revolutionary War. Now you can’t call it a bribe. When I call it a bribe—the government actually bribes people?—I get my fingers burned. That’s like saying abortion is murder, taxation is theft; you’re not supposed to say these things on television, but when you do say them, people’s ears perk up. Yeah, it was a bribe. New Jersey got its debts removed and the feds agreed to take over those debts in return for New Jersey ratifying the Constitution, yes, and the same was the case with the majority of the other states as well.
Madison is the most interesting character in all of this because of the various phases of his career. As a student at Princeton and during the Revolutionary era, he’s a radical along with Thomas Jefferson. When he’s crafting the declaration of the Constitution of the United States, he’s a big government person that’s using all kinds of artifices to craft this constitution which allows the federal government to sap the authority of the states and even to take away liberties from individuals. But then something happens to him. He’s a member of Congress; it’s time to write the Bill of Rights. He’s the chair of the committee of the House of Representatives to write the Bill of Rights, and he writes twelve amendments; only ten were adopted, the ten that we now know as the Bill of Rights. So, that iconic language, “Congress shall make no law abridging the freedom of speech,” is Madison’s. All of that beautiful language, your right to say what you want, to think what you say, to publish your thoughts, your rights, your worship or not to worship, your right to assemble or not to assemble, your right to keep and bear arms—which is not the right to shoot deer, it’s the right to shoot tyrants if they take over the government.
That quintessential American right, your right to be left alone—all of those rights are articulated by Madison in the Bill of Rights. The Bill of Rights, of course, is adopted in record time and the first ten amendments are part of the Constitution. And then it becomes time for the Federal government to pay off that debt that it assumed. And so, Alexander Hamilton, who was the secretary of the Treasury, persuades President George Washington and Vice President John Adams and all the big government Federalists who control the House of Representatives and the Senate to enact the First National Bank of the United States. And who do they look to as to whether there is authority in the Constitution to enact a bank? The guy that wrote the Constitution, the guy that just wrote the Bill of Rights, the congressman from Charlottesville, Virginia, little Jimmy Madison. But, this is a different Madison at this point. Madison knows there’s no authority in the Constitution for a central bank and Madison gives one of the greatest speeches in American history, known simply as the bank speech. Google it. It is a masterpiece of the following argument: the federal government has no authority but what was given to it in the Constitution. He doesn’t say this because he was too modest: I know because I wrote the Constitution. But the argument is clearly there. (By the way, if you do Google it, they didn’t have stenographers in those days, they had people writing as fast as they could, so some of the bank speech is literally what came out of Madison’s mouth, some of the bank speech is a summary by the persons taking notes of what they heard Madison say.
But by the time of the bank speech, the former radical, the then big government guy, now becomes a small government Anti-Federalist. They call themselves by the name that’s alien to our ears today, the Democratic Republicans, but this was Jefferson’s maximum individual liberty, maximum state rights, minimum federal government party. Madison has now left the Federalists and he’s back with them. Maybe some of this was personal, I don’t know, but clearly when he gave that bank speech, he exalts two of the ten amendments: the Ninth Amendment, which says, Just because we listed rights in the first eight, doesn’t mean that those are the only rights. There are other rights that human beings have, which the government shall not disparage. And the Tenth Amendment, which says, Those powers not delegated in this Constitution to the federal government are reserved to the states or to the people, respectively. Among those powers never delegated away and among the rights never articulated in the first eight, was the right of the states to create a bank. So, Madison’s argument is clear: there’s no authority under the Constitution for the federal government to create a bank. This argument will come back to haunt him. The bank, of course, passes. Professor Newman gave us a wonderful historical description. It was a disaster. It passes, and then it passes out of existence because it was such a disaster.
When it comes time for the Second National Bank, Madison is in the second half of his second term as president of the United States. He vetoes the Second National Bank of the United States, and then his buddies start to get to him and he changes his mind and he signs into law the Second National Bank of the United States—and by doing so contradicts everything he said in the bank speech, all the arguments that he made about how the federal government can only do what is delegated to it in the Constitution. And this is 1816; the bank comes into existence in 1817. In 1819, the State of Maryland decides to tax the bank. It taxes the Baltimore branch of the Bank of the United States and that tax is challenged in the Maryland state courts, and the State of Maryland prevails in the state courts, and then the federal government appeals it to the Supreme Court, and we have arguably the most consequential Supreme Court case in American history after Marbury v. Madison, which gives the court the right to engage in judicial review, to void what the Congress and the president have done when they exceed their authority under the Constitution. This case is called McCulloch v. Maryland.
McCulloch is the head cashier at the branch of the Second National Bank of the United States in Baltimore, and he is suing Maryland, asking the Supreme Court of the United States to invalidate the tax by invalidating the bank. So, the issue before the Supreme Court is, Does the Constitution of the United States authorize the Congress to establish a national bank? If you read the Bank Speech, Madison’s greatest artistry next to the Bill of Rights, it is clear that it doesn’t, but this is a different Madison and this is a different era, and by this point John Marshall—who, as Professor Newman pointed out, was an investor in the Second National Bank of the United States but sold the investment before ruling on the case—John Marshall writes again, one of the more consequential decisions he’s ever written. But this one—rather than restraining the government as judicial review did in Marbury v. Madison—this one unleashes the government.
So, where in the Constitution can the federal government establish a bank? Here is the government’s argument: well, the federal government can tax, the federal government can collect taxes, so the federal government needs a bank in which to put the taxes that it collects. Well, wait a minute, up to this point the federal government has put tax dollars that it collected into private and state-chartered banks. Why do they need their own bank? Ah, after the seventeen clauses in the Constitution giving seventeen specific, unique, discrete powers to the federal government is the Elastic Clause, also known as the Necessary and Proper Clause, which says, I summarize, I paraphrase, Congress shall have the power to do whatever is necessary and proper to put into action the foregoing authorities that we have given it. So, is the bank necessary and proper—not necessary or proper, necessary and proper—in order for the government to collect taxes and to store the tax dollars before it wastes them?
So, I’m going to take a little break from this. I’m going to come back to necessary and proper. Two theories of the origins of law: one is our humanity, natural rights; by the exercise of reason, we know right from wrong. The other is what’s known as positivism—whatever the lawgiver says the law is, as long as the lawgiver has written it down and it’s been ratified, that’s the law. So, positivism would say “necessary and proper” literally means necessary and proper. John Marshall comes up with an inverse positivism. Because the Constitution didn’t say absolutely necessary, the word necessary doesn’t mean necessary. It means needful or helpful. So, McCulloch v. Maryland says “necessary and proper” doesn’t mean necessary and proper because it didn’t say “absolutely necessary” and Little Jimmy could have put the word absolutely in there but he didn’t. So, by arguing from a word not present in the Constitution, Marshall upholds the constitutionality of the bank.
What about the Tenth Amendment? The bank speech dwells on the Tenth Amendment: the states never delegated away the authority to establish banks. We know that because the states have established their own banks. Ah, Marshall says, But the Tenth Amendment doesn’t say whatever is expressly delegated to the federal government. So, again, this inverse positivism. Two words that are not in the Constitution authorize him to expand the power of the federal government, and in doing so, he writes the following language, which is frequently quoted today, much to our dismay. “Let the end be legitimate. Let it be within the scope of the Constitution an all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consistent with the letter and spirit of the Constitution, are constitutional.” Basically meaning, If Congress wants to do something because it is helpful to the specific powers given to Congress, it can do so. This case, and Marshall’s language, has been cited thousands of times. Regrettably, it is still the law of the land; it is the lynchpin to allow the federal government to get away with the chicanery that it gets away with today.
We’re fighting the War between the States. Lincoln’s government is issuing greenbacks pursuant to a statute the Congress authorizes which allows them to pay the government’s bills in worthless, not gold- or silver-backed, but worthless greenbacks because people are accepting the greenbacks. This is challenged shortly after Lincoln’s death in a very famous case called Hepburn v. Griswold. A lot of these challenges are not somebody suing the federal government because they think the greenbacks are unconstitutional. It’s two private citizens suing each other because one wants to pay his debt to the other in greenbacks and the other says, The war is over, Lincoln’s dead, the legislation was temporary, I’m not going to accept the greenback. So, the litigation is over whether or not a debt, a legitimate, not denied debt under a contract, can be paid in greenbacks. And the Supreme Court says, No, Congress did not have the authority during the Civil War to issue greenbacks because the Constitution says only gold and silver is money in the United States, and there’s no central bank at this point in time.
And then there occurs something that everybody’s talking about today called court packing. So, Andrew Johnson is the president of the United States and the radical Republicans who control the Congress do not want him to be able to appoint new justices to the Supreme Court. So instead of expanding the Supreme Court, they shrink it. It goes from nine to six, meaning when somebody dies or leaves the court there’s no seat for him [Johnson] to replace somebody with. The Supreme Court goes down to six, Johnson is impeached, he survives the impeachment, he doesn’t run for reelection. Ulysses S. Grant is elected. What do the radical Republicans do? Increase the court back up to nine, and Ulysses S. Grant appoints three of his buddies to the Supreme Court. And then there’s a second challenge, again involving a private contract, this one called Knox v. Lee, and the same issue is before the court in 1871 that had been before it in 1869, except you have a different makeup on the court. And this time the court says, Greenbacks, greenbacks. The government can issue whatever it wants and these are lawful for debt.
This case, Knox v. Lee, and its companion cases are known to lawyers and judges as the Legal Tender Cases. They have been argued by scholars time and again, over whether the Legal Tender Cases were properly decided. Justice Scalia told me he did not think they were properly decided but believed that it would be cataclysmic if the Legal Tender Cases were to be overruled and greenbacks not backed by gold or silver were to become money. That is the last time this issue of the power of the federal government to issue paper money is resolved, and the challenges to the Federal Reserve never succeed. There have been a dozen efforts by various litigants to challenge the constitutionality of the Federal Reserve as we now understand it, and all of these challenges are swatted away by judges saying either, This is a political question and if you don’t like the Federal Reserve, go elect a Congress that will undo the Federal Reserve, or—this is judge-made law, this is what judges do when they don’t want to decide cases—You don’t have the standing to bring this litigation, meaning, Your injury is not unique to you and therefore under the Case or Controversy requirement of the Constitution, we’re not going to hear the case. So, the last time the courts examined the constitutionality of the Federal Reserve, it had to do with how people get on the Federal Reserve and is it constitutional for the president to appoint these people and for the Senate to confirm them. And the court said, We’re washing our hands of it.
Some years ago, Lew Rockwell asked me to give a talk entitled “Do We Still Have a Constitution?” At the time I gave the talk, I said barely. I’m not sure that we still have a Constitution now because of the ability of the government, the ability of courts, to twist and torment words, and we have this thing called precedent. Just because John Marshall in 1819 said that “necessary and proper” really means needful and helpful, should we be bound by that? For those of us who believe that the Constitution is an instrument of restraint, this is the contrary of that. For those who believe like the progressives and the Left today that the Constitution is an instrument that unleashes the federal government, they delight in this. The Madisonian view of the Constitution was, I take this from the bank speech, I don’t take this from his signing the legislation. (By the way, when you sign the legislation establishing the Second National Bank, he never repudiated the bank speech; he never repudiated his veto. He just signed it because the popular will was so strong. He also signed it because he wanted to help his fellow Virginian James Monroe get elected president of the United States and he didn’t want the issue of a Second National Bank to be a campaign issue in the presidential election of 1816.) But just because we have these precedents that permitted the big government people to get away with what they wanted 150 years ago, should we be bound by them today?
Unfortunately, that’s the way the legal system works. All those beautiful words in the Declaration of Independence and the Bill of Rights, some of which I summarized for you, work in a law school classroom and can excite us in an environment like this. But unless we resist the forces of government that are sapping power liberty, whether it is our liberty to say to the government, I have the right to take chances and you can’t take that right away from me, or whether it’s our liberty to leave, or liberty to ignore the government, our right to travel, our right to say to the government You shall not pass this threshold. Whatever these rights are, they only work when we exercise them. We can talk about them all day. We can write about them well into the night, but unless courageous people exercise these rights, we are going to be stuck under the thumb of government, whether it’s a state government like New Jersey or Michigan or New York or whether it’s a federal government like we have today.
There’s an argument that I made holding up my iPhone during the Justice Kavanaugh hearings which evolved around his personal behavior in which I said, Here’s my problem with him: he thinks that the federal government and the state governments can get in here without a search warrant and he’s written that. And I encouraged Republicans on the Senate Judiciary Committee to ask him about that. Nobody asked him about it. He may be conservative politically on certain social issues, but not when it comes to the power of the government to intrude in our lives. I fear that with the court today. I once had the privilege to interrogate Justice Scalia before about twenty-five hundred people at the Brooklyn Academy of Music, and I was pounding him on the natural law, and he looked at me and he goes, “You’re a freak for the natural law. The fourth amendment only protects persons, houses, papers, and effects. That’s the language in the fourth amendment.”
I say, “Justice Scalia, this is an iPhone.”
“Yes, I know. I may be older than you, but I know what it is.”
“In the iPhone is a computer chip. Is the computer chip an effect?”
“I’d rather not answer; I think that case is coming before us. You tried to trap me and tried to trick me.”
Well, I mean, I knew the case was coming before them and I did try and trap and trick him, but I also wanted to make a point. The language that Madison used—persons, houses, papers, and effects—was intended to protect our right to privacy, what Madison called the right to be left alone.
So, where does all of this leave us today? We know that most of what we have heard about covid is utter nonsense, driven by those in power who want to use a crisis to control us. I have never heard a more articulate vision and version of that nonsense than my longtime bosom buddy Tom Woods just gave us earlier this afternoon. We know from reading Bob Hicks’s masterpiece Crisis and Leviathan that government always grows in crisis. We also know that there is nothing in the world more permanent than a temporary government program. And we know, we can laugh at the juxtaposition of words, but we know what the government will do. It will hang on to that power, keep it long, keep us under its thumb, get us accustomed to it. There is no concentration camp easier to manage than one where the inmates are familiar with its terrors, because they have allowed its terrors to be visited upon them in the name of democracy and electing people to terrorize them.
I expect that when I die, I will die in my bed peacefully surrounded by those who love me, faithful to first principles; but not everybody will have the luxury of dying that way. Some young people here may die in a government prison, faithful to first principles. Some young people here may die in a government town square, to the sound of the government’s trumpets blaring, but faithful to first principles. When the time comes, you will know what to do, because freedom lies in the human heart and no government, no army, no tyrant can take it away. But it must do more than lie there. We must exercise it. We must terrify the government, because, as Jefferson said, “When the people fear the government, there is tyranny. When the government fears the people, there is liberty.” Thank you and God bless you.
About twelve years ago [in 2016], an obscure law professor wrote a law review article arguing that the Federal Reserve, Social Security, Medicare, and paper money is unconstitutional. Her name: Amy Coney Barrett.
Americans have been trained to regard the US Supreme Court as a principled, non-political institution whose rulings must be obeyed. This assessment of the court is very wrong.
And be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
The introduction of Obamacare was only the natural evolution of many decades of increasing state control of the healthcare industry.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Original Article: "One Hundred Years of Medical Fascism".
Judge Stickman is right that the Pennsylvania lockdown cannot be defended by anyone who takes human rights seriously.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
Original Article: "Federal Judge: Pennsylvania's Stay-at-Home Order Is an Assault on Human Rights".
Although governments continue to insist "it's for the children," we should never go back to the dark ages of privacy before easy-to-use encryption. Nor should we allow a "back door" for governments to access our data.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "The Feds Want to Snoop on Your Encrypted Data. It's 'for the Children.'"
Our guest is Adam Mortara, lead trial counsel in the case of Students for Fair Admissions v. Harvard University. We discuss the legal aspects of affirmative action in light of the paper by Dr. Norman Wang that set off a storm of controversy in academic medicine.
SHOW NOTES Adam Mortara, JD: Professional page
Watch the episode on YouTube
Norman Wang’s paper: Diversity, Inclusion, and Equity: Evolution of Race and Ethnicity Considerations for the Cardiology Workforce in the United States of America from 1969 to 2019.
Murray Rothbard’s theory of punishment has often been misunderstood. Economists who have written on punishment and mentioned Rothbard find his “double restitution” idea puzzling, because they think about it only in terms of economic efficiency. This isn’t what he has in mind. He is combining economics and moral philosophy.
Many economists reason in this way. Suppose we have a society in which the penalty for theft is that you have to return the item you stole. If you no longer have the item, you have to pay the monetary value of it. In that case, a thief has nothing to lose if he is caught, and something to gain if he isn’t caught. In other words, if the thief is motivated by self-interest, he should steal when he thinks he can get away with it. He has at least some chance of succeeding.
In “Punishment and Proportionality,” Rothbard acknowledges this argument: “if there were no punishment for crime at all, a great number of people would commit petty theft, such as stealing fruit from a fruit-stand.” But he rejects a pure deterrence principle of punishment:
most people have a far greater built-in inner objection to themselves committing murder than they have to petty shoplifting, and would be far less apt to commit the grosser crime. Therefore, if the object of punishment is to deter from crime, then a far greater punishment would be required for preventing shoplifting than for preventing murder, a system that goes against most people's ethical standards. As a result, with deterrence as the criterion there would have to be stringent capital punishment for petty thievery — for the theft of bubble gum — while murderers might only incur the penalty of a few months in jail.
His view of punishment is different. The victim can do to the criminal what the criminal did to him. This is the famous “double restitution” principle:
If, then, we are to say that the criminal loses rights to the extent that he deprives the victim, then we must say that the criminal should not only have to return the $15,000, but that he must be forced to pay the victim another $15,000, so that he, in turn, loses those rights (to $15,000 worth of property) which he had taken from the victim. In the case of theft, then, we may say that the criminal must pay double the extent of theft: once, for restitution of the amount stolen, and once again for loss of what he had deprived another.
This puzzles some economists. One of them wrote that this theory is arbitrary: Why not threefold restitution, or tenfold? Instead, these economists want to calibrate punishment so that we have the economically “efficient” amount of deterrence.
What these critics fail to see is that Rothbard’s theory is based on a moral principle:
It should be evident that our theory of proportional punishment — that people may be punished by losing their rights to the extent that they have invaded the rights of others — is frankly a retributive theory of punishment, a ‘tooth (or two teeth) for a tooth’ theory.
(Murray credits Walter Block for the latter expression.) Obviously, double restitution has a deterrent effect, but that isn’t its rationale.
If you keep this in mind, it’s obvious why he favors double restitution rather than some higher amount. It’s a basic moral principle, he thinks, that punishment should be proportional to the crime:
The proportionality rule tells us how much punishment a plaintiff may exact from a convicted wrongdoer, and no more; it imposes the maximum limit on punishment that may be inflicted before the punisher himself becomes a criminal aggressor.
Thus, it should be quite clear that, under libertarian law, capital punishment would have to be confined strictly to the crime of murder. For a criminal would only lose his right to life if he had first deprived some victim of that same right. It would not be permissible, then, for a merchant whose bubble gum had been stolen, to execute the convicted bubble gum thief. If he did so, then he, the merchant, would be an unjustifiable murderer, who could be brought to the bar of justice by the heirs or assigns of the bubble gum thief.
Now Rothbard has to face a new objection. Isn’t it obvious that retributive theories of punishment are wrong? The most important argument in favor of this view starts from the premise that pain is bad. The pain that the criminal causes the victim is bad, and adding to that pain is also bad. Punishment is inflicting pain. It may be necessary to inflict it to achieve some goal such as deterrence, but in itself punishment is bad. Retributive punishment, since it is carried out for its own sake, is thus bad.
There’s a philosophically very interesting way to respond to this argument. I’ll leave it to readers to assess how much merit this response has, but I do think it’s worth considering. A key assumption of the anti-retribution argument is that the badness of pain is always additive. (No, that isn’t a misprint for “addictive.”) If you combine the pain of the punishment with the pain caused by the crime, you will increase the total amount of pain. But, as the Austrian philosopher Franz Brentano pointed out, it’s an intelligible view that this decreases, rather than increases, the badness of this state of affairs. You might think that the whole composed of the pain caused by the crime plus the pain caused by retribution is better than the badness of the pain of the crime by itself, even though of course the amount of pain increases with retribution. We can view retribution, according to Brentano, as taking away part of the badness of the situation, even though—or rather because—the total pain increases. If you think about this, you will see that this view can be used to undermine certain forms of utilitarianism as well.
As usual, Rothbard opens up depths that lesser economists ignore.
Every law must ultimately be enforced using the police power of the state. For those who resist, this means violent arrest and imprisonment. Or worse.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "More Laws Mean More Police Brutality".
The Supreme Court this week limited a state government's control over what is supposed to be a sovereign Indian tribe. The next step lies in limiting federal control over the tribe also.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "What the Supreme Court Got Right in Its Indian Tribe Ruling".
Includes question and answer period. Recorded at the Mises Institute in Auburn, Alabama, on 13 July 2020.
Introduction by Murray Rothbard: We are all indebted to Carl Watner for uncovering an unknown work by the great Lysander Spooner, one that managed to escape the editor of Spooner's Collected Works.
Both the title and the substance of "Vices are not Crimes" highlight the unique role that morality and moral principle had for Spooner among the anarchists and libertarians of his day. For Spooner was the last of the great natural-rights theorists among anarchists, classical liberals, or moral theorists generally; the doughty old heir of the natural law–natural rights tradition of the 17th and 18th centuries was fighting a rearguard battle against the collapse of the idea of a scientific or rational morality, or of the science of justice or of individual right.
Not only had natural law and natural rights given way throughout society to the arbitrary rule of utilitarian calculation or nihilistic whim, but the same degenerative process had occurred among libertarians and anarchists as well. Spooner knew that the foundation for individual rights and liberty was tinsel if all values and ethics were arbitrary and subjective.
Yet, even in his own anarchist movement Spooner was the last of the Old Guard believers in natural rights; his successors in the individualist-anarchist movement, led by Benjamin R. Tucker, all proclaimed arbitrary whim and might-makes-right as the foundation of libertarian moral theory. And yet, Spooner knew that this was no foundation at all; for the State is far mightier than any individual, and if the individual cannot use a theory of justice as his armor against State oppression, then he has no solid base from which to roll back and defeat it.
With his emphasis on cognitive moral principles and natural rights, Spooner must have looked hopelessly old-fashioned to Tucker and the young anarchists of the 1870s and 1880s. And yet now, a century later, it is the latter's once fashionable nihilism and tough amoralism that strike us as being empty and destructive of the very liberty they all tried hard to bring about. We are now beginning to recapture the once-great tradition of objectively grounded rights of the individual. In philosophy, in economics, in social analysis, we are beginning to see that the tossing aside of moral rights was not the brave new world it once seemed—but rather a long and disastrous detour in political philosophy, which is now fortunately drawing to a close.
Opponents of the idea of an objective morality commonly charge that moral theory functions as a tyranny over the individual. This, of course, happens with many theories of morality, but it cannot happen when the moral theory makes a sharp and clear distinction between the "immoral" and the "illegal," or, in Spooner's words, between "vices" and "crimes." The immoral or the "vicious" may consist of a myriad of human actions, from matters of vital importance down to being nasty to one's neighbor or to willful failure to take one's vitamins. But none of them should be confused with an action that should be "illegal," that is, an action to be prohibited by the violence of law. The latter, in Spooner's libertarian view, should be confined strictly to the initiation of violence against the rights of person and property.
Other moral theories attempt to apply the law—the engine of socially legitimated violence—to compelling obedience to various norms of behavior; in contrast, libertarian moral theory asserts the immorality and injustice of interfering with any man's (or rather, any noncriminal man's) right to run his own life and property without interference. For the natural-rights libertarian, then, his cognitive theory of justice is a great bulwark against the State's eternal invasion of rights—in contrast to other moral theories that attempt to employ the State to combat immorality.
It is instructive to consider Spooner and his essay in the light of the fascinating insights into 19th century American politics provided in recent years by the "new political history." While this new history has been applied to most of the 19th century, the best work has been done for the Midwest after the Civil War, in particular the brilliant study by Paul Kleppner, The Cross of Culture.Paul Kleppner, The Cross of Culture: A Social Analysis of Midwestern Politics, 1850–1900 (New York: Free Press, 1970). Also see Richard Jensen, The Winning of the Midwest: Social and Political Conflicts, 1888–1896 (Chicago: University of Chicago Press, 1971).
What Kleppner and others have shown is that the political ideas of Americans can be reduced, with almost remarkable precision, back to their religious attitudes and beliefs. In particular, their political and economic views depend on the degree to which they conform to the two basic poles of Christian belief: pietistic or liturgical (although the latter might be amended to liturgical plus doctrinal). Pietistic, by the 19th century, meant all groups of Protestants except Episcopalian, High Church Lutheran, and orthodox Calvinist; liturgical meant the latter plus Roman Catholic. (And "pietistic" attitudes, often included deist and atheist.)
Briefly, the pietist tends to hold that to be truly religious, a person must experience an emotional conversion; the convert, in what has been called "the baptism of the Holy Spirit," has a direct relationship to God or to Jesus. The liturgical, on the other hand, is interested in either doctrinal belief or the following of prescribed church ritual as the key to salvation.
Now, it might seem as if the pietistic emphasis on the individual might lead to a political individualism, to the belief that the State may not interfere in each individual's moral choices and actions. In 17th-century pietism, it often meant just that. But by the 19th century, unfortunately, such was not the case. Most pietists took the following view: since we can't gauge an individual's morality by his following rituals or even by his professed adherence to creed, we must watch his actions and see if he is really moral.
From there the pietists concluded that it was everyone's moral duty to his own salvation to see to it that his fellow men as well as himself are kept out of temptation's path. That is, it was supposed to be the State's business to enforce compulsory morality, to create the proper moral climate for maximizing salvation. In short, instead of an individualist, the pietist now tended to become a pest, a busybody, a moral watchdog for his fellowman, and a compulsory moralist using the State to outlaw "vice" as well as crime.
The liturgicals, on the other hand, took the view that morality and salvation were to be achieved by following the creed and the rituals of their church. The experts on those church beliefs and practices were, of course, not the State but the priests or bishops of the church (or, in the case of the few orthodox Calvinists, the ministers.) The liturgicals, secure in their church teachings and practices, simply wanted to be left alone to follow the counsel of their priests; they were not interested in pestering or forcing their fellow human beings into being saved. And they believed profoundly that morality was not the business of the State, but only of their own church mentors.
From the 1850s to the 1890s the Republican party was almost exclusively the pietist party, known commonly as the "party of great moral ideas"; the Democratic party, on the other hand, was almost exclusively the liturgical party, and was known widely as the "party of personal liberty."
Specifically, after the Civil War there were three interconnected local struggles that kept reappearing throughout America; in each case, the Republicans and Democrats played out their contrasting roles. These were: the attempt by pietist groups (almost always Republican) to enforce prohibition; the attempt by the same groups to enforce Sunday blue laws; and the attempt by the selfsame pietists to enforce compulsory attendance in the public schools, in order to use these schools to "Christianize" the Catholics.
What of the political and economic struggles that historians have, until recently, focused on almost exclusively—sound money vs. fiat money or silver inflation; free trade vs. a protective tariff; free markets vs. government regulation; small vs. large government spending? It is true that these were fought out repeatedly, but these were on the national level, and generally remote from the concerns of the average person. I have long wondered how it was that the 19th century saw the mass of the public get highly excited about such recondite matters as the tariff, bank credits, or the currency. How could that happen when it is almost impossible to interest the mass of the public in these matters today?
Kleppner and the others have provided the missing link, the middle term between these abstract economic issues and the gut social issues close to the hearts and lives of the public. Specifically, the Democrats, who (at least until 1896) favored the free-market libertarian position on all these economic issues, linked them (and properly so) in the minds of their liturgical supporters, with their opposition to prohibition, blue laws, etc. The Democrats pointed out that all these statist economic measures—including inflation—were "paternalistic" in the same way as the hated pietistic invasions of their personal liberty. In that way, the Democrat leaders were able to "raise the consciousness" of their followers from their local and personal concerns to wider and more abstract economic issues, and to take the libertarian position on all of them.
The pietist Republicans did similarly for their mass base, pointing out that big government should regulate and control economic matters as it should control morality. In this stance, the Republicans followed in the footsteps of their predecessors, the Whigs, who for example were generally the fathers of the public school system in their local areas.
Generally, the "mind your own business" liturgicals almost instinctively took the libertarian position on every question. But there was of course one area—before the Civil War—where pestering and hectoring were needed to right a monstrous injustice: slavery. Here the typical pietistic concern with universal moral principles and seeing them put into action brought us the abolitionist and antislavery movements. Slavery was the great flaw in the American system in more senses than one: for it was also the flaw in the instinctive liturgical resentment against great moral crusades.
To return now to Lysander Spooner—Spooner, born in the New England pietist tradition, began his distinguished ideological career as an all-out abolitionist. Despite differences over interpretation of the US Constitution, Spooner was basically in the anarchistic, "no-government" Garrisonian wing of the abolitionist movement—the wing that sought the abolition of slavery not through the use of the central government (which was in any case dominated by the South), but by a combination of moral fervor and slave rebellion. Far from being fervent supporters of the Union, the Garrisonians held that the northern states should secede from a proslaveholding United States of America.
So far, Spooner and the Garrisonians took the proper libertarian approach toward slavery. But the tragic betrayal came when the Union went to war with the Southern states over the issue of their declared independence. Garrison and his former "no-government" movement forgot their anarchistic principles in their enthusiasm for militarism, mass murder, and centralized statism on behalf of what they correctly figured would be a war against slavery.
Only Lysander Spooner and a very few others stood foursquare against this betrayal; only Spooner realized that it would be compounding crime and error to try to use government to right the wrongs committed by another government. And so, among his pietistic and moralizing antislavery colleagues, only Spooner was able to see with shining clarity, despite all temptations, the stark difference between vice and crime. He saw that it was correct to denounce the crimes of governments, but that it was only compounding those crimes to maximize government power as an attempted remedy. Spooner never followed other pietists in endorsing crime or in trying to outlaw vice.
Spooner's anarchism was, like his abolitionism, another valuable part of his pietist legacy. For, here again, his pietistic concern for universal principles—in this case, as in the case of slavery, for the complete triumph of justice and the elimination of injustice—brought him to a consistent and courageous application of libertarian principles where it was not socially convenient (to put it mildly) to have the question raised.
Talk about a suppressed intellectual tradition!
While the liturgicals proved to be far more libertarian than the pietists during the second half of the 19th century, a pietistic spirit is always important in libertarianism to emphasize a tireless determination to eradicate crime and injustice. Surely it is no accident that Spooner's greatest and most fervent anarchistic tracts were directed in dialogue against the Democrats Cleveland and Bayard; he did not bother with the openly statist Republicans. A pietistic leaven in the quasi-libertarian liturgical lump?
But it takes firmness in libertarian principle to make sure to confine one's pietistic moral crusade to crime (e.g., slavery, statism), and not have it spill over to what anyone might designate as "vice." Fortunately, we have the immortal Lysander Spooner, in his life and in his works, to guide us along the correct path.
Murray N. RothbardLos Altos, California1977
"Defunding" the police isn't likely to actually lessen the control the state has over our lives. But repealing countless laws that give police far too much power would certainly help.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "Repealing Useless and Abusive Laws Might Do More Good Than "Defunding" the Police".
The Left believes that we need the state to force people to act in line with "social justice." This means that somebody must force compliance with state edicts, even if those people aren't called "police."
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "Abolishing the Police Won't Mean Abolishing State Violence".
A moral injustice is a legal injustice, period.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "Bastiat Leads the Way on the Morality of Forced Lockdowns".
Just as America begins to reopen from the Coronavirus lockdowns, protests break out across the country over the killing of George Floyd by police in Minneapolis. Governors deploy riot police into the streets to deal with looting, Trump threatens to invoke the Insurrection Act of 1807, and millions of Americans wonder if they still have a job. Racial tensions grow, while groups like Antifa violently agitate for the abolition of property and capitalism. With curfews and business closures in effect, what does the rule of law even mean? How does government at any level maintain legitimacy when it cannot provide basic order?
Judge Andrew P. Napolitano, the Senior Legal Analyst for Fox News and a board member of the Mises Institute, joins Jeff Deist for an in-depth look at the legal crisis facing America in the wake of COVID-19 and ongoing civil unrest. Among the topics:
What powers do Trump and governors have to quell protests or prevent the spread of disease? Are orders not authorized by legislatures flatly illegal? Do they carry the force of law?Can Trump call out National Guard or federal military forces without congressional approval or consent of governors?What does due process mean during a crisis? Do constitutional protections disappear when public health is at stake or mass protests overtake the streets?What level of constitutional scrutiny should apply to measures taken by governors and mayors—quarantines, business closures, curfews, police mobilizations?Are qualified immunity protections keeping dangerous cops and politicians from accountability? Will business owners be able to sue state or local governments for violating their rights?Is "property vs. lives" a false choice from a legal perspective? Do police have any affirmative duty to safeguard either?What roles do the Ninth and Tenth Amendments play—or should they play—in how various states deal with these crises? Is federalism poised for a resurgence? This online seminar is a hard-hitting and uncompromising discussion of government malfeasance and lawlessness.
It’s important to call the government and media on this unholy alliance, whether you view their targets as sympathetic or not. If we stay silent when they come for our enemies, they will ultimately come for us.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "Michael Flynn, Lori Loughlin, and the Permanent Culture of Prosecutorial Abuse"
Police are not legally obligated to provide protection from criminals. Nor are they motivated to go after hardened criminals or investigate violent crime. Self defense (or private security) is the only reliable option.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "Minneapolis Riots Are a Reminder That Police Don't Protect You or Your Property"
A high German court recently ruled that the European Central Bank has overstepped the bounds of its power. The angry response from high-ranking European bureaucrats tells us a lot about what they want for the EU.
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.
Original Article: "The German Court's Unexpected Blow to the ECB"
Libertarians know Michael Boldin as the founder of the Tenth Amendment Center, but he started out as a leftist promoting clubs in LA and other major cities. In this fun conversation, Michael explains his origins and how he ended up advising state governments on how to kick the NSA out of their backyard.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
Our guest is Dorit Reiss, Professor at UC Hastings College of the Law in San Francisco, California. She holds an undergraduate degree in Law and Political Science from the Faculty of Law at Hebrew University in Jerusalem and a PhD in Jurisprudence and Social Policy from the University of California, Berkeley. She is a legal authority on the question of vaccines and vaccine mandates. She has published numerous articles on this topic in a variety of law review journals and her expertise is recognized around the world.
ABSTRACT: John Hasnas (2008) has famously argued that anarchy is obvious and everywhere. It is less well known, however, that Hasnas also argues that anarchy must be achieved gradually. But how can this work? In this paper, I show that directly confronting state power will never produce viable anarchy (or minarchy). Using the example of Soviet jurist Evgeny Pashukanis, I detail an episode in apparent anti-statism which, by relying on the state, ended in disaster for the putative anti-statist. I next show how combining the theories of Austrian legal thinker Eugen Ehrlich and American political philosopher William Sewell, Jr., can lead to a gradual undoing of state power via case law. Finally, I bring in the example of Japanese jurist and early anti-statist Suehiro Izutarō as a warning. Suehiro also attempted to decrease state power by means of case law, but because he lacked a clear anti-statist teleology he ended up becoming an accomplice of state power, even imperialism. The way to Hasnian anarchy/minarchy lies through the skillful application of case law with an eye always towards the attenuation, and eventual elimination, of the power of the state.
“No one believes that we can transition from a world of states to anarchy instantaneously. No reasonable anarchist advocates the total dissolution of government tomorrow.” John Hasnas (2008, 129)
Jason M. Morgan (morgan.jason.michael@gmail.com) is associate professor of foreign languages at Reitaku University.
The author would like to thank Lenore Ealy, Joe Salerno, and Mark Thornton for helpful comments on an early draft of this article. All errors and omissions remain, of course, the author’s own.
INTRODUCTION There is nothing more dangerous than the state. (Rummel 1994) The modern nation-state, regardless of the ideology upon which its existence is premised, is an enemy of human freedom and a threat to peace and prosperity at home and abroad. (Rockwell 2014) Proponents of various political arrangements argue endlessly over which kind of state is the best, but these debates merely obscure the central fact of the state: it is always and everywhere a sovereign outlaw predicated on theft, coercion, and violence. (Rothbard 2000)
The state, properly considered, is thus seen as the common foe of humanity. And yet, despite the animosity to it which the state’s very nature virtually ensures, the state has shown a remarkable ability to endure. Attempts to confront state power directly almost always fail, while those that succeed tend only to produce even bigger state apparatuses. (Cf. the Bolshevik Revolution, the fall of the Qing Empire, the American Revolution, the French Revolution, and the Meiji Restoration.) Likewise, attempts to declare autonomy from state power through secession or other voluntary forms of disassociation (for example, by refusing to acknowledge the state’s jurisdiction over one’s privately-held land or property) are also virtually guaranteed to end badly.
For example, in 1861 the Southern States of the United States effected an orderly and thoroughly lawful separation from the North, but this was met with such overweening violence—including widescale attacks on non-combatants—that the newly-formed Confederate States of America were forced to rejoin the larger state on humiliating terms of surrender. (Cisco 2007) Likewise, when law-abiding citizens such as Cliven Bundy and Randy Weaver have attempted to absent themselves from the purview of state power, the state has responded with overwhelming use of force, often lethal. (Grigg 2015)
Anyone who desires freedom is thus presented with a seemingly impossible choice, between submission to the state, which surely ends freedom, and suicidal rebellion, which ends both freedom and life. How does one respond to the dilemma presented by the state? Is there some way to enhance human freedom within the context of the state while also attenuating state power gradually, with the eventual goal of so diminishing statism that a true Hasnian anarchy becomes possible? I believe there is. In this paper, I argue that the theories of Austrian legal philosopher Eugen Ehrlich point toward the real possibility of greater freedom within a given state and, ultimately, the gentle overthrow of pernicious state power.
However, such a project, although surely worth the attempt, is understandably fraught with peril. States, and statists, are ever mindful of the precariousness of their position, and so are sensitive to even the slightest whisper of rebellion. Not only that, but armed suppression is not the only way that states deal with those who try to carve out non-state spheres for themselves. Many states, and statists, are as expert at co-opting freedom-loving groups and individuals as they are at killing them or throwing them in prison. To give just one example, legal scholar and jurisprudential reformer Suehiro Izutarō, who attempted an Ehrlichian project of his own in interwar Japan, was co-opted by the state due to his failure to maintain the teleology of anti-statism. As a result, Suehiro ended up using Ehrlich’s theories, not to chip away at state power, but to further amplify it. (Morgan 2019) I will detail how this happened in the hopes of guiding other would-be Ehrlichian freedom-partisans safely around this hazard. The demise of the state must be the ultimate goal of any truly human society, but this must be accomplished gradually, dialectically, and stealthily. A subdued anarchy, grounded in Ehrlichian legal pluralism, is the surest method for communities to regain their freedom.
I begin with a consideration of Evgeny Pashukanis, a Soviet jurist who attempted to instantiate the Marxian-Engels mythology of the autopoetic ‘withering away of the state’. Pashukanis’s example proves the folly of directly confronting state power. Before turning to an explication of how the theories of Eugen Ehrlich, put properly and prudently into practice, can advance freedom and sap the state’s strength, it is necessary to show what happens when legal theorists try to confront the state head-on.
I. EVGENY PASHUKANIS Evgeny Bronislavovich Pashukanis (1891–1937) was a Soviet legal thinker who achieved wide renown in the early years of Stalin’s dictatorship. Pashukanis was (seemingly) protected by political connections to people in high office, but he eventually ran afoul of the state by arguing openly that state power should be curtailed. For his naivete he was executed by, of course, the state.
What makes the case of Evgeny Pashukanis especially striking is that, in calling for the end of the state, he was simply repeating what he, and many others, took to be political orthodoxy in that state. Pashukanis never attempted violent revolution. He merely used the same platitudes that the state’s ostensible intellectual fathers had advanced—platitudes, indeed, that the theorist had been promoted to chief justice of the state’s supreme court for publicly espousing. The absence of all but a faint gloss of legality on the state’s swift execution of the theorist when his theories—which were not even his, and which he had long been encouraged by the state to disseminate—fell from favor provide a chilling capstone to this lesson against directly facing off against statism.
Pashukanis’s most well-known argument was little more than a recapitulation of Marx’s and Engels’s teaching that, with the advent of socialism, the state would “wither away.” (The ‘withering away of the state’ was first predicted by Friedrich Engels. (Engels 1878, 302, cited in Kelsen 1988, 25 fn. 62.)) When this happened, Pashukanis said, law would become superfluous. Although much of the legal thinking in Marx and Engels is ambiguous at best, the Soviet Union was founded by Lenin as an experiment in putting the ideas of Marx and Engels into practice, and Lenin himself had expanded upon Marx and Engels’ legal ideas by accentuating their prophecy of the state’s quiet self-destruction.See Lenin ([1917] 1932, 149), in Kelsen (1955, 51 and 51, fn 1). It therefore seemed entirely safe for Pashukanis to argue in favor of a doctrine from the philosophical forebears of the Bolsheviks and from the Bolsheviks’s leader, Lenin. And yet, it was for precisely this that Stalin, Lenin’s heir and thus the world’s chief enforcer of Marxist-Leninist thought, had Pashukanis killed. Stalin revised the thinking of Marx, Engels, and Lenin to justify a permanent state with himself at the head. Stalin was therefore not interested in the withering away of the state, because that would have meant the withering away of Stalin. Pashukanis confronted state power directly, albeit unintentionally, and was killed as a result.
Pashukanis came from humble beginnings, but for a time his studies in the law led to a rapid rise in his notoriety and access to state power. Pashukanis studied at the University of St. Petersburg during World War I, and later became a circuit judge after joining the Bolsheviks in 1918.See Hazard (1980), and Bellingham (2018). He was then “a legal adviser in the People’s Commissariat of Foreign Affairs” in the early 1920s.Beirne and Sharlet (1990, 17). See also Hazard (1971, 143) citing also Hazard (1938, 244). Pashukanis remained virtually unknown until the 1924 release of the book that would both win him fame and position, and also lead to his eventual purge and execution: The General Theory of Law and Marxism: An Experiment in the Criticism of Basic Juridical Concepts. (Obshchaia teoriia prava i marksizm, cited in Stuckha 1988, 41, fn. 1) The book, written as Pashukanis’s attempt to work through some initial ideas about jurisprudence in a purely socialist society based on the writings of Engels and Marx, quickly gained a prominence out of all proportion to the author’s modest motivations in writing it.Beirne and Sharlet, (1990, 41, fn. 1). Hazard sees Pashukanis’s early work as not systematic. See Hazard (1938, 245).
Working under the general aegis of Marx-Engels thought, Pashukanis borrowed from German philosopher Hegel and Soviet historian M.N. Pokrovsky in emphasizing the “distinction between essence and appearance,” attacking the “Roman lex persona [as] an insufficient basis for the universality of rights attached to individual agents under capitalist modes of production” (Beirne and Sharlet 1990, 41, fn. 7; citing Pashukanis 1931) and insisting that “the development of Russian capitalism must be understood in the context of the historical primacy of mercantile capital” (Beirne and Sharlet, 1990, 41, fn. 8; citing Pokrovsky n.d.). For Pashukanis, it was key that:
Marx had begun his analysis of the inner dialectic of the capital-labor relationship (the production of surplus value) with a critique of the categories of bourgeois political economy. […] In order to apprehend the historically specific form of the relationship of capitalist exploitation, one had first to pierce the veil of appearances/semblances/forms which the real relationship inherently produced, and on which it routinely depended for its reproduction.
In other words, Pashukanis took seriously the polylogism that was central to Marx’s class-materialist analysis of capitalism and applied it to the field of law, premising his own analysis on the Marx-Engels dogma that the state would become superfluous under full socialism.
Pashukanis wrote his 1924 treatise during the first flowering of Lenin’s New Economic Policy (NEP), a strategic retreat into temporary capitalism in order to strengthen the Soviet experiment in the long term. In the earliest stages of the revolution, the Bolsheviks aggressively dismantled the legal order on the grounds that it had been a function of the bourgeoisie’s domination of the proletariat. A skeletal framework of institutions was left in place in order to accomplish the move into full socialism, and the law itself was largely discarded in favor of Bolshevik judges’ use of “revolutionary consciousness” in undoing what few legal remnants continued to exist. (Beirne and Sharlet 1990, 24) The Russian Civil War, though, necessitated a more robust court system for rooting out and punishing so-called enemies of the revolution. Pashukanis saw this move in the same way Lenin characterized the NEP, i.e., as an expediency and not as a permanent feature of a truly classless society. (Beirne and Sharlet 1990, 25). This also necessitated a retreat from the anti-intellectualism of the early Bolshevik turmoil (David-Fox 1997).David-Fox cites structuralist Theda Skocpol (1979) in accentuating this point. This dramatic shift in policy and the lack of abiding principles it betrayed might have alerted Pashukanis against assuming that safety would lie in adherence to Marxist thought, no matter how orthodox.
In the event, however, Pashukanis’s abiding concern in joining Marx and Engels in anticipating the withering away of the state was his belief, which he found also in Marx’s The Critique of the Gotha Program (1875), that the commodity form was inextricably linked to, and indeed gave rise to, the legal form. Because of this, “proletarian or socialist law was a conceptual, and therefore a practical, absurdity. While the market bond between individual enterprises (either capitalist or socialist) remained in force, so also the legal form had to remain in force.” (Beirne and Sharlet 1990, 25) Eventually, the law would come to resemble what Pashukanis saw as the only sustainable feature of the NEP, namely, its “administrative-technical rules which governed the economic plan.” (Beirne and Sharlet 1990, 25) Once socialist man had been freed of his bourgeois shackles, he would need only economic tinkering. Crime would be as unthinkable as the spontaneous exchange of goods for a profit. Indeed, Pashukanis was so convinced that Marx had intended such an evaporation of the legal “superstructure” that Pashukanis called the withering away of the law “the yardstick by which we measure the degree of proximity of a jurist to Marxism.” (Beirne and Sharlet 1990, 25, citing Pashukanis 1929, 268)
Central to Pashukanis’s critique was what he saw as the artificial juridical and economic individualism underpinning bourgeoisie society. Taking Marx’s “club-law is law nevertheless”Korsch (1922), cited in Pashukanis (1924), in Babb (1951, 180). For Marx’s views of the state see Marx (1938, 8, 17) and Engels (1875), cited in Marx 1938, 31. as his touchstone, Pashukanis held that:
law, like barter, is a means of intercourse between disunited social elements. The degree of such disunion may be greater or less historically, but it never disappears entirely. Thus the enterprises belonging to the Soviet state perform one general task in fact; but—working by the methods of the market—each of them has its own isolated interest; they are opposed to each other as buyer and seller, and they act at their own risk and peril—accordingly they must necessarily be in juridic intercourse. The final victory of the planned economy will put them exclusively into an association with each other based on technical expediency and will make an end of their juridic personality (Pashukanis 1924, 181).See also Kelsen (1955), esp. ch. 1, “The Marx-Engels Theory of State and Law.”
Because of this rigid conformity to Marxist ideology, Pashukanis was forced into a concomitant adherence to the archetypical Marxian history of the rise of the state as a tool of merchants and class exploiters:
As an organization of class dominance and an organization for the conduct of external wars, the state neither requires—nor essentially admits of—legal interpretation. These are domains where the so-called raison d’etat—that is to say, the principle of bare expediency—holds sway. Conversely, authority—as the guarantor of exchange in the market—cannot only be expressed in the terminology of law but itself is represented as law and only law: that is to say, it merges completely with an abstract objective norm. Accordingly, every sort of juridic theory of the state which would embrace all the state’s functions is necessarily inadequate—it furnishes only an ideological—that is to say a distorted—reflection of reality and cannot reflect faithfully all the facts of state life. (Pashukanis 1924, 183)
For Pashukanis, the law was a fundamentally bourgeois concept and could not be reformed. As the state inevitably disappeared, the law, too, would just as inevitably disappear along with it.Cf. Lenin: “With the extinction of classes the state itself will inevitably pass out of existence. The society which will organize production on a new basis of free and equal associations will relegate the state where it shall belong: to the museum of antiquities along with the spinningwheel and the bronze axe.” Lenin, Sochineniya, vol. 21, p. 372, quoted in Chakste (1949, 22). Pashukanis’s view of the state was also informed by Engels’ conceptualization of the state as a kind of Leviathan cork keeping potential class warfare in check. See Pashukanis (1924, 184), citing Engels 20th German ed., 177–78.
Pashukanis’s theories were in plain agreement with Marx-Engels orthodoxy (such as it was) on the subject of law, and as herald and prophet of the state’s demise under the conquering Bolsheviks Pashukanis was appointed in swift succession to a variety of top-ranking positions in various departments in the emerging Soviet government. Pashukanis’s ideas, reprisals of those of Marx and Engels, themselves became part of the Bolshevik canon. As John Hazard points out:
Pashukanis’ influence was such that courses in civil law in the law schools were abandoned. Courses in the administrative law of planning, called in Pashukanis’ parlance ‘economic law’, as in Germany, replaced them. A few hours only were devoted at the end of the full year’s course to those aspects of civil law which Pashukanis interpreted as the vestige of the past. Textbooks on Civil Law likewise were replaced by textbooks entitled Economic Law. A similar atrophying of criminal law was anticipated, with the substitution of ‘general principles’ to guide the judges instead of precise articles defining types of crime and setting specific penalties (Hazard 1980, xxxi).
Pashukanis’s place in the Soviet legal pantheon seemed assured.
Had Pashukanis been able to study the works of Ludwig von Mises, he might have understood that “the state” cannot act, and cannot wither away, because “the state” is nothing more than a grouping of individual people. (Mises 1949) Among different people, many will be interested in free trade and peaceful cooperation. Some will be comparatively hostile to fruitful interaction, but will do the bare minimum necessary to get by. Given human nature, a few will lie, cheat, steal, and even kill in order to advance their individual ambition. It is against such people that societies have always arranged some system of self-defense. Pashukanis imagined a socialist society free of individual aggression because, by a process of the denaturalization of mankind as a class partisan, free of juridical and economic individuals per se. But what Pashukanis got instead was Josef Stalin. The emerging Soviet state was hijacked by one man bent on converting the state apparatus into the machinery for effecting his personal designs, including revenge on enemies and former allies.
The first stirrings of trouble for Pashukanis came in April of 1929, when Stalin gave a speech on Leninism in which he denounced his erstwhile friend, the Old Bolshevik Nikolai Bukharin, for the latter’s insufficient understanding of dialectics. Chief among Bukharin’s failings, according to Stalin, was his having presumed to lecture (the deceased) Lenin on “the problem of the state.” Stalin accused Bukharin of failing to make the distinction between the bourgeois state and the state of the dictatorship of the proletariat as used for the purpose of furthering revolution internally and defending the homeland from hostile forces abroad. Stalin was asserting, in his speech, his sole heirship to the mantle of Lenin—asserting, that is, the sole right to interpret Lenin’s writings and speeches and to pass judgment upon what was orthodox and what was not. Even more ominously, Stalin was announcing his personal identification with the state. Those who called for the “withering away of the state” were being put on notice that such pronouncements were henceforth liable to being interpreted as calls for the withering away of Stalin himself.
In retrospect it is obvious why Stalin could not dispense with the machinery of the law and the state—he needed the courts as a stage for the show trials that would later clear away the last of his rivals among the Old Bolsheviks, principally Bukharin himself. There is also a separate, but related, element of deception in Stalin’s appropriation of Leninism. (See Tucker 1979, 347–66) As Adam Przeworski and Michael Wallerstein write in “Structural Dependence of the State on Capital”:
The central and only distinctive claim of Marxist political theory is that under capitalism all governments must respect and protect the essential claims of those who own the productive wealth of society. Capitalists are endowed with public power, power which no formal institutions can overcome. People may have political rights, and governments may pursue popular mandates. But the effective capacity of any government to attain whatever are its goals is circumscribed by the public power of capital. The nature of political forces that come into office does not alter these limits, it is claimed, for they are structural—a characteristic of the system, not of the occupants of governmental positions nor of the winners of elections.Przeworski and Wallerstein (1988, 11), also citing Luxemburg (1970) and Pashukanis (1924) in Babb, (1951). See also Fred Block (1977, 6–27), cited in Przeworski and Wallerstein (1988).
Surrounded by ascendant capitalist states (and forced thereby to admit that the worldwide triumph of communism would be at best seriously delayed, thus necessitating a period of accommodation to reality), Stalin actually adopted a Fordist approach to economics and emphasized vast programs of production (his notorious “Five-Year Plans”) for the quasi-market of perpetual “War Communism.”The “transition” period from bourgeoisie rule to pure socialism was undertheorized by Marx and Engels, and the problems associated with the transition were dealt with largely ad hoc. Cf. Hans Kelsen: “Marx says that in the phase of transition from the proletarian revolution to the establishment of perfect communism, that is to say, during the period of the dictatorship of the proletariat, there will be still a law, but that this law, in spite of its progress as compared with the bourgeois law, will still be ‘infected with a bourgeois barrier (mit einer buergerlicher Schranke behaftet)’.” Kelsen (1955, 3), citing a letter from Marx to Bracke, May 5, 1875, published in Neue Zeit, IX–1, 1890–91, 561 et seq. See also Hazard (1938, 247), citing Taracouzio (1935). On the challenges of internationalism for the Soviet Union and for Soviet law, see Hazard (1957, 387–88). On later Soviet internationalism, see Hirsch (2008, 701–30). It was in part to avoid the embarrassment of having this betrayal of Marxism-Leninism made theoretically plain that Stalin purged Pashukanis, who as a faithful mouthpiece for orthodox Marxian thought was a hindrance to Stalin in his plans to co-opt Marxism and Leninism for his own private ends.Cf. Marx, Gesamtausgabe I–1, 574, cited in Kelsen (1955, 19, fn 47). See also Lenin (1917, 221), cited in Kelsen (1955, 55 and 55, fn. 18).
By the end of the first Five-Year Plan, the National Socialists had taken power in Germany and the Bolsheviks were preparing for what many in both the Communist and National Socialist camps saw as the inevitable war between the two totalitarian systems. (Reisman 2014) Given the realities of the age, the War Communism of the Russian Revolution was giving way to Stalin’s assertion that socialism was possible, at least for the time being, in one country. As such, the state, Stalin argued, was indispensable, both for carrying forward the revolution domestically, and for protecting it from enemies closing in from abroad. Pashukanis’s insistence on a rigid interpretation of Marx’s and Engels’s teaching about the transience of the state under pure socialism was a liability, and Stalin set about removing both the theories and their main proponent.
After a telling failure to gain election to the Academy of Sciences (the ‘immortals’, as the Soviets called its members), there followed a scathing denouncement by Stalin of Pashukanis’s theories (and charges of treason and espionage) published in the September 1, 1937, issue of Bolshevik. (Hazard 1980, xxix) The handwriting on the wall was unmistakably clear. In the wake of Stalin’s 1929 speech sharply criticizing Bukharin, and implicitly putting Pashukanis on notice, too, Pashukanis had written a revised version of his General Theory of Law and Marxism and had published articles and given speeches in which he “confessed” to his own ideological errors and attempted to restore himself to the Soviet leadership’s good graces. All was for naught. On January 4, 1937, Pashukanis was disappeared from his Deputy Commissar office, driven past his house on Gorky Street so he could see his files being thrown in the back of a truck, and, after being investigated by “impartial” officers from the Ukrainian branch of the NKVD and arraigned by his former friend Vasilii Vasilievich Ulrikh—one of the leading jurists at Stalin’s show trials—was later condemned to death, also by Ulrikh. The sentence was carried out by firing squad just a half hour after it was read into the record (Vaksberg 1991, 129–33).
There is much irony in Pashukanis’s having been executed in this way, especially given his opposition to capital punishment and his refusal to incorporate it into the early Bolshevik legal guidelines on the grounds that it was unworthy of an enlightened socialist state. But there is even further irony in Pashukanis’s having been executed by the same state, and under the same law, that he was sure would soon wither away as mankind entered into a new mode of existence following the disappearance of class warfare and the false juridical monadism that Pashukanis saw as the grounds of the legal form. But it should also be remembered that Pashukanis had also benefitted greatly from statism. Although he had championed a ‘withering away of the state’, he could hardly have failed to notice that all of his political opponents had been dispensed with by the same state that Pashukanis was prophesying would meet its own demise.
As historian Robert Sharlet writes in “Stalinism and Soviet Legal Culture”:
The jurisprudence of terror [i.e., of Stalin’s rolling purges] flourished rapidly along the interface of the strengthened prerogative and the weakened normative state. The fruit of this development was an especially grotesque species of political justice. Legal forms were co-opted for extra-legal purposes, judicial process was subordinated to political ends, and law itself was used to legitimize and rationalize terror. The jurisprudence of terror institutionalized and routinized political terror within the context of formal legalism. In effect, terror was ‘legalized’ and the criminal process ‘politicized’. (Tucker 1977, cited in Bellingham 2018, endnote 22)
Pashukanis must have known this. In fact, John Hazard, who studied under Pashukanis in the 1930s as an American foreign exchange student in the Soviet Union, remembered that “those who strayed from Pashukanis’s line were castigated … or denied faculty appointments, promotions and salary raises. […] Teachers [were] compelled to conform not only to ideas of Marx but also to those of Pashukanis.” (Hazard 1980, xiii–xiv, cited in Bellingham 2018, endnote 43) Pashukanis seems to have been confident that the statist forces which had elevated him to the primacy of his profession and cleared the field of his rivals would never turn against him.
Pashukanis’s example is a stark reminder that confronting the state directly is suicidal. It is essential that the state be overcome so that those who would cartelize under the statist banner be denied a platform for their plans, but it is also equally essential that the state be done away with by slow degrees, and not all at once (and certainly not by marrying a putatively anti-state ideology to state power). I therefore propose that communities engage with the state dialectically, weakening and transforming the state incrementally over time. The best way to do this is through case law. A legal-pluralist caselaw system, coupled with jury trials, is the surest path toward the downfall of the state. A clue as to how this might be undertaken comes first from a little-known Austrian legal thinker, while one of that thinker’s disciples provides a cautionary tale against implementing anti-state ideas without a clear anti-state teleology in mind.
II. EUGEN EHRLICH Evgeny Pashukanis had the misfortune of living under one of the most brutal regimes in human history, but his case is not generically unique. Stalin and the Bolsheviks acted with acute ruthlessness against Pashukanis. However, virtually any other state would also have taken steps to eliminate someone who actively challenged state authority, even abstractly. Virtually any contemporary state would do likewise, as the examples of Edward Snowden and Julian Assange amply attest. In light of these realities, let us turn to another legal thinker whose work offers some hope that the state may, perhaps, be challenged, and eventually defeated, incrementally, stealthily, and with low risk for the challengers. Austrian legal philosopher Eugen Ehrlich (1862–1922) offers a model for how such a project might unfold.
Born into a deracinated Jewish family in Czernowitz in the Austria-Hungarian province of Bukovina, Eugen Ehrlich did his Habilitation on Roman law in Vienna in 1894. He was never able to rise above the post of rector at Franz-Josef University in Czernowitz, a second-rate appointment attributable largely to Ehrlich’s Jewish background.Rottleuthner (1987, 19). Ehrlich converted to Roman Catholicism ca. 1894. Johnston (1983, 89). Taking advantage of his de facto exile in the hinterland, Ehrlich was among the seminal group of law-and-society thinkers at the turn of the century that launched the sociological turn in both jurisprudence and in legal philosophy. Ehrlich, along with Hermann Kantorowicz (1877–1940), founded the Freirechtsbewegung (Free Law Movement) in the first decade of the twentieth century and, together with Kantorowicz, Max Weber (1864–1920), Émile Durkheim (1858–1917), Hugo Sinzheimer (1875–1945), and Roscoe Pound (1870–1964), formed the nucleus of what would later become known as the law and society movement.
Disillusioned with state power for a variety of reasons both personal and intellectual, Ehrlich sought the legitimacy of the law in something other than the reigning corporatist-positivist state. Specifically, Ehrlich conducted extensive research in community custom, which he saw as a way to reform Austrian law by means of insisting on the validity of legal pluralism within the existing Civil Code jurisprudential system. For many thinkers in the German tradition, the state and its laws were seen as forming an unassailable edifice not open to reform. While some German thinkers had posited a distinction between Gemeinschaft, or community, and Gesellschaft, or civil society, the legal system itself conceptually “saw” only Gesellschaft. Most theorists admitted of a working identity between law and the state. Ehrlich, on the other hand, argued that the state and the law are not the same. In many ways, they are at odds with one another, if not opposites. German experience itself tends to prove this. Ehrlich’s groundbreaking Grundlegung der Soziologie des Rechts (1913), for example, offers clues to the ability of the law to endure even amidst political crisis, such as in the wake of the Second Reich’s defeat in World War I.
Ehrlich, along with Kantorowicz, observed that societies organically and spontaneously generate their own legal orders apart from the oversight of a state, and often in contradiction to the state’s Pandekten-style law (a centralized system of law based on the Pandects, a codification of Roman law) claiming a totality of legal sovereignty.Cf, e.g., “Pandektenrecht und deutsches Privatrecht,” Hatoyama et al. (1916). The plurality of law in Ehrlich’s Bukovina region of Austria-Hungary was probably the source of his initial puzzlement over the gap between what the law in the books said, and what the people in the villages and towns actually did. While interpersonal disputes were meant to be adjudicated according to the Weberian scheme of the state’s monopoly of violence, in reality those disputes were often resolved according to customs and practices that often seemed to have very little to do with the codified positive law. For Ehrlich, the application of the law involved, not the robotic matching of real-life happenings to an ethereal and abstracted Civil Code, but, rather, a great deal of human agency floating clear of the legal realm and drawing on norms better understood by the new discipline of sociology. (Rottleuthner 1987, 5) Gemeinschaft, in other words, was not an ideal imposed from above by the Gesellschaftlich corporatist state, but a process of messy discovery taking place in actual lived society far removed from state control.
Unlike his predecessors, Ehrlich was almost indifferent toward the existence of the state within the framework of actually-existing legal practice. Ehrlich’s turn away from German legal idealism found expression in his theory of Free-Law:
As a Free-Law advocate […], Ehrlich criticized the ideal of the seamless web of a codified legal order, and made clear that the decision in an individual case could not be understood as a logical derivation from general norms (or even concepts), performed ‘with the aid of a hair-splitting machine and a hydraulic press’. Like Fuchs, he too emphasized the creative role, the personal moment, in the application of law. However, by this he did not intend that the private intuition of the judge be set free. Rather this is the point where his specific understanding of legal sociology came into play: when the law permits no orientation, the application of law should orient itself on social norms, on the norms of the law which was actually alive in society. In his legal sociology, Ehrlich stressed precisely the central role of society—as the totality of human associations—for the emergence and development of law. Legislation, jurisprudence, and judicial decision-making, by contrast, were considered secondary phenomena. The true legal science—understood as legal sociology—had to capture the law that was ‘alive’ in society. Traditional jurisprudence was blind to this sphere and only took into account laws and the norms of judicial decisions.Rottleuthner (1987, 5), citing Ehrlich, lecture at Juristische Gesellschaft, Vienna, April 3, 1903, reprinted in Ehrlich (1967, 196), and Ehrlich (1913, 196).
For Ehrlich, the central question of law was this tension between the people and the state. The Pandekten idealists and strong-state advocates had things precisely backwards. Increasing the power of the state—to legislate, regulate, and control ever-greater swaths of private life and to co-opt ever more non-state institutions through promises of political inclusion—led only to greater corruption and a wider gulf between law and society. Left to their own devices, people actually fared much better without interference from the state. A political solution to social ills was therefore not even misguided; it was oxymoronic.
With the theories of Eugen Ehrlich we have a blueprint for foregrounding communities and communal custom and practice as the “groundwork” for an entirely new kind of law. But how can this new law be animated and deployed to challenge the power of the state? The answer lies in the works of American sociologist and historian William Sewell, Jr. In chapter four of Logics of History, for example, Sewell posits a relationship between structure and agency that is open to interventions and contingencies. (Sewell 2005, 124–51) Sewell’s kinetic view of the interaction between people and institutions expands on Anthony Giddens’s “duality of structure” and Pierre Bourdieu’s habitus to envision complex of social, political, cultural, and economic influences that more closely approximates the reality of human life amid structural patterning. (“By this [i.e., ‘duality of structure’] he [i.e., Giddens] means that [structures] are ‘both the medium and the outcome of the practices which constitute social systems’ (Giddens 1976, 1979, 1981, 1984). Structures shape people's practices, but it is also people's practices that constitute (and reproduce) structures. In this view of things, human agency and structure, far from being opposed, in fact presuppose each other.” (Sewell 2005, 127)) This approach “(1) recognize[s] the agency of social actors, (2) build[s] the possibility of change into the concept of structure, and (3) overcome[s] the divide between semiotic and materialist visions of structure.” (Sewell 2005, 126–27) Sewell’s rethinking of structural malleability is the key to setting legal-pluralist anarchy against the existing state, chipping away at the state one small interaction at a time. The dialectic is the key to the ongoing existence and substantive autonomy of the Gemeinschaft vis-à-vis the Gesselschaft, and especially the Gesselschaft writ large, the state.
The absence of a state short-circuits this dialectic, destabilizing the legal-pluralist Gemeinschaft and inviting reprisal, such as Stalin’s against his enemies (including Pashukanis). Giving up the notion that structures themselves are negotiable, pliable, and subject, at least partially, to human agency—or, as Sewell put it, that structures (such as law) are “continually evolving outcome[s] and matri[ces] of process[es] of social interaction”—leaves a Gemeinschaft with no partner in the dialectic diminishment of the state. (Sewell 2005, 151) Gemeinschaftlich autonomy via legal-pluralist anarchy is much better accomplished by means of case-law interactions with state authorities. Case-law trials, even in the state’s courts, are small-scale legal skirmishes, as it were, that afford small Gemeinschaften a fighting chance of winning small victories against state power and incrementally undermining the state’s power.
This tension among law, society, and the state was summed up by Ehrlich himself, although in the context of legislation and not case law. The important point, however, is that, for Ehrlich, law was a means of attenuating state power, not augmenting it:
Legislation is commonly considered the oldest, the original, the peculiar task of the state. In reality, however, the state becomes a law-giver only late in its existence. The original state is a purely military center of might and is concerned neither with law nor with courts. The original state, so far as it is not yet Europeanized, knows no legislation. We speak, it is true, of the legislation of Moses, of Zarathustra, of Manu, of Hammurabi, but these are only collections of judicial and juristic laws together with numerous religious, moral, ceremonial and hygienic provisions such as we can see in popular or popular-scientific writings. An oriental despot can, if he pleases, level a city to the earth or condemn a few thousand human beings, but he cannot introduce civil marriage into his kingdom.Eugen Ehrlich, “The Sociology of Law,” under the heading “An Appreciation of Eugen Ehrlich,” Pound (1922, 137), cited in Rokumoto (1994, 101).
The more central planners work to bind up law and society through executive power, the farther law and society drift apart from one another. Local communities can achieve a measure of autonomy from state interference by acknowledging and reflecting the spontaneity and unpredictability of social order under the banner of legal pluralism, with jury trials as a key feature of this arrangement.
Also, when communities or their members have no choice but to interact with the state’s courts, this helps to ensure that the state’s judges will be forced to divorce their decisions from statist-ideological presuppositions. Legal-pluralist decentralization and the promotion of anti-statist jurisprudence are both effective at carving out spheres of autonomy for local Gemeinschaften. The gradual “withering away,” one case at a time, of the state’s monopoly on the justice process, along with the championing of legal pluralism and spheres of law separate from the state’s legislative prerogative, are the two abiding promises of Ehrlichian jurisprudence.
III. SUEHIRO IZUTARŌ In the ideas of Eugen Ehrlich and their animation when coupled with the theories of William Sewell we thus have a blueprint for reducing statism and recovering human freedom in our time. Through discrete dissociation from the jurisprudential machinery of the state via an Ehrlichian exercise of community-based common law, those who are willing may be able to attenuate the state’s monopoly on “justice” (in the case of the state, this almost always means, simply, “arbitrary immunity from arbitrary violence”) and effect real justice organically and in accordance with the natural law. What’s more, Ehrlich’s program does not even require that its practitioners repair to a commune and convene trials apart from the state’s court systems. In fact, it is even more effective if the Ehrlichian practitioner turn the tables on the state by using the state’s courts as an entrepôt for importing Gemeinschaftlich justice into statist jurisprudence. By means of case law, an Ehrlichian may be able to establish precedent and cultivate judges of conscience, such that pockets and veins of humanity may begin to appear within the statist apparatus. Eventually, if all goes well, the state will be defeated from the bottom up and the inside out. Without firing a shot, the justice-minded jurist will be able to bring the state to heel.
However, the example of someone who tried just such a project should give us pause. Suehiro Izutarō, a Japanese jurist, student of Eugen Ehrlich, and one of the founders of the law-and-society movement in Japan, returned from a period of research with Eugen Ehrlich determined to use case law to upend the Japanese legal system and bring about a quiet Ehrlichian revolution in Japanese society. Under Suehiro’s plan, courts, instead of being adjuncts of the state, were to become levers of the disenfranchised people. The force of the masses, case by case, would be brought to bear on the courts, thus bringing the promises of that sweeping zeitgeist of liberalization and social change known as “Taishō Democracy” to the men and women in the street who remained without the right to vote.
But it was not so simple. Eventually, Suehiro was himself converted from Ehrlichian champion of the underclasses to legal technician in the service of the imperial state. Without grounding in principles and focusing only on Ehrlichian method, Suehiro fell into the state’s powerful gravity field and turned against the original aims of his youthful Ehrlichian ambitions. His case, somewhat akin to Pashukanis’s but with key differences, is thus also a warning of what can happen whenever someone tries to undo the evils of the state, even indirectly and even using Ehrlichian means. Without the teleology of anti-statism, incremental anti-statist activities run the risk of, conversely, amplifying state power and leading to the cooptation of would-be anti-statists.
Suehiro Izutarō began his legal career as a high statist. Like virtually every other law student of his time in Japan, Suehiro had been trained largely in the conceptual jurisprudence then fashionable in Europe and taught to view the changeless legal code as both the means and the end of courtroom reasoning. Legislatures, however constituted, were thought to produce timeless tables of law, into which the various cases that came before a judge’s bench were to be fitted in order to conform to the Platonic ideals expressed in the Civil Code. (Aomi [1967] 2007, 154) In response to the ongoing disenfranchisement of the vast majority of the Japanese population, Suehiro began to formulate a plan to use case law as a way to apply pressure on judges to turn aside from the state-centric mode of forcing individual cases to fit into the Japanese Civil Code, which had been modeled on the French and German codes. In doing this, Suehiro reasoned, judges would be obliged to pay attention to the details of the cases brought before their benches, thereby rendering individual plaintiffs and defendants at least visible to the judge, and therefore, in theory, more likely to receive the justice that was their due.
Under the statism of the Meiji Constitution of 1889, (Kawagishi 2007, 308–31, esp. 315–16) the court system, which might have exerted a measure of supervision over the political and administrative processes qua extensions of the imperial person, was almost exclusively a site for the one-sided application of state power (Takayanagi and Blakemore, in Mehren 1963, 9–10, and Haley 1991, 78). Cases—even those in which the judicial system was called upon to interpret actions of the legislature—were understood to be adjudicated in the emperor’s name. (Kawagishi 2007, 314ff) Checkmated by the ascendancy of Prussian-style conceptions of the relationship between the individual and the state, liberals, natural lawyers, and other non-statists in Japan began to search for ways to involve those of the lower classes more fully in the political process. Suehiro realized that a systematic approach was needed in order to pressure judges to act as individuals, thus forcing a space to open up even within the state’s Code-based legal order for the Ehrlichian “living law” practices of communities whose traditional practices had previously been invisible to the state. And the way to do that was to continually adapt statutory law to social realities by means of case law.
In particular, Suehiro attempted to develop, within the existing court system, an entirely new strategy for adjudicating cases, along with an entirely new body of case law as a result. By introducing the case method, Suehiro hoped to make visible to the courts the classes excluded from the judicial process, and also to make judges—and, ultimately, the political network as a whole—more responsive to those classes. Using Ehrlich’s work on the law-and-society movement as a guide, Suehiro established the Civil Code Caselaw Research Group (Minpō hanrei kenkyūkai) at the University of Tokyo in 1921. In volume after volume of case-law reports, Suehiro and his university acolytes pounded away at the status quo in the Japanese courts, revealing again and again—by dint of a simple investigation of the facts of a given case—that most supreme court (Daishin’in) judges could not possibly have sought to administer justice to those who appeared before their bench. Almost universally ignorant of the particularities of a given suit or case, the judge, as Suehiro and his research group showed, was most likely to have glanced at a brief summary of the case, applied some abstract tenet of the Civil Code, and then declared the case to be closed and the matter resolved. By publishing their case-law reports, Suehiro and his team exposed the travesties of Code-based justice, thereby applying intense social pressure on judges to act more equitably in making their decisions.
Suehiro saw “the security of the law” (Rechtssicherheit, hōteki anzen) as an important guarantee of autonomy for local Gemeinschaften:
It is a certainty that those who hold law to form a perennially perfect Geschlossenheit [cohesive unity] will, of course, deny that legal decisions have the power to create law. […] The first and most important point we stress in the study of caselaw is not about how a court understands a phrase in a law text in an abstract, scholarly way. Nor is it the formal logic apparent in a decision, nor is it simply the conclusion itself. Judges are people who, when faced with the concrete details of a case, engage, unconsciously, in a complex set of behaviors that goes beyond formal logic and rigid reasoning. The essential point of the study of caselaw is to attempt to arrive at a thoroughgoing, concrete legal security, Rechtssicherheit, by discerning fixed principles from within that set of behaviors.Minpō Hanrei Kenkyūkai (1922, 1877). Cf., e.g., Ernest Gellner’s geschlossener Handelstaat, or “autarchic modern state,” in Gellner (1983, 107).
This security of the law, bought by pushing back against the state in an ongoing, low-level dialectic via the medium of the caselaw, was to be a key transitional strategy in Suehiro’s legal-pluralist anarchical scheme.
In Suehiro’s case, however, the absence of underlying legal principles and of a clear anti-statist teleology eventually left him scrambling for the security, not of the law, but of the state, when the political order around him began to break down. As Japan entered a phase of autarky during its high-imperial expansion into Asia and the Pacific, the state gradually expanded to conquer even internal epistemes, such as legal studies, and co-opt formerly non-state and anti-state actors into the imperial project. The state became the nation, and the nation became the state. In this milieu, Suehiro proved helpless to resist state power. Proclaiming the rendering of jurisprudence as a scientific pursuit, with statistical data to be used in both legislation and interpretation of laws, Suehiro proposed strengthening the command economy by carrying out surveys of places that had recently come under the control of the Japanese Empire.Ishida Makoto, in Rokumoto (2004, 170), citing Suehiro (1941, 61–62).
For example, in the October, 1938 issue of Hōritsu Jihō, Suehiro laid out the justifications for surveys of North China, noting that:
Henceforth, the most important thing that we can do for the sake of Japan’s political contact with the Chinese masses is first to learn what legal customs are current among those masses. […] The most important preparation that we can make is to respect those [legal customs] and to continue using them, thus regulating our relations with them [i.e., the Chinese]. […] Even if, for instance, we refuse to do this on the grounds that this kind of survey would have no political value, it would still have a tremendous scholarly significance to do this kind of large-scale survey of the legal customs current among the Chinese masses, as such a survey should have been carried out before but so far has not sufficiently been undertaken. (Suehiro 1938, 2–3)
The order of the justifications is significant. As legal history scholar Ishida Makoto argues:
It is noteworthy here that [Suehiro’s] emphasis on the political significance of the surveys comes before [his emphasis on] their scholarly significance. From the very beginning, Suehiro called for this survey with a clearly political intention to contribute to the control of occupied territory in the aftermath of the start of the Second Sino-Japanese War.Ishida, in Rokumoto (2004, 170–71), citing Suehiro (1938, 2–3). See also Suehiro, “Hōritsu to kanshū: Nihon hōri tankyū no hōhō ni kansuru hito kōsatsu,” in Chūgoku nōson kankō chōsa kankōkai (1955, 25–32); quotes taken from 27.
The earlier, Ehrlichian Suehiro would have couched seeking out the “social facts of law” (Rechtstatsachen) as they prevailed among a non-state setting.See Coutu (2009, 593). However, the Suehiro of 1938 foregrounded the fact that one of his express goals in proposing, organizing, and completing the survey was to aid in the Japanese government’s administration of recently-conquered Chinese territory.
In the introduction to a work on his 1930s and 40s China surveys, Suehiro wrote:
Of course, neither economic nor social laws are absolutes. In whatever way, the dictates of political disingenuousness stand to change [these laws] quite extensively. This goes without saying. Nevertheless, we must very severely admonish [those who would] fall into the way of thinking which ignores completely the authority of [economic and social] laws, and hold that political power should be given free rein to shape everything. While I think that, in order to prevent the damage that would result [from such an approach], we must make preliminary efforts to separate and set in opposition the state, which is the symbol of political power, and society, which is the symbol of social laws, I also think that the scientific method is the most suitable for studying the state, politics, and law. (Chūgoku nōson kankō chōsa 1955, 25–32; quotes taken from 31)
The scientific method notwithstanding, Suehiro wrote these words as an introduction to a report on surveys carried out for the more efficient administration of areas of China conquered by the Japanese Imperial Army.
IV. CONCLUSION The failure of Suehiro to build up communities apart from the state and to continue to attack the state incrementally using case law led to his identification with the state and the end of his original, Ehrlichian anti-statist program. Likewise, Pashukanis was executed by the state for naively claiming that the state would eventually wither away with the ascendancy of Marxist ideology. In light of these historical realities, I propose a blending of the insights afforded by Suehiro, Pashukanis, Ehrlich, and Sewell in order to outline a general program for establishing communities as independent as possible from state authority, while also voluntarily interacting with the state in order incrementally to attenuate that authority, acting as a constant corrosive against the self-aggrandizement of the state’s leaders and agents.
First, as William Sewell’s insights into structures and events make clear, the state is a given and is not going to disappear by force. If anything, force used against the state only makes the state stronger. As Evgeny Pashukanis learned, even those who do nothing more than write books about the state’s disappearance are often deemed a threat to the state’s monopoly of violence.
But, second, the state can be ignored, at least to some extent. Amish communities and American Indian tribes, along with monasteries and other non-statist Gemeinschaften, are witness to the fact that isolation from the state often affords more autonomy than does openly challenging the state or theorizing its dissolution.
Third, an Ehrlichian legal order unique to a given community and evolving from within it, such as the English Common Law or Germanic tribal law did, is a virtually ready-made way to ensure stability in an anarchical community. Jury trials are the best way to ensure that law does not become tyranny over society. Furthermore, state courts should, and can, be avoided at all costs in order to maintain Gemeinschaflich autonomy as far as possible.
Fourth, when it becomes necessary to interact with state courts, a case-law method is best. Case law forces judges to think using synderesis and not statist ideology, prying them away from their Code-based justifications and entangling them in the limiting skeins of the natural law. As a bonus to case law, each case becomes precedent that, ideally, incrementally undermines Code law, thus attenuating the power of the state while also injecting more of the “living law” into the jurisprudential corpus of a given state.
The state is a threat to the freedom of people everywhere. John Hasnas has rightly argued that anarchy is “obvious” and that our human communities and daily lives do not require the state. Indeed, the state, in any form, is not only deleterious to human freedom but positively hostile to human life and incompatible with human flourishing. Rome will not be un-built in a day. It will take patience, planning, and no small degree of wiliness. But it can be done. Taken as a set, the examples I offer here show us how the state can be taken on and, eventually, made to wither away.
ABSTRACT: I will first offer a general understanding of the flavor of libertarianism I will be using as the foundation for my argument for open borders. Then, I will summarize the argument put forth by Joseph Carens (1987) which consummates the importance of open border policy in maintaining the efficacy of property rights. After, I will supplement an additional argument to Carens’s in order to strengthen it. In this section, I will interpret Robert Nozick’s Anarchy, State, and Utopia (1974) such that it informs the importance of the enforcement of a right of free movement, and I will furthermore detail how border restrictions directly violate that right. In the final section of this paper, I will address criticisms made both by libertarian and liberal thinkers against the enforcement of a right of free movement. One of the liberal criticisms, in particular, will serve as a jumping-off point for a conversation highlighting the ways in which libertarian arguments for open borders differ from liberal arguments for open borders. These differences, I contend, illuminate how disparate these philosophical traditions are, especially in the manner that they conceive of rights.
Connor K. Kianpour (ckianpour1@gsu.edu) is a student in the Department of Philosophy at Georgia State University. The author would like to thank Dr. Robert S. Taylor in the Department of Political Science at the University of California, Davis for help in making this paper what it is; he is indebted to his generosity, open-mindedness, and endless encouragement (it is not often that a student is encouraged to pursue his interest in libertarianism). The author is also grateful to have had very helpful comments on an earlier draft of this paper from two anonymous referees who sincerely appreciated this approach to the immigration problem.
INTRODUCTION For human beings, life is rendered a futile venture when the ability to pursue our highest-order interests is not safeguarded by the governments that claim to protect us. Such was the case for the Jews whose lives were lost during the Holocaust and the Japanese-Americans who fell victim to internment. These afflicted peoples were effectively made means to the ends of flagrantly criminal governments. I would argue that such reprehensible practices existed long before those unfathomable historical moments and still persist to this day in the form of the enforcement of border restrictions. Those individuals who yearn to immigrate for better life prospects are essentially denied their humanity when they are turned away at borders in ways comparable to the plights of the Jews and the Japanese. I understand that this is a bold claim to make since many reasonable individuals maintain that border restrictions are not only useful but necessary to the advancement of those very rights which I claim they violate.
Some endorse border restrictions because they affirm the associational rights of nations (Wellman 2008, 110–11), while others do so by calling upon utilitarian principles (Miller 2005). Needless to say, individuals justify these beliefs because it is thought that border restrictions are in the best interest of those citizens whose country is potentially subject to permeation by immigrants. However, a strong case can be made for the importance of open borders in best serving the interests of both alien and citizen. Some use John Rawls’s (1999) original position to exemplify the ways in which open borders advantage those least well-off members of global society (Carens 1987, 255–62), some use a principle of humanity to denounce the act of turning the disadvantaged away at the border (Kukathas 2005, 207–20), and some even invoke those same utilitarian principles used by advocates of border restrictions to justify the existence of open borders (Carens 1987, 263–64). This paper, however, will focus on a justification for open borders that is entirely reliant upon libertarian principles.
Libertarianism can best be defined as a philosophy that places fundamental rights ahead of any other mechanism used to determine the permissibility of human action. Thus, a libertarian justification for open borders explains how border restrictions violate the rights of individuals and how open borders protect the rights of individuals. To form a strong libertarian case for open borders is to likewise build an argument which is reliant upon principles alone; rather than arriving at a conclusion which circumstantially justifies open border immigration policy, one would have access to an argument which justifies such a policy under any and every circumstance. It is important to note here that there are libertarian consequentialists who contend that adherence to libertarian values is important because of the favorable consequences it produces (Murray et al. 2005, 31–39). However, I will take for granted that even these libertarians will agree that there is some worth inherent to libertarian principles themselves that make them worthy of moral consideration in a way that is not inherent to mere consequentialism.
Some may find the idea of a libertarian argument for the endorsement of open borders to be self-evident and altogether needless. It seems that an ideology stationed in non-aggression and the inviolability of human rights would necessarily have to extol such a border policy, but some libertarian thinkers have developed arguments that defend border restrictions. John Hospers, for example, argues for the observance of a distinction between absolute and prima facie rights within the libertarian tradition. Furthermore, he posits that border restrictions are consistent with libertarianism because the rights violations that would ensue in the enforcement of a restrictive border policy would only be considered such in the first place under ideal political conditions (Hospers 1998, 153–57). In other words, any rights that would be violated by the enforcement of border restrictions are not inviolable rights but rather rights that could be undermined given certain non-ideal political realities and proper justifications. Other libertarians, like Hans-Hermann Hoppe, have suggested that political societies with substantial amounts of public space have an interest in restricting immigration for the sake of preserving free trade (Hoppe 1998, 221–33). Moreover, he argues that publicly owned territory ought to be understood as expropriated private property belonging to citizens who have the right to exclude or avoid foreigners (Hoppe 1998, 231). Ultimately, it will be the goal of this paper to demonstrate that these ostensibly libertarian arguments fail to reconcile libertarian values with border restrictions.
I will first offer a general understanding of the flavor of libertarianism I will be using as the foundation for my argument for open borders. Then, I will summarize the argument put forth by Joseph Carens (1987) which consummates the importance of open border policy in maintaining the efficacy of property rights. After, I will supplement an additional argument to Carens’s in order to strengthen it. In this section, I will interpret Robert Nozick’s Anarchy, State, and Utopia (1974) such that it informs the importance of the enforcement of a right of free movement and I will furthermore detail how border restrictions directly violate that right. In the final section of this paper, I will address criticisms made both by libertarian and liberal thinkers against the enforcement of a right of free movement. One of the liberal criticisms, in particular, will serve as a jumping-off point for a conversation highlighting the ways in which libertarian arguments for open borders differ from liberal arguments for open borders. These differences, I contend, illuminate how disparate these philosophical traditions are, especially in the manner that they conceive of rights.
I. THE ANATOMY OF LIBERTARIANISM Before developing a libertarian argument for open borders, it is imperative that libertarianism is clearly defined. While those readers who are not persuaded by the libertarian ideology may be particularly interested in a defense of these values, it is not the object of this paper to rationalize the merits of libertarianism. Libertarianism, for the purposes of this paper, is merely a lens through which I will look for the sake of making a compelling case for open borders to a readership which likely endorses a core set of values. Though it is beyond the scope of this paper to offer a comprehensive defense of libertarianism, there have been many libertarian theorists who have propounded compelling arguments for the legitimacy of their adherent philosophy.See Rothbard (2006) and Nozick (1974), for example. That being said, those qualities which tend to distinguish the libertarian tradition from other political philosophical traditions are a reverence for self-ownership, a commitment to non-aggression, and a belief in rights of life, liberty, and property.
Self-ownership entails the right to control one’s own person. Furthermore, libertarians generally recognize that all rational agents are self-owned. This means that individuals may pursue ends that are of interest to them using those attributes over which they exhibit self-ownership, but that others may not interfere with them without their consent. This basic principle can be understood as a uniquely libertarian non-aggression axiom which I will later analyze in greater detail. The concept of self-ownership alone, however, is crucial to understanding the interests which the libertarian philosophy aims to protect. In assuming that rational agents have ownership over themselves in the same way that they may own objects proprietarily, libertarians affirm the normative separateness and inviolability of persons (Vallentyne and van der Vossen 2014). It is important, however, to acknowledge that there are some libertarians who do not cede that individuals have transactional authority over their persons in the ways that a capacious understanding of self-ownership would require.For a libertarian argument against possessing transactional authority over one’s own person, see Kinsella (2003). Suffice it to say, even these libertarians would accept that individuals have a considerable amount of discretion over what they can do with or to their bodies though they may not concede that they have the discretion to sell their bodies. This is because the body of an individual can strongly be understood as theirs. It is in this sense that all libertarians believe in self-ownership.
Self-ownership, and the subsequent affirmation of the separateness of human existences that springs forth from it, ultimately leads to the acceptance of a libertarian side constraint that prohibits aggression against other rational agents (Nozick 1974). This non-aggression axiom, as stated before, is derived from the assertion that individuals are self-owners. Persons who own themselves are necessarily owed non-aggression from other persons; likewise, self-owners are subject to a moral stricture which forbids their enactment of aggression against others. Aggression can best be understood as it is defined by Murray Rothbard: “the initiation of the use or threat of physical violence against the person or property of anyone else” (Rothbard 2006, 27). In this respect, libertarianism uses the concept of self-ownership and the higher interests which it preserves as a means by which to develop a set of enforceable duties that individuals have to one another as moral agents.
The enforceability of these derivative duties is made concrete through the libertarian recognition of property rights. In asserting that individuals own themselves and that this fact engenders a non-aggression axiom, libertarians maintain that they have an enforceable property right in their own person. Having this right can be construed as a right of life on a libertarian understanding of the term. And this property right likewise gives rise to the necessary acceptance of a right of liberty understood in a purely negative sense. Individuals are free to do what they will with those bodies in which they have a property right so long as they do not infringe upon the rights of others in their pursuits. Libertarians, in other words, generally understand individuals to be free only insofar as they are owed non-aggression rather than free in the sense that they are self-masters (Berlin [1958] 1969).
While most libertarians are in agreement about enforceable rights of life and liberty, there is discord within the philosophical tradition regarding the application of a self-owner’s right of property to external objects. Though some libertarians hold that natural resources belong to all individuals in some egalitarian manner, I will be presenting my case for libertarian open borders under the presumption that natural resources can be owned, given that they are acquired justly (Vallentyne and van der Vossen 2014).
To better understand libertarianism, it is helpful to examine it alongside a political tradition which endorses its own specific set of values: liberalism. Liberalism is a political philosophical tradition which is characterized by its commitment to liberty of conscience, equality of opportunity, the role of markets in economic relations, the role of government in providing public economic goods of certain kinds, and the impartial, general administration of the law (Freeman 2001). The liberal tradition is home to thinkers with vastly different conceptions of the good in politics, from classical liberals like John Locke ([1689] 1946) to liberal egalitarians like John Rawls (1999).
On its surface, liberalism seems similar to libertarianism in many ways: liberals and libertarians alike support an individual’s right of free conscience, equality of opportunity––at least, of a certain kind––to participate in public institutions, the role of markets in economic relations, and the impartial, general administration of the law. Some libertarians even believe that the government ought to play a role in providing certain kinds of economic goods to the public, or they at least believe that the government has a legitimate function in preventing individuals from monopolizing the acquisition of certain resources (Nozick 1974). However, I believe that this paper will illuminate the characteristics of libertarianism which distinguish it so markedly from the liberal tradition it is at times conflated with. Through a property rights argument and a freedom of movement argument for open borders, libertarianism’s unique, unwavering commitment to individualism is made evident.
II. THE IMPORTANCE OF PROPERTY RIGHTS The libertarian case which Joseph Carens makes for generally open borders is predicated on the power of strongly enforced individual property rights in determining the nature of movement across borders. Put succinctly, individuals have the fundamental right of voluntarily entering into contractual agreements even if that means contracting with individuals across state borders. If one were to accept this principle, it would necessarily follow that he or she would support the right of an immigrant who engaged in a voluntary transaction with a citizen to live on the property of said citizen given those were the terms of the contract. Therefore, the government has no legitimate interest in obstructing free migration because its doing so would be a direct violation of the associational rights of both alien and citizen (Carens 1987, 253).
The simplicity of this line of argumentation, however, fails to divert criticism of its contentious conclusion. It is for this reason that Carens anticipates two arguments against generally open borders. The first argument is what I shall refer to as “the nationalist argument,” which states that nations do have and ought to have the right to admit and exclude whomever they desire. Carens rightly criticizes this proposition for making an appeal to the existence of collective rights. The majoritarianism inherent to the concept of a collective right, however, poses a direct threat to the individualistic property rights for which libertarians so fervently advocate (Carens 1987, 252).
It is through the assertion of collective rights that individual rights are ultimately undermined. A collective right to safety, for example, comes at the expense of potentially jeopardizing an individual’s right of privacy if its circumvention is intended to promote public safety. Such tradeoffs between collective and individual rights are ultimately inconsistent with the higher aim of protecting the interests of those individuals who constitute the collective in the first place. Moreover, such strong claims about the rights of a nation could potentially legitimize the exercise of a right to expel citizens just as much as it would a right to admit or exclude aliens. If a nation is validated in implementing precautionary measures to enforce some ambiguous right, it is surely then justified in expatriating individuals in an act of self-defense whom it deems are violating its rights. Certainly, such arbitrary authority would undermine not only the autonomy of aliens but of citizens as well. Though evidently faulty, the nationalist argument does complicate our understanding of individual rights when it is presented in a specific way. I will return to this concern in a later section of this paper.
The second argument against open borders which Carens addresses in his paper is what I shall refer to as “the entitlement argument.” The entitlement argument states that the restriction of open immigration may be justified when citizens are hindered in the marketplace because of competition from aliens. This line of reasoning rests on the assumption that citizens are in some way entitled to protection from alien competition in the marketplace (Carens 1987, 253). This could be interpreted as a different formulation of the nationalist argument wherein the collective right called into question is a right of citizens to be guarded against the economic competition of aliens.
Even if the case could be made that such actions protect one’s individual right to protection against competitive disadvantage, Carens makes clear that it would be unreasonable at best to accept that a person has such a right just by virtue of being a citizen. The enforcement of such a right ultimately requires the contravention of a right which is even more fundamental. Though the features and extents of this right are outlined in greater detail in the next section of this paper, it is important to note that what is being called into question here is a right of free movement. One ought not condone the exercise of arbitrary rights that encroach on rights stationed in higher human interests because the capacity to act with respect to these interests is integral to the human condition. Carens notes that even contemporaries like Nozick make a point of explicitly denying the existence of such a right, and ultimately uses his reading of Nozick to conclude that the state has no right to exclude aliens. This conclusion is reached appealing solely to the importance of property rights in libertarian philosophy.
A strong emphasis on property rights, however, does not encompass all of the relevant libertarian motivations for open borders. The emphasis this type of argument places is on the burdens placed upon a citizen of a country who wishes to invite a foreigner onto his property. It fails, however, to make clear the ways in which the foreigner is wronged by border restrictions. While Carens aptly constructs a libertarian, property rights argument for open borders using Nozick’s Anarchy, State, and Utopia, he ultimately fails to conduct a reading on the text which yields a crucial component of the libertarian justification for open borders: freedom of movement as a fundamental human right.
III. NOZICKIAN FREE MOVEMENT Although the property rights argument for open borders is fairly strong on its own in addressing the ways that open border policy protects the associational rights of citizens, I propose that Carens overlooks a crucial supplementary argument that would strengthen his case for open borders. While a property rights argument brings to bear primarily the interests of the citizen, a supplementary freedom of movement argument offers a more complete justification for open borders which underscores the fundamental rights of aliens. In order to clearly interpret Nozick’s work as an affirmation of the fundamental right of freedom of movement, it is essential to look to his utopian model.
The utopian model is a thought experiment designed to generate a theoretical utopian framework which accounts for varied interests and values across individuals. In the model, individuals are allowed to conceive of worlds that reflect their values and desires with the exception that any imagined person in that world has the agency to stay where they have been imagined or to leave and imagine their own world. These imagined persons would likewise have certain constraints placed upon the ways they can be imagined––namely, they could not be imagined such that it would logically follow that they would want to live in a given world or with certain kinds of people. Ideally, individuals would imagine worlds and emigrate to others until every person found themselves in a community which best represented their observed values (Nozick 1974, 300–03). In this way, Nozick endows all individuals in his thought experiment with rights of imagining and emigration for the sake of self-determination.
Through the construction of his utopian model, Nozick illustrates how freedom of movement is integral to affirming an individual’s right to make choices with his or her life. These individuals, however, cannot act in such a way that their choices would infringe upon the rights of others (Nozick 1974, 27). Because the idea of choice in the utopian model is so inextricably tied to an individual’s ability to exist or not exist within certain boundaries, it is therefore implied that freedom of movement is essential to the endorsement of free choice. Without the ability to freely move from one given world to another, the individuals in Nozick’s utopian model would lack the power to establish themselves in worlds of their choosing with others who endorse values similar to their own. Likewise, aliens who are unable to move freely across borders are unable to determine for themselves what type of society represents their interests most fully because they are constrained by the limits of nations with governments that unilaterally control the openness (or lack thereof) of their borders.
This is not to say that an alien has an absolute right to freedom of movement on the common understanding of the word absolute, however. If an alien has a fundamental right of free movement, it does not necessarily follow that the alien’s rights supersede the property rights of citizens. That would be the moral equivalent of asserting that a pagan’s right of freedom of religion overrules the right of life of that individual whom they wish to sacrifice for their gods. An alien may move freely only insofar as their movement does not infringe upon the rights of anyone else. In this respect, the right of free movement is not absolutist in the ordinary sense of the word, but it is absolutist* which henceforth shall be understood as absolutist with the singular moral side constraint of being obligated not to violate the rights of others placed upon the general concept.
One may claim, however, that there are relevant distinctions between the endowment of these absolute* rights in imaginary individuals who can create and emigrate from worlds at will in Nozick’s theoretical model and in real human beings under non-ideal conditions. And it may, furthermore, be the case that these distinctions complicate our understanding of free movement as a fundamental right. The ways in which the utopian model differs from the model projected onto the world as we know it are as follows:
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In the utopian model, there are always enough people to live in non-exploitative communities because imaginers can will as many individuals as they see fit into existence while, clearly, this is not the case in the real world.
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In the utopian model, communities affect one another only insofar as they draw members from each other whereas in the real world, communities may engage in commerce or war.
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In the utopian model, there are not information costs involved in knowing what communities exist beyond the confines of the most immediate one, but this is the case in the real world; and the possibility of communities restricting information about the outside world is a distinct one in the real world (Nozick 1974, 307–08).
The first distinction, in fact, serves as grounds for stronger justification for the enforcement of free movement across borders. If it is not possible to will people into existence until a substantial number of them espouse the values on which you would found a community, you should be at liberty to move (given you have the resources to do so) until you are able to establish yourself within a community most reflective of your ideals. To deny one’s ability to pursue such an end without jeopardizing the liberties of others is an affront to both liberty and humanity.
The second distinction also highlights the importance of free movement in allowing individuals to realize their desired ends. If it is the case that war can befall your nation, should it not just as obviously be the case that you should have the ability to exercise your right to flee to a nation that is not war-torn if the lives of you and your family members are in peril? If a human being is denied the enforcement of this right, there ought to be a substantial justification for it. Few, however, seem compelling enough. The right of self-defense seems to be a relatively uncontroversial right insofar as one accepts that humans are entitled to retaliate against those who threaten their life, liberty, or property. Yet it suddenly becomes contentious once the defense manifests in the form of deserting oppressive political circumstances. Some have even contended that prohibiting the needy from crossing borders to justly obtain necessities for life is tantamount to premeditated murder (Huemer 2010, 431–32). Fleeing from one country to another is sometimes the only means by which an individual is able to stay alive when the country in which he or she lives is systematically threatening the protection of fundamental human rights. There are arguments made in favor of restricting free migration even in such circumstances, but I will address their faults in the next section of this paper.
Lastly, the third distinction between the utopian model and the framework as projected onto the real world does not have any implications regarding the restriction of one’s right of freedom of movement. Rather, it calls into question the extent to which governments have a legitimate role in ensuring that certain material conditions are met for individuals to adequately exercise this right. Does the state, for instance, have a legitimate interest in making sure that children are aware of communities external to their own so they can make informed choices about whether or not they want to remain in the communities they were born into? While this question is a most intriguing one, it is not the concern of this particular paper.Kukathas (2003) and Barry (2001) outline their views on these and related issues.
Thus, it is the case that Nozick’s theoretical framework can be interpreted such that individuals are endowed with an absolute* right of free movement and it is subsequently the case that any differences between the theoretical framework and the actualized framework only serve to strengthen the cause for surety of this right. But a close examination of Nozick’s argument for how the utopian model projected onto the world yields utopian society gives even more insight into the fundamental nature of this right and how its affirmation is correspondingly an affirmation of human worth.
Nozick opens his argument for the legitimacy of his particular utopian theory by criticizing the weaknesses of utopian theory generally understood. First, he underscores the tendency of utopian thinkers to assume that there is one best world for all people regardless of their differences. Utopian thinkers do not typically imagine that all members of society would engage in the same activities and make the same choices at all times, so why is it then that there is only one best composite world which is generally advocated for? Since human beings differ so greatly in their interests, values, and consciences, it seems that their environments should reflect those variations too. Nozick also notes that utopians tend to evade the problem of implementation, meaning that they do not intimate those details necessary to understanding how utopia would be realized. Would the initiation of force be a requirement for the development of a utopian infrastructure? Would individuals have to be inculcated with a set of perfectionist values in order to be receptive to a utopian solution to the world’s problems? Would individuals choose, of their own volition, one singular conception of utopia? Assuming that one vision of the world is the correct one, it is important to explain how the world as it is currently will become the world as it should be (Nozick 1974, 310).
Nozick’s utopian model projected onto the real world, however, resolves both of these problems characteristic of utopian theory. By describing the perfect world as that world which allows for individuals to determine their unique plans of life, the issue of imposing one schema onto varied individuals is bypassed. There is no schema but that which allows for each human being to forge a way of life for themselves. And if it is the case that there is, on the off-chance, one morally superior arrangement it is because an individual is free to move that the utopian vision would be realized. Individuals would design and filter (Nozick 1974, 312–17) through the various communities until eventually there would be one which appealed to every person. Though this is not necessarily the aim of Nozick’s utopian model, it certainly is a feature built into it which solves the problem of implementation that has harrowed utopian theory (Nozick 1974, 328).
Were it not for his reverence for free movement, Nozick would be unable to construct a position that corrected those problems which typified the flawed utopian theory. The existence of a certain community––be it an association, organization, or state––rests entirely upon an individual’s voluntary choice to submit to its rules and regulations. The assertion of one’s existence within a society is, in this way, comparable to currency which pays into the development of one particular image of utopia. His belonging to one group rather than another signals to others all that is right with the group to which he belongs and all that is wrong with the groups to which he does not. It is by having the freedom to move, and by extension the freedom to shape plans of life, that utopia is possible. To refuse the enforcement of such a right is to erode the efficacy of our rights of life, liberty, and property. When viewed in congruence with the property rights argument for open borders offered by Carens, the freedom of movement argument extrapolated from Nozick’s text corroborates the marriage between libertarianism and open border policy.
IV. THE INEFFICACY OF BORDER RESTRICTIONS Now that we have supplemented Carens’s original reading of Nozick that justifies open borders on the basis of property rights with a reading of Nozick that justifies open borders on the basis of free movement, it is important to consider the arguments made against a right of freedom of movement. First, I will anticipate and address arguments that have been made in favor of border restrictions by libertarians. I will focus specifically on arguments advanced by John Hospers (1998) and Hans-Hermann Hoppe (1998). Then, I will address three liberal arguments proffered by David Miller (2005) in his “Immigration: The Case for Limits” against an enforcement of the right of free movement. The last of his arguments will serve as a point of clarification between liberalism and libertarianism. Understanding this difference, I contend, is central to understanding the modus operandi of libertarianism.
John Hospers grounds his criticism of enforcing a right of free movement in the claim that some rights are absolute while others are generally accepted until proven injurious (1998, 153–57). He would suggest that a right of free movement would fall into the latter category and would defend libertarian border restrictions on the grounds that a right of free movement is merely a prima facie right. This is a highly contentious claim, especially to those working within the libertarian philosophical tradition. Even if it were the case that there could be such a distinction made between kinds of rights, it would not be the case that a right of free movement would fall into the latter category by virtue of the superlative human interests which it demonstrably protects. As I indicated earlier, an individual’s right to move freely may be the difference between life and death. Beyond that, free movement is a means by which individuals can affirm their first principles and be surrounded by those that will support them in the realization of their plans of life. Because of this, libertarian thinkers like Hospers would need to justify the violation not only of prima facie rights but also of fundamental rights that protect the highest-order human interests of life and life plan revision. A libertarian who accepts the doctrines of self-ownership, non-aggression, and the inviolability of fundamental rights (as most self-proclaimed libertarians do) would likely have no such justification.
Hans-Hermann Hoppe (1998), on the other hand, offers arguments against the enforcement of a right of free movement that are more substantive and interesting to consider. It is important to mention that he does make arguments about the ways that open borders may adversely affect national security which I believe are worth mentioning in passing, though I do not find them worth addressing at length. I will not examine these kinds of arguments for two reasons. Firstly, they rest on empirical assumptions that are contestable.Those interested in perusing literature that questions the previously unquestioned relationship between immigration and national security should see Nowrasteh (2019). Secondly, this paper is concerned with making a case for open borders using libertarian––not utilitarian––arguments. The arguments made by libertarians for border restrictions which are of interest to me are those that engage uniquely libertarian intuitions. I wish to show how these types of arguments do not succeed in enshrining libertarian values.
Hoppe ultimately argues against the widely-held libertarian belief that free markets require open borders. He suggests, in fact, that the only way to ensure that markets are free is by restricting immigration. This is because the relationship between trade and immigration is one of elastic substitutability, meaning that having more of one requires less of the other. Hoppe points out that, ceteris paribus, businesses relocate to low-wage areas and labor moves to high-wage areas. Since national borders tend to separate low-wage areas from high-wage areas, and high-wage areas are presently engaging in welfare statism on the domestic front and protectionism against low-wage areas internationally, immigration poses a threat to the rights interests of those in nations considered to be high-wage areas. This is because immigration, unlike free trade, involves the “invasion” of citizens by aliens. The following quote is illustrative of the sense in which Hoppe believes free trade and immigration are necessarily distinct:
…with respect to the movement of people, the… government will have to do more in order to fulfill its protective function than merely permit events to take their own course, because people, unlike products, possess a will and can migrate. Accordingly, population movements, unlike product shipments, are not per se mutually beneficial events because they are not always—necessarily and invariably—the result of an agreement between a specific receiver and sender. There can be shipments (immigrants) without willing domestic recipients. In this case, immigrants are foreign invaders, and immigration represents an act of invasion. Surely, a government’s basic protective function includes the prevention of foreign invasions and the expulsion of foreign invaders. Just as surely then, in order to do so and subject immigrants to the same requirement as imports (of having been invited by domestic residents), this government cannot rightfully allow the kind of free immigration advocated by most free traders (1998, 221–27).
It may be, however, that the kind of free immigration required by libertarian commitments is not the kind “advocated by most free traders.” Here, I would like to reiterate that freedom of movement, for our purposes, is not an absolute right but rather an absolute* right. When examined closely, this side constraint precludes the very “openness” that is intuitive to a general understanding of open border policy in terms of libertarianism. It is possible to conceive of a libertarian society where geographically contiguous individuals decide to forbid the entry of foreigners on their private property owned in common. Furthermore, it is conceivable that these individuals could make use of restrictive covenants that would ensure that whoever inherits these properties in futurity would not be allowed to permit foreigners on said private property owned in common. The fundamental difference between this aforementioned society and a society that enforces border restrictions publicly, however, is the voluntarism inherent in the creation of the former society. The ability to act voluntarily, even in an arguably discriminatory manner, is an indispensable human interest because it sanctifies choice and empowers individuals to forge unique life plans. A libertarian is therefore not ideologically committed to unrestricted, free movement. They are only committed to unrestricted, free movement when it is challenged by the authority of a state that claims to be exercising its dominion over individuals regardless of the interests of all those implicated.
Therefore, the argument put forth in this paper evades the force of Hoppe’s criticism of open borders. Hoppe himself concedes that the need for border restrictions entailed by his theorization becomes less urgent as the amount of public property in a nation is reduced. This is because the invasion problem associated with immigration would be dealt with via the corrective measure of enforcing private ownership rights and respecting the ability of property owners to exclude (and admit) aliens and citizens alike from their property (Hoppe 1998, 231). It is natural to wonder at this point whether citizens would be able to exclude aliens from public property. While Hoppe would contend that they can because they are de facto owners of public property as taxpaying members of the domestic public, other libertarians do not advance this position (Hoppe 2002, 75–97). Walter Block and Gene Callahan (2003) suggest that aliens occupying public spaces are homesteading property that is under the illegitimate control of government. If a libertarian enshrines the importance of private property rights (as Hoppe himself does), he must also necessarily commit himself to the illegitimacy of collectively-owned public property. The only reason to treat public property as the property of taxpaying members of the domestic public would be to preserve order in said public spaces, but this is not sufficient grounds for overriding an individual’s fundamental right of free movement. If anything, Hoppe’s view merely commits him to significantly reducing the amount of public property while respecting individuals’ absolute* right of free movement, which is a view to which the present paper is highly amenable.
Now that we have examined libertarian criticisms of the enforcement of a right of free movement, we will turn to liberal criticisms made by David Miller (2005) to clarify what it is that makes libertarianism distinct as a political philosophy. The way that Miller addresses rights, however, is quite foreign from a libertarian perspective. In the libertarian tradition, rights are not enforced because of their instrumental value or because there is a body politic which grants them to its subject population. Rather, libertarians believe rights ought to be enforced because they demand enforcement in and of themselves. Miller makes arguments for why freedom of movement should not be treated as a right, but for the purposes of this paper I shall interpret his arguments as reasons for which the right of freedom of movement ought not be enforced. This is because, even within the libertarian tradition, there are compelling arguments against the enforcement of a certain right when exercised in a particular manner.
In general, libertarians would agree that freedom of speech is a fundamental right that ought not be undermined even when the speech articulated is highly controversial and vastly unpopular. However, a case consistent with libertarian principles can be made against the enforcement of this right when the speech is used to clearly and presently pose a danger to the life, liberty, or property of an individual or group of individuals. Similarly, it might be the case that a right of free movement exists but that there are compelling circumstances under which its restriction may be warranted consistent with libertarian principles. I shall argue in this section that there is a fundamental problem with the liberal arguments made against the enforcement of a right of free movement when examining them with libertarian principles, but that these failings ultimately illuminate a distinct and central feature of the principles used to unearth them.
The first argument against the enforcement of a right of free movement is what I shall refer to as “the population control argument.” Miller essentially posits that there are two levels at which population size affects the world: the global and national levels. At the global level, the carrying capacity of the Earth may be reached if the population grows without restraint. Miller suggests that, “In such a world it is in all our interests that states whose populations are growing should adopt birth control measures and other policies to restrict the rate of growth” (Miller 2005, 201). He argues that states would not have the incentive to adopt such measures if it was convenient for them to dispose of the population posing a threat to their overall population by encouraging international migration. At the national level, high population density may adversely affect a citizen population by altering its way of life in a fundamental manner. The more people there are in a given state, the less space there is for individuals to enjoy. Moreover, mobility, ecological welfare, and consumption levels would be affected to varying degrees if nations were unable to restrict immigration (Miller 2005, 202).
Needless to say, Miller overlooks the importance of rights considerations when championing particular policies, as he invokes mere consequentialism when he asserts that states with growing populations ought to legislate birth control measures to constrain unstable population sizes. If it is possible to justify birth control measures on the basis of population stability for the common good, would it be possible to justify forcible organ-harvesting on those very same grounds? Effecting birth control measures may compromise the bodily autonomy of individuals who wish to use their bodies to instantiate child-rearing in a manner tantamount to the forcible harvesting of non-vital organs like kidneys, lung lobes, testicles, and ovaries. Would there be a justification for forcible organ-harvesting were it the case that the prosperity of 99.9 percent of the population would upsurge exponentially if 0.1 percent of the population were stripped of their non-vital organs? Imagine if you were to fall in the 0.1 percent. Would you feel as though you are being slighted by your government when it robs you of your body for the sake of others you may not even know? If you would, this intuition uncovers the basis for the libertarian’s commitment to the inviolability of certain rights, including the property right one has in their own person. If a single person’s body can be used indiscriminately and non-consensually to the end of some other person’s arbitrary amelioration, it seems that person cannot even call his body his. The same could be said when a single person’s reproductive power can be restrained by the state to the end of some other person’s life prospects.
Therefore, people who revere bodily integrity and life for reasons independent of their mere instrumentality in achieving certain unclear, arbitrary ends do not take seriously the type of argument put forth by Miller with regard to restricting immigration for the sake of stabilizing population size alone. If it were truly the case that states would be discouraged from implementing birth control measures because of an open border policy, one may have even more reason to champion such a policy. Unrestrained population size may very well be preferable to the nature of dystopian policies which aim to control population size by stripping individuals of their reproductive rights and subsequently their bodily autonomy altogether.
The second argument made by Miller against the enforcement of a right of free movement is what I shall refer to as “the cultural continuity argument.” The cultural continuity argument maintains that free migration may threaten the society of a subject nation with unprecedented cultural change. These changes pose a threat of such gravity that they warrant the implementation of border restrictions in order to prevent them. Miller posits that all immigration involves both alien and citizen changing and being changed by their respective values. This fact leads him to conclude that members of a society have a vested interest in stabilizing their culture by effectively ensuring cultural continuity within their nation via the restriction of movement of aliens across borders (Miller 2005, 199–200). In his paper, Miller calls to mind the interest that individuals have in preserving a national linguistic identity and how restricting immigration aids in maintaining cultural continuity with respect to language. Without having a legitimate claim to the formation of culture and those aspects which constitute it, citizens of a certain society would not be able to preserve their language, which is likewise one of their most important distinguishing characteristics (Miller 2005, 200).
The first criticism which I shall levy against Miller’s cultural continuity argument is founded on the pragmatic flaws of the argument, while the second criticism is more concerned with its underlying principles. Pragmatically, there is an issue with the claim that restricting free movement is a manifestation of a collective interest in cultural continuity because radical cultural change can occur in spite of such restrictions. Miller’s specific fixation on language preservation calls to mind the malleable qualities of language which subject the spontaneous order to the whims of ever-changing colloquialisms. If the preservation of a cultural feature such as language serves as an interest which may require the subversion of a human right, is it possible to conceive of a polity which would justify an extreme form of cultural isolationism that is characterized by governmental barriers being put in place to restrict the communication of individuals across borders via technology? And if so, is it at all practical to believe that any government would be able to imprison its citizens in a way such that language undergoes no crucial alteration? Even when in isolation, it is conceivable to imagine that the communities within a nation would develop linguistic differences that could potentially lead to misunderstandings between national subgroups. While Miller takes great care to underscore the fact that his argument is not meant to be interpreted as an argument against cultural change of any kind but as an argument for cultural continuity of a certain kind, he fails to acknowledge that even within a nation at one given time there can be and often are culturally disparate communities and continuity is not possible when values and customs are inherently at odds.
Regardless, even if it were possible to restrict free movement such that a kind of cultural continuity is achieved by a nation, I would argue that there is something fundamentally wrong with Miller’s cultural continuity argument. To assert that an individual has a right to live in a society that is culturally continuous by means of governmental interference is to assert that they have a right to be protected by the government against those things which may pose a threat to cultural continuity. If this is the case, it would be wise to return to Nozick’s argument against a positive right to protection from competitive disadvantage which ultimately serves as a rebuttal against the nationalist argument described in the second section of this paper. However, rather than formulating a right to protection against competitive disadvantage in an economic marketplace, Miller is alluding to the existence of a right to protection against competitive disadvantage in a marketplace of cultural values. However, there is a fundamental right of free movement for all individuals, and the enshrinement of this right is essential to the relevant exercise of other fundamental rights (as demonstrated through the reasoning of the previous section of this paper) in a way that a supposed right to protection against competitive disadvantage is not. Therefore, the enforcement of such a right would abjure the fundamental importance of a right of freedom of movement and is therefore not legitimate.
The last argument which Miller offers against the enforcement of a right of free movement, and arguably his most sophisticated and revealing one, is what I shall refer to as “the sufficiency argument.” The argument essentially highlights the ways in which rights have certain physical extents and how these extents constrain an individual’s right of free movement. While generally individuals should be able to move freely, they cannot move freely about the property of others. Furthermore, individuals cannot move freely such that they neglect traffic laws or any restrictive laws made in the public interest. Miller makes the case that most people would not view these restrictions as violations of fundamental human rights in liberal society and implies that such restrictions are consistent with liberal principles. Though individuals have an enforceable right of freedom of movement, Miller would stress that this right is circumscribed by relevant physical extents and that it ought not be treated as absolute. In short, people in liberal society exercise a sufficient amount of their right of free movement rather than exercising it in an absolute manner. Miller ultimately suggests that this is how it ought to be as well (Miller 2005, 195).
We have already established that libertarians believe not in absolute rights, but in absolute* rights, so the first stipulation of his sufficiency argument is relatively uncontroversial, even for libertarians. The restriction of free movement as it pertains to the regulation of public spaces, however, illuminates a complicated and distinct aspect of libertarianism beyond the scope of the immigration debate. Miller notes that public spaces are often heavily regulated and are consequently characterized by the limits they place on free movement. Examples of these limitations include traffic lights, speed limits, and the hours of operation of public parks (Miller 2005, 195). Within the liberal tradition, it is not uncommon to accept these sorts of restrictions on one’s free movement as necessary to the end of some sort of public order. The restrictions placed upon people within the United States, however, are different than those restrictions placed upon people in the United Kingdom. Take, for instance, the side of the road which Americans drive on and the side of the road which Brits drive on; the rules are different between these two stable liberal democracies, yet it is not the case that people perceive the members of one society as more oppressed than the members of the other, or that the members of either of these societies are oppressed at all.
Within the liberal tradition, rights can very much have the physical extents in public places to which Miller alludes in his paper. This sufficiency argument can also be applied to other rights such as freedom of speech. It is common knowledge that the extent to which an individual’s freedom of speech is protected varies across stable liberal democracies and these variations are not seen as different forms of oppression so much as they are seen as separate manifestations of cultural values. And this is the point at which the libertarian tradition diverges from the liberal tradition by which it seems to be so heavily informed.
While liberal thinkers advocate for restrictions placed upon rights of free speech and free movement in the interest of some common good, libertarians recoil at the prospect of permitting the state’s determination of a sufficient exercise of a given right. In public spaces, it ought not be the case that regulations can be written to restrict the movement of peoples because the right of free movement would lose the force with which it constrains the powers of the state. If it can be rationalized that free movement is not to be treated as an absolute* right but rather as a right that is to be exercised in sufficient quantity, who then would determine the extent of this right? What if it were the case that the state restricted movement in public spaces to an extent where entire groups of people––perhaps racial minorities––were unable to move in a way that was convenient and comfortable to them for the sake of some allegedly higher good? Libertarians would reject that the state could have any such arbitrary authority and would defend the notion that rights could be circumscribed only by the rights of other rational agents.
Some liberal democrats may attempt to avoid the force of Miller’s sufficiency argument by suggesting that the only reason freedom of movement is legitimately restricted in public spaces is that those individuals subject to the strictures which limit free movement are also participants in the liberal democratic system which is restricting them. Aliens who aim to traverse borders that are closed to them, on the other hand, do not participate in the liberal democratic system which subjects them to state coercion (Abizadeh 2008, 45). Ultimately, this line of reasoning would yield the creation of institutions which would most likely enact open border policies because aliens would have a say in the policies which would possibly subject them to state coercion. This line of argumentation, however, fails to acknowledge the severity of a potential outcome of such a system: even despite alien participation in a liberal democratic system, it may still be that they vote for heavily controlled borders.
Regardless of whether or not a majority approves of such a measure, the rights of individuals would still be violated. Individuals are under a moral obligation to abstain from infringing upon the rights of others even if there are circumstances under which a majority expresses a desire to abnegate the rights of certain people. In other words, restricting free movement is not made acceptable when it is done through democratic processes in the same way that forced slavery is not made respectable simply because it is derived from a democratic process. To libertarians, rights are demonstrably primary; to liberals and liberal democrats, they seem to be secondary.
CONCLUSION We are all human beings, whether we were privileged enough to be born into a society which reflects our values or whether we were unfortunate enough to be born into an oppressive society which we seek to escape through migration. And it is by virtue of our humanity that we are all endowed with those rights discussed ad nauseam in this paper: rights of property and free movement. Without these rights, and the enforcement of these rights by a government that actualizes libertarian ideals, it would not be possible for individuals to have the power to make the kinds of choices in life that emblematize freedom. Without an enforceable right of property, individuals would have no claim to the hard-earned fruits of their labor which are integral to the preservation of life and well-being. Without an enforceable right of free movement, individuals would not be able to determine their plans of life meaningfully. Without having these rights enforced, human beings are effectively gridlocked at the whims of pernicious governments that claim to be defending life and liberty while simultaneously eroding both.
While border restrictions seem to be consistent with liberal values to some extent, they are not compatible with libertarian values at all. Even when thinkers working within the liberal tradition attempt to make liberal cases for open borders, they tend to help themselves to property rights arguments and freedom of movement arguments which are inherently libertarian. However, the invocation of these absolute rights directly contradicts the application of the enforcement of other rights in liberal theory. As discussed before, the enforcement of an individual’s right of free speech varies across liberal democracies; yet, it seems that the type of free movement which is advocated for by open-border liberals resembles the type of free movement which is unique to the libertarian philosophy––free movement which is unbounded with the exception that it cannot be used to encroach upon the rights of others (Jones 2019). Why is it the case that liberal arguments can justify the arbitrary circumscription of some fundamental rights such as free speech while concurrently championing a sort of libertarian absolutism for others?
It is because liberals fail to venerate the importance of individual rights in affirming the humanity of an individual. It is through free choice and being allowed to pursue a path of life independent of governmental sanction that individuals can avow a sincere generosity, tolerance, and industriousness. And border restrictions prevent individuals from doing so in the most fundamental way: they deny abject peoples those rights which may allow them to raise themselves out of abjection.
This Murray Rothbard Memorial Lecture, sponsored by Dr. Don Printz, was given at the Austrian Economics Research Conference at the Mises Institute on March 23, 2019. A number of edits have been made for clarity.
I was invited to talk on “how I came to develop my novel anarchistic arguments against the classical liberal and social democratic conceptions of the state, which parallel, but are not based on the views of Murray Rothbard and Hans Herman Hoppe.” Indeed, I am not a longtime participant in your conferences and the Mises Institute. It is relatively late that I got in contact with you. But it was at a moment, when I realized, there is a group, there is a movement whose way of thinking is precisely or let’s say, very close to what I think.
In any event, I feel deeply honored to present this Murray Rothbard Lecture on how I came to these almost same conclusions. The short answer is, because it’s inescapable. And a more extensive answer on how I came to this inescapable result will follow now.
WHAT IS LAW? At the beginning, there was not something like, there is a fundamental problem with the state, or property rights should be supported in a much better way. At the beginning, there was a different and quite simple question: What is law? When I began to study this subject, I didn’t know exactly why. If you choose medicine as the subject of your education, it’s much easier to imagine the topic. But law is something quite abstract and I really wanted to learn what it was. The answers in the first courses were quite disappointing. In the basic studies as well as in later courses for the bar exam I just learned something like a professional craft, but not what this remarkable phenomenon of law is.
A bit later I came closer to the answer of my question, when I spent a year at Harvard Law School with interesting comparisons between our European system of codified law on the one hand and the US and English tradition of the precedent-based common law on the other hand. There I met different ways of thinking about sources of the law and related questions such as whether the law is just there or whether it emerges on special occasions and whether the law needs judges to apply and legislators to produce it. I then deepened these aspects in my habilitation thesis some years later and came to the conclusion that law does not depend on official authorities such as judges, magistrates or legislators, but that the law gives answers even though there are no statutes or no precedents at all, and that the final “source” of law is the conflict at the occasion of which the law is called upon. Or in short, the conflict creates its own legal solution.
That gave a first answer to what law is: Law is a phenomenon that emerges under certain situations. It is not just there as a preexisting body of abstract norms, but it is something, some reaction, some need that appears if there is a conflict to be solved.
Law, that was a further consequence, is somehow a side effect of a world in movement and in change, it is a function of something which is happening. It is a dynamic phenomenon, not a static one. It is a correction of something happening and not a correction of something being.
And thirdly, law depends on being articulated within a conflict of colliding and therefore incompatible interests. I.e., law is something that arrives loudly, which in turn has to do with its dynamic aspect just mentioned. The law is articulated, there are outraged arguments, there may be crying or shouting, there are subjects impacted by the conflict and assuming the role of parties of a legal dispute.
LEGAL PRINCIPLES Now, within this context, parties are relevant only as far as they collide with each other. Any other properties or features of the parties are irrelevant, i.e. no party is of more value than another party. They just collide. And out of just the collision all elements to deal with the case emerge. This quite trivial aspect is nothing less than the principle of Equality before the Law.
Then, only as far as their collision is in contrast with the parties’ subjectivity, you have to deal with law. Otherwise, i.e. if a party agrees with the collision there is no need to consider the legal consequences. This — again quite trivial — aspect shows a further well-known principle of law, i.e., the principle of consent or of contract, or in Latin: volenti non fit iniuria, no injustice is done to the consenting party.
And a third triviality, so to speak, that can be drawn out of the facts of a conflict is that preexisting positions are stronger than later ones. What you already have, such as your body, your personal belongings, the land you stand on etc. become objects of a conflict if somebody else touches or takes or destroys them. What is then being articulated by the previous holder of these objects is nothing but property and the nonaggression principle or again in Latin: neminem laedere, do not hurt anybody.
All these principles are developed out of the conflicts themselves. Historically too, one could say that almost all western legal tradition, not only the common law tradition, the European one as well, have emerged from court cases. The ancient Roman law is primarily court-made law. Even most parts of the famous Corpus Iuris Iustiniani were not state made legislation. They were long time collections of court decisions. And private law in general, even in the European continental system, is court-made law. The many codes in that tradition are derivations out of court decisions, at least until the mid-19th century.
All this means that both theoretically as well as historically, principles of law do not need the state. They just come out of the conflicts at stake and of long traditions of courts handling them. You do not need anybody, namely no state legislator, to make law, you just need people and organizations that find it, such as judges, courts, or mediators. This was especially interesting for me as a civil law lawyer accustomed to look first for answers in the state made code. In any event this brought me close to anarchism, even though I did not say yet the State is illegitimate. That came later.
It came when I thought that those principles of Equality before the Law, of Consent and of Nonaggression should be applied to the state as well, and then realized that the state violates these principles in an almost excessive way:
EQUALITY OF LAW According to the lex, rex slogan, formulated in the Scottish enlightenment by Samuel Rutherford, the king or the state should be subject to law. This is what we call today the “Rule of Law”, i.e. that the state should not act arbitrarily but according to legal rules. And in fact, if you look at the formalities of today’s state behavior you see that the state — usually — corroborates his activities with paragraphs of statutes, ordinances, guidelines etc. The problem, however, is that all these laws are made by the state itself. I.e., the law that should guide and control the state is made by itself!
And so, it is no accident, that the state preaches water and drinks wine (as we say), i.e., the state grants broad privileges to itself while he denies them to normal people. The most prominent case is the explicit distinction between private and criminal law on the one hand and public law on the other. Private law for normal people like you and me or private enterprises, and public law for the State itself. In practice this means that the state allows itself to collect taxes even against the will of the taxpayer while the very same behavior made by a citizen, would be punished as a criminal offense, namely theft. And it furthermore means that in case of litigation between the state and a citizen, it is a state paid court that decides on the case, while an analogous dependence of a judge from one party in a private lawsuit would be prohibited. And there are many more examples. There is an institutionalized violation of the principle of equality before the law, a breach of this important principle by the very fundamental structure of our law system.
A next element of the Rule of Law is Separation of Power, in order to prevent the risk of concentration of state power. Traditionally, we distinguish between the legislative power, the executive power and the judicial power which means that these are three different organizations for these three functions. Now are there three organizations? In reality there is just one! The notion “branches of governments” is as accurate as it is treacherous: Three branches of the one and very same tree, a concentration of all three powers to one organization. All three powers are on the same payroll, financed by taxes levied by the one and same state.
DEMOCRACY Now, what about the next principle, the principle of consent we developed from the conflict? Once you scale up this principle from a small-scale contract to society as a whole, you will get to a principle of democracy. Since the state’s field of activity is society as a whole — and if the state respects the principle of consent — then it must grant democracy. In a strict sense of the Greek Demos and Kratein, it is the people who govern themselves. Or in a saying of the French revolution “… that under democracy men are not governed by other men but exclusively by laws, and thus by laws that nobody has made but themselves."
This sounds convincing, but reality is different. Take as an example Switzerland, which is proud of its direct democracy, as opposed to just an indirect, parliamentary one. Here, the figures — on the federal level — show this:
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Direct democracy—in the meaning that people vote on material legislative bills—sometimes takes place indeed, but to an almost negligible extent. It is rather an allusion to democracy, than democracy itself. Much more legislation is rendered by the people’s representatives, i.e. the deputies in the two parliamentary chambers. But this is not a representation such as a power of attorney you can grant along with specific instructions and withdraw again, it is rather something like tutorship by a guardian. Because you share “your” representative with 30,000 other “principals,” you are not allowed to give instructions and you cannot withdraw the power. Therefore, the ratio of representation, beside other quantitative modification, must be divided by 30,000 which leads to a very low rate under indirect democracy. And finally, 74 percent of all legislation is not even rendered by the parliament but by the executive branch, which has nothing to do with democracy at all.
When I realized that all the many state interventions such as taxation, economic regulation etc. are based on virtually no consent of the people themselves, which is a flagrant violation of the principles mentioned before including the Nonaggression Principle, I became even more sympathetic with anarchy. It was clear now that the state is not only unnecessary in order to have legal order, but that it is the pure opposite of lawfulness. In other words, with a state you cannot have a legal order.
MORE KNOWLEDGE ABOUT THE LAW This outcome, in turn, is an exemplary case of the theory mentioned earlier, i.e. that law emerges out of a conflict. The unlawfulness of the state is not just there, it becomes evident only at the many occasions of its interferences with the interests of the people. It is this aggression that creates reactions, argumentations, and hence the counterreaction by the state trying to justify its behavior. Not by accident it refers to principles that are objectively convincing in cases of conflicts, such as equality of law, consent and nonaggression. But since its excuses are false, he turns out to be unlawful, i.e., law forbids its aggression.
In other words, law emerges in case of need and disappears (not when justice is established, but) when unlawfulness is eliminated. Law is the absence of unlawfulness, such as for instance the unlawfulness of the State. Law is essentially negative. It is destructive, but what it destroys is worth being destroyed, namely unlawfulness.
Unfortunately, this does not mean that law is always successful against unlawfulness. Its main adversary is power, and quite often power is stronger than law. So, what about the force of law? How can law have effects on unlawful facts? The answer to this again, has to do with that interrelation between unlawfulness and law: The force of law comes out of the unlawfulness it reacts with. The heavier the unlawfulness, the stronger the reaction by law. Action equals reaction. The law does not need to be put into force. It is a myth that law needs some strong instance that helps enforcing it, such as the State. Law takes place, you do not deed to order it and you cannot escape it. Law is essentially inescapable. Law is what no one can escape from, not you, not me, not the universe, and of course not the state. Law is — and I think this is the answer to my original question — inescapability.
And by the way of law’s inescapability, I became an anarchist.
LUDWIG VON MISES, MURRAY ROTHBARD, AND HANS HOPPE As inescapable as are law and anarchism, as inescapable are Mises, Rothbard and Hoppe.
Ludwig von Mises himself deals in some contexts with inescapability of law, though less of legal laws but of the laws of the market (Mises 1951). He showed how “the discovery of the inescapable interdependence of market phenomena overthrew … [the] opinion of an ideal state. … In the course of social events there prevails a regularity of phenomena to which man must adjust his action if he wishes to succeed.” And what convinced me most: “One must study the laws of human action and social cooperation as the physicist studies the laws of nature.” (Mises [1949] 1998, 2). I think it convinced me more than Mises did himself, since in later writings he seems to be somehow reluctant to follow this point of view.
Murray Rothbard was more important for me, namely because he — unlike Mises — explicitly advocated anarchism. After I had already converted to anarchism myself, I came across a small article entitled “Society Without the State,” some few pages, very precisely written in 1975, by an author, so far unknown to me, called Murray Rothbard. And I read sentences like “The basic point, however, is the legal state is not needed to arrive at legal principles or their elaboration….” and
[I]ndeed, much of the common law, the law merchant, admiralty law, and private law in general, grew up apart from the State, by judges not making the law but finding it on the basis of agreed upon principles derived either from custom or reason. The idea that the State is needed to make law is as much a myth as that the State is needed to supply postal or police service.… (Rothbard [1975] 2016, 283)
That was precisely what I thought too, when I realized that conflicts produce their own solution. That was precisely the reason why the State is not needed. And then, of course, there are these very clear and true sentences: “Thus the State, by its very nature, must violate the generally accepted moral rules, to which most people adhere. … Thus, the State is a coercive criminal organization that subsists by a regularized large-scale system of taxation-theft, and which gets away with it by engineering the support of the majority ….” (Rothbard [1982] 2016). By the way, it is never a majority, it is always a tiny minority, as demonstrated in my chart above.
So much for the inescapability of Murray Rothbard. And finally comes the inescapability of Hans Hermann Hoppe. There is that interesting link from Rothbard to Hans Hoppe: “And yet, remarkably and extraordinarily, Hans Hoppe has proven me wrong. He has done it: He has deduced, an anarcho-Lockean rights ethic from self-evident axioms.” What Rothbard alludes to here is Hoppe’s concept of argumentation. Its ethics are not derived from sources such as natural law, customs etc. but rational consistency, avoidance of self-contradiction. And it seems to me that this approach is quite close to mine, once you accept that rational consistency is always related to some object. There is no meaningful argumentation without an object, no meaningful legal argumentation without a conflict to argue and to fight about. And the other way round, there is no conflict without subjects articulating their respective positions. In other words, the Hoppean Argumentation is part of the phenomenon that conflicts create their own solution, that they provoke arguments and that these arguments help to find a solution for the conflict.
Hans Hoppe’s approach is more on the rational level of how to argue about the conflict, while mine is more on the real level of the conflict as such. We debated these issues on several occasions already, and by this we became good friends, inescapably. Many thanks!
All over the United States, if you are reading this in a daylight hour, there is a ceaseless downpour of new laws. Every day some of us, somewhere, are being encumbered or shackled by still more restrictions. There are just too many laws.
But how do we tell how many laws are too many, and which ones are pernicious?
Let us begin with some elementary considerations. A law may be defined as an edict which either forbids you to do something or compels you to do something. Sometimes, it is true, it may be merely a guiding rule which tells you how to do something, or defines procedures or standards, like weights and measures. But such standard-setting laws are few in number. Most laws are prohibitions or compulsions—in short, commands.
Why are laws necessary? They are necessary, first of all, to prevent people from injuring or aggressing against their neighbors; to prevent theft and fraud, vandalism and violence. On the more positive side, they are necessary to lay down rules of action, so that others may know what to expect of us and we of others, so that we may anticipate each other’s actions, keep out of each other’s way, and work and act so far as possible in cooperation and harmony.
In a modern society, the traffic laws epitomize law in general. When they instruct us to keep on the right side, to drive within a specified speed limit on a given street or highway, to stop at a red light, to signal our intended turns, they may seem to an impatient driver to be restricting his liberty, to be preventing him from getting to his destination in minimum time. But because these restrictions apply to everyone else, they are, if they are well conceived, helping not only him but all of us to get to our multitudinous destinations in the minimum time in which this can be done smoothly and safely.
How many traffic laws do we need? That is a difficult question to answer numerically. A general traffic code need consist only of a few simple rules, but they could all, it would seem, easily be embodied in a single statute. In any case, if the government confined itself to enacting a code of laws simply intended to prevent mutual aggression and to maintain peace and order, it is hard to see how such a code would run into any great number of laws.
England in 1854 Now let us look at the situation we actually face. In order to get an adequate picture, let us begin by comparing it with the situation as it existed more than a century ago in, for example, England. Let us take the year 1854, when the British philosopher Herbert Spencer wrote an essay on “Overlegislation.” Some of us are apt to assume that the mid-nineteenth century in England was perhaps the time and place when a great nation came nearest to a laissez-faire regime. Spencer did not find it so. He found the country buried under needless legislation, and piling up more. With the change of a few details, his essay sounds as if it were written yesterday:
Take up a daily newspaper and you will probably find a leader exposing the corruption, negligence, or mismanagement of some State department. Cast your eye down the next column, and it is not unlikely that you will read proposals for an extension of State supervision. …Thus, while every day chronicles a failure, there every day reappears the belief that it needs but an Act of Parliament and a staff of officers, to effect any end desired.
Spencer went on to refer to mid-nineteenth-century England’s “20,000 statutes, which it assumes all Englishmen to know, and which not one Englishman does know.” He found officialdom systematically slow, stupid, extravagant, unadaptive, and corrupt; and yet given more and more duties to fulfill. Instead of being confined to its primary duty of protecting each individual against others, the State is asked in a hundred ways to protect each individual against himself—“against his own stupidity, his own idleness, his own improvidence, rashness, or other defect.”
“It is in the very nature of things,” he continued, “that an agency employed for two purposes must fulfill both imperfectly.”
… And if an institution undertakes, not two functions, but a score—if a government, whose office it is to defend citizens against aggressors, foreign and domestic, engages also to disseminate Christianity, to administer charity, to teach children their lessons, to adjust prices of food, to inspect coal mines, to regulate railways, to superintend housebuilding, to arrange cab-fares, to look into people’s stink-traps, to vaccinate their children, to send out emigrants, to prescribe hours of labor, to examine lodging-houses, to test the knowledge of mercantile captains, to provide public libraries, to read and authorize dramas, to inspect passenger-ships, to see that small dwellings are supplied with water, to regulate endless things from a banker’s issues down to the boat fares on the Serpentine—is it not manifest that its primary duty must be ill discharged in proportion to the multiplicity of affairs it busies itself with?
Let us now pass over a century and a quarter, and see how our situation today compares with England’s then.
It is the individual states that enact the laws that affect their citizens most often and most intimately in their daily living. A figure averaging the number of laws passed each year in each of the 50 states would be hard to compile on a continuing basis and perhaps mean less than particular examples. Let us take our two most populous states, New York and California. During 1975, 1976, and 1977, the New York state legislature passed, respectively, 870, 966, and 982 public laws. (“Private laws” are not included here, as these individually affect only a handful of people.) During these same three years the California state legislature passed 1280, 1487, and 1261 public laws.
Prohibitions or Rule-Changes Now let us look at the implications of this. What does a new law do? It either puts a new prohibition or a new compulsion on each of us (or a large number of us), or it changes the rules under which we have hitherto been acting. So on the basis of these figures the citizens of individual states are being subjected to an average of about a thousand new prohibitions or rule-changes every year. No one is excused from not knowing what every one of these new laws commands. I leave it to the reader to picture what all this means in terms of human liberty.
But we have not even got to Federal laws. Supposedly, these are only needed to cover such matters as interstate commerce and are subject to severe limitations by the Constitution, so an innocent reader of that document might not see the need for many such laws. Though the Federal books were presumably blank when it started, the First Congress, which began on March 1789, did not see the need for many Federal laws. It enacted only 94.
But then, as more and more laws were piled up, succeeding Congresses were convinced that more and more additional laws were necessary. The 85th Congress, which opened in January 1957, enacted 1,009 laws; the 94th, which began in January 1975, enacted 588. The ten Congresses during that period enacted an average of 735 laws each, which means an average of 367 new Federal laws a year—or one new law every day. The reader should be reminded that individually many of these laws ran to well over 100 pages each.
Congressional Promises The mania for piling up additional laws—new compulsions or prohibitions or changes of the rules—seems to be endemic in our democratic process. Every two years, when a new Congress is chosen, the rival candidates are eager to convince the voters that they can shower more blessings upon them than their respective competitors. “There ought to be a law,” they tell the voters, to forbid this or that, or to give you this or that. “If I am elected, I will introduce a bill”—to guarantee you this or that. So almost every Congressman introduces at least one bill with his name attached to it.
In the 94th Congress, which began in January, 1975, 3,899 bills were introduced in the Senate and 15,863 in the House—an average of 37 bills per member. These are by no means unusual figures. In the 93rd Congress, 4,260 bills were introduced in the Senate and 17,690 bills in the House. It is at least one stroke of luck for the country that only about one in every 30 or more such bills survives to enactment. But the individual Congressman who introduces it has made his point. He has “carried out his promise” to the voters.
It has been estimated that American legislative bodies ranging from city councils to Congress pass 150,000 new laws every year.Newsweek, January 10,1977. This total does not mean too much, because only a small section of the total applies to the residents of any given town or state. But a very meaningful figure would be the total number of live laws that still do apply to American residents of any given city or state.
Since its beginning Congress has enacted more than 40,000 laws. It is a fair assumption that most of these are still operative in some form.
When we come to the individual states we get to some really formidable figures. For Connecticut I am officially informed that: “We do not have information on the ‘live’ laws now on the books, but it is our understanding that there are about 3,500,000 words in the eleven volumes of the General Statutes.”Letter, June 7, 1978, from Agnes L. Kerr, Director, Administrastive-Legislative Division, Office of the Secretary of State, State of Connecticut. The legislative authorities of California regret that so far as the number of “presently operative statutes” of that state are concerned, “no such enumeration is readily obtainable,” though “most (but not all) enactments of the California legislature are codified in one of twenty-eight codes.” And the Department of State of New York informs me that so far as the total of live laws on the state’s books are concerned, “unfortunately, we don’t have the answer to this question.” So far as the “consolidated” (as distinguished from the “unconsolidated”) laws are concerned, however, these can be found in “six volumes covering 891 pages.” No one is allowed to plead ignorance of any of these state laws, of course, if he happens to violate one.
Local Ordinances When we come to the number of town and city ordinances to which each of us is subject, it is difficult to say precisely what would be an average figure. But in Boston, for example, the Building Code alone contains about 500 pages; in addition, the City of Boston code consists of approximately 300 pages of ordinances and 300 pages of statutes. The Administrative Code of New York City consists of ten volumes running to a total of 8,000 pages. There are also 23 thick volumes of ringbinder notebooks containing the rules and regulations of city agencies published since 1967.
But on top of all of these laws—Federal, state, and local—is piled the greatest mountain of all—the endless orders, regulations, and edicts issued by the Federal and state “independent agencies.” There are 89 separate Federal independent agencies listed in the Congressional Directory for 1977. These are in addition to the innumerable commissions, “offices,” “services,” and “administrations” listed under the 12 cabinet departments. As long ago as 1954 the Hoover Commission found that the Federal government embraced no fewer than 2,133 different functioning agencies, bureaus, departments, and divisions. And practically all of them were running “programs.”
It was 10 years ago that Delaware Congressman William V. Roth and his staff made an eight-month statistical study and came up with the finding that “no one, anywhere, knows exactly how many Federal programs there are”—or who is spending how much on what. According to the 1968 Roth study, the Federal government at that time had 1,571 identifiable programs. Questionnaires sent to various agencies drew spotty responses. Inquiries were made as to the purpose of some 478 programs in Health, Education and Welfare; only 21 responded.
In August 1978, Congressman Gene Taylor from Missouri, going through stacks of the Code of Federal Regulations, found that the Code ran to 19,789 pages in 1938, to 20,643 in 1958, to 73,149 in 1976, and calculated it would top 120,000 pages by the end of 1978.
Adding the Costs How can we add up the countless costs, penalties, discouragements, delays, hazards, impediments, obstructions, that these orders place in the way of production and commerce?
Even if we give up the futile attempt to add up the government regulations numerically, we can still point to some of the costs and hardships that they impose on the taxpayer, the motorist, the businessman, the homeowner, the consumer, the worker, the investor, and the nation as a whole. In the July Tax Review of 1978, published by the Tax Foundation of New York, Murray L. Weidenbaum, a former Assistant Secretary of the Treasury, has detailed some of these costs:
• The outlays of 41 regulator agencies are esimated to have increased from $2.2 billion in the fiscal year 1974 to $4.8 billion in fiscal 1979, a growth of 115 percent over the five-year period.
• Federally mandated safety and environmental features increased the price of the average passenger automobile by $666 in 1978.
• There are over 4,400 different Federal forms that the private sector must fill out each year. That takes 143 million man hours. The Federal Paperwork Commission recently estimated that the total costof Federal paperwork imposed on private industry ranges from $25 billion to $32 billion a year, and that “a substantial portion of this cost is unnecessary.”
• Regulatory requirements imposed by Federal, state, and local governments are adding between $1,500 and $2,500 to the cost of a typical new house.
• On the basis of a conservative estimating procedure, the aggregate cost of complying with Federal regulation came to $62.9 billion in 1976, or over $300 for each man, woman, and child in the United States. On the same basis, these costs may have reached $96.7 billion in the fiscal year ending September 30, 1978.
• The minimum-wage law has priced hundreds of thousands of people out of the labor markets. One increase alone has been shown, on the basis of careful research, to have reduced teen-age employment by 225,000.
• Approximately $10 billion of new private capital spending is devoted each year to meeting governmentally-mandated environmental, safety, and similar regulations rather than being invested in profit-making projects. Edward Denison of the Brookings Institution has estimated that in recent years these deflections of private investment from productive uses have resulted in a loss of approximately one-fourth of the potential annual increase in productivity.
• The nation as a whole feels the effect of government regulation in a reduced rate of innovation and in many other ways. The adverse consequences of government intervention in business decision-making range from a slowdown in the availability of new pharmaceutical products to the cancellation of numerous small pension plans.
Congressman Gene Taylor, whose figures on the extent of the Code of Federal Regulations I have previously cited, declares: “The cost imposed on the American economy by federal regulatory activity is now more than $60 billion per year. This serves to drive up the cost of consumer items, harasses small businessmen, fuels inflation, and increases the tax burden on the individual citizen.”
An Ominous Trend Suppose we turn back from our survey of the present enormous power and control now exercised by government, to a look at its growth since 1854 in England when Herbert Spencer was already expressing his alarm at the extent of that control. If the reader will glance down the list of the interferences that Spencer was then deploring, he will see that our own government is still engaged in all of them, or their equivalent (with the exception only of disseminating Christianity and sending out emigrants), but has added literally hundreds more.
In 1977 The Conference Board of New York was referring to some of that year’s economic interventions: price and income controls; limitations on profits; growing representation of workers and government on company boards of directors; statutory wage hikes; credit limitations; foreign exchange and import controls; limitations on foreign ownership; rent controls and subsidies; regulations on land-use planning; environmental, safety, and consumer protection regulations; antitrust laws; direct and indirect taxes; and government ownership. But the list could have been indefinitely extended.
There are two or three ways of trying to measure the size or growth of government quantitatively. One index is the number of people that it wholly or partly supports. In 1940 all American governments, Federal, state, and local, were employing 4,474,000 people. In 1977, the number was 14,624,000. The Federal government alone, in 1978, employed 2,066,000 persons in its armed forces and 1,930,100 in full-time permanent civilian employment. In addition, it was making Social Security payments to some 33 million persons, and the Congressional Budget Office was estimating that about 44 million were receiving some form of welfare aid.
The annual expenditures of the Federal government tell a succinct story. If we take them at ten-year intervals since 1929, we get the following result:
Year Expenditures
1929 $ 3.1 billion1939 $ 8.8 billion1949 $ 38.8 billion1959 $ 92.1 billion1969 $184.5 billion1979 $487.5 billion
If any forecaster had dared to predict in 1929 that 50 years later the Federal government would be spending nearly 160 times as much in dollars in a single year (or 43 times as much in “real” terms), nobody would have believed him. By such a comparison, we have had a 4,200 percent growth in the Federal government since 1929.
A Bewildering Mass of Government Interventions Some readers may object that it is meaningless to complain about the mere number of laws; that we should carefully separate the “good” laws from the “bad,” and deplore only the latter. What this objection overlooks is that the mere multiplication and proliferation of laws is itself a major evil. Every unnecessary law is itself bound to be pernicious. And almost all laws that interfere with the functioning of the free market tend to delay or prevent necessary readjustments in the balance of production and consumption and to have other consequences opposite to those that the framers intended. When the rules of the game are being changed every day, when the totality of laws and regulations reaches the tens of thousands and the hundreds of thousands, the number of legislative blunders must multiply far more than proportionately. How is it possible to talk of retaining our liberties, for example, when collectively we are subjected not only to thousands of prohibitions and compulsions but to daily increasing prohibitions and compulsions?
More than 40 years ago the Swedish economist Gustav Cassell was warning: “The leadership of the state in economic affairs … is necessarily connected with a bewildering mass of governmental interferences of a steadily cumulative nature. The arbitrariness, the mistakes and the inevitable contradictions of such a polity will, as daily experience shows, only strengthen the demand for a more rational coordination of the different measures and, therefore, for unified leadership. For this reason planned economy will always tend to develop into dictatorship.”
Whatever the outcome may be, the future seems ominous. By whatever standard we measure it—the number of laws, the rate at which new ones are enacted, the multiplication of bureaus and agencies, the number of officeholders, pensioners, and relief-recipients the taxpayer is forced to support, the total or relative tax load, the total or per-capita expenditures—there has been an accelerative growth in the size, arbitrary power, and incursion of government, and in the new prohibitions, compulsions, and costs it keeps imposing upon us all.
Ryan McMaken and Tho Bishop join for a discussion on the differences between Congress and state legislatures. Drawing from personal experiences, the two look at the differences in incentives, leadership power, and legislative process, to look at what makes Washington DC so particularly dangerous to liberty.
Presented during the "Law and History" session at the Libertarian Scholars Conference on 28 September 2019, at The King's College in New York City.
JEFF DEIST: Judge Napolitano, it’s great to speak with you.
Some people, even your fans, think you’ve been too hard on Trump on the issue of alleged collusion by his campaign surrounding the 2016 election. A lot of libertarians don’t think collusion or conspiracy ought to be crimes at all.
JUDGE ANDREW NAPOLITANO: Collusion is Rudy Giuliani’s word, which he carefully insinuated into the dialogue. The crime for which the president’s campaign was investigated was conspiracy. Was there an agreement between the Russians and the president’s campaign to violate federal election law by receiving something of value from the Russians? I join with the condemnation of these statutes, but the analysis to which you refer is based upon the law that exists, not the law I wish it to be. If it were up to me, there would be no such thing as conspiracy crimes because they are thought crimes and word crimes. But, at the present time in our history and in fact, for all of our history, regrettably, an agreement to commit a felony, agreement by two or more people or two or more entities to commit a felony and a step in furtherance of that agreement, constitutes an independent crime. That’s what the president was investigated for. The president has claimed Bob Mueller didn’t find any evidence of a conspiracy. On the contrary, he found 127 phone calls in 15 months between Russian agents and the Trump campaign, and conversations about when dirt about Hillary Clinton would come out. That is surely enough to qualify under the statute for conspiracy, but Mueller felt he could not prove the case beyond a reasonable doubt. In the world of freedom, where you and I and people reading this live, conspiracy is a phony crime. For 600 years of Anglo-American jurisprudence, all accepted definitions of crime contained an element of harm. Today, crime is whatever the government says it is.
JD: Do you think he will be indicted and prosecuted after he leaves office?
JAN: Not for the conspiracy, but there’s certainly a chance he could be indicted for obstruction of justice, which is taking a material step to interfere with a criminal investigation for a corrupt purpose. If a lawyer files a motion before a federal judge to get the FBI off the lawyer’s client’s back, that is interfering with the FBI investigation, but it’s not for a corrupt purpose. It’s to protect the constitutional and fundamental liberties of the client. But if the president of the United States — as Bill Clinton is alleged to have done and Richard Nixon is alleged to have done — tells his underlings to lie to federal investigators or to grand juries, now that is classic obstruction of justice. Again, that, too, is a crime which in the libertarian world wouldn’t exist because it’s a thought crime and it’s a word crime. These are clearly crimes for which people are prosecuted in America under the law as it is, not as I might want it to be. The president qualifies as a potential defendant and likely defendant.
JD: In the wake of two recent horrific mass shootings, you’ve remained outspoken in your defense of Second Amendment rights. Do you think the Heller decision, the notion of gun rights as individual rights, and the larger idea that citizens should have access to the same weapons as government, are in danger? Does the push for gun control worry you?
JAN: It worries me terribly. There’s a poem by Herman Melville written right after Lincoln was killed. “Beware the people weeping when they bare the iron hand.” That’s exactly what’s happening now. People are weeping because of the innocent human lives that were crushed by madmen and that weeping may manifest itself in the confiscation of guns. Can you imagine the police coming to your house and saying, “that gun which you lawfully own and safely use, you must give it to us. Somebody else had a similar one, also lawfully owned it, but they didn’t safely use it.” That’s absurd. There’s no place for that in American history. The Heller opinion you mention (District of Columbia v. Heller, 2008), with Justice Scalia writing for the majority, characterizes the right to keep and bear arms as a pre-political individual right. You and I, and people reading this, would call that a fundamental or natural right. Whatever you call it, it is the highest level of protective right known to American law. It’s akin to protections for speech and press and travel. The government constitutionally cannot take fundamental rights away because of the harmful actions of others. That is what the Nazis did, punishing innocents.
JD: Gun control advocates will argue there is a compelling state interest in avoiding these kinds of mass shootings.
JAN: I’m sure that’s what their argument will be. They have to find a less restrictive way to address the compelling state interest than confiscating guns from people who lawfully own them and safely use them. For example, it would be a lot safer for all of us if the citizenry were armed and trained because police cannot respond immediately. These creeps would either think twice or be blown away as soon as they started their slaughter — by the guy standing next to them.
JD: A more narrowly tailored approach to gun crime might be “red flag” laws, which you’ve also criticized recently.
JAN: Red flag laws are profoundly unconstitutional. They permit the interference with a fundamental right, the right to keep and bear arms, on the basis of what some judge decides a person might do, M-I-G-H-T in caps. That “might-do” standard is a profound violation of the presumption of innocence and the due process requirement of proving demonstrable fault. The presumption of innocence requires that when government wants to take away liberty, it must prove its case beyond a reasonable doubt. How can you possibly prove beyond a reasonable doubt that something MIGHT happen? It’s an impossible thing to prove. And in terms of due process, the Constitution is very clear. Government has to prove you committed a crime, not that you might commit a crime. When the old Soviet Union finally revealed it used psychiatric testimony against people the government hated — to prove what these people might do, and incarcerate them — Ronald Reagan led the charge against this. Now we have a president who wants to do this. This is a perversion of the protection of our liberties. If the government can take away Second Amendment liberties because it can show a judge how someone might abuse those liberties, then no liberty is safe: speech or religion or travel or privacy or due process. No liberty will be safe if that standard becomes the law.
JD: Speaking of due process, the American Bar Association wants to redefine the notion of consent as it relates to criminal sexual assault. Its proposal puts the onus on defense lawyers to prove consent was ongoing throughout a sexual encounter. This approach borrows a very broad concept of consent from certain university administrative policies and applies it to criminal law.
JAN: That would violate the presumption of innocence. The presumption of innocence has many prongs to it, one of which is that the government prove every element of the crime beyond a reasonable doubt. The defendant does not have to prove consent. The government has to prove that there was no consent. If they put the burden of proof on the defendant to prove anything, then that profoundly violates longstanding American jurisprudence, which imposes all the burdens in a criminal case on the government and none on the defendant. If I allege in a criminal prosecution against me that I used my weapon in self-defense, I don’t have to prove affirmatively self-defense. The government must affirmatively disprove self-defense beyond a reasonable doubt, before it can get a conviction of me. That’s been the standard in America for 200 years.
JD: Let’s consider the Fourth Amendment, which many people think is in trouble. The Patriot Act, civil asset forfeiture, the 100 mile border search exception zone, NSA spying — it seems like a terrible time for civil libertarians. What are your current thoughts on the Fourth Amendment?
JAN: I think it’s in terrible shape. The 100 mile exception zone is profoundly unconstitutional because it’s judge-created. It’s not in the Fourth Amendment. Most of this began during the drug wars initiated in the Nixon years, when federal judges decided it was better for society to curtail liberties and get drugs off the street than to be faithful to their oaths to uphold the Constitution. There are so many exceptions to the Fourth Amendment in criminal prosecutions that it hardly exists at all. Add the Patriot Act — the so-called Patriot Act — and the USA Freedom Act, which both permit profound violations of the Fourth Amendment on the theory that evidence obtained will be used for intelligence purposes and not for criminal prosecution. Unfortunately, it doesn’t work that way. The same statutes that permit violations — such as listening to every phone call and capturing every keystroke — not only permit but require information obtained by intelligence agencies to be shared with law enforcement. Any judge who accepts this has violated the oath to uphold the Constitution. Privacy, right now, is the least favorite right of the government. It is an individual and pre-political right — meaning fundamental and natural — but hardly any government anywhere in America treats it as such.
JD: Of course the Patriot Act continues to be reauthorized by Congress, when technically all or portions of it could expire under the original statute.
JAN: It’s actually even worse, because they don’t even debate it. They don’t even schedule time for debate. Congressional leadership just says, “well, this is in the category of everything we have to vote for,” and like lemmings they vote for it. Members of Congress are either afraid of what the intelligence community has on them, or they have no concept of the nature and extent of the violation of fundamental liberties the government engages in by following this Act. And the Act itself is really a façade because the NSA doesn’t even follow it. The NSA goes ahead and captures all the intelligence it wants, so much intelligence it doesn’t have time to sift through it. This intelligence overload doesn’t keep us safe. They invade the privacy of anyone they want for any reason they want without telling a judge or even getting one of those facetious FISA warrants. FISA is also a façade, a shield behind which the NSA hides while it profoundly violates the fundamental liberties of everybody in the country. Justice Scalia told me that once the Court itself was being spied on by the NSA. How much worse can you get than that?
JD: What about Big Tech? These companies have access to our data, phone conversations, email, texts, you name it. Are they in bed with the state?
JAN: I think they are in bed with the state. They have either been given immunity or they’ve been threatened or they’ve been paid for their skills. It’s not metadata — it’s actual communications. They don’t have the time to listen to us as we speak or the time to look at our keystrokes as we press them, but they have all of that stored. They can look at it anytime they want. They want us to think it is metadata, but metadata is who, what, when, where, what number, and for how long — but without content. The NSA captures all the content of everything transmitted on any fiber optic cable in the United States, period. How do I know this? The former NSA official who invented some of their practices, the courageous Bill Binney, has stated this hundreds of times in public.
JD: We hear about data swept up indiscriminately by intelligence agencies. Let’s say the NSA has access to a person’s old email archives. Years later that person becomes a suspect in a crime. The email was already sitting there, but now the NSA looks at it. Is that a search?
JAN: That is a search, which can’t be done without a search warrant, but what the government does is what’s called parallel reconstruction. It will find some fictitious way to justify to a judge how it obtained this information. It will never, ever, ever admit in a public courtroom that it captures all the information all the time. Remember the San Bernardino killers, the husband and wife who committed mass murder at a government office? The FBI went nuts trying to get the cell phone passwords each of them used on their cell phones. All they had to do was call the NSA, but the NSA would never admit to having the passwords. So it was necessary to hire Israeli experts to hack the phone and get the information. Both are unconstitutional, but in fact the government already had that information. It just wouldn’t admit it.
JD: You gave a talk a couple of years ago at Mises University on the real meaning of the First Amendment. You were surprisingly upbeat about the relatively robust free speech protections upheld by the current Supreme Court.
JAN: Yes, particularly under the Roberts court. Even horrible things like snuff films (these are horrible films of animals being killed), can be watched as an expression of an idea. It has been the president’s wish to curtail the dark side to the internet, but this is protected speech now. The standard is a 1969 Supreme Court opinion called Brandenburg v. Ohio, in which the Supreme Court ruled that all innocuous speech is absolutely protected — and all speech is innocuous when there is time for more speech to address or challenge it. That’s about as broad a pro-free speech standard as you’re ever going to find. It’s been the law of the land since 1969. The Court has not adhered to this standard as rigorously with child pornography laws. But with that exception the Supreme Court since 1969 has been remarkably aggressive in its protection of the freedom of speech.
JD: Speaking of robust speech, do you agree with the Rothbardian-Blockean conception of defamation? Since you cannot “own” other people’s thoughts or attitudes or opinions about you, you should not be able to sue for injury to your reputation?
JAN: You’re talking about in theory.
JD: I’m talking about in theory.
JAN: I do agree with that. I believe in unbridled free speech and press, but of course, that’s not the law that we have today.
JD: Let’s say an ostensibly private tech company aggressively de-platforms people for political speech. The First Amendment is not implicated, but should we consider tort or estoppel theories as a remedy against this?
JAN: No. I would like to see people stop using one search engine or company and put together another one that does not de-platform people. I would use the free market to address that. I don’t like what Google does to people, but they’re not the government. They’re a bulletin board. They have the right to post on that bulletin board whatever they want. They can choose their customers and they can choose not to deal with certain customers. That’s where the free market comes in. There are obviously barriers to entry, with Google for example. You can’t start a competing service overnight, but if Google mistreats enough people, those people will want an alternative. Where there’s a demand in the free market, if we had one, there should be capital to address that demand.
JD: You’ve probably heard different arguments: by not de-platforming people consistently, uniformly, or transparently, tech companies effectively waive or alter some of their terms of service and thus might be liable under contract theory. Or consider where a user relied on the representation of a neutral platform, put time and energy into building up a following, and suffers harm when the platform is suddenly taken away. This is the estoppel approach.
JAN: I understand that argument. I might make it if I were their lawyer. But in my world, forcing a business to accept somebody as a client is government occupation of private property — and it violates many of our basic principles.
JD: But imagine if someone typed “Mises” or “Rothbard” into Google and no mises.org search results show up until the thirtieth page. We could be “disappeared” that easily.
JAN: Yes. Build another search engine.
JD: I want to talk about the Supreme Court itself. After the Kavanaugh debacle, it is abundantly clear — it was already clear — how both sides see the Court as a weapon. It is a political tool, a way to vanquish or bludgeon the other side. Both sides see the stakes as enormously high. Have we crossed the Rubicon when it comes to the Supreme Court and its supposed role?
JAN: Much of the country, including the president, thinks that the Supreme Court is like a legislature. I heard him say it’s important for the Republicans to control the courts. That may be a Freudian slip or it may be ignorance of our system. Yet confirmation battles seem to rage on as if people think that the Supreme Court or the federal judiciary is just another sort of super legislature. It isn’t. We give judges and justices life tenure in return for fidelity to first principles, not fidelity to party. Not all judges and justices have been faithful to first principles, and some of them have been political activists on the bench. One would like to think they would be faithful to first principles and not to the demands of a political party.
JD: A lot of people, myself included, think the Supreme Court’s outsized power comes from a misinterpretation of the Constitution itself. Judicial review is nowhere to be found in the text of Article III, and the Court is merely supreme over lower federal courts. It is not supreme over the other federal branches, or over the states themselves. But most people see Court decisions as the “law of the land.”
JAN: In my world, the Supreme Court and the federal judiciary would not be supreme over the states, other than to prevent states from interfering with fundamental liberties. That’s not the way it is. The Supreme Court is superior to everything. If there were no judicial review the courts would be toothless. The whole purpose of an independent judiciary is to be anti-democratic, to preserve the life, liberty, and property of the minority from incursions by the majority. When the Court properly trumps what the legislature or the executive have done in deference to a right articulated or implied in the Constitution, it literally prevents the tyranny of the majority in order to preserve the liberty of whomever the majority targets. That’s what we want it to do. The idea that the federal Supreme Court could tell the states how they are to operate beyond keeping them respectful of fundamental liberties, that’s pure John Marshall. It hasn’t changed for 200 years. It might take acts of secession to get it to change, but I’m with our dear friend, Tom Woods on that: a state court of last resort is competent to articulate what federal law means in that state and it should be immune from interference by the federal judiciary.
JD: We have to grapple with the awful “living Constitution” idea. We might look at Ruth Bader Ginsburg in any particular case before her and say she has a result in mind, often a political result. So she reverse-engineers her decision, using whatever legal reasoning sounds plausible to justify the result. We think of this as “bad” judicial activism, but you also talk about beneficial “constitutional activism.” What is the distinction?
JAN: Ruth Bader Ginsburg is not the only person who does this. My late great friend Justice Scalia was accused, I think quite properly, of doing the same thing: finding an end result, usually a political result, and then looking for some pseudo-constitutional way to get there. That is judicial activism. Constitutional activism, by contrast, presumes the government is wrong. It presumes that the individual is correct, requires the government to demonstrate its case beyond a reasonable doubt, and requires the government to protect fundamental liberties unless those liberties have been waived by an individual’s conduct. Stated differently, a constitutional activist is a judge who limits government to protecting fundamental liberties. When it does more than that, when it takes property from A and gives it to B, a constitutional activist will stop the government from doing so. That type of judge exists only in theory and on paper, not in reality. This is because judges have all taken an oath to uphold the law, whether they agree with it or not. Often the constitutionality of a law, strictly speaking, is not challenged before the judge. A variety of tools, allegedly derived from the Constitution, prohibit judges from going beyond the “four corners” of the legal challenge in front of them. This prevents judges from willy-nilly striking down whatever they think or know to be is unconstitutional.
JD: The country is divided, and not just politically. We have deep cultural and social schisms, and real disagreement on things like abortion and guns and free speech and climate science. What is the way forward? What do you see as the best approach to improving this nasty climate in America?
JAN: It is education, like what we do at Mises all year around. Trying to make people realize that their rights are integral to their humanity. Government can only interfere with them when it proves to a jury that a person has given up his or her rights by interfering with someone else’s rights. When we explain to people — whether in a basic or advanced way — the case for natural law constitutionalism and Austrian economics, they usually understand it. When we explain the primacy of the individual over the state, the inviolability of natural rights, the reality that only a free market (meaning free from government interference) produces the highest amount of wealth for the greatest number of people, people usually understand it. But none of this is taught in government schools because government schools are not interested in theories that clip the government’s wings.
JD: Give us your quick definition of natural law constitutionalism.
JAN: Natural law teaches that our rights come from our humanity, and that all persons exercising human reason will come to a similar conclusion about the investiture of those rights within us. Not everyone will exercise their rights the same way. Some people will use their freedom to do harm, as opposed to good, but all rational people recognize that these rights come from within us. It is the duty of the federal government under the Ninth Amendment to protect those rights, because the Ninth Amendment prohibits all governments — local, state, and federal — from interfering with or disparaging natural rights. The Ninth Amendment is one of those amendments like the Second and the Tenth that the government doesn’t want to talk about and doesn’t like to rely on. I remind people that when Madison wrote the Ninth Amendment he was going through a transformation from being a big government person to a small government person. Madison wrote the Ninth Amendment to assure us that the government would recognize unarticulated natural rights and it would protect them, although things didn’t end up as Madison wanted. That, in a nutshell, is natural law constitutionalism: the concept of the existence of unarticulated natural rights residing within each human being, for which government has an obligation to protect the existence and exercise of them.
JD: Did the Constitution at least attempt to codify natural law and protect natural rights, or should we view it entirely as a positive law document?
JAN: It’s a positive law document and a triumph of the big government crowd, which kept its powder dry during the Revolution, so to speak. They kept their big government wishes to themselves until after we won the Revolution. The Bill of Rights was added in order to prevent the calling of a second Constitutional Convention, which might have written a new constitution that seriously impaired the power of the central government. But the Constitution itself, with its elastic clauses — which Madison, by the way, claimed are not there — gives powers to government. Madison toward the end of his life sounds like Ron Paul, but not at the Constitutional Convention. He was the same human being, but his thoughts were radically different. The document itself ratified slavery and ratified the slave trade. It permitted the Necessary and Proper Clause to mean needful and helpful, rather than necessary. It gave far too much power to a central government. The person you and I respect a lot, Murray Rothbard, argued that the last time there was freedom in this country was right after the Revolution — before the Constitutional Convention, under the Articles of Confederation. At that time if you didn’t like the tariffs and monopolies on Rhode Island, you could walk to Massachusetts where you might get a different version of them, but you didn’t have a central government making everything uniform.
JD: What would a better, freer judicial and legal system look like? If Judge Andrew Napolitano could create an improved system, would it reflect a preference for common law over positive law?
JAN: I don’t know what it would look like, but I would change some things in the Constitution. I would define “commerce” in the Commerce Clause as the movement of goods over interstate lines between merchants. I would return the word “expressly” into the Tenth Amendment. I would remove the Necessary and Proper Clause and make it very clear that the Constitution limits the federal government only to those powers expressly set forth in it. All other powers not specifically and expressly delegated to the feds reside in the states. Of course the states are no saints; they ran the system of slavery in the United States and absent the Fourteenth Amendment they would trample our natural rights. And there has to be some sort of provision guaranteeing the right to secession, just as we seceded from Great Britain. New Jersey could secede from the Union and my little farming town in northwest New Jersey could secede from New Jersey. The right to secession has to exist. Government has to fear that if it takes too much liberty or too much property, people will resist it and it will go out of business.
JD: I could not agree more, but secession inflames people and brings out faulty arguments.
JAN: There’s basically a right to ignore the government. This fits in with the argument that government’s only lawful role in a free society is to enforce natural rights. Everything else is some sort of redistribution, a socialist redistribution of assets.
JD: Our audience is particularly interested in libertarian ideas and even anarchism. Your book Constitutional Chaos, written in 2004 during the Bush years, depicts a lawless federal government. We worry about citizens behaving badly without rules, but what happens when government itself fails to follow the rules? That seems the bigger threat.
JAN: Government finds ways to protect itself when it violates its own laws. Government makes it very difficult to sue the government. You slip and fall on a lettuce leaf in a supermarket, you can sue the supermarket. But if you slip in the post office, it is very difficult to sue the post office. If you don’t go to the right lawyer who knows what hoops to jump through, you find yourself without any recourse. Why? Because the government has protected itself. The most fiercely prosecuted crimes are those that harm the government’s prerogatives. They’re not property crimes against private individuals. The most fiercely prosecuted crimes interfere with what the government does. Mises is right. Government is essentially the negation of liberty. The whole theory of natural rights is that each individual is sovereign. Each individual has human liberty, and everything the government does, everything from A to Z, is a negation of that liberty. The only legitimate negation of that liberty occurs when government protects natural rights, when it protects A from interfering with the natural rights of B. Then it can interfere with A’s liberty to perpetrate that interference. This is a species of the nonaggression principle. What government is legitimate absent consent? One that enforces the nonaggression principle, or one that enforces natural rights and does no more. And does no more.
JD: Very well said, as always. Thank you.
Patrick Frey has more than two decades of experience as a Los Angeles prosecutor. Although he is an enthusiastic fan of Austro-libertarianism, Frey comes on the show to challenge Bob’s views on plea deals and AnCap society.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
Hannah Cox is National Manager of the organization Conservatives Concerned About the Death Penalty. She is conservative/libertarian on standard policy issues, and is a strong advocate of the 2nd Amendment, but even so—perhaps surprisingly to some—she is also very alarmed with the State’s abuses in the criminal justice system.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
Includes introductions by Tho Bishop and Judge John V. Denson. Recorded on the Auburn University campus in Auburn, Alabama, on 15 July 2019.
Bob talks with Stephan Kinsella about the basis of libertarian law, and how we could have justice without a coercive State. They then discuss Stephan’s pathbreaking work making the case that property must be in tangible things, rendering “intellectual property” an incoherent and dangerous concept.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
Virtually all laws involve "legislating morality." When people use this phrase they often really just mean "I want laws to back my version of morality, not yours."
Original Article: "Every Law 'Legislates Morality' — From Abortion to Minimum Wage".
Bob goes solo to explain why the common practice of “offering a plea deal” is a horrible practice, which gives us little reason to trust that those convicted are actually guilty of the crimes to which they confess.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
Bob brings on Mises Institute founder Lew Rockwell to primarily discuss Lew’s article in defense of Lori Loughlin (“Free Lori Loughlin and All Political Prisoners”). Why is the FBI involved in a college admission scandal in the first place? And why is Lori Loughlin’s behavior so much worse than all the other cheating that happens systematically? Bob and Lew then discuss the chilling role of the FBI in American life, as well as various methods by which the CIA takes care of business. Bob also asks Lew questions submitted in the Bob Murphy Show Facebook group.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
As far as the FBI is concerned, it can do whatever it wants — and anyone who resists its power is guilty of "obstruction of justice."
Original Article: "'Obstruction of Justice' Isn’t What People Think It Is".
The Murray N. Rothbard Memorial Lecture, sponsored by Don Printz. Includes and introduction by Joseph T. Salerno.
The Austrian Economics Research Conference is the international, interdisciplinary meeting of the Austrian School, bringing together leading scholars doing research in this vibrant and influential intellectual tradition. The conference is hosted by the Mises Institute at its campus in Auburn, Alabama, and is directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.
Liberty musician Jordan Page discusses the plight of Schaeffer Cox, an Alaska liberty activist and militia leader who is being held by the federal authorities in a high-security prison. There were many irregularities in the case, with the original verdict having been vacated and the case sent to a lower court for re-sentencing. Cox’s supporters argue that he was targeted for his political views.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
[This originally appeared in Libertarian Review in November 1978.]
Libertarians surely favor freedom of speech, that is, the right to speak without being hampered by the government. But the right to speak implies the right not to speak, the right to remain silent. Yet libertarians have themselves been strangely silent on the many instances of compulsory speech in our society.
The most flagrant example of continuing compulsory speech takes place in every courtroom in our land: the compulsory bearing of witness. Now surely each person is the absolute owner of his or her own body; as the owner of his own body, only the individual should decide on whether or not to speak in any given situation, and there should be no compulsion upon him to talk or not to talk. And yet in every court, witnesses are dragged in by force (the subpoena power) and compelled to bear witness for or against other people.
The Fifth Amendment, as we all know, prohibits the government from forcing a person to testify against himself: “nor shall any person … be compelled in any criminal case to be a witness against himself.” Excellent. But why should an accused criminal possess a right not also granted to admittedly innocent persons? In short, by what right does a government compel someone to testify against another? Here is a flagrant invasion of liberty, a flagrant abuse against the rights of the individual, and an initiation of force and violence against an innocent person. Yet where are the libertarians to raise their voices against this practice?
There is also something peculiarly monstrous and anti-libertarian about the way in which courts, i.e. judges, move against such “crimes” as non-testimony. In every other criminal case, whether real or victimless, the defendant is duly charged, indicted, and prosecuted, and is allowed to plead his case before third parties: judges or juries who are not involved in the dispute. Yet with the “crime” of failing to testify, all such procedures and safeguards go by the board. The judge is the prosecutor — charging the defendant with “contempt of court” — and also the decider of the defendant’s guilt (in this “crime” against himself). The judge is the plaintiff, prosecutor, judge, and jury all wrapped into one.
What is more, in all other cases of crime, the conviction and the sentence are punishments after the fact, after the crime has been committed. Someone commits a crime, and is then punished. But not so in the case of “contempt of court.” In such cases, the judge uses the “punishment” in an attempt to compel action on the part of the “criminal.” The punishment is before the fact, an attempt to force the defendant to do something the judge wants him to do. And, in theory at least, the judge can keep the victim in jail for life until he “purges himself of contempt” by performing the required deed. He can keep the defendant in jail until he agrees to bear witness in court, until he performs the required speech.
A particularly dramatic case involving a clash between compulsory testimony and the First Amendment is the predicament of New York Times reporter Myron A. Farber. In 1976, Farber wrote a series of articles in the Times which resurrected the mysterious multiple murders committed a decade before in a New Jersey hospital, in which a number of patients were killed by injections of excessive amounts of curare. As a result of Farber’s investigations, the surgeon, Dr. Mario Jascalevich was indicted (and later acquitted) of three of the murders.
During the trial, the court, at the behest of the defense, ordered Farber to turn his notes in the investigation over to the court. Farber refused, citing the First Amendment (which protects freedom of the press as well as speech), and also a New Jersey “shield law” designed to defend journalists against compulsory disclosure of their sources. Farber added that the government must not be able to commandeer a reporter’s notes and sources if a free press is to be maintained. And the judiciary, he pointed out, is a branch of the government.
The court ruled, however, that in this case the shield law and even the First Amendment were overruled by the Sixth Amendment of the Bill of Rights, which guarantees the accused in a criminal trial “compulsory process for obtaining witnesses in his favor.” Still Farber refused to turn over the notes. He spent 39 days in jail before Dr. Jascalevich’s acquittal won him his freedom. Furthermore, Farber was hit with a $2000 fine, and the New York Times too was fined a flat sum of $100,000 plus $5000 a day as long as Farber’s notes remained outside the judge’s custody.
While the jailing of Farber was, of course, a far more heinous injustice, the crippling effects of the fine on the newspaper should not be overlooked. Not every newspaper is as affluent as the New York Times. As Ken Johnson, editor of the Grand Junction (Col.) Daily Sentinel puts it, “there would be no recourse against such an incredible abuse of judicial power. We would have to capitulate to the judge’s outrageous and illegal demands, or simply say there no longer will be a free and independent newspaper in this community.”
Even a veteran civil libertarian and First Amendment absolutist like Nat Hentoff is nonplussed and disarmed by the Farber case. For Hentoff (and the American Civil Liberties Union as well) feel that they have to balance — and even override — the First Amendment by the Sixth, so that Farber should be compelled to turn over his notes if the defense can show relevance to the case at hand. (See Hentoff, “The Confused Martyrdom of M.A. Farber,” Inquiry (Oct. 16, 1978), pp. 5–7.)
Well, what does one do if one is a Bill of Rights absolutist — as Hentoff is — and two amendments contradict each other, as they clearly do in the Farber case? What does one do, in general, if one is a Constitutional absolutist and two parts of the Constitution contradict each other, which they do frequently? There is only one way to resolve such contradictions (if one really wants to resolve them, rather than waffle one’s way through arbitrary qualifiers piled on each other). And that is to have a non-contradictory set of principles that is held higher than any written document, even one as generally beneficent as the Bill of Rights. Libertarians have such a set of principles, and libertarians therefore are particularly well equipped to point the way out of this First Amendment–Sixth Amendment morass.
For libertarians hold that it is ever and always illegitimate to use force against a non-aggressor, against someone who has not himself used force against someone else. That means that no one, no innocent person, regardless of his occupation: whether he be newspaperman, lawyer, physician, accountant, or just plain citizen, should ever be forced to testify or turn over notes to anyone, whether as witness against himself, or for or against anyone else. In contrast to Bill of Rights absolutism, libertarian absolutism sheds a pure and non-contradictory light on the issue. The Sixth Amendment must be altered to drop the compulsory process clause. The remainder of the Sixth Amendment provides guarantees for defendants against the government; only this clause provides defendants with compulsory powers against innocent people. It must be repealed.
Who then will bear witness in court? Whoever wishes to do so, freely and voluntarily. Conscription of witnesses is no more justified than conscription into the armed forces or into any other service or occupation. Freedom and individual rights must extend to all institutions and all branches of life, even into the judiciary, the heart of State power.
Research Handbook on Austrian Law and EconomicsTodd J. Zywicki and Peter J. Boettke, eds.Northampton, Mass.: Edward Elgar, 2017, 440 pp.
Alexandre Padilla (padilale@msudenver.edu) is an Associate Professor of Economics at Metropolitan State University of Denver. Quarterly Journal of Austrian Economics 21, no. 2 (Summer 2018) full issue, click here. Few scholars disagree that Austrian economists and their fellow travelers have made significant contributions to law and economics. Anyone familiar with the works of Carl Menger, Friedrich Hayek, Ludwig von Mises, Murray Rothbard, and Israel Kirzner recognizes their undeniable additions to law and economics, particularly in analyzing institutions, monopoly and antitrust laws, and regulations and their (unintended) consequences. The contributions in the Research Handbook on Austrian Law and Economics build on and expand the work of these great Austrian economists by applying what editors Todd Zywicki and Peter Boettke (2017, p. 21) call the “propositions that are the defining substantive position of the contemporary Austrian school of economics” to a large variety of areas in law and economics. Such areas include property rights and conflict resolution in the absence of formal rules (Krause), criminal constitutions (Skarbek), the efficiency of the common law (Zywicki and Stringham), family law (Horwitz), and rule reform (Coyne).
Because many of these contributions build on the work of the great Austrian economists, they share common themes that are not necessarily emphasized in mainstream law and economics:
1) The institutions that define the rules of the game, particularly property rights, matter. They “have been devised by human beings to create order and reduce uncertainty in exchange” (North 1991, p. 97).
2) Competition is not a state of affairs but a market “process of entrepreneurial discovery” (Zywicki and Boettke, 2017, p. 21).
3) Utility and costs are subjective.
4) Individuals, including those working in government and the courts, face a knowledge problem and operate under uncertainty.
5) Formal institutions are not necessarily superior or better-performing than informal institutions if those formal institutions are not being recognized as beneficial by the members of the group or society operating under those (competing) institutions.
The third and fourth themes are important because they lead Austrian economists to conclude that government usually cannot do a better job than markets. The fifth theme lies at the core of chapter 2, “Property Rights, the Coase Theorem and Informality” (Krause, 2017), and chapter 8, “Self-Governance, Property Rights, and Illicit Commerce” (Skarbek, 2017). Krause (2017, p. 31) shows that people living in slums in poor and developing countries, despite lacking a formal definition of private property rights or a formal justice system, have recourse to voluntary solutions as well as informal mediation services to resolve disputes between neighbors. He provides several examples showing that people have incentives to negotiate an outcome that benefits both parties, as predicted by Coase (1960), even when property rights are not formally defined. Even when there is a formal justice system, Krause (2017, p. 35) shows that, in the case of Peru, the overburdened administrative authorities eventually accepted the decisions of the informal organizations in the slums.
Krause (2017, p. 31) also draws another lesson from these natural experiments: “informal solutions of disputes among neighbours follow a ‘rights’ approach and do not intentionally look for efficiency, although this may be an unintended or secondary result of allocating rights.” According to Krause (2017, p. 39), “this speaks against a cost/benefit analysis on such decisions since making the allocation of property rights dependent on a judge’s evaluation of a net result would bring instability back.”1 Krause’s discussion of dispute resolutions in slums represents another piece of empirical evidence supporting the idea that people have incentives to voluntarily resolve their disputes outside the government authority. His work also complements Williamson and Kerekes (2011), who, among others, show that formal institutions are not necessarily superior to informal institutions when it comes to securing property.
Skarbek (2017, p. 178) “challenges the legal centrism hypothesis by examining the internal governance institutions of prison gangs, arguing that order and property rights can emerge without the state” or, more accurately, despite the state. His chapter discusses how one of the largest prison gangs in Northern California, Nuestra Familia (NF), which operates outside the law both in and out of prison, has developed “effective self-enforcement internal governance mechanisms to limit opportunistic and shirking behavior” (Skarbek, 2017, p. 178). As Skarbek discusses (2017, p. 181), NF recruits members primarily in prison, and one of its main revenue sources is drug trafficking behind bars. Skarbek’s analysis of the internal organization of NF is consistent with the idea that prison gangs operate like a profit-maximizing enterprise that seeks to reduce shirking, opportunism, and turnover when it comes to retaining its best employees.
NF recruits its members and associates by offering them protection against predatory inmates and rival gang members. In exchange, recruits swear lifetime allegiance to the Familia and work for the Familia while in prison and after release (Skarbek, 2017, p. 183). In addition, NF has rules that its members and associates must follow and punishments for breaking those rules. NF has also established rules that govern interactions outside the gang. Those rules are just as important as the rules governing interactions within the gang, because intergang violence diverts resources away from NF’s main source of profit: drug trafficking. All these rules have been codified in a written constitution that, similarly to what corporate culture does, sets workable principles and routines that create shared expectations for group members (Kreps, 1996).
Much of Skarbek’s work on the prison gangs’ internal organization echoes Peter Leeson’s work on the internal governance institutions of pirate ships (Leeson, 2009). Whether pirate ships or prison gangs, it is in the interest of these criminal organizations to develop self-governance mechanisms to mitigate moral hazard and adverse selection so as to maximize their profits. They cannot use the government to enforce contracts or to arbitrate conflicts.
These two chapters by Martin Krause and David Skarbek undoubtedly represent important contributions to the law and economics literature, particularly as it relates to the development of self-governance institutions to coordinate human interactions in the absence of government or, in the case of criminal organizations, in spite of government. However, it is unclear what makes these two contributions uniquely Austrian. Challenging the legal centrist assumption that without government, there are no property rights, does not make one’s contribution uniquely Austrian.
When it comes to the economic analysis of the law and particularly property rights, Austrian economists have long disagreed with mainstream scholars on efficiency. Building on the Austrian literature, Zywicki and Stringham (2017, p. 193), in their chapter “Austrian Law and Economics and Efficiency in the Common Law,” are highly critical of Posner and his followers who argue that “the common law is efficient (Kaldor-Hicks efficient) because judges view wealth maximization as a normative ideal.” Zywicki and Stringham (2017, p. 195) acknowledge not all mainstream economists agree that the common law maximizes wealth. The problem is these economists who argue in favor of changes to make the common law more efficient ignore that judges suffer from the same problems that public choice scholars identify with legislatures: interest-group pressures, rent-seeking, and rent-dissipating (Zywicki and Stringham, 2017, p. 196).
Since costs and benefits are subjective, judges cannot predict how specific decisions will affect litigants’ willingness to pay. Willingness to pay might make sense in markets where willingness to pay changes as market conditions change, but within the context of the courtroom, judges face the same challenge as those “of a Soviet-style economic central planner” (Zywicki and Stringham, 2017, p. 197). In light of this conclusion, Zywicki and Stringham (2017, p. 198) argue that “the primary purpose of the law is not to try to impose rules that bring about the wealth maximizing ‘outcome,’ but instead to provide a stable institutional framework that will enable individuals to plan and coordinate their affairs in a world of constant dynamism.” If the rules that individuals operate within are constantly changing, it will indeed be much more difficult for individuals to coordinate their plans, and we should expect much more judicial intervention. Higgs’s (1997, 2012) concept of “regime uncertainty” defined as “a pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights” illustrates the point made by Zywicki and Stringham when applied to explain why the Great Depression lasted so long.2
Zywicki and Stringham (2017, p. 198) also believe, like other Austrians such as Block, Kirzner, and Rothbard, that the law should be evaluated “using extra-economic means,” that is, “society-wide shared ethical perspectives” (Kirzner, 2000, p. 85). They argue that “Austrian economics is a positive discipline that does not say what any given policy or any given law should or should not be” (Zywicki and Stringham, 2017, p. 198). This argument echoes Mises, Kirzner, and Rothbard’s position about economics being “a value-free science” that cannot tell us anything about whether a policy or a law should be passed or repealed. At best, economics might be able to tell us whether some goals are incoherent (Rothbard, 2006, p. 251).
Zywicki and Stringham (2017, p. 202) take their argument further and argue that Hayek ought to be praised for his analysis of the common law. However, his belief that “ultimately judges must be subservient to the legislature which can step in to alter the law when common law reaches a ‘dead end’ through adherence to precedent or when the law develops in ways that are inconsistent with the market economy” runs into the same problems that judges would face if they were to maximize Kaldor-Hicks efficiency when deciding cases (Zywicki and Stringham, 2017, p. 202). Instead of relying on the government to “improve the law,” Zywicki and Stringham (2017, pp. 203–204) argue that we should allow for competition in law in the same way that we allow for competition in the market process, which enables entrepreneurs to discover unexploited profit opportunities to better satisfy consumers.
We can find precedent in the Middles Ages, when litigants sought out private judges for their expertise, judges who competed de facto with each other since part of their pay came from litigants’ filing fees. Competition made judges more efficient in adjucating cases and also resulted in better laws and procedures to meet parties’ needs (Zywicki and Stringham, 2017, p. 204). As the authors remind us, to some extent today, “competition takes place alongside government law, as with modern arbitration, mediation, and other forms of alternative dispute resolution,” which suggests that “consumers” do not necessarily value government law since they use those alternative mechanisms of dispute resolution (Zywicki and Stringham, 2017, p. 205).
There is little doubt that competition as a discovery procedure is a better mechanism than government to sort out the rules and enforcement procedures that people actually value. But before reaching that conclusion, the authors spend two-thirds of the chapter arguing against Kaldor-Hicks efficiency—which no law and economics scholars claim is the panacea—without providing an alternative way to evaluate the law. More importantly, when Zywicki and Stringham (2017, p. 202) say that “the real test of the usefulness of a legal rule is found in the unseen effects of the rule in terms of the number accidents avoided or conflicts averted, not the seen effects of the cases that come before the judge,” they seem unaware that by writing this, they are saying that the law’s role is to minimize the costs associated with accidents or conflicts—which is another way of saying that the law’s role is to maximize wealth.
Similarly, as discussed previously, Zywicki and Stringham’s argument that the law’s role is “to provide a stable institutional framework that will enable individuals to plan and coordinate their affairs in a world of constant dynamism” (2017, p. 198) sounds a lot like the argument that the law’s role is to ensure that people can pursue their activities in an environment that fosters peaceful cooperation as opposed to plundering or, to be more accurate, to foster an environment where people are discouraged from engaging in violent wealth-extraction-type behaviors—and it is the law’s role to do this because it allows people to maximize wealth. This is why theft is illegal: if stealing were allowed, people would spend resources trying to perfect their craft in stealing other people’s property while others would spend resources attempting to protect their property. Tremendous resources would be wasted on activities that do not create wealth.
Nobody denies that we can rely on noneconomic means such as ethical principles to explain why theft should be and is illegal, but certainly efficiency and wealth maximization seem to be useful tools to explain why theft should be and is illegal. It is curious that Austrian scholars who have written on the tragic consequences of alcohol and drug prohibitions would argue that we should either rely on society-wide ethical principles or, better yet, abstain from evaluating any law or policy. It is partly because of those society-wide ethical principles that most drugs remain illegal in the United States despite the obvious inefficiency of the war on drugs and its tragic consequences, intended and unintended. If Austrian scholars want mainstream economists to pay attention to their work, we should avoid telling them that economists should rely on noneconomic means to evaluate a law or a policy, and we definitely should avoid telling them that economists should abstain from evaluating a given law or policy because economics is a positive science.
Steven Horwitz’s (2017) chapter, “Family Law, Uncertainty, and the Coordination of Human Capital,” shows how Austrian economics can contribute to both the economic analysis of the law and to the economic theory of the family. His chapter updates Gary Becker’s model of the family in several ways. First, Horwitz integrates the Austrian theory of capital into his analysis to help explain how “marriage and the family can be understood as structures of human capital formed in the face of uncertainty and intended to create an ongoing enterprise of cooperation to achieve a set of goals at lower costs than feasible alternatives” (Horwitz, 2017, p. 398). To complicate matters, members of the family produce not only for the market to earn income but also for the household when engaging in childcare and other household activities. Therefore, family members have to decide how much “market human capital” and “household human capital” they will respectively invest to make the whole venture successful (Horwitz, 2017, p. 398).
With an Austrian theory of marriage and the family, a law and economics analysis of family law will then investigate to what extent “the law facilitates or complicates the coordination process by which couples form marriages and decide on questions of market and household production” (Horwitz, 2017, p. 399). Horwitz (2017, pp. 407–408), for example, shows how laws that favor granting custody to the mother can alter significantly both parties’ decisions regarding how much to invest in market human capital versus household human capital. This phenomenon also can help us understand part of the gender pay gap, since the mother will be less likely to invest in market human capital and more likely to invest in household human capital if she is more likely to end up with custody of the children.
When it comes to no-fault divorce law, its effects are more ambiguous. On the one hand, no-fault divorce law somewhat increases the uncertainty about how long the marriage will last compared with fault divorce law, thus decreasing incentives for both parties “to invest in the sorts of relationship-specific forms of human capital that are necessary to sustain the marriage and the large family that might result” (Horwitz, 2017, p. 411). On the other hand, “no-fault divorce can be seen as an effective institutional adaptation” to reduce the costs of exiting a bad marriage when one or both parties realize that they are not a good match and the probability of having a successful marriage and family is low (Horwitz, 2017, p. 413). Horwitz’s analysis of family law as it applies to custody and no-fault divorce is further evidence that rules matter when it comes to coordinating human action, whether in a market or a nonmarket environment.
One thing Horwitz does not address (maybe because it is beyond the chapter’s scope) is the impact of low-skilled immigration on women’s incentives to invest in market human capital while still attempting to have a family. There is evidence not only that increased low-skilled immigration allows women to increase their labor supply, but also that increased low-skilled immigration that provides affordable household services leads to increased fertility among college-educated women (Furtado and Hock, 2010; Cortés and Tessada, 2011). Therefore, when it comes to analyzing marriage and the family, such empirical evidence shows that other laws, such as immigration law, can indirectly impact women’s human capital investment decisions.
Christopher Coyne’s (2017) “The Law and Economics of Rule Reform” represents the best chapter in this volume and should be recognized as an important Austrian contribution to which mainstream law and economics scholars should pay attention. In this chapter, Coyne (2017, p. 92) combines the tools of mainstream law and economics with those of Austrian economics to explain why some rule reforms succeed and others fail. His work builds on North’s work on institutions as well as the works of Mises and Hayek and their intellectual heirs analyzing why central planning is bound to fail. As Coyne (2017, p. 92) explains, the goal of rule reform is to make “changes to existing rules in order to achieve a preferable state of affairs from the standpoint of the reformer.” When analyzing rule reform, mainstream law and economics scholars tend to focus on how to generate the proper incentives such that the “relevant players” prefer those new rules to the old ones.
Certainly, incentives are a necessary but not sufficient condition for success in rule reforms. As Coyne (2017, p. 93) points out, a vast empirical literature shows that failures in economic, political, or social rule reforms attempting “to improve the human condition” abound. The major reason for these failures is what Austrian economists call the “knowledge problem,” which “emphasizes that planners lack the context-specific knowledge to effectively achieve their ends through rational planning” (Coyne, 2017, p. 93). As Coyne (2017, p. 93) tells us, “determining the appropriate incentives is a difficult task given that the perceptions of citizens in other societies are grounded in a cultural context that often cannot be understood by outsiders in a manner that can be effectively incorporated into policies.” For Coyne (2017, p. 93), the core of the problem with determining the appropriate incentives so that rule reform will succeed resides in “the distance between the local knowledge and the knowledge possessed by those designing the rules.” The greater the “knowledge distance” between the rule reformers and “the locus of knowledge associated with the problem they seek to address,” the more likely the rule reform is to fail (Coyne, 2017, p. 93).
Similar to how Buchanan argues that Hayek was warning us not only against “rational constructivism” but also against “‘romantic constructivism’ which attempts to design rules while ignoring ‘culturally evolved rules for human behavior that constrain the set of institutional alternatives,’” Coyne warns us against “romantic rule reform” (Coyne, 2017, pp. 103–104). The more disconnected reforms are from “the underlying realities of the society in which they are imposed”—the less rule reform appreciates people’s underlying beliefs and attitudes and the informal rules they operate under—the more likely such intervention will fail, regardless of how well intended the reformers are (Coyne, 2017, pp. 103–104). The overarching implication of Coyne’s work is that rule reformers are significantly constrained in what they can do and, therefore, sometimes the status quo is the least bad option.
Other chapters in the Handbook deserve attention, also. But—though this is not necessarily a bad thing—too many of those chapters read like a literature review of what Austrians have said on a particular law and economics topic rather than novel contributions. As mentioned at the beginning of this review, there is little doubt that Austrian economists have made significant contributions to law and economics, and the Research Handbook on Austrian Law and Economics is additional evidence of that.
When it comes to catching the attention of mainstream scholars, a problem Austrians face is that mainstream law and economics journals, with a few exceptions, tend to publish papers on narrow topics relying on advanced statistical analysis. One problem for mainstream law and economics is that the research question has become subservient to the methodology. Austrians, by contrast, agree that the research question should dictate the methodology used to answer that question; therefore, they are more able to tackle a larger variety of questions using whatever methodology is necessary. Some of the chapters reviewed, particularly Krause, Skarbek, Horwitz, and Coyne, are evidence of how much more versatile Austrians are when it comes to tackling some interesting law and economics questions. Those chapters also answer partially some of the three questions Zywicki and Boettke (2017, p. 426) think “demand our attention in the field of law and economics,” questions about the emergence and evolution of norms and the dichotomy between market and government in creating law.
Finally, it is also this reviewer’s viewpoint that Austrian scholars should not shy away from engaging mainstream law and economics scholars, even using their preferred methodology when appropriate, but also scholars in other fields. Many topics covered in this volume certainly are of interest not only to law and economics scholars, but also to scholars in political science, criminal justice, management, finance, sociology, and other subjects. Austrian economics can shed new light on questions that scholars in those other fields are interested in answering, questions that mainstream law and economics scholars might sometimes refrain from tackling because they cannot be addressed using their preferred methodology.
When the Americans with Disabilities Act was passed, employers hired fewer disabled workers, because they feared lawsuits. We may now be seeing a similar trend in the face of more sexual harassment claims.
Original Article: "After #MeToo, Men Begin Avoiding Female Co-Workers".
The midterm elections failed to produce an overwhelming Blue Wave, and political rancor in the US remains feverishly high. Now an astonishing new article in The Intelligencer considers the idea of a "federated" America, broken up into several political entities associated via compacts. It's not a dystopian view of a possible future, but rather a clear-eyed projection of what a political breakup of America might actually look like.
But is a breakup feasible? Does it have to involve outright secession by several states, or can some form of federalism allow Team Red and Team Blue to live together, even uneasily? Is Mises's conception of true self-determination, implemented by smaller administrative units rather than huge centralized states, lost to us today? Michael Boldin of the Tenth Amendment Center joins Jeff Deist to discuss the realities behind breaking up the US politically.
In a slave system, threats of brutality underlay the whole relationship.
Narrated by Floy Lilley. This article is excerpted from Conceived in Liberty, Volume 1, Chapter 6, "The Social Structure of Virginia: Bondservants and Slaves".
The Constitution represented a coup from the beginning, and it's a dead letter today. The Declaration of Independence, however, is a truly radical libertarian document still worthy of consideration. Judge Andrew Napolitiano, our Distinguished Scholar in Law and Jurisprudence, recently gave a rousing talk at Mises University on the Declaration's natural law tradition–and how federal courts relentlessly and successfully attacked the principles it represented. This is Judge Nap at his scorching best, and you won't want to miss his comments on Supreme Court nominee Brett Kavanaugh.
ABSTRACT: In his famous 1970 paper that raised issues about “lemons” problems in markets in which asymmetric information places at least one party to an exchange (usually buyers) at a big disadvantage, George Aklerlof wrote that if dishonesty continues, a “Gresham’s Law” situation can arise in which the bad products will drive good products out of certain markets. We apply not only Akerlof’s analysis, but also analysis from Mises (1944) and Rothbard (2004) and others, along with various theories of regulation, to show how the legal doctrine of prosecutorial immunity creates a “lemons” problem in criminal courts through moral hazard. Because prosecutors are immune both to lawsuits and most disciplinary procedures that private attorneys face when accused of misconduct, prosecutors have the incentives to hide evidence, and lie in court to gain convictions. This is especially true since convictions are important to career advancement. While criminal courts are not the same as private markets, nonetheless honest information is vital to the workings of both. Markets, however, have mechanisms for dealing with asymmetric information, both legal and economic, but the courts are much more resistant to measures used to ensure all involved parties have access to the truth. This paper examines the situation, including reasons for providing prosecutors with absolute immunity, and concludes that abolishing such immunity not only would result in fewer wrongful convictions, but also provide incentives for prosecutors to be more accurate in presenting evidence in criminal cases.
KEYWORDS: asymmetric information, lemons problem, Gresham’s Law, criminal law, common law JEL CLASSIFICATION: B4, H1, H4, H7, K1, K3, K4 1. INTRODUCTION On November 4, 2009, the U.S. Supreme Court heard arguments in the Pottawattamie County v. McGhee case in which the High Court was to decide whether or not to overturn or modify its 1976 Imbler v. Pachtman decision in which it had ruled that prosecutors in criminal cases, both state and federal, are protected by absolute immunity from lawsuits for actions they may take relative to their prosecutorial duties. The prosecution in the Pottawattamie case allegedly fabricated evidence to convict two black teenagers of murder (Rosenzweig and Shatz, 2009), only to see the verdicts overturned after the men had served 25 years in prison.
Lynch and Shapiro (2009) write about the lawsuit that the two wrongfully-convicted men brought against Pottawattamie (Iowa) County and the prosecutors:
After the convictions were overturned for prosecutorial misconduct, McGhee and Harrington sued the county and prosecutors. The defendants in that civil suit invoked the absolute immunity generally afforded prosecutors to try to escape liability. After the Eighth Circuit ruled against them, the Supreme Court agreed to review the case. (p. 1)
According to Richey (2009), prosecutors made an especially egregious argument in their defense claiming there was “no freestanding constitutional right not to be framed.’” (Emphasis ours) The facts of the case—that prosecutors framed innocent people in order to win a conviction—were morally repugnant to most observers. Nonetheless, then-U.S. Solicitor General Elena Kagan (before she joined SCOTUS herself) wrote in a friend-of-the-court brief in favor of the prosecutors: “A prosecutor, however, may receive absolute immunity from suit for acts violating the Constitution in order to advance important societal values. This Court’s cases recognize a common law tradition of immunity that ensures that prosecutors are free to carry out their work ‘with courage and independence.’”Friend of the Court Brief for Petitioners, Pottawattamie v. McGhee, No. 08-1065. (Emphasis ours)
The Supreme Court never ruled on the case, as the two men settled with Pottawattamie County before the court could act. However, had SCOTUS followed its past rulings, the prosecutors would have been protected and the defendants left with no recourse. Lithwick (2009) notes that during the proceedings, Justice Sonia Sotomayor also pointed out that neither of the two prosecutors faced any disciplinary procedures, which indicates that even the entities that allegedly serve as watchdogs against prosecutorial misconduct officially had no problems with their actions.
Pottawattamie in a broader context is hardly unusual, the claim that defendants have no “right not to be framed” notwithstanding. Recently, however, prosecutorial misconduct has come under increased scrutiny. When he served on the U.S. Ninth Circuit Court of Appeals, former Justice Alex Kozinski declared in a dissent (USA v. Olsen, 2013) that prosecutorial immunity provides incentives for prosecutors to violate the Supreme Court’s Brady ruling (1963). Brady requires prosecutors to turn over exculpatory evidence to criminal defendants in a timely manner. Kozinski writes:
A robust and rigorously enforced Brady rule is imperative because all the incentives prosecutors confront encourage them not to discover or disclose exculpatory evidence. Due to the nature of a Brady violation, it’s highly unlikely wrongdoing will ever come to light in the first place. This creates a serious moral hazard for those prosecutors who are more interested in winning a conviction than serving justice. In the rare event that the suppressed evidence does surface, the consequences usually leave the prosecution no worse than had it complied with Brady from the outset. (p. 11)
As Lithwick (2009), Kozinski, and others have pointed out, prosecutors rarely are punished for misconduct, be it withholding Brady material or fabricating evidence. There are theoretical avenues of punishment. They include criminal prosecution of wayward prosecutors, firing offenders, or disciplining the offending prosecutor through federal or state bars. In those cases, the worst punishment that the bars can inflict upon an offending prosecutor is taking away the prosecutor’s law license.
In rare cases, prosecutors are punished for misdeeds on the job. Two of those were related to the Duke Lacrosse Case in North Carolina, and the Michael Morton wrongful conviction in Texas; prosecutors were disbarred and served a brief time in jail. In the Duke case, prosecutor Michael Nifong brought false charges of rape and kidnapping against three members of Duke University’s men’s lacrosse team, claiming they had raped a stripper at a team party. The North Carolina State Bar, after investigating Nifong’s conduct in the case, stripped him of his law license, and he had to resign his position as District Attorney of Durham County. (Taylor, Jr., and Johnson, 2007)
Ken Anderson withheld crucial evidence from the defense in the trial of Michael Morton, who was accused of murdering his wife. Morton served 25 years in prison before DNA evidence uncovered the actual killer, who later was convicted for the crime. For his violation of Brady, a judge representing the Texas State Bar made Anderson give up his law license, do 500 hours of community service, spend 10 days in jail, and pay a $500 fine. (Ura, 2013)
Yet, these punishments meted to prosecutors are considered to be extraordinary precisely because they are rare. Even when prosecutors engage in serious misconduct, including subornation of perjury and withholding evidence, it is highly unlikely that they will be punished. Sullivan and Possley (2015) write that prosecutorial misconduct is widespread, but note that punishment for such wrongdoing rarely occurs, and that this problem has persisted “for many decades.” Radley Balko and Tucker Carrington (2018) write about a pathologist and a dentist that for more than 20 years presented dishonest forensic testimony in thousands of criminal cases in Mississippi and Louisiana, leading to numerous wrongful convictions. However, even after the misconduct was exposed, courts in those states refuse to reopen cases in which openly-fraudulent testimony led to a large number of possibly wrongful convictions.
Balko (2013) writes that the systems of checks and balances in the courts does not work well in the age of the modern prosecutor. He writes:
… in a culture where racking up convictions tends to win prosecutors promotions, elevation to higher office and high-paying gigs with white-shoe law firms, civil liberties activists and advocates for criminal justice reform worry there’s no countervailing force to hold overzealous prosecutors to their ethical obligations.
He also notes:
Prosecutors and their advocates say complete and absolute immunity from civil liability is critical to the performance of their jobs. They argue that self-regulation and professional sanctions from state bar associations are sufficient to deter misconduct. Yet there’s little evidence that state bar associations are doing anything to police prosecutors, and numerous studies have shown that those who misbehave are rarely if ever professionally disciplined.
From an economic viewpoint, it is clear that the systems of incentives that prosecutors face gives them room to engage in self-interested behavior that can lead to wrongful convictions. We argue, using insights from Mises, Rothbard, and others, that the current regime of absolute immunity creates a “lemons problem” (after Akerlof, 1970) in which jurors and other decision makers in the courts receive information from prosecutors that very well might be unreliable and certainly may include outright lies. Unless a defendant has deep financial pockets and a good attorney, the untrue testimony suborned by the prosecution may never be found out.
As in marketplaces, where false or misleading information can create harm for both buyers and sellers, the integrity of the courts in criminal law depends heavily upon prosecutors and judges displaying at least some elements of a conscience and obeying the law. We argue in this paper that institutional arrangements, and especially the doctrine of absolute immunity for prosecutors, lead to information asymmetries that place the defendants at a huge disadvantage and ensure that without major scrutiny of the information presented by the prosecution, jurors and others in the court cannot make accurate assessments, which leads to wrongful convictions.
Balko (2013) seems to agree with that viewpoint:
In the end, one of the most powerful positions in public service—a position that carries with it the authority not only to ruin lives, but in many cases the power to end them—is one of the positions most shielded from liability and accountability. And the freedom to push ahead free of consequences has created a zealous conviction culture.
We proceed in this paper in the following way:
In Part II, we examine Akerlof’s 1970 paper, “The Market for Lemons,” and critique his analysis employing criticisms from DiLorenzo (2011). In Section III, we examine the structures of incentives, as well as institutional arrangements that ensure that asymmetric information is built into the criminal justice system, and in Section IV, we apply economic analysis from Mises and Rothbard and others. Section V presents our conclusion.
- AKERLOF AND INFORMATION ASYMMETRIES Participants in market transactions often enter those transactions with unequal information, which can affect economic outcomes, something economists call asymmetric information. George Akerlof (1970) addressed how information asymmetry affects markets, citing the used car market as an example of how information asymmetry affects price in a market. According to Akerlof, in some cases, information asymmetry can eliminate a market completely, which he claims can occur even though there are buyers and sellers that could come to an otherwise mutually acceptable price for a commodity.
According to Akerlof, information asymmetry does not exist in the new car market, since neither the buyer nor seller knows with any greater probability whether or not a new car is a “lemon.” However, once a car is sold and has been driven for many miles, the original buyer likely gains substantial knowledge about the car’s performance—and lack thereof. He writes:
After owning a specific car, however, for a length of time, the car owner can form a good idea of the quality of this machine; i.e., the owner assigns a new probability to the event that his car is a lemon. This estimate is more accurate than the original estimate. An asymmetry in available information has developed: for the sellers now have more knowledge about the quality of a car than the buyers. But good cars and bad cars must still sell at the same price—since it is impossible for a buyer to tell the difference between a good car and a bad car. (p. 489)
This information asymmetry can cause a significant reduction in demand for used cars and a significant reduction in the price of used cars compared to new. This price is so low that the one-day owner of a previously new car cannot even receive the expected value of a new car in the used car market. Akerlof writes:
Gresham’s law has made a modified reappearance. For most cars traded will be the “lemons,” and good cars may not be traded at all. The “bad” cars tend to drive out the good (in much the same way that bad money drives out the good). But the analogy with Gresham’s law is not quite complete: bad cars drive out the good because they sell at the same price as good cars; similarly, bad money drives out good because the exchange rate is even. But the bad cars sell at the same price as good cars since it is impossible for a buyer to tell the difference between a good and a bad car; only the seller knows. In Gresham’s law, however, presumably both buyer and seller can tell the difference between good and bad money. So the analogy is instructive, but not complete. (pp. 489–490)
Akerlof argues that since this situation causes the price of used cars to drop even farther, this in turn further increases the probability that only lemons will be offered for sale in that market. What results is a vicious cycle in which dropping prices increases the probability that only lemons will be offered for sale, which further drops the prices. In the extreme, no market for used cars would exist. Akerlof extends his analysis to other examples, such as insurance.
In the insurance market for patients over 65 years old, asymmetry of information also exists. The patient knows the probability he will need insurance; the company does not. This causes the company to raise the price of insurance. But, as the price rises, there is an increased probability that only people that perceive themselves as lemons will want to buy insurance. This forces the insurance company to raise prices more, which further increases the probability that only lemons will seek to buy insurance. This is the principle of adverse selection. As the price rises, only the very sick want insurance.
The potential for dishonest dealings also causes an information imbalance in markets. The seller knows if he or she is dishonest, the buyer does not. The probability of dishonest dealings lowers the price that buyers are willing to offer. As the price falls, there is a higher probability that only dishonest sellers will participate in the market. Therefore, the potential for dishonest dealings drives honest sellers out of the market. This is particularly true in underdeveloped countries where quality variances are greater. Asymmetric information combined with the potential for dishonesty on behalf of the sellers and huge quality variance in commodities combine to completely eliminate some markets in third world countries. This happens even though there are potential buyers and sellers who could agree on a price exclusive of the presence of dishonesty. He writes:
The presence of people in the market who are willing to offer inferior goods tends to drive the market out of existence—as in the case of our automobile “lemons.” It is this possibility that represents the major costs of dishonesty—for dishonest dealings tend to drive honest dealings out of the market. There may be potential buyers of good quality products and there may be potential sellers of such products in the appropriate price range; however, the presence of people who wish to pawn bad wares as good wares tends to drive out the legitimate business. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence. (p. 495)
His point regarding dishonesty is particularly appropriate for this paper, since it identifies a “Gresham’s Law” effect in potential markets where dishonesty dominates. Indeed, this paper says that if prosecutors are not punished when they introduce false information into a criminal court proceeding, it raises the likelihood that more dishonesty will occur and that people who are dishonest may well self-select into the profession of prosecutor.
Akerlof concludes his article by stating that there are counteracting institutions, including the offering of guarantees and brand names, which help to remove some of the information asymmetry in markets. Guarantees from the seller help eliminate the effects of information asymmetry in markets where the potential exists for dishonest dealings. Brand names or chains also provide information to the buyer about quality in locales where the buyer is unfamiliar. This explains, for example, why chain restaurants are much more frequent along interstates than family run local restaurants.
While Akerlof writes of economic transactions, there certainly is overlap into how people deal with information issues in other institutional settings. As we shall emphasize more than once, criminal courts are not markets, and participants are not dealing in entrepreneurial situations involving uncertainty, profits, and losses. At least one party—the accused—is under duress and the exchanges are coerced, not voluntary. Yet, information is information; people act on it and those that are making decisions—no matter what the setting might be—generally prefer to be acting upon information that is accurate and truthful.
In regards to the counteracting institutions, Akerlof indicates that they generally present an effective mechanism to reducing uncertainty in economic transactions. Businesses that over time put inferior goods into the marketplace are punished by consumers, and the courts also can produce effective remedies for situations in which sellers fail to meet buyer expectations or engage in dishonest behavior. That is not true for criminal courts and prosecutors, however, as Kozinski and Balko point out. Instead, the lack of institutional remedies and the reluctance of the courts to punish prosecutors that give false information or lie in court stands in contrast to what occurs in market settings.
Government, Markets, and Asymmetric Information: DiLorenzo’s Critique
DiLorenzo (2011) criticizes Akerlof’s thesis, writing:
… so-called asymmetric information is a source of market failure is deeply flawed. Asymmetric information is essentially a synonym for “the division of knowledge (and labor) in society,” which is the whole basis for trade and exchange and the success of markets. (p. 249)
Far from creating failure in markets, asymmetric information, according to DiLorenzo, is the basis for a market economy. Citing Hayek (1964), DiLorenzo notes that division of labor actually is a division of knowledge. He writes:
…all information about all products and services is asymmetrical in successful, capitalist economies because of the division of knowledge (and labor) in society. If we all had symmetrical information about all of the above tasks, none of the above-mentioned businesses and occupations would exist. It is neither desirable nor possible for everyone to have symmetrical information. (p. 252)
DiLorenzo, however, notes that while market processes deal with issues of asymmetric information, the same cannot be said for government:
When potential problems do arise, such as superior knowledge on the part of a used car dealer, marketplace competition provides a solution, as described above. No such solutions exist in government, however, which is where asymmetric information is a serious problem. (p. 253)
He cites “rational ignorance” on behalf of voters as an example of how governments operate on the basis of asymmetric information, but that there are few, if any, political remedies to rectify the problems. As we demonstrate in the next section, institutional barriers in the courts and a system of perverse incentives often lead to tragic outcomes, as people are wrongfully convicted of crimes.
- PERVERSE INCENTIVES AND WRONGFUL CONVICTIONS Markets have an abhorrence of ignorance, and according to Stigler (1968), “…our understanding of economic life will be incomplete if we do not systematically take into account of the cold winds of ignorance.” (p. 188) Thus, as DiLorenzo (2011) notes, market participants develop numerous mechanisms to better inform both buyers and sellers:
The Akerlof-inspired asymmetric information literature also ignores the implications of the dynamic nature of competition. If a used car dealer is known to be dishonest, he creates a profit opportunity for a competitor in doing so. In a competitive market more honest car dealers will take market share away from the less honest ones, precisely the opposite of the outcome predicted by Akerlof. (p. 253)
But while markets may punish dishonesty, government institutions—and especially the courts—seem to take the opposite approach in providing incentives for dishonest behavior and ensure that the kinds of information asymmetries that result in wrongful convictions not only are tolerated, but actually encouraged. Balko (2013) addresses the problem of prosecutorial misconduct, which he says is a major reason for wrongful convictions. As he points out, because prosecutors are rewarded for convictions—even if they are wrongful convictions—and rarely face punishment for breaking the law, we should not be surprised that prosecutors do the latter. Writes Balko (2013):
There are a number of ways for a prosecutor to commit misconduct. He could make inappropriate comments to jurors, or coax witnesses into giving false or misleading testimony. But one of the most pervasive misdeeds is the Brady violation, or the failure to turn over favorable evidence to the defendant. It’s the most common form of misconduct cited by courts in overturning convictions.
Brady violations come from the 1963 U.S. Supreme Court decision Brady v. MarylandBrady v. Maryland, 373 U.S. 83 (1963). in which the court ruled that prosecutors are required to turn over all “favorable” or “exculpatory” evidence to the defense. Violating Brady ultimately brought down both Michael Nifong and Ken Anderson. However, as Balko notes, the Nifong and Anderson cases were extraordinary not necessarily for what they did, but that they happened at all. The reality in the courts is that most prosecutors—even those that have committed willful and egregious Brady violations—face no punishments. Writing about the Connick v. Thompson case in which Brady violations by prosecutors in New Orleans put a man, John Thompson, on death row for more than a decade before defense investigators found hidden evidence that ultimately acquitted him, Balko declares:
The particularly striking thing about that argument—that self-regulation and professional discipline are sufficient to handle prosecutorial misconduct—is that even in the specific Supreme Court cases where it has been made, and where the misconduct is acknowledged, the prosecutors were never disciplined or sanctioned. None of the prosecutors in Pottawottamie v. McGhee suffered professional repercussions for manufacturing evidence, for example. Neither did any of the men who prosecuted Thompson. In fact, there’s a growing body of empirical data showing that the legal profession isn’t really addressing prosecutorial misconduct at all.
Keenan, et. al., (2011) authored the Yale Law Review article that Balko references. The authors examine the Connick case in which the U.S. Supreme Court ruled in 2011 that although prosecutors deliberately withheld exculpatory evidence from Thompson’s defense team, the Orleans Parrish District Attorney’s office could not be held liable, thus vacating a $14 million verdict a civil jury rendered in Thompson’s suit against Connick’s office (Harry Connick, Sr., was the district attorney). They write:
…prosecutorial misconduct is a serious problem. A 2003 study by the Center for Public Integrity, for instance, found over two thousand appellate cases since 1970 in which prosecutorial misconduct led to dismissals, sentence reductions, or reversals. Another study of all American capital convictions between 1973 and 1995 revealed that state post-conviction courts found “prosecutorial suppression of evidence that the defendant is innocent or does not deserve the death penalty” in one in six cases where the conviction was reversed. Other scholars and journalists have also documented widespread prosecutorial misconduct throughout the United States.
Because the courts have limited the redress that wrongly-convicted people can receive when prosecutors have withheld exculpatory evidence or suborned perjury or engaged in other misconduct, the state bars are left to administer punishment. While state bar intervention did result in punishment for Nifong in North Carolina and Anderson in Texas, such actions by state bars are rare. As Keenan, et. al., write:
Similarly, bar discipline procedures have not proved a fruitful sanction for deterring prosecutorial misconduct. Many state bar disciplinary systems barely seem to contemplate prosecutorial misconduct as a cognizable complaint, focusing instead on fee disputes and failure to diligently pursue a client’s claim.
Balko (2013) agrees, saying: “The charges against Nifong and Anderson are newsworthy precisely because they’re so uncommon.” In the wrongful conviction of John Thompson, for example, the only prosecutor in Connick’s office disciplined by the Louisiana State Bar was a prosecutor whose role in the case was peripheral at best. The ones that actually hid evidence and lied to the courts received no punishment at all.
Gordon, Weinburg, and Williams (2003) and a 2010 USA Today investigation found that errant prosecutors simply are unlikely ever to be disciplined for wrongful and even illegal conduct. The USA Today study looked at 201 cases in which federal prosecutors were judged to have engaged in misconduct. Only one prosecutor received even temporary punishment.
Writing in Harmful Error—Investigating America’s Local Prosecutors (2003), Gordon, Weinburg, and Williams from the Center for Prosecutor Integrity declared:
Since 1970, individual judges and appellate court panels cited pros-ecutorial misconduct as a factor when dismissing charges, reversing convictions or reducing sentences in over 2,000 cases. In another 500 cases, appellate judges offered opinions either dissents or concurrences in which they found the misconduct warranted a reversal. In thousands more, judges labeled prosecutorial behavior inappropriate, but upheld convictions using a doctrine called “harmless error.”
Sapien and Hernandez (2013) examined 30 cases in New York City in which appeals courts overturned convictions based upon prosecution misconduct. Of the prosecutors in those cases, only one was disciplined, Claude Stuart, losing his job and then having his law license temporarily suspended. However, for many years, according to the authors, his conduct went unchecked:
…until Stuart’s forced resignation, there were no signs that Queens District Attorney Richard Brown saw him as a problem. Instead, Stuart had garnered a string of raises, promotions, and positive performance reviews, winning a reputation as an aggressive litigator, according to records and interviews.
“We have a broken system,” said New York University legal ethics professor Stephen Gillers. “We disbar lawyers for taking two hundred dollars from a client’s escrow account, even if they return it. But there are rarely consequences for someone who has stolen someone else’s due-process rights and possibly put an innocent person in jail.”
Thus, one can say safely that the likelihood is almost zero that an American prosecutor, state or federal, will face meaningful sanctions for misconduct—even that which results in wrongful convictions of innocent people. This creates moral hazard and increases the possibility that information prosecutors present to jurors is likely to be tainted, not to mention that the lack of consequences for illegal behavior would lead dishonest people to self-select into this line of work. This “lemons problem” is made worse, however, by the fact that prosecutors clearly are rewarded for convictions, not engaging in justice.
For example, in 2011, the Denver Post reported that former Arapahoe County District Attorney Carol Chambers paid bonuses to prosecutors in her office for convictions they won at trial.Fender, Jessica, “DA Chambers offers bonuses for prosecutors who hit conviction targets,” The Denver Post, March 23, 2011. Although what Chambers’ methods were a bit unorthodox, tying bonuses directly to a conviction rate, it is clear that prosecutors across the country are rewarded for getting convictions. Given that prosecutors are highly unlikely to be charged with misconduct no matter how egregious their conduct, one should not be surprised to see them respond positively to whatever structure of incentives exists in the legal system.
One of the problems of examining incentives in prosecutorial offices, however, is the lack of publicly-available information. Leonetti (2012) writes that prosecutors often will follow a policy of “overcharging,” that is, charging a defendant with multiple crimes for a single act, or finding other corresponding charges in order to force a desperate defendant into pleading guilty instead of going to trial. In one case documented by Balko (2013), prosecutors charged one defendant with multiple counts of armed robbery, and then threatened to try each count at separate trials, which would have made an adequate defense nearly impossible, leading the defendant to go ahead and plead out.
Writing in the Wrongful Convictions blog, Phil Locke (2015) says:
…the prosecutor has no problem assembling a very long list of charges against you. The penal code has become so vast, and there are so many laws, that there’s a law against practically everything. I suggest that most people are not even aware they’re breaking a law when they do it, because they don’t know the law exists.
Blume and Helm (2014) write that most criminal cases result in pleas, as opposed going to trial, and that often results in innocent people pleading guilty to something simply because they lack the resources to take charges to trial or do not have confidence that the system will work for them, and they will receive harsher sentences than had they just pled guilty. The plea system, Blume and Helm write, is almost completely free of judicial or legislative oversight and regulation, which makes things even more hazardous for defendants, given that prosecutors receive no sanctions for overcharging or coercing guilty pleas from innocent persons.
According to Leonetti, prosecutors engage in overcharging because they are incentivized to do so:
As opposed to seeking another way to limit prosecutorial discretion, this Article examines and evaluates an alternate cause of overcharging, one that has not received much attention from courts or in the scholarly literature: the extent to which internal personnel policies in prosecutors’ offices create incentives to overcharge. Instead of focusing only on the ways in which prosecutors exercise their discretion in the criminal justice system, scholars also need to focus on the policies governing those who exercise that discretion, particularly when those policies suggest the existence of bias. Career advancement should not be the controlling factor in how charging, prosecuting, and sentencing decisions are made. (pp. 59–60)
Likewise, Balko (2013) quotes the famed criminal-defense and civil-liberties attorney Harvey Silverglate on how prosecutors are incentivized to engage in misconduct: “Publicity and high conviction rates are a stepping stone to higher office,” says Silverglate. “Except in some rare cases, misconduct isn’t going hurt a prosecutor’s career. And it can often help,” he says.
Leonetti writes:
While prosecutors have always made their reputations by winning trials, these new quantitative standards (from state and federal agencies) mean that prosecutorial success, for the explicit purposes of job evaluation and remuneration, is now measured by the number of convictions and amount of punishment, leading to reelection for district attorneys and promotion for their deputies. (p. 65)
Such forms of evaluation, she notes, leave out evaluations of unethical or illegal conduct, as they concentrate simply upon “output,” with “output” meaning convictions and adjudication of cases favorable to state authorities. She adds:
Because those offices did not see training and avoiding ethics violations, errors, and disciplinary actions as relevant measures of prosecutors’ performance in achieving justice, they chose to forgo this measurement. As a result, there is no data to compare how those performance measures (training, ethics violations, errors, and disciplinary proceedings) may have correlated with more traditional performance measures, such as conviction rates and the length of sentences. A strong correlation, for example, between the number of ethics violations and a prosecutor’s (high) conviction rate would have been strong evidence that personnel policies that reward prosecutors for conviction rates encourage unethical behavior. (p. 65)
To give an analogy using Aklerlof’s “lemons” example, the kind of prosecutorial misconduct outlined in this section and elsewhere in this paper might be compared to a used car dealer making claims about a car he sells to an unwitting customer, with the car breaking down almost immediately after the customer purchases it. When the customer complains and demands that the dealer give him a refund, the dealer refuses and turns to other employees of his business, and all of them agree that it was a good car and that the buyer should accept the results and not carp about them, and that the dealership followed all of the proper procedures for preparing the car for sale, and that it had no known defects.
Furthermore, in this particular example, the wronged buyer is prohibited from using the tort system and is told to check with government agencies that regulate used car sales. When the buyer turns to those agencies—after having discovered documented proof that the dealer knowingly lied about the car he sold—the employees of those organizations tell him that they are sorry, but that the dealer was just “doing his job” and that they will neither require the dealer to take back the “lemon” he sold nor discipline him.
It is near-impossible to imagine such a scenario in the event a car dealer sells a “lemon” to a customer. However, this was the reality that John Thompson and thousands of other wrongly-convicted people have experienced after prosecutors engaged in illegal and unethical conduct to place them behind bars. After having their freedom taken from them, sometimes for decades, they found that the judicial and law enforcement agencies so protect their employees that no meaningful redress is possible.
In the vast literature on wrongful convictions, there are some common threads, one being that prosecutors in possession of truthful evidence withheld it from the defendants and, of course, jurors and judges. Prosecutors almost always benefit personally and professionally from such actions, as it enables them to gain more convictions, and, as we have demonstrated in this paper, they usually face few or no consequences for their actions.
To make matters worse, even when the courts are made aware that prosecutors withheld evidence or engaged in fraudulent practices, they often refuse to revisit the outcomes of either guilty pleas or trials resulting in convictions. Balko and Carrington (2018) write about thousands of criminal convictions in Mississippi and Louisiana in which prosecutors used testimony from two “forensic experts,” Dr. Steven Hayne, a medical examiner, and Dr. Michael West, who claimed to be a forensic dentist.
Hayne made a number of extraordinary claims, including testifying in a trial in which he claimed that after he examined the path of the bullet wound that killed a police officer, he could tell that the bullet came from a gun in which two people pulled the trigger simultaneously. Balko (2013) explains:
In 2007, the Mississippi Supreme Court overturned the conviction of Tyler Edmonds, a 13-year-old convicted of conspiring with his sister to murder his sister’s husband. In that case, Hayne testified that he could tell by the victim’s wound pattern that two people held the gun that fired the fatal bullets—a conclusion other forensic specialists have dismissed as preposterous.
Neither Hayne nor West, whose testimony also has helped place people on death row, are now considered credible expert witnesses in the courts, but for many years, their testimony went nearly-unchallenged in Mississippi and Louisiana courts. Requarth (2018) writes:
Over the years, his “expertise” metastasized, and he proffered opinions not only on bite marks, but also on gunshot reconstruction, wound pattern analysis, fingernail scratch reconstruction, trace metal analysis, video enhancement, pour pattern analysis, tool-mark analysis, cigarette burns, arson investigations, and shaken baby syndrome. West called his ultraviolet method the “West Phenomenon” because he could see what no one else could. He matched an abrasion on a murder victim’s body to a suspect’s shoelaces. He matched a bruise on the victim’s abdomen to a specific pair of hiking boots. He declared that simply by looking at a suspect’s palm, he could tell that the individual had been holding a particular screwdriver several days earlier. West likened his virtuosic talents to those of violinist Itzhak Perlman and once described his error rate as “something less than my savior, Jesus Christ.”
Requarth continues:
West peddled unconscionable pseudoscience in court. Typically, a bite-mark examiner would take a plaster mold of the suspect’s teeth and then compare the mold to photographs of the victim’s skin. If the pattern sufficiently matches up, the examiner could exclude everyone in the world except the suspect. Or at least that’s how the theory goes: Bite-mark matching has never been scientifically proven. West’s practices in this already-scientifically-shaky field were even more dubious. In Brewer’s and Brooks’ cases, as in many others, West pressed a plaster mold of the suspect’s teeth directly against the victim’s skin. With this method, West could have been creating the bite mark he was then claiming to have matched. In one case, West even pressed a dental mold into the hip of a comatose woman. A forensic dentist and longtime West critic posted a video of the examination on his blog. “Tampering with the evidence on the skin is likely a crime,” the dentist later said. “But to create those marks on a woman who was comatose, and who hadn’t given consent, is also an assault.”
Despite the fact that experts from around the country have dismissed the analysis of both Hayne and West as being utterly fraudulent, Mississippi Attorney General Jim Hood—who also used Hayne’s testimony when he prosecuted cases as a district attorney—refuses to revisit any of the convictions that came about (often in large part) through Hayne’s testimony. (Mott, 2014) Whether or not many of these people are innocent of the crimes for which they were convicted is irrelevant to state authorities.
In concluding this section, it is clear that the problems with asymmetric information in the criminal courts are institutional in nature. The main players in the system and the ones most responsible for bringing false information into a criminal proceeding are prosecutors, who also are the most protected actors in the system, as they have almost zero accountability. In the next section, we employ analysis from Austrian economists and others to explain why the government employees and their witnesses in criminal courts are protected to the point where even misconduct that sends innocent people to prison and death row not only goes unpunished, but the courts refuse redress to the victims of official misconduct, even leaving some of them to languish in prison.
- BUREAUCRACY, PRIVILEGE, AND AUSTRIAN ANALYSIS In his famous speech to a gathering of federal prosecutors in 1940, Attorney General Robert Jackson reminded his audience that their job was to do justice. He declared: “While the prosecutor at his best is one of the most beneficent forces in our society, when he acts from malice or other base motives, he is one of the worst.” With apologies to George Stigler (1971), one suspects that such a speech from a modern U.S. attorney general to prosecutors would be met with “uproarious laughter.”
Jackson continued:
Nothing better can come out of this meeting of law enforcement officers than a rededication to the spirit of fair play and decency that should animate the federal prosecutor. Your positions are of such inde-pendence and importance that while you are being diligent, strict, and vigorous in law enforcement you can also afford to be just. Although the government technically loses its case, it has really won if justice has been done. (Emphasis ours)
The modern standards that the American Bar Association lays out for prosecutors show that at least some of Jackson’s idealism has not disappeared. Parts (a) and (b) of Standard 3-1.2 of the ABA’s Fourth Edition of the Criminal Justice Standards for the Prosecutorial Function declare:
(a) The prosecutor is an administrator of justice, a zealous advocate, and an officer of the court. The prosecutor’s office should exercise sound discretion and independent judgment in the performance of the prosecution function.
(b) The primary duty of the prosecutor is to seek justice within the bounds of the law, not merely to convict. The prosecutor serves the public interest and should act with integrity and balanced judgment to increase public safety both by pursuing appropriate criminal charges of appropriate severity, and by exercising discretion to not pursue criminal charges in appropriate circumstances. The prosecutor should seek to protect the innocent and convict the guilty, consider the interests of victims and witnesses, and respect the constitutional and legal rights of all persons, including suspects and defendants.
This clearly is not the American criminal justice system described in sections I and III of this paper, but explaining why this is the current situation requires something much different than exhorting the players in the system to “serve the public.” If there is anything clear, the players in the system, from police to prosecutors to the judges do not serve the interests of the “public,” but rather their own interests.
Economists in the Austrian and Public Choice camps should not be surprised at this situation. Yandle (1983) wrote of his experience with the Federal Trade Commission and how oblivious its staff economists seemed to be to the problems of regulatory issues. He writes:
Not only does government rarely accomplish its stated goals at lowest cost, but often its regulators seem dedicated to choosing the highest-cost approach they can find. Because of all this, I and others in academia became convinced years ago that a massive program in economic education was needed to save the world from regulation. If we economists could just teach the regulators a little supply and demand, countless billions of dollars would be saved. (p. 13)
As he received his “education” in bureaucratic thinking, however, Yandle came to realize that the regulatory dynamic was not what he originally had imagined. He continues:
…instead of assuming that regulators really intended to minimize costs but somehow proceeded to make crazy mistakes, I began to assume that they were not trying to minimize costs at all—at least not the costs I had been concerned with. They were trying to minimize their costs, just as most sensible people do. (p. 13, emphasis his)
Those costs, he pointed out, included costs of making mistakes, costs of enforcement, and political costs. Those firms being regulated, he noted, also had goals that were well outside what the public perception of regulation was supposed to be. Writes Yandle:
They want protection from competition, from technological change, and from losses that threaten profits and jobs. A carefully constructed regulation can accomplish all kinds of anticompetitive goals of this sort, while giving the citizenry the impression that the only goal is to serve the public interest. (p. 13)
Most of the regulation literature focuses upon the relationship between government and private firms that government agents regulate, but while courts are entirely government entities and the analogies between the various players in the courts and those in the regulated marketplace are not exactly the same, nonetheless there are similarities. First, and most important, as McCormick and Tollison (1981) write, all of those who take part in the systems—both markets and in government—are self-interested individuals:
They (government employees and politicians) are economic agents who respond to their institutional environment in predictable ways, and their actions can be analyzed in much the same way as economists analyze the actions of participants in the market processes. (p. 5)
If one can compare the actions of prosecutors to business owners, one can apply Rothbard’s analysis (2004) that individuals will seek to gain psychic gains and also can suffer psychic losses. There is one important difference, however: Should the individuals in private business—entrepreneurs and the capitalists—engage in error or disseminate false information over time, they well may suffer real economic losses, losing their own resources.
Prosecutors, on the other hand, use state-owned resources, are protected from their own personal losses by both the legal doctrine of absolute immunity and the refusal of the so-called watchdog agencies such as state bar discipline committees to hold prosecutors accountable for lawbreaking and other wrongdoing. Furthermore, their actions force others to use their own resources, and when prosecutors target business owners, losses and occasional bankruptcies follow.
Calton (2017) reinforces this point by likening the courts to a commons or, more specifically, a “public good” that is owned by the state, and the government players have no incentive to economize on resources financed by taxpayers. He writes:
Because the government holds a monopoly on the justice system in the United States, courtrooms are treated as public goods. For public goods, costs are socialized, so there is no individual cost to using this resource. From the perspective of the criminals, of course, this seems like a no-brainer—a defendant is hardly going to pay the cost of his own conviction. But the socialized costs of courtrooms remove the incentive to economize for two specific groups of people: legislators and police officers.
Calton explains that legislators can expand the criminal code to look “tough on crime” without having to use their own resources, while police gain from making more arrests, even though most of the people they collar are likely to be non-violent lawbreakers. To put it another way, the gains for the government players in the system, including police, prosecutors, judges, and lawmakers are private while the costs themselves are socialized.
While we use market analysis, nonetheless, we emphasize again that courts are not markets, and that plea bargain sessions are not exercises in mutual exchange. In economic exchanges, all parties involved anticipate being better off afterward, while in the courts, one party will be better off and the other will be worse off. Rothbard writes about government intervention:
On the market,…, there can be no such thing as exploitation. But the thesis of an inherent conflict of interest is true whenever the State or anyone else wielding force intervenes on the market. For then the intervener gains at the expense of the subjects who lose in utility. On the market all is harmony. But as soon as intervention appears on the scene, conflict is created, for each person or group may participate in a scramble to be a net gainer rather than a net loser—to be part of the intervening team, as it were, rather than one of the victims. (p.881)
Prosecutors generally are winners in their interactions with people who are accused of crimes, and given the high conviction rates and the high rates of plea bargains (that serve as convictions), prosecutors benefit well from the existing system. This does not mean that society as a whole benefits from how the courts operate, however, and when innocent people are convicted and the courts and prosecutors refuse to rectify the errors, not only are the wrongfully-convicted individuals done irreparable harm, but also family and loved ones of the victim. Furthermore, every refusal to correct official wrongdoing that goes unpunished (and that is nearly every one of those cases) creates perverse incentives for prosecutors and judges to do more of the same.
As we have emphasized before, for all of the talk about how prosecutors “serve society,” the system is one in which many of the actors, such as prosecutors, gain individually from the system, but the benefits to others are not as clear. While it is true that most people would benefit with dangerous and violent criminals being punished and “taken off the street,” close to half of people in prison are there not for violent crimes like robbery, rape, and murder but rather for using or distributing drugs such as marijuana or cocaine. (Carson, 2018) While one can argue whether or not such substances should be legal, nonetheless usage of these substances does not necessarily post a threat to the lives and property of others.
Mises (1944) provides a number of insights into bureaucratic mind. For the purposes of this paper, we look at the “justice” system as a bureaucracy, as opposed to dealing with whether or not elected prosecutors behave differently than appointed prosecutors, a subject for later research. Commenting on the differences between private enterprise and a bureaucratic office, Mises writes:
The objectives of public administration cannot be measured in money terms and cannot be checked by accountancy methods. Take a nation-wide police system like the F.B.I. There is no yardstick available that could establish whether the expenses incurred by one of its regional or local branches were not excessive. The expenditures of a police station are not reimbursed by its successful management and do not vary in proportion to the success attained. If the head of the whole bureau were to leave his subordinate station chiefs a free hand with regard to money expenditure, the result would be a large increase in costs as every one of them would be zealous to improve the service of his branch as much as possible. It would become impossible for the top executive to keep the expenditures within the appropriations allocated by the representatives of the people or within any limits whatever. It is not because of punctiliousness that the administrative regulations fix how much can be spent by each local office for cleaning the premises, for furniture repairs, and for lighting and heating. Within a business concern such things can be left without hesitation to the discretion of the responsible local manager. He will not spend more than necessary because it is, as it were, his money; if he wastes the concern’s money, he jeopardizes the branch’s profit and thereby indirectly hurts his own interests. But it is another matter with the local chief of a government agency. In spending more money he can, very often at least, improve the result of his conduct of affairs. Thrift must be imposed on him by regimentation. (p. 46)
While no one doubts that even prosecutors face scarcity constraints (even though critics may say prosecutors have “unlimited” resources), nonetheless there is an economic calculation issue facing a defendant that prosecutors do not share. Because individuals charged with crimes are expected to pay for their own representation—or face the tender mercies of an overworked public defender that is unlikely to offer an adequate defense—they are likely to face resource problems. Prosecutors, on the other hand, are using resources of others and face a much different calculus than do defendants. Mises explains, at least in part, the process:
In public administration there is no market price for achievements. This makes it indispensable to operate public offices according to principles entirely different from those applied under the profit motive.
Now we are in a position to provide a definition of bureaucratic management: Bureaucratic management is the method applied in the conduct of administrative affairs the result of which has no cash value on the market. Remember: we do not say that a successful handling of public affairs has no value, but that it has no price on the market, that its value cannot be realized in a market transaction and consequently cannot be expressed in terms of money. (p. 47)
As Mises points out, market prices and behavior will at best impose only partial constraints upon the bureaucrat’s actions, and given that the kind of economic calculation that constrains entrepreneurs and capitalists does not fully restrain prosecutors, the system then requires restraints of another kind imposed by a political process or the whims of an administrator. However, as Yandle notes, the regulator is interested in minimizing his own costs, not to mention reluctant to limit the power of his office. In other words, there are plenty of reasons for those who either supervise the prosecutor or are able to impose discipline for prosecutorial misconduct to shirk their assigned duties, as to do so in the long run would diminish the power of the prosecutor’s office, thus reducing all of their authority.
While this paper does not advocate reform for prosecutorial offices, nonetheless it is clear that the denial of using the tort system takes away the one remedy that one wronged by a prosecutor directly can take against his false accuser. Every other remedy—from other prosecutors charging the offending prosecutor with a crime to the state bar imposing discipline up to taking away the prosecutor’s law license—requires those who are government officials and also have a vested interest in preserving their own power and authority to do something that in the long run undermines their own power.
Such a state of affairs should surprise no one. Mises notes in Bureaucracy that one cannot really reform the bureaucratic insti-tutions other than try to limit their influences. He pointed out that bureaucracies cannot run an economy with any success or replace a market. Likewise, one cannot impose “market-based” reforms upon bureaucracies; people charged with crimes cannot refuse to submit to prosecutors and the courts, and average citizens have no power over the system other than to serve on juries and, on occasion, impose their own form of “justice” through jury nullification.
By creating an atmosphere in which prosecutors nearly are invulnerable to legal accountability, the courts also have unleashed a situation in which F.A. Hayek (1944) described as one in which “the worst get on top.” Hayek—as well as Austrian economists such as Mises and Rothbard—warned that a collectivist system is more than likely to empower people who are more likely than not to abuse that power. He writes:
The principle that the end justifies the means is in individualist ethics regarded as the denial of all morals. In collectivist ethics it becomes necessarily the supreme rule; there is literally nothing which the consistent collectivist must not be prepared to do if it serves “the good of the whole,” because the “good of the whole” is to him the only criterion of what ought to be done. (pp. 146–147)
- CONCLUSION Twenty years ago, Bill Moushey (1998) of the Pittsburgh Post-Gazette introduced a 10-part series on federal law enforcement misconduct with these words:
Hundreds of times during the past 10 years, federal agents and prosecutors have pursued justice by breaking the law.
They lied, hid evidence, distorted facts, engaged in cover-ups, paid for perjury and set up innocent people in a relentless effort to win indictments, guilty pleas and convictions, a two-year Post-Gazette investigation found.
Rarely were these federal officials punished for their misconduct. Rarely did they admit their conduct was wrong.
New laws and court rulings that encourage federal law enforcement officers to press the boundaries of their power while providing few safeguards against abuse fueled their actions.
Victims of this misconduct sometimes lost their jobs, assets and even families. Some remain in prison because prosecutors withheld favorable evidence or allowed fabricated testimony. Some criminals walk free as a reward for conspiring with the government in its effort to deny others their rights.
For anyone in the Austrian or even Public Choice camps of economic analysis, none of Moushey’s words are surprising. As Mises (1944) noted, for all of the idea that government employees “serve the people,” the gains of employment through salaries, promotion, and prestige go to the individual government workers. Moreover, we see a “capture effect” in which those employed by government in the bureaucracies have usurped the legislative process and become virtually independent of the legislative branch, which Roberts (2000) points out accelerated during the New Deal of the 1930s, as Congress “re-delegated” many of its constitutional powers to the bureaucracies of the executive branch.
Rothbard (2004) writes that individuals act to make their “psychic revenue” greater than the “psychic costs” incurred during a particular action, and the doctrine of absolute immunity for prosecutors—and the refusal of the “watchdog” organizations to discipline prosecutors when they break the law—has the effect of lowering the real costs that they face for their actions. Likewise, their promotions, pay raises, and general prestige for “winning” in the courtroom and at the plea bargaining table falls into the “psychic revenue” category. Given that set of circumstances, perhaps one should be surprised that prosecutors ever obey the law when it comes to satisfying their Brady requirements.
Although this paper has dealt with the single issue of absolute immunity for prosecutors and its effects on the court systems, there is a larger area of study looking at how we observe a form of “regulatory capture” in the courts. In this case, prosecutors would “capture” the process that disciplines them, such as the state and federal bar disciplinary organizations. There exists a body of literature on regulatory capture both in and out of the Austrian tradition, and there would be rich ground for more study here.
As we noted in the previous section, the set of institutional constraints and incentives make prosecutorial abuse inevitable, and it explains the lack of desire by authorities given the power to discipline wayward prosecutors to carry out their legal duties. Because prosecutors are rarely punished for lying and presenting false evidence, along with suborning perjury, it is safe to say that the information they often present to jurors and judges is less reliable than the information given by the seller of the Akerlof used car.
While we agree that ending the legal standard of absolute immunity for prosecutors would provide for a major reform of the criminal justice system and compel prosecutors to be more truthful in their pursuit of convictions, nonetheless we also understand that the courts are unlikely to give up their self-created protections. Prosecutors, which have a strong lobbying presence both in state legislatures and in Congress, are incentivized both to illegally withhold exculpatory information in order to win cases and to demand continued protection for their unlawful actions, and at the present time, there is no political or administrative mechanism in existence that is likely to change the status quo. Thus, to paraphrase McCormick and Tollison (1981), we realize that at the present time, lamenting this major imperfection in the criminal justice system might be the most we can do as long as state authorities enjoy the legal monopoly to pursue their version of “justice.”
The Supreme Court is hopelessly politicized, far too powerful, and relentlessly hostile to liberty.
Our legal expert Allen Mendenhall joins Jeff Deist to discuss the liberal and illiberal aspects of nominee Brett Kavanaugh's record, the limits of originalism, and the intractable reasons why changing the makeup of the Court won't save us from a rapacious federal government.
The life and work of the 19th century economist and statesman, Claude-Frédéric Bastiat (1801–1850), are highlighted by Guido Hülsmann. Beginning his work in economics to fight against tariffs and to argue for free trade, Bastiat published The Law in 1850. His influence spread quickly as it was translated into many languages all over Europe. In it he argued that the whole point of law is to protect the private property of every member of society.
Thanks to Bastiat, we have the brilliant illustration of the broken window fallacy from his essay “What Is Seen and What Is Not Seen.” To see destruction as a source of economic growth by increasing income to re-build, Bastiat argued, is to focus only what is immediately visible and missing the loss of pre-existing wealth.
The Who Is? podcast is available on iTunes, Google Play, Stitcher, Soundcloud, and via RSS.
Public sector unions think it's okay to force employees who aren't union members to pay dues that fund leftwing lobbying.
Libertarians support any voluntary associations, including unions, but oppose compelled speech and legislatively-mandated collective bargaining.
Our guest Jacob Huebert is the attorney who won the enormously important Janus vs. AFSCME Supreme Court case, this week. He's also an Associated Scholar with the Mises Institute and author of an excellent primer titled Libertarianism Today. Jacob and Jeff Deist break down the libertarian perspective on this landmark case.
Some members of congress are pushing for new laws to make police a protected group in a way similar to "hate crime" legislation. Original article: Government Police Are the Latest Persecuted "Victim" Group.
Attorney General Jeff Sessions was at it again last week, insisting that the supremacy of federal law is "settled"—which is his way of saying nullification and secession are illegal. But Sessions is hardly alone in his thinking, which would be right at home on the pages of Salon or National Review. Michael Boldin of the Tenth Amendment Center joins Jeff Deist to discuss how we can fight back against the cult of federal supremacy, and why decentralization is a far more pragmatic and humane way to create greater freedom than trying to win national elections.
Ryan McMaken discusses how government agents and agencies are often not held accountable for their actions. Text version: Lack of Police Accountability Shows the "Social Contract" Isn't Working
Ryan McMaken discusses the rising homicide rate in Mexico, and addresses the argument that most illegal guns in Mexico are from the United States. Text version: Stop Blaming Mexican Violence on American Guns
The gun control debate is nothing more than a smokescreen: another divisive and emotional issue in a country obsessed with politicizing every human ill, all premised on the wildly irrational idea that we can get rid of 300 million firearms. But there is a market for safe schools and safe public spaces, a market security entrepreneurs could fill if government got out of the way. Mises.org editor Ryan McMaken joins Jeff to discuss private solutions to gun violence, the kind of solutions only available to private property owners with skin in the game. It's time to apply market incentives to school security.
Read more on this topic here, here, and here.
Ryan McMaken discusses issues surrounding public school security measures in response to school shootings — and addresses some arguments made against increasing security. Text version: "Security Works at Disney — But Can't Work at a Public School?"
Season 2, Episode 10. What is now considered the worst Supreme Court ruling of all time, Dred Scott v. Sandford, was a decision that sought to end the controversy over slavery that had raged since the Compromise of 1850. By ruling that Congress had no legal power to prohibit slavery in the territories, Chief Justice Roger B. Taney poured gasoline on the fire that was dividing the nation.
So far, the federal investigation into Russian collusion during the 2016 election has been a farce. Lawless and corrupt federal prosecutors—and their pet police agency, the FBI—dominate the headlines. Yet, the Constitution never provided for a federal police force, and lists very few federal crimes. So, how and why did federal prosecutors and agents become so powerful? Mises.org editor Ryan McMaken joins Jeff Deist to discuss.
For further reading, see Bill Anderson's Mises Wire article, "Federal Prosecutors Are Running Amok".
Season 1, Episode 12. Following the death and torture of a DEA agent, the War on Drugs is taken to even greater heights. In the final episode of the Historical Controversies "War on Drugs" series, Chris Calton explains the legislation and police operations that led to America having the world's largest prison population.
This audio from Judge Napolitano's introductory lecture at Mises University this week includes an introduction by Lew Rockwell, as well as a Question and Answer Period. Recorded on the campus of Auburn University on 24 July 2017.
Lysander Spooner called it "The Constitution of no authority." Conservatives fetishize it, but don't follow it. Progressives want it annulled. So, what should libertarians think about America's founding document?
Our guests Brion McClanahan and Allen Mendenhall give us the unadulterated history and unpleasant truths about constitutionalism—but also consider its underappreciated benefits. This is a discussion of the Constitution you won't hear anywhere else.
Follow our guests on twitter: @BrionMcClanahan and @AllenMendenhall
The US criminal justice system is hopelessly broken, riddled with bad incentives and bad actors. In the wake of recent police shootings, Dr. Ed Stringham joins Jeff Deist to help us understand how and why private security firms could create vastly better outcomes for crime victims, society, and even perpetrators. This is a fascinating discussion you won't want to miss.
Recommended reading: Private Governance: Creating Order in Economic and Social Life
Brutus, writing in The Antifederalist Papers, had this to say about judges:
There is no power above them, to control any of their decisions. There is no authority that can remove them, and they cannot be controlled by the laws of the legislature. In short, they are independent of the people, of the legislature, and of every power under heaven. Men placed in this situation will generally soon feel themselves independent of heaven itself.
Now Trump has announced his nominee for the Supreme Court. Here to explain everything from a libertarian perspective is Allen Mendenhall, a lawyer, PhD, and director of the Blackstone and Burke Center. How will Gorsuch likely rule on important issues, given what we know about him? Is he an activist, an authoritarian, an originalist, or a positivist? Is he too cozy with federal power, or does he show a libertarian Coloradan streak? And, if confirmed, will he occupy a "stolen" seat?
A Conversation with Allen MendenhallA frequent collaborator with the Mises Institute, Allen Mendenhall is associate dean and executive director of the Blackstone & Burke Center for Law and Liberty at Faulkner University and is the author of Literature and Liberty: Essays in Libertarian Literary Criticism (2014) and Oliver Wendell Holmes Jr., Pragmatism, and the Jurisprudence of Agon: Aesthetic Dissent and the Common Law (2016). He recently spoke with us about his legal work, how the Mises Institute has influenced him, and his predictions for the new president.
The Austrian: Tell us about your new position at Faulkner University and how you came to be associated with the Mises Institute.
Allen Mendenhall: I’m an associate dean in the law school at Faulkner and the executive director of a new center there called the Blackstone & Burke Center for Law & Liberty. The center promotes the common-law tradition and coordinates educational programs and research initiatives on liberty and private ordering.
I first started reading publications of the Mises Institute when I was a law student. I was freeing myself from the bad presuppositions and habits of thinking that had entangled me as an undergraduate English major.
For many years, I was a distant observer of the Institute. I was working through economic ideas for the first time, startled at the depth of my ignorance and exhilarated by the discoveries I was making through Austrian economics.
One day, on a whim, I wrote a book review and emailed it to the editors of Mises Daily. The next day, the piece was published. I was thrilled. After that, I wrote more pieces for the Institute, and when I attended Auburn University for my doctorate, Lew generously gave me office space to use during the school year.
While I worked toward my doctorate, I participated in an Austrian Scholars Conference, attended Mises Circle events, and completed Mises Academy courses with Thomas DiLorenzo, David Gordon, Stephan Kinsella, and Robert Murphy. I was also working with Paul Cantor on developing libertarian approaches to literary criticism, an effort that resulted in the publication of my first book, Literature and Liberty: Essays in Literary Criticism.
TA: Now that you’ve had time to take a look at Trump’s appointments following the election, what do you expect will be the overall tone of the administration?
AM: It’s hard to say. Trump can seem evasive and unpredictable about details, even if his broad vision for certain policies — say, immigration or trade — is clear. I do find it promising that Trump has favored the private sector in his choices for cabinet positions: Andrew Puzder at Labor, Wilbur Ross at Commerce, Betsy DeVos at Education, and Linda McMahon at the Small Business Administration. And I’m fascinated by his decision to nominate Oklahoma attorney general Scott Pruitt, a longtime enemy of the EPA, to head up that agency, which exercised extraordinary powers under the Obama administration.
Whether these nominees will, if confirmed, reduce the power and spending of government or, instead, facilitate corporatism and cronyism remains to be seen. One harbors doubts when figures like John Bolton are in the mix for cabinet positions.
TA: What do you think are the best parts of the new Trump administration and what are the worst?
AM: The best, as I’ve suggested, include the selections of non-politicians and non-government figures. The worst, at least on the basis of track record, involve foreign policy. Given the choices at Homeland Security, Defense, and National Security Advisor, I’m fearful this won’t be a return to an Old Right foreign policy.
As of this writing, Trump’s nominee for Secretary of State is Rex Tillerson, the chairman and CEO of Exxon. I don’t know much about Tillerson’s perspective on foreign policy, but at least he’s not John Bolton, and I consider his business experience to be valuable.
TA: As an attorney, do you foresee any meaningful changes in the federal judiciary — including the Supreme Court — as a result of Trump’s election?
AM: Yes. The history of the federal judiciary demonstrates that, no matter who the president is, courts always institute meaningful changes in society, for better or worse. On this score, I’d prefer a President Trump to a President Clinton.
The framers of the Constitution believed they could restrain the powers of government through a system of federalism, separation of powers, and checks and balances. Perhaps they were quixotic; the state of the federal government today would seem to suggest that they were. Even an ardent nationalist like Hamilton would be shocked at the growth and power of the federal government, let alone the federal judiciary. Many libertarians take an anti-Jeffersonian approach to the federal judiciary, advocating for robust judicial powers that can be enforced against local communities and private businesses. This bothers me.
Imagine if Hillary Clinton had won this election and appointed judges to federal vacancies in the district and circuit courts, and also to the US Supreme Court. Imagine if these judges and justices believed in a fundamental right to basic income or subsistence and attempted to incorporate these alleged rights against the states through the Fourteenth Amendment. Imagine new judges and justices who believed that forms of politically incorrect speech constitute “hate speech” that’s not protected by the First Amendment. Imagine new judges and justices who believe the government is responsible for remedying past wrongs against certain groups and thus favored affirmative-action programs in schools and businesses. Imagine judges and justices hostile to the Second Amendment. We might have seen the federal judiciary populated by such jurists had Clinton been elected.
Because Trump won’t nominate jurists like these, at least if his list of 21 potential nominees to the US Supreme Court is any indication, I believe his election will affect the role of judges in our society.
TA: In spite of Trump’s victory, it’s hard to ignore that the election was extremely close. Do you think there’s any real ideological change in the US going on, or could we just be looking at a return to another typical center-left presidency in four years?
AM: Something has changed. Just four years ago, a Donald Trump presidency would have been inconceivable. I don’t know whether a change in public opinion or culture or norms or attitude or demographics or whatever translates into a change in the size and structure of government at this point. We’re experiencing political unrest, but it’s not clear to me yet whether that will lead to more or less liberty and economic freedom in the long term.
Judge Napolitano, the great constitutional scholar and legal analyst for Fox News, recently gave a dynamite talk to our Mises U students on the real meaning of the 1st Amendment. While many protections in the Bill of Rights have been almost completely eviscerated by a lawless federal government, the Judge finds reasons to be optimistic about the current state of free speech in America. In fact, he suggests that 1st Amendment freedoms actually may be expanding—even as much of the Constitution becomes a dead letter. This is a compelling talk you won't want to miss.
Dr. Mark Thornton and Garrett Petersen from Economics Detective Radio discuss drugs in the United States.
Topics include: how drug prohibition causes homelessness, the rising heroin epidemic in America, the effects of American foreign policy on opiate supply, and the political lies behind drug prohibition.
See Dr. Thornton's recent article on the Heroin Epidemic here, and visit The Economics Detective website here.
A heroin epidemic has been spreading across the United States, expanding enormously for the last several years. With it, the number of people dying has also increased dramatically. While politicians offer failed solutions like “securing the borders,” the real solution is to legalize drugs.
The number of drug overdoses in the US is approaching 50,000 per year. Of that number nearly 20,000 are attributed to legal pain killers, such as Oxycontin. More than 10,000 die of heroin overdoses. I believe these figures vastly underestimate the number of deaths that are related to prescription drug use.
The “face” of the heroin epidemic has changed since the 1960s when it was largely contained to urban “junkies” and Vietnam veterans. In recent years the epidemic spread to suburbia as heroin became a low-cost substitute for other drugs. In more recent times, the epidemic has spread to rural areas such as fishing villages in Maine and coal mining towns in Pennsylvania and West Virginia.
The problem of the epidemic rests with two causes. The first is the War on Drugs which creates profit incentives in the black market for the distribution of the most dangerous drugs. The second is the pharmaceutical-medical-FDA complex, or Big Pharma, which profits from treating pain with dangerous pharmaceutical drugs.
The Problem with Illegal OpiatesThe War on Drugs makes the business of black market drugs more risky and expensive. Hundreds of thousands are arrested every year for illegal drug violations. If drug smugglers can make their shipments of, for example, 1,000 doses or units smaller, they are better able to avoid detection, capture, and punishment. The best and most obvious way to achieve this is to smuggle more potent versions of the drug, or more potent drugs.
Marijuana growers sought to meet the demand of smugglers by offering better processed, better grown, and eventually genetically engineered products tightly packed into “bricks.” As a result, the potency of THC in marijuana increased from less than 0.5 percent when the War on Drugs began in the early 1970s, to almost 10 percent today.
Of course, the incentive from the War on Drugs does not stop there. It also encourages producers to switch to other drugs that are more compact and potent. Therefore, marijuana as a class of drug is disadvantaged compared to more potent and more dangerous drugs like cocaine and heroin. This leaves a black market where one dose of marijuana is relatively more expensive than one dose of heroin.
In the black market consumers do not know how potent their purchases will be until after the product has been consumed. In the free market, the potency of a Bayer aspirin is always the same. In the black market, the potency of products can vary widely over time. Also, a consumer’s tolerance for a drug changes over time. Daily users may have to increase their dose over time, while new users or relapsed addicts may only need small doses. If any individual takes much more than the appropriate dose for them, then they will stop breathing and can die.
Phillip Seymour Hoffman’s overdose death helps illustrate the pitfalls created by the War on Drugs. Hoffman was a drug addict that had been off of drugs for many years. When he became overwhelmed with personal problems he relapsed and died from a combination of prescription and potent illegal drugs. There have also been numerous reports about heroin being sold that contains both heroin and a legal opiate, Fentanyl, which is often lethal.
In a free market, heroin would come in an unadulterated pharmaceutical grade form of various indentified doses. It would have warning labels and instructions. You might have to consult a medical doctor or pharmacist before purchasing heroin, or you might have to go to a clinic. The producers, distributors, and retailers would have some liability for negligence. Before it was made illegal in 1914 one of the most popular heroin products was Bayer’s Heroin.
The Problem with Legal OpiatesOne of the biggest problems with legal opiates and heroin is that the medical-pharmaceutical-FDA complex has achieved a much greater use rate in recent years. Essentially, the pharmaceutical companies bribe medical researchers, doctors, and heath bureaucrats to recommend to authorities such as the FDA to promote the use of drugs such as Oxycontin and Vicodin, instead of less powerful and less addictive alternatives that were used in the past. Of course, the taxpayer ends up paying for most of the bill.
A couple of years ago while traveling I went to a “Doc in the Box” for a minor medical issue. I was examined by a physician’s assistant and was asked what pharmacy I used. I picked up the prescription after leaving and took one pill when I arrived at the motel. I sat in a chair and later became groggy and almost lost my balance when I stood up. As soon as I steadied myself, I went to check the prescription. To my amazement, it was Oxycontin!
The problem gets worse from there because physicians are also under pressure from the government to not overprescribe strong painkillers. They, for example, cannot continue to prescribe pain killers after a wound has obviously healed. The result is that people are addicted and then cut off from these powerful opiate prescriptions.
Their alternatives include entering an addiction treatment program which can be expensive, time consuming, and ineffective. As a result, these freshly minted addicts can turn to the black market for Oxycontin and Vicodin. The problem here is that it can cost $10–25 per pill and addicts require multiple pills per day. Also the supply of such pills can be erratic.
Their next alternative is the black market heroin which seems to be more available than ever and often at a lower price per dose. If you buy in large quantities you can obtain a dose for as little as $4.00 and possibly lower.
Legal Use Leads to Illegal UseThis explains why we have seen the heroin epidemic spread across the country. Doctors are prescribing legal opiates to people like fishermen and coal miners who sustain painful injuries on a regular basis. They become addicted and then get cut off. Eventually they cannot afford the black market prescription drugs, so they turn to the often deadly alternative, heroin.
How can the drug legalization help solve this vexing problem? First of all, in a free market you would not have Big Pharma rigging the medical practices of doctors around the country creating thousands of addicts each month. Second, drug addiction treatment programs could use the maintenance and withdrawal method which was used somewhat effectively prior to the passage of the Harrison Narcotics Act in 1914.
Third, in a free market, drugs like heroin would be produced and sold on a commercial basis. It would be a standardized product(s) and companies that sold dangerous and addictive products would do so under several legal constraints, such as liability and negligence law. Fourth, cannabis would be legal and produced for several medical purposes, like it was prior to the Marijuana Tax Act of 1937. Many of the pre-prohibition products were used to treat pain, as well as many of the symptoms associated with opiate withdrawal, such as muscle aches, anxiety, inability to sleep, nausea, and vomiting.
With drug legalization the number of overdose deaths would plummet and tens of thousands of families would not have their lives ruined every year.
Libertarianism doesn’t often attract attention from The Atlantic, but a recent article, “The Information Revolution’s Dark Turn,” features philosopher Alistair Duff who attacks libertarianism in general, and Murray Rothbard specifically. Unfortunately, the article misrepresents libertarianism, but does so in a superficially plausible way. Many critics of libertarianism, I suspect, view it in the same way the article does.
The article is an interview of Alistair Duff, who teaches information society and policy at Edinburgh Napier University. Duff is interested in the information revolution in Silicon Valley, and he thinks that people who work there are too anti-statist.
Duff says of libertarianism, “I think it’s a mistaken philosophy.”
I have read [Robert] Nozick’s Anarchy, State, and Utopia, and Murray Rothbard’s Ethics of Liberty, and Milton Friedman’s Capitalism and Freedom — I’ve read it all, and it’s a flawed philosophy. The ultimate value is not liberty: It is justice. Liberty has to fit within the context of social justice. And where it violates justice, I’m afraid justice trumps liberty.
Libertarianism says that freedom is the paramount value. But I don’t think that’s the case. I’m a follower of John Rawls, the great Harvard political philosopher, and in his Theory of Justice, he makes clear that justice is the paramount virtue in political life.
It should incorporate a great deal of freedom, including some inalienable freedoms, but you cannot trump justice with liberty in the way Tim Cook is doing.
In brief, according to Duff, libertarians think that freedom is the highest value, but justice is in fact more important.
Readers might expect me to say that Duff is mistaken: freedom outranks justice; but this would not be a good way to proceed. To do so would be to accept the way Duff characterizes libertarianism, and it would be wrong to do so.
At first sight, one might think that Duff was correct. After all, Murray Rothbard says “Libertarianism does not offer a way of life; it offers liberty, so that each person is free to adopt and act upon his own values and moral principles. Libertarians agree with Lord Acton that ‘liberty is the highest political end’ — not necessarily the highest end on everyone's personal scale of values.” Further, Rawls says, “Justice is the first virtue of social institutions, as truth is of systems of thought.” (A Theory of Justice, 1st edition, p. 3)
Isn’t this exactly the contrast that Duff has set forward? Libertarians rank liberty first: supporters of Rawls think that justice outranks liberty. What could be clearer?
We Need the Correct Theory of JusticeThe contrast that Duff draws in fact rests on a false assumption. As libertarians see matters, liberty and justice are not separate values that need to be ranked. Rather, “liberty” refers to the system it supports of rights based on self-ownership and property rights, and precisely this system is “justice” as libertarianism characterizes it. The difference between libertarians and Rawls concerns the correct theory of justice, not whether “justice” or “liberty” has greater importance. Rothbard makes this vital point clear in his discussion of Isaiah Berlin, who did speak of “liberty” unmoored from other values. He writes, “Berlin’s fundamental flaw was his failure to define negative liberty as the absence of physical interference with an individual’s person and property, with his just property rights broadly defined.” (The Ethics of Liberty, p. 216) Nozick takes exactly the same position. Anarchy, State, and Utopia offers an alternative to Rawls’s theory: it is not an endeavor to elevate liberty above justice in the hierarchy of values.
Duff may have gotten the wrong idea about libertarianism because when he thinks of “justice,” he has in mind his own view. He says, “There is massive inequality, which is unacceptable. Inequality should not be so great that it crystallizes into class distinctions — master-servant relations — and I think you have that in Silicon Valley, to some extent.” It’s certainly right that libertarianism doesn’t value equality of income and wealth, but this is not a rejection of justice. Duff cannot see that his view of justice is not the only one on offer. By the way, why Duff thinks that inequalities of wealth lead to master-servant relations is not obvious. Are the employees of Silicon Valley companies who earn less than the billionaire owners of these firms the “servants” of these owners? Why think that?
Duff might respond to the line of criticism I have suggested by saying, “So what! Even if libertarianism does have a theory of justice, it’s the wrong one. Rawls’s theory is better.” If Duff were to say that, though, he would have to argue for the superiority of Rawls’s theory to the libertarian one. It would not suffice merely to dismiss libertarianism for preferring liberty to justice. Duff’s tactic is no more than a rhetorical trick.
Duff’s Odd Notions of JusticeThere is another questionable claim in Duff’s interview. In a statement I have already quoted, he says that “public life should incorporate a great deal of freedom … but you cannot trump justice with liberty in the way Tim Cook is doing.” He is talking about Cook’s refusal to obey the FBI’s demand that Apple engineer software to help unlock the iPhone of one of the San Bernardino shooters. Duff is adamant on this matter. He says, “I’m with the state on that, absolutely. I think Tim Cook is out of his mind. It’s a clear case where the state’s rights prevail over the right of individual privacy, and I say that as an advocate of privacy. We’ve got to get common sense on privacy, not fanaticism.”
It is difficult to see why Duff regards Cook’s position as one that unduly prefers liberty to justice. Rawls’s theory, which Duff favors, doesn’t directly address conflicts of this sort between liberty and national security. Why, then, does Duff take what is at stake to be a conflict between liberty and justice? Perhaps Duff would appeal to Rawls’s discussion of conscription (A Theory of Justice, 1st edition, pp. 380ff.), but in the absence of a fuller account by him, his claim is baffling.
Duff says about libertarian theory that he has “read it all,” but he has not done so very carefully and thoughtfully.
The United States is notable for incarcerating a very large portion of its population compared to other countries. Surprisingly, this may increase homicide rates and lead to enclaves of ex-cons which would help explain why so many homicide victims have criminal records, writes Justin Murray.
This audio Mises Daily is narrated by Ben Wiegold.
In recent years, there has been a growing awareness fact that the United States imprisons a far larger percentage of its population than many other nations. Much of this is due to the fact that what we call crime in the US is often not an imprisonable offense in the EU nations.
In the US, for example, a prison term is commonly employed for small-time drug offenders. According a study done by the Vera Institute of Justice, such sentences are rarely used for drug offenses in Germany and the Netherlands.
This is even true of more serious crimes. The report notes:
In most cases — even for relatively serious crimes such as burglary, aggravated assault, or other crimes considered felonies in the United States — prosecutors divert offenders away from prosecution or judges sanction offenders with fines, suspended sentences, or community service. In both the Netherlands and Germany, fines are used extensively as a primary sanction.
This reflects a basic difference in sentencing in the US. In the US, imprisonment is the primary sanction in many cases, leading to an unusually large prison population:
Jurisdictions across the U.S. and around the world grapple with the same basic questions regarding the role of punishment in their criminal justice systems: Who should be punished? How should offenders be punished? Under what conditions? For how long? By no means are these questions answered uniformly. Within the U.S., the rate of incarceration and the proportion of offenders sentenced to prison and community supervision differ from state to state. Indeed, the rate of imprisonment in state prison in the U.S. ranges from 147 per 100,000 residents in Maine to 865 per 100,000 residents in Louisiana. The overall imprisonment rate in the United States, including the jail and federal population, is 716 per 100,000 residents. The comparison to European rates is startling: 79 per 100,000 residents in Germany and 82 per 100,000 residents in the Netherlands are in prison.
The use and sale of prohibited narcotics makes up a majority of the US’s prison population. If we include immigration offenses and the category of extortion, fraud, and bribery, the non-violent prison population is almost 68 percent of all inmates and, therefore, nearly 68 percent of all individuals with a criminal record. Further non-violent offenses are buried in the remaining categories such as “other,” which includes a broad range of imprisonable offenses such as not paying the tag tax on your automobile or getting lost in a snowstorm.
Source: Bureau of Prisons, February 2009Does the Extensive Use of Prison Increase Violence?Despite the formal sentence handed down by a judge, a prison sentence is a life sentence. The simple fact is that being branded a criminal cuts off individuals from nearly all forms of employment opportunities. Non-violent offenses average between three to five years combined with prison and supervised parole. Even if employers ignored a person’s prior prison history in hiring decisions, the length of time absent from the workforce is significant, while the lost income during incarceration is frequently insurmountable. Being a guest of the State often carries an added sentence of perpetual state-induced poverty.
Prison itself is a dehumanizing experience. Confining people in degrading conditions generates a different attitude and behavior. Because of the philosophy of isolation as a means of punishment, individuals exposed to that environment develop behavioral patterns and mentalities vastly different from those necessary to function in civil society. These individuals are then thrown back into the general public or transitioned through ineffectual halfway homes where the social network of former inmates continues to be dominated by other unemployed ex-cons.
Indeed, both inside and outside prison walls, convicted criminals who are unable to find employment often end up spending their prime years learning new criminal trades and behaviors that only perpetuate criminal behavior.
In turn, this has led to a phenomenon in which we find an enormous correlation between having a criminal past and being a victim of homicide.
Statistics in several major metropolitan areas, including Milwaukee, Baltimore, and Newark, have shown a clear connection between the two. According to USA Today:
In Milwaukee, local leaders created the homicide commission after a spike in violence led to a 39% increase in murders in 2005. The group compiled statistics on victims' criminal histories for the first time and found that 77% of homicide victims in the past two years had an average of nearly 12 arrests. … Philadelphia also has seen the number of victims with criminal pasts inch up — to 75% this year from 71% in 2005. ... In Newark ... roughly 85% of victims killed in the first six months of this year had criminal records, on par with the percentage in 2005 but up from 81% last year, police statistics show.
A Connection Between Incarceration and Homicide?So, does the cycle of imprisonment and impoverishment actually lead to more serious crime? Given the economic impacts of a prison sentence, and thus the increased likelihood that one will continue to associate with others who have criminal records, it’s plausible that extensive use of prisons for so many offenses encourages the formation of violent social enclaves outside of prison.
This in turn leads us to the fact that a disproportionate number of homicide victims have criminal records.
In fact, if we look for a connection between incarceration rates and homicide rates in US states and European countries, we find a clear correlation (x and y axes: n per 100,000):
This chart compares the homicide rate of each of the fifty US States and a number of Western and Central European nations. The incarceration rate of the US is 716 per 100,000 compared to the average of Western and Central European nations, which is 102.
Making comparisons between countries and states on homicide is very problematic, and any number of factors can be at play. It’s difficult to show clear connections between homicides and other factors, such as gun ownership. Moreover, one might be tempted to claim that incarceration rates are higher because Americans are more violent due to some other outside factors. However, given the prevalence of criminal records among homicide victims, and the American propensity to create large numbers of people who have spent time in prison, it may be worth a second look at how our immense prison population may be a contributing factor to overall violent criminal activity. It may be just another example of one of the state’s efforts to “protect” us gone wrong.
The government is taking away basic freedoms granted under the Constitution. This helpful guide gives a clear vision of what your rights are and how you can protect them.
In order to truly understand the freedoms we have as people of the United States, we must fully comprehend our Constitution and the reasons why our Founding Fathers devised it. If we don’t, we’ll never fully grasp the danger that lurks today of losing those freedoms to an ever-growing government and its lack of accountability. As a nationally recognized expert on the U.S. Constitution, Judge Andrew P. Napolitano states in simple Q&A format the meanings behind our Constitution and exposes areas that are in jeopardy of unequivocal compromise. He addresses hard-hitting questions such as, What are the limits to government power in a free society? Are your rights guaranteed? What forces have collaborated to destroy personal freedom? and many more. Seeing, studying, and examining these issues will illuminate the unconstitutional realities of the government’s role today.
Alcohol abuse and heavy tobacco use are two of the leading causes of death in the United States. It seems rather ludicrous to advocate the outlawing of drugs and not the outlawing of alcohol and tobacco. (p. 11) Vance writes from a viewpoint that will surprise many readers. He himself does not condone the use of dangerous drugs. To the contrary, he is a Christian and a Bible scholar of considerable note and he regards their use as sinful. "As an adherent to the ethical principles of the New Testament, I regard drug abuse to be a vice, a sin, and an evil that Christians should avoid even as they avoid supporting the government's war on drugs" (p. 79).
If Vance takes this view of drug use, why is he so adamant that people have the right to consume these drugs? His answer will be of interest to all students of moral theology. He holds that Christians can with perfect consistency uphold the distinction between vices and crimes, with only the latter an appropriate area for forcible suppression.
Our show this weekend features Judge Andrew P. Napolitano, Distinguished Scholar in Law and Jurisprudence at the Mises Institute and Senior Judicial Analyst at Fox News.
In this talk presented at the 2014 Mises Circle in Costa Mesa, California, Judge Napolitano lays out the difference between Natural Law and Legislative Law.
Murray N. Rothbard considered 'No Treason' (1867–1870) by Lysander Spooner "the greatest case for anarchist political philosophy ever written." This audio is of 'No Treason 6' (1870), the third and last installment in Spooner's series (numbers 3–5 were never published).
Narrated by Matt Pritchard.
Download the complete audiobook (20 MP3 files) here. This audiobook is also available on Apple Podcasts, Google Podcasts, and via RSS.
Rothbard proposes a once-and-for-all escape from the two major political parties, the ideologies they embrace, and their central plans for using state power against people. Libertarianism is Rothbard's radical alternative that says state power is unworkable and immoral and ought to be curbed and finally abolished. Read by Jeff Riggenbach.
Download the complete audiobook (17 MP3 files) here. This audiobook is also available on Soundcloud, Apple Podcasts, Google Podcasts, and via RSS.
In the wake of last month’s shooting at Umpqua University in Oregon, national debate has once again been sparked over the role of firearm controls. Gun-control laws must be passed, we are told, that target these events and reduce or eliminate their frequency. However, much like most debates in the political realm, convenience and sound bites take the center stage over understanding root causes of violence itself. The debate is further confused by improper data comparison and information gathering techniques, mainly to drive a pre-designed political agenda and not to attempt to solve the homicide problem.
Before we get into the issue of general homicide, it is important to clear a few common errors in identifying the events in Oregon.
The biggest claim, made by President Obama, is that this doesn’t happen in the same frequency in Europe. Even the linked “Fact Check” at PolitiFact uses information incorrectly. The biggest mistake is that individual nations are compared 1-to-1. A large event in a single small nation will upend the homicide rate while it is true that a smaller nation will have fewer individual events on virtue of being a smaller nation. Before a meaningful comparison can be made, the data needs to be normalized. To accomplish this, I placed every advanced, safe nation in Europe that had a kind of mass killing event into a single, unified nation for the purposes of this exercise. This normalized the population with both the US and this unified state with nearly identical population levels. The nations selected, that had these kinds of events in the past fourteen years, are The United Kingdom, Switzerland, Sweden, Slovakia, Norway, The Netherlands, Italy, Germany, France, Finland, The Czech Republic, Belgium, and Austria.
An additional error that was made by PolitiFact is that their research ignored acts formally defined as terrorism, which means the Boston Marathon bombing in the US and the three Paris terrorist attacks in 2015 were ignored. I included all forms of mass killings since it is difficult to argue that a mass shooting is fundamentally different because of the motivation of the perpetrator. After the normalization, the chart of these events and the aftermath looks like this:
On the surface, this does appear to meet the criteria of President Obama’s claim. These events do happen more often in the United States than in the above grouping of EU nations, with forty-four distinct events in the United States and twenty-five in the EU. However, counting distinct events doesn’t tell the whole story. To get a better understanding of the risk of mass killings, we have to identify the real cause of concern — the loss of human life. When we bring the human loss into consideration, the story changes significantly.
This certainly doesn’t support the claim that the EU is safer from mass killers than the US. The main differences that, it is true, these events happen more often in the US, but the events in the EU normalized zone are more deadly (15 killed per EU event vs 7 per US event) which makes the EU events far worse. Further, the total danger from these events is greater in the EU countries, with the EU zone experiencing 933 injuries and 352 casualties to the 473 injuries and 322 casualties in the US.
Is More Government Security the Answer?We’ve previously pointed out that gun control doesn’t have any meaningful impact on homicide rates in general, but would such controls, and other controls such as improved mental health screening and background checks, resolve this issue? Unfortunately, as the EU has shown, particularly with the recent tragic events in Paris, if a full on ban on ownership doesn’t work, then it is unlikely targeting the above factors will work, either. Not to trivialize those who lose their lives in these events, here is what these events look like compared to the general homicide rate:
I didn’t label this EU or US because both are identical, a small blue sliver in a sea of orange. The total percentage is so small, that it shows up as “zero percent.”
These events are difficult to counteract because of their randomness and infrequency. The ability of the government to identify ahead of time whether or not a small group of men obtained automatic weapons against their ban is likely impossible. Moreover, other means of prevention, such as laws against restricting individuals with mental health problems from purchasing guns, are only as good as those who actively seek help. None of our nations would be willing to subject ourselves to mandatory annual mental health screenings and placing our results in central databases.
Gun bans, mental health screenings, and other government solutions to protect us from these unpredictable events fall under the classification of Security Theater. When the State is actively telling us that they’re taking care of our protection, we allow ourselves to be lulled into a false sense of security. Further, many governments restrict or outright ban individuals from ensuring their own safety.
But State agents can’t be everywhere at all times. Security of your own self is ultimately only possible by engaging in the protection yourself. Around the world, governments have decided on our behalf that we do not have the option to secure our own bodies from violence and, in turn, generate the situations that lead to these events. Much like how most of us would own auto insurance absent government mandates, not because we fear the destruction of our vehicle but because, as the saying goes, it’s better to have it and not need it than need it and not have it. A society that is given the option to protect itself is not a fearful society, it is a prudent one. The victims of Paris were never allowed the option to protect their lives, nor were they fortunate to have armed defenders present or trained combatants to stop the attack before it reached them. People need the opportunity to secure their own safety since, as the past twelve years has shown, the State will fail them.
At our Dallas-Ft. Worth Mises Circle, we discussed the dangers of authoritarian PC culture and the infantilization of American universities. This past week, this issue was driven to the forefront of national conversation. Cheered on by their absurdly leftist professors, we have watched a movement sparked by claims of racial intolerance devolve into petulant demands for more free stuff and explicit attacks on free speech. If there is a silver lining, hopefully these campus demonstrations will awaken more people to the importance of eliminating the state from education altogether.
Dr. Thomas DiLorenzo joined Jeff Deist this week to discuss what is happening on American campuses today. DiLorenzo shares his experiences from behind enemy lines in leftist academia. Are Americans waking up to the decaying state of modern universities?
In case you missed any of them, here are this week’s featured Mises Daily articles and some of our most popular articles at Mises Wire:
No, the Military Has Not Withered Away Under Obama by Ryan McMakenPope Francis Contradicts Himself on Religious Liberty and Capitalism by Roy CordatoSocial Security: The Long Slow Default by Kirby CundiffFour Ways to Build a Free Society by Jeff DeistWhen You're Popular, You Don't Need Freedom of Speech by Andrew Syrios"There, There, Work With Us, And We'll Cut You In" by Hunter LewisSummer Fellowships: Excellent Research Opportunity by Jonathan NewmanAcademic Welfare Queens by Tho BishopWorld War I as the Triumph of Progressive Intellectuals by Murray RothbardNew York State Bans Fantasy Football by Mark ThorntonThe War on Cash Grows More Painful by Joseph SalernoCalifornia and New York Are Poorer than You Think by Ryan McMakenCan You Find the Crisis? by Carmen Elena DorobățGovernment Shutdown Averted: Record-Breaking Spending to Continue by Ryan McMakenTry The New Mises Boot Camp!
Featuring Bill Haynes (CMI Gold and Silver, Inc., CMI-Gold-Silver.com), Kathryn Muratore (Fresno, California), Jordan Ausman (Beyond Software, BeyondSW.com), Marc Victor (AttorneyforFreedom.com), Hunter Hastings (BHC Consulting, San Diego), Taylor Conant (Valueprax.WordPress.com), Don Printz, M.D. (Stone Mountain, Georgia), and Peter Kallman (Liberty.Menu). Includes introductions by Jeff Deist.
Recorded at the Mises Circle in Phoenix, Arizona, on 7 November 2015. Special thanks to CMI Gold and Silver, Inc., for making this event possible.
Free speech is not something that people would normally see as a realm of economics, but in many ways, an economic understanding of the support and opposition to free speech can shed a lot of light on what’s happening now in the West.
The first thing that needs to be noted is that the left is winning the culture war. Even though more people identify as “conservative” than “liberal” in the United States, more people now identify as “liberal” than in the past by a substantial margin. Attitudes toward gay marriage shifted extremely quickly toward the left while support for legal abortion stayed mostly steady. And obviously the media, academia, and Hollywood are far to the left as a study by the non-partisan political analytics firm Crowdpac found (and as anyone who watches anything other than Fox News can tell after about five minutes).
Now, some of this is certainly good, such as the shifting views on marijuana legalization. Some is troubling, such as the growing popularity of socialism.
Regardless though, the left, having ascended to cultural dominance, is no longer in need of free speech. After all, no one ever got in trouble for agreeing with the conventional wisdom. As Noam Chomsky said, “Even Goebbels was in favor of free speech he liked.”
On the other hand, the right is behind the eight ball in the culture wars and thereby supports the concept of free speech because they need it lest their very opinions be outlawed. In an economic sense, this could be called the “diminishing marginal utility of free speech.”
The law of diminishing marginal utility states that while keeping consumption of other products constant, there is decline in marginal utility that a person derives from consuming an additional unit of that product. In this case, the product is free speech. New leftists may have proposed unfettered free speech back in the early 1960s, but that was just because the right was the one in power culturally at the time. Free speech had a high utility to the left at the time and low utility to the right.
Now the situation has reversed. The right is at the disadvantage so it appeals to free speech. The left is ahead and no longer needs free speech, so it has discarded it.
If that statement sounds hyperbolic, just think of all of the campus speech codes and the ever expanding list of mostly trivial microagressions that can be taken for “hate speech.” Here is just a small sampling of examples to illustrate how absurd this has become:
Brendan Eich was forced to resign as CEO of Mozilla after a massive backlash for having opposed gay marriage.A candidate in the European elections was arrested in Britain for quoting a passage from Winston Churchill about Islam.Gert Wilders, a politician in the Netherlands, was tried on five counts including “criminally insulting Muslims because of their religion.”Conservative radio host Michael Savage was banned from the airwaves in Britain.Both Mark Steyn and Ezra Levant were dragged in front of the Canadian Human Rights Commission on charges of being “Islamophobic.”A man was fired because someone eaves dropped on his joke about dongles and caused a fuss about it on social media.A group called Color of Change applied enough pressure to get Patrick Buchanan fired from MSNBC for expressing politically incorrect opinions in his book Suicide of a Superpower.The “Pickup Artist” Julien Blanc was barred from entering Britain for making sexist comments.A student at Purdue University was found guilty of “racial harassment” for reading (yes, reading) a book called Notre Dame Vs the Klan in which — it should be noted — the Klan is the bad guy.Indeed, the list goes on endlessly, and is perhaps best summed up by the almost unconscionable lack of self-awareness required by University of Manchester feminists who recently censored the anti-feminist columnist Milo Yiannopoulos from participating in a debate on — you guessed it — censorship.
Of course much of this is just social pressure or the decisions of private institutions, which is permissible (albeit not condoned) under a libertarian framework. But much of it does involve outright government force, or the longing to use it. For example, Adam Weinstein wants to literally “Arrest Climate-Change Deniers.”
Indeed, while many believe that the youth of today are the most politically tolerant in history, they are actually the least. As April Kelly-Woessner notes, “political tolerance is generally defined as the willingness to extend civil liberties and basic democratic rights to members of unpopular groups.” Which groups are unpopular, is not the question being asked.
So, for example, someone who believes that a man should be able to marry his pet goat is not necessarily politically tolerant. What would make him tolerant in this sense is whether he is willing to recognize the rights (particularly regarding speech) of those who disagree with him and his marital proclivities.
In this respect, political tolerance has declined substantially. For the first time since it was measured, the political tolerance of young people has fallen below that of their parents and as Kelly-Woessner again notes, “… is correlated with a ‘social justice’ orientation,” at least for those under forty.
Indeed, the inability to tolerate political views that run counter to one’s own, particularly on the left, has become so ridiculous to be comical. Just take, for example, Judith Shulevtiz’s description of the “safe space” set up at Brown University because of a debate between the feminist Jessica Valentia and Wendy McElroy where McElroy was likely to criticize the term “rape culture.”
The safe space … was intended to give people who might find comments “troubling” or “triggering,” a place to recuperate. The room was equipped with cookies, coloring books, bubbles, Play-Doh, calming music, pillows, blankets and a video of frolicking puppies, as well as students and staff members trained to deal with trauma.
Well, at least they actually let the debate happen.
But the left has not always had a monopoly on anti-free speech thought and legislation. Nor does the right seem to be opposed to it when it can push such things through today. Helen Thomas was fired from the White House Press Corps for saying “The Jews should get the Hell out of Palestine.” Shirley Sherrod was fired for allegedly anti-white statements, a Kansas woman was fired for a fifty-word Facebook post that was considered anti-American-soldier, and the right went into a fervor over Jeremy Wright’s “chickens coming home to roost” comment.
Whereas liberals want to ban words such as “slut” and, at least in Sheryl Sandberg’s case, “bossy” too, conservatives used to all but ban those “seven words you couldn’t say.”
When the right had more cultural authority, alleged communists were being dragged in front of the House Committee on Un-American Activities, Civil Rights activists were harassed, and the Motion Picture Production Code banned Hollywood directors from showing things such as miscegenation.
But that was then and this is now. As the pendulum of cultural prominence swung from one side to the other, the left and right swapped their support for free speech.
Nevertheless, I don’t want to draw a false equivalence here and say the right would be just as bad as the left if they were winning the culture wars. Much of the ideology on the left, at least the far left, is derived from the likes of Herbert Marcuse and other cultural Marxists who explicitly wanted to limit the free speech of “oppressor classes.”
Discerning what exactly free speech is can sometimes be challenging, as in cases of libel, slander, and direct threats. But these are really not the issues at heart here. The vast majority of speech being “regulated” today is simply that of an unpopular opinion. Yes, many ideas are bad. And they should be refuted. Moreover, resorting to the use of political force to silence adversaries is a sign of the weakness of one’s own position. But, in using force to silence others, anti-speech crusaders are making another argument. They’re arguing that political force can and should be used to silence people we don’t like. What idea could be worse than that?
On Tuesday, Vermont Senator Bernie Sanders stood up on the stage of a Democratic Party presidential debate and proudly proclaimed himself a “democratic socialist” to an adoring crowd. Spurred on by myths about the success of socialism in countries like Sweden and Norway, the horrors of a centrally planned economy have never been more popular in American politics. As Mises President Jeff Deist highlighted in Thursday’s Mises Daily:
These ideas, and the people who hold them, are not outliers in America. There are millions … who believe exactly as Bernie believes. They may prefer to vote for Hillary Clinton purely as a tactical matter because they are unsure the country is “ready” for full socialism … but average progressives and Democrats agree with Bernie Sanders across the board …
Ninety-five years after Ludwig von Mises published his indispensable essay Economic Calculation in the Socialist Commonwealth, it is as critical to stand up to the tyranny of statism — on any scale — now as ever before.
The devastating consequences of government intervention into healthcare markets is the topic of this week’s episode of Mises Weekends. Charles Hugh Smith joins Jeff to discuss how Washington’s desire to eliminate markets from medicine has led to the industry being captured both by incompetent government regulators and insurance lobbyists.
In case you missed any of them, here are this week’s featured Mises Daily articles and some of our most popular articles at Mises Wire:
Charles Murray's Tepid Radicalism by David GordonWhat "Progressive" Corporate Welfare Looks Like by Andrew SyriosThe Dirty Business of Government Trash Collection by Allen MendenhallSanders and His Followers Are Not Outliers by Jeff DeistHow Modern Sweden Profits from the Success of Its Free-Market History by Yonathan AmselemGeorge Akerlof, Meet Oliver Williamson by Peter KleinAngus Deaton and Modern Economics by Peter KleinThe Mistake of Only Comparing US Murder Rates to "Developed" Countries by Ryan McMakenThe Fed’s Quadral Mandate and Impossible Balancing Act by Jonathan NewmanRothbard on Economic Ignorance by Matt McCaffreyTrue Money Supply: August Money Supply Growth Remains Way Down from 2012 Levels by Ryan McMakenDonald's Remarks on the Bubble and the Fed Are on the Money by Joseph SalernoNo way, Norway! by Carmen Elena Dorobăț
Depending on one’s point of view, Bernie Sanders either held his own or boosted his chances against perceived front-runner Hillary Clinton in Tuesday night’s Democratic presidential primary debate. His message clearly resonated with the live audience, particularly his statements about raising the minimum wage to $15 per hour, global warming, and government-mandated paid childcare leave.
Progressives are emboldened by Sanders, who reportedly draws upward of 20,000 people at events. He inspires them with his attacks on capitalism, happily calling himself a “Democratic Socialist.” And his economic plans, while a mess, appeal to their radical (and disastrous) notions of egalitarianism.
Happily, there are murmurs of discontent — progressives like to eat their own. His crowds skew overwhelmingly white and older, leading to allegations that Sanders suffers from a whiteness problem. His home state of Vermont is laughably un-diverse and prosperous, home to woodsy limousine liberals who like the idea of urban living more than the reality. But nobody ever lost a political race purely for hypocrisy — and while Bernie’s brand of socialism might fade with the Birkenstock Boomer crowd, Occupy Wall Street millennials stand waiting.
Regardless of whether Sanders ultimately secures the nomination, the size and energy of the Bernie phenomenon should not be underestimated. If anything, libertarians consistently misjudge the degree to which socialist thought is deeply rooted in the American psyche.
Like Sanders, millions of American progressives hold these deeply statist and authoritarian beliefs:
changes in climate threaten human extinction, and thus drastic laws must be passed to prevent a calamity;fossil fuels should be banned, and alternative fuels should be mandated;wealth and income should be forcibly redistributed;no individual should earn more than a set amount of money each year;welfare and entitlement programs should be vastly increased;whole industries (healthcare, education) should be nationalized, while others (energy, banking) should be regulated to the point of de facto nationalization;some form of global government should be installed;a global wealth tax should be implemented;private ownership of firearms should be banned;anti-discrimination legislation should be applied to private religious organizations;racial, gender, and sexual orientation quotas should be mandated on both public and private employers;certain types of speech should be criminalized;certain criminals should be subjected to greater penalties if motivated by “hate”;social justice should be pursued by any means necessary; andgovernment should attempt to engineer equality of outcomes. These ideas, and the people who hold them, are not outliers in America. There are millions of rank and file progressives, mostly registered Democrats, who believe exactly as Bernie believes. They may prefer to vote for Hillary Clinton purely as a tactical matter because they are unsure the country is “ready” for full socialism, or because they think Hillary has a better chance of beating the hated Republicans in the general election.
But average progressives and Democrats agree with Bernie Sanders across the board, whether they plan to vote for him or not.
Do average Republicans and conservatives agree with Ron Paul? Do most registered Republicans really advocate eliminating income taxes, abolishing entire federal agencies, repealing the Federal Reserve Act, ending all foreign interventions, and drastically downsizing the US military? Are most conservatives, in their hearts, radically anti-state? The answer is no. Most conservatives are only nominally less statist, often more corporatist, and almost invariably more militarist than progressives.
The reason is simple, though we tend to forget it: the twentieth century was a radically progressive century. Income taxes, central banking, social insurance schemes, demand-side Keynesian economics, and Wilsonian internationalism — all radical ideas — have become entrenched articles of faith over the past 100 years. When we talk about politics or economics today, we do so within a thoroughly progressive framework.
The entire progressive agenda of the last century, which would have sounded outrageous to the libertarian-tinged ear of the average American in 1900, is now merely the baseline from which all government action originates.
That’s why abolitionist libertarians are on the defensive in modern political discourse, while grandiose progressives are on the attack: the default position in American politics is for government to do something.
So we shouldn’t downplay or minimize the success of progressives in shifting the landscape dramatically in favor of the state over the past century. Progressives never went away, despite the rhetoric of Ronald Reagan or Milton Friedman or Bill Clinton. The era of big government is still here, and it always was.
So what should libertarians do, in an absurd progressive world obsessed with supposed global warming, inequality, racism, sexism, homophobia, transphobia, and privilege, ad nauseam?
The answer could fill a book, but let me suggest we start by freeing ourselves of the burdens of politics. Our battle is for hearts and minds, not votes. While Democrats and Republicans fixate on candidates and their supposed policies, libertarians are free to remain psychologically and emotionally detached from the whole sordid process.
And with that detachment comes freedom: the freedom to inspire, educate, and influence other people of good will without the divisive cloud of partisan politics creating suspicion and distrust. Once people know you’re not simply making arguments to support “your guy” — or any guy — they tend to view you more impartially and hence more favorably.
A new era of liberty, peace, and prosperity will not be won at the ballot box. It will be won at ground level, individual by individual, as progressive ideas crumble in the face of unsustainable government debts, unsustainable government wars, and unsustainable government entitlements.
International trade grabbed headlines this week with Monday’s announcement that twelve governments have reached agreement on the Trans-Pacific Partnership. While it should be of no surprise to see the news celebrated in the editorial pages of the Wall Street Journal or the Council of Foreign Relations blog, it is unfortunate even libertarian organizations are praising the agreement.
Of course, this is not the first time alleged defenders of lassiez-faire have endorsed intergovernmental agreements that enhance the power of the state. Ferghane Azihari and Louis Rouanet put TPP in historical context in Wednesday’s Mises Daily:
Murray Rothbard opposed NAFTA and showed that what the Orwellians were calling a “free trade” agreement was in reality a means to cartelize and increase government control over the economy. Several clues lead us to the conclusion that protectionist policies often hide behind free trade agreements, for as Rothbard said, “genuine free trade doesn’t require a treaty.”
Dr. Ed Stringham takes on the notion that government is necessary at all for markets and trade to thrive in his new book Private Governance. He joined Jeff Deist to discuss his work on the latest episode of Mises Weekends. Listen as Jeff and Ed destroy the argument that markets rely on government to protect property rights, mediate contracts, and numerous other excuses interventionists make in defense of the state.
In case you missed any of them, here are articles from this past week’s Mises Daily and Mises Wire:
The TPP and the Trade Rhetoric by Carmen Elena DorobățTPP: The Latest Assault on Free Trade by Ryan McMakenRothbard: Gun Regulation Explained by Murray RothbardIn Policy Debates, Can Economics Trump Ethics? by Matt McCaffreyThe Future Is Decentralized by Patrick ByrneNo More "Free Trade" Treaties: It's Time for Genuine Free Trade by Ferghane Azihari and Louis RouanetThe Menace of Egalitarianism by Lew RockwellFashionable Prohibition for Modern Lawmakers by Ryan McMakenIn Brazil, Free-Market Ideas Rise as the Economy Falls by Antony P. MuellerMissed last Saturday’s Mises Circle? Watch Jeff Deist, Tom DiLorenzo, Tom Woods and Lew Rockwell tackle the threat of political correctness.
Our guest this weekend is Edward Stringham, professor of Economics at Trinity College in Hartford, Connecticut. He is the author of a fantastic new book called Private Governance: Creating Order in Economic and Social Life. In this book, Ed looks back at the history of private legal systems, and in so doing demolishes the idea that only the state can manage and adjudicate human conflicts. Today, Ed gives some concrete, real-world examples of how private governance operates in our statist world. If you're interested in Rothbardian and Hoppean anarcho-capitalism, you'll find Ed's book a great addition to your library, and you'll enjoy hearing this interview with Edward Stringham.
With the latest school shooting, all humane people are expected to jump up and do something to stop the next shooting. The most popular response among media pundits and national policymakers right now is an expansion of the various prohibitions now in place against guns.
For anyone familiar with the history of prohibitions on inanimate objects, however, these appeals to prohibition as a “common sense” solution are rather less convincing.
Americans and others have tried a wide variety of similar prohibitions before, and with mixed results at best. Nowadays, prohibitions on drugs are in decline as states continue to unravel prohibitions of the past and make the nature of prohibition less drastic and less punitive. And, of course, the prohibition of alcohol has been dead for decades.
The prohibitions of old have been deemed failures. But fortunately for prohibitionists, there’s a fashionable form of modern prohibition that won’t go away.
Why Not Ban Alcohol?Now, I know what some of you are saying: “Hey, McMaken, you can’t compare alcohol prohibition to gun prohibition because alcohol mostly only hurts the drinker, while guns have many harmful side effects for the public at large.”
But the fact that anyone could think this shows just how well the anti-alcohol-prohibition rhetoric has worked. Since the repeal of prohibition in the 1930s, alcohol has taken on an image of fun and relaxation. Sure, some people use it irresponsibly, we are told, but for the most part, people should be allowed the freedom to use it. For those high risk behaviors linked to alcohol, such as drunk driving, we’ll regulate that, but the ownership of alcohol itself, of course, should be open to all adults.
And yet, in the face of this laissez-faire attitude toward drinking, we could offer a host of illustrations of how alcohol is in fact a public safety menace.
Indeed, prior to the 1920s, during the heyday of the temperance movement, alcohol’s image was as anything but a mere benign luxury among a sizable portion of the population.
While many people today assume that the prohibitionists argued along puritanical lines, and emphasized the dangers of moral ruin, the arguments against alcohol were really far more complex than that.
The prohibitionists argued — quite plausibly, mind you — that any number of social ills could be addressed through alcohol prohibition. Chief among these was the fact that many families, including children, were often rendered destitute by the drinking of the male head of the household who was unable to hold down a job due to his addiction. Moreover, cases of child abuse and spousal abuse were clearly connected to alcohol consumption, as were household accidents and accidents on the job.
When breadwinners were killed or injured on the job, or if a drunk spent half his income at a bar on payday, families often ended up on the local dole. Or worse.
And there was a connection to non-domestic violence too. Public drunkenness, bar fights, and the deadly and irresponsible use of guns were connected to drinking as well.
Ironically, back then though, it wasn’t the guns that were seen as the problem (although gun control advocates did exist). For many, the problem was that drunks were irresponsibly using guns and that the common-sense solution was to prevent them from getting drunk.
Guns are Less Deadly than AlcoholNowadays, 88,000 deaths per year are attributed to alcohol abuse, and thirty people per day in the United States die in alcohol-related auto accidents. Heavy drinkers are more prone to violence, suicide, and risky sexual behavior.
In fact, if we compare these statistics, we find that alcohol abuse is significantly more deadly and problematic than misuse of guns. There were 36,000 gun-related deaths (including suicides and accidents) in the US in 2013, and as a percentage of all causes of death, alcohol-related deaths are more than twice as common as gun deaths.
What’s more, one-third of gun deaths are alcohol related. Thus, according to prohibitionist logic, we could eliminate one-third of gun-related deaths overnight by prohibiting alcohol consumption. So why aren’t we doing it? If it could save one life, wouldn’t it be worth it?
Most have concluded that saving one life is not, in fact, worth it. In practice, alcohol-related deaths (including those inflicted against third-party victims) are treated very differently than gun-related deaths.
For example, it is clear that alcohol is a central component in the more than 10,000 drunk-driving deaths that occur each year. So, is the response to restrict certain types of alcohol or populations that can buy it? Are background checks instituted to prevent sales to incorrigible drunk drivers? No, the response is to ban how alcohol is used in certain cases.
On the other hand, in response to the 11,000 gun-related murders per year, the prescribed response is to restrict the guns themselves. But, if we were to apply the same logic behind drunk driving bans to gun violence, the only legislation we would be considering would be something along the lines of special penalties for carrying firearms when mentally impaired, on psychotropic drugs, when sight impaired, or in crowded areas where accidents are more likely to affect bystanders. The mere purchase or ownership of guns would not be restricted, just as the purchase or ownership of alcohol is not restricted in response to drunk driving.
Indeed, if we add to drunk driving all the cases of spousal abuse and child abuse and public cases of assault, bar fights, and more, it becomes clear that alcohol is in fact far more damaging to the social fabric than guns have ever been. Once we factor in the harm that alcohol does to the user himself, in terms of health problems, riskier sex, and suicides, the numbers look even worse for alcohol.
Does Prohibition Work?Now, you might be thinking, “yes, but if gun prohibition works, shouldn’t we try it?” Unfortunately, there are few reasons to believe that it would work, or that the cure would not be worse than the disease.
Mark Thornton illustrated years ago that alcohol prohibition led to more alcohol consumption, and more consumption of harder distilled drinks versus more mild beer and wine beverages. In addition to the complete failure to end the behavior it targeted, Americans also became acquainted with numerous unpleasant side effects of prohibition including more organized crime and more government harassment of peaceful citizens.
Comparing the StatesAs far as gun prohibition goes, thanks to a diversity of gun laws among the American states, we can compare between gun ownership levels in the states and homicide rates.
And what we find is that there is no correlation between the level of restrictiveness in gun laws and the murder rate. Most recently, Eugene Volokh ran the numbers looking at homicide rates and the so-called Brady Score assigned to states by gun-control advocates. Volokh even provides the data so you can analyze it yourself. (Volokh explains why homicides and not “gun deaths” is the important metric here.)
We can also see that this is quite plausible by simply eyeballing the data if we look at gun restrictions by state and homicide rates. Gun-control advocates like to point to southern states that have both permissive gun laws and high murder rates, such as Alabama and Mississippi. But, even a cursory analysis beyond this cherry-picking shows that there are numerous states with permissive gun laws (such as Utah, Wyoming, Kansas, and others) where the murder rate is very low. And states with more restrictive laws, such as Illinois, New York, and California have higher murder rates than numerous states where it is easy to buy a gun.
So, while gun-control advocates press for “common-sense” restrictions, real common sense suggests that gun restrictions cannot explain the prevalence of murder in a state. This means that gun-control advocates are looking at the wrong social statistics to explain the violence.
Reasons Why They Want to Ban Guns and Not AlcoholBut none of this matters when gun violence is being exploited to drive for more state power and more regulation of private citizens. Many gun-control advocates really do believe that government regulation and management can solve every social ill. They ignore the realities behind failed experiments such as alcohol prohibition or the war on drugs, and instead move on to the latest sexy prohibitionist drive because they sense an opportunity to control one more aspect of daily life.
Most everyone accepts that prohibition creates unintended consequences that can be negative, and with alcohol prohibition, these consequences included organized crime and the criminalization of peaceful citizens. Gun-control advocates assert, however, that whatever the downsides of gun control may be, they are minimal compared to the many advantages.
As Murray Rothbard pointed out in For a New Liberty, whether or not you come face to face with those down sides can depend a lot on your wealth and influence within society. For example, white, middle class people who live in safe suburbs, have influence over local police forces, and can even resort to private security (including alarm systems) see little down side to gun control. After all, they have little reason to fear police or common criminals when they can exercise their well-established political influence at the local level or purchase a home security system with the expectation that police will arrive quickly in case of emergency.
Powerless minorities, on the other hand, face much larger downsides to gun control. For them, police are an unreliable deterrent to local crime, and are little use in cases of social unrest. Many may remember how police in Ferguson, Missouri protected government buildings, but left the rest of the town on its own during the riots there. Local citizens paid for police protection, but got none. And then, of course, there are countless cases of the “proper” authorities using their legal guns against powerless populations, with no resource left to them other than private firearms. Just one example would be the Texas Ranger rampages that followed the so-called Plan de San Diego when the Rangers swept through southern Texas lynching Mexican-Americans who were deemed traitors.
Consequently, some principled leftists, most of whom are radicals, do not subscribe to the dominant gun-control position of the left. But certainly the mainline left, dominated by university intellectuals, government employees, and politicos with nice houses in safe neighborhoods, see few problems associated with centralizing coercive power in the hands of “official” law enforcement.
The downsides of restricting alcohol, however, are plentiful for those who spend many hours at cocktail parties and send their children to booze-soaked elite universities to be paired up with a future spouse from the appropriate social class.
So, until this changes, we ought not expect much of a change in the double standard applied to alcohol and guns in terms of violence, health, and safety. The people who make the laws are quite happy having plenty of booze around. But they can afford to pay someone else to handle the guns for them.
Being a government means never having to say you’re sorry. And it also means you get to blame everyone else for all the problems you’ve caused.
This week at mises.org, we explored how deeply indebted governments blame the ones who lend them money, while government prosecutors blame entrepreneurs, businesses, and “white collar crime” for other problems in the economy. And surges in drug prices, we’re told, have nothing to do with government control of the drug market.
Lackluster new jobs data and continued surges in home price inflation confirm that the distortions of the Fed-induced boom continue to add up.
But even with all the bad news, the miracles of the market place point toward a brighter future. This week on Mises Weekends, Rod Martin, a co-founder of PayPal and world renown philosopher-capitalist, joins Jeff for a wide-ranging interview covering such topics as the refugee situation in Europe, unrest in the Middle East, and why some cultures are more prosperous than others. Martin contrasts the difficulties world governments have in confronting global macro-crises with the hope and resilience of technological innovation and entrepreneurship.
Indeed, Ludwig von Mises would have easily understood how market innovations outpace government innovations, since Mises, whose birthday we celebrated this week, pioneered our understanding of how government intervention cannot achieve the goals it tries to achieve. Be sure to see this never-before-published essay by Bettina Bien Greaves, and this newly-discovered recording of a Mises lecture from 1962.
In case you missed any of this week’s Mises Daily and Mises Wire articles, take a second look:
The Reality Behind the Numbers in China's Boom-Bust Economy by Yonathan AmselemDrug Shortages, Price Gouging, and Our Broken Health Care System by Michel AccadThe Coming Corporate "Crime Wave" by William L. AndersonLuwig von Mises, Genius? by Bettina Bien GreavesGovernments Turn to the UN to Avoid Paying Their Debts by Nicolás CachanoskyThe Military Gravy Train: Full Speed Ahead by Andrew SyriosThe Silent, Slow, Stubborn Revolution Carmen Elena DorobățCollege Athletics: Public Institutions Are the Real Sham By Jonathan NewmanThe Real Estate Crisis in North Dakota's Man Camps by Mark Thornton
In a recent appearance before Congress, Deputy Attorney General Sally Quillian Yates declared that the US Department of Justice is going to ratchet up its prosecution of individuals employed in corporations as part of a larger push against “white collar crime.” There is no doubt that such prosecutions will be very popular to a large section of voters, given that presidential candidates like Bernie Sanders, Hillary Clinton, and Martin O’Malley, along with Massachusetts Senator Elizabeth Warren pretty much have declared that nearly all American businesses are part of a massive criminal conspiracy that must be brought down by federal authorities.
Within the next year, we should expect to see mid-level business and finance executives doing “perp walks” in front of the news media, as federal prosecutors will charge them with various “economic crimes” in hopes that they will implicate their superiors. All of us by now know the drill and in a time of anemic economic growth complete with business failures, it won’t be hard to find scapegoats.
Everyone Is “Guilty”When famed civil liberties attorney Harvey Silverglate published his now-famous book, Three Felonies a Day, it caused quite a stir. Going through a number of very disturbing cases, Silverglate made clear that if federal prosecutors want to target an individual, it is very easy to fashion criminal charges against them.
To prove his point, he noted how the federal prosecutors in New York when Rudy Giuliani was US Attorney for the Southern District of New York regularly played a game in which they would see if various celebrities and others, including Mother Theresa, had broken federal criminal law. The result, unfortunately, was that for each person no matter how good his or her public character, a federal statue existed that would place them in prison.
Being that Giuliani’s prosecutors — and Giuliani himself — regularly committed felonies by selectively leaking grand jury information to favored journalists in order to damage the ability of accused people to defend themselves. He also did it to stoke the fires of the anti-business mobs, and these prosecutors were quite familiar with how to fashion the ever-malleable federal statutes to turn ordinary acts into crimes. During the 1980s, when Giuliani was at DOJ, the New York office engaged in a massive show of force against Wall Street firms and other business enterprises in large part to enhance the coming political careers of Giuliani and others who worked under him, and to appease the anti-business Democrats and Republicans who were anxious to declare to roll back what they called the “Decade of Greed.”
Is a New Wave of Crackdowns Coming?Federal prosecution of business figures tend to come in waves. During the Great Depression, prosecutors tried to claim criminal behavior by businessmen was responsible for the lengthy economic downturn. During the 1980s, Wall Street rivals of Michael Milken and others who challenged the established financial firms were the quiet-but-effective engine of prosecution, combining their political connections with Giuliani’s ambition to nearly destroy the alternative capital funding machine that was overturning the corporate status quo with new startups and shakeups of existing firms.
Because Milken had become wealthy through his financial dealings, he became the symbol of “greed” by the Democratic Left, which at that time was facing a loss of influence during the Ronald Reagan years and was desperate to regain its former status of America’s “conscience.” Going after Milken mollified both the Left and the Republican establishment on Wall Street, as the “old money” firms were happy to see Giuliani eliminate the competition.
After the spectacular failure of Enron and other firms that depended upon Alan Greenspan’s Federal Reserve System policies of easy money, policies that ended in the Tech Bubble meltdown in 2000 and 2001, the George W. Bush administration went after people like Ken Lay and Jeffrey Skilling of Enron and others who had high-profile CEO jobs. In the lynch-mob atmosphere that inevitably follows the bust cycle of Fed-induced business cycles, it was not hard to convince Americans that the corporate bankruptcies and the subsequent recession were the handiwork of criminal executives.
I have written about federal criminal law and its abuses for more than a decade and have not changed my viewpoint. No matter how often writers and activists expose the consequences of expanding federal criminal law, the law expands anyway. People are elected to Congress on platforms of “being tough on crime,” and large crowds heartily approve when Bernie Sanders and Elizabeth Warren call for more business executives to be thrown into prison for unspecified “crimes.” (They demand the Beria approach. Beria, who was the head of the original KGB, famously stated: “You bring me the man, I'll find you the crime.”)
A Winning Political StrategyThe current public mood is ugly, and perhaps for good reason. Although the official rates of unemployment are relatively low, statistics clearly show that huge numbers of potentially-employable people have left the job market altogether because they know that finding meaningful employment is highly unlikely. We know that in percentage terms, labor participation in the workplace is at near-record lows. We also know that, economically speaking, the economy is stagnating and that individuals continue to be squeezed as real pay fails to keep up with creeping-but-real inflation. In short, people are angry, and they want someone to pay.
Many angry people have found a political home with candidates like Sanders and Donald Trump, both of whom speak to voter frustrations and who also find perfect scapegoats for vengeful Americans. Bernie Sanders blames businesses and entrepreneurs for “greed,” while Trump blames immigrants. Economically speaking, neither Sanders nor Trump is correct, but it doesn’t matter; angry voters don’t want facts, they want scalps.
Ever since sociologist Edwin Sutherland during the 1930s came up with the term, “white collar crime,” politicians and the media have claimed that businesses often are little more than criminal enterprises. Certainly the current political climate reflects that sentiment and more. Furthermore, politicians are appealing to voters with proposals that would destroy capital formation, criminalize much of entrepreneurship, and make it much more difficult for business firms to engage in normal activities.
In a recent campaign speech, Democratic hopeful Hillary Clinton declared, “We’re going to go back to enforcing labor laws. I’m going to make sure that some employers go to jail for wage theft and all the other abuses that they engage in.” Few candidates of either party are willing to stand up for businesses and entrepreneurs, and as the campaign rhetoric becomes more inflammatory, federal prosecutors are going to find it increasingly easier to charge business owners and employers for law “violations” that might be called “criminal” even if they never were intentional, according to law professor John Baker.
Selective and Politically-Motivated ProsecutionBecause there are so many business owners and executives, and because federal prosecutors cannot go after everyone, it will be a crapshoot as to whom prosecutors select for “the treatment.” For the most part, those targeted will not have political connections (such as many Wall Street executives), nor will they be people involved in “green energy” ventures, such as those businesses tied to people like Al Gore.
When people think of so-called business crimes, they think of embezzlement, firms falsifying information, tax evasion, or to engage in fraud while performing services under contract with the government. For example, say that Ajax Company is supposed to build tanks for the US Army and is paid on a cost-plus basis. The company then bills the army for a number of tanks it did not build or for phantom services, with the company CEO and his mistress putting the fraudulently-obtained money in a Swiss bank account.
This certainly would fall under anyone’s fraud statute, and if the government were to prosecute just those kinds of cases, few people would object. However, government fraud statutes are incredibly malleable and can apply to conduct that would seem to be legal. In an article I wrote for Regulation six years ago, I point out Enron’s practice of placing “non-earning assets” into “special purpose entities” was legal and also was made known to Enron stockholders, yet federal prosecutors decided to include those actions under the umbrella of “Honest Services Fraud.”
Prosecutors wanted jurors to believe that even though Enron’s activities met federal laws and regulations, nonetheless the company undertook those actions in order to present the company to stockholders and others in a false light, making the company’s financial condition seem better than it really was. Thus, it was left to the jurors to determine whether or not this action truly was a violation of the law, even though the original act did fall within the letter of federal statutes and regulations.
One can see immediately where there is a problem. Under most state laws governing crime, there often is no doubt that an actual crime was committed. The question is not whether someone broke the law, but rather who broke it, the defendant or someone else.
Federal Law Is Ambiguous Enough to Allow Prosecution of Nearly AnyoneIn the federal system, however, jurors often are asked to decide whether or not someone actually broke the law and, thus, broke federal statutes. Jurors, who usually have no legal training, then are asked to determine whether or not a highly-complex deed that they may not understand was a legal violation, and more often than not, if jurors don’t understand it, or if they deem the defendants to be less-than-savory, they will vote guilty as a default position.
Furthermore, federal prosecutors have such leeway that they are able to pile on numerous charges that might be based from a single endeavor, thus creating a situation for defendants in which they either can chance going to prison for decades (and federal prosecutors almost always win at trial) or plead guilty. (I have a well-known friend who was charged with “Honest Services Fraud,” because the US attorney believed that the fees he negotiated with his clients were higher than they should have been. The prosecutor did not allege that he had defrauded his clients per se, since he charged the clients the fees upon which both parties agreed, but that because the fees were higher than fees other lobbyists charged their clients, then they simply had to be illegal. So, according to federal prosecutors, one can negotiate fees in daylight with all parties agreeing and still be breaking the law.)
Federal prosecutors also are notorious for appealing to the prejudices of juries. When the late Ken Lay and Jeffrey Skilling were on trial in Houston, Texas, prosecutors appealed to the fact that when Enron collapsed, a lot of people lost money. (That Skilling and Lay also lost most of their income and wealth in the same collapse apparently was irrelevant, and prosecutors claimed that any act of Lay and Skilling diversifying their own personal financial portfolios — although both men held most of their wealth in Enron stock — was an attempt to knowingly bail out of a sinking ship.) Because the trial judge also was openly hostile to the defendants, prosecutors pretty much were able to do and say what they wanted without fear of legal repercussions.
Rudy Giuliani once noted with amusement that people charged with “white-collar crime” were more likely to “roll over” than were hardened criminals. Part of the reason is that most people, and especially business owners and executives who do try to obey the law, are horrified at the prospect of being charged criminally and going to prison. Because federal prosecutors can easily fashion charges that often defy defense, it is not hard to understand why business people plead guilty.
If Barack Obama and US Attorney Loretta Lynch decide to target business people, prosecutors will find plenty of targets. Because violation of regulations can be rolled into the “fraud” and “conspiracy” statutes — even if the violations were unintentional or the “targets” were unaware of their existence — it is not hard to find subjects to prosecute. Being charged in such conditions is more like “winning” an “unlucky lottery” than engaging in actual criminal behavior.
That turning the business community into a wreckage of criminal charges will have long-term effects on the willingness of entrepreneurs to risk their own assets will be no deterrent to people like Obama and Lynch. Neither of them have a minute of business experience, and they truly believe that businesses themselves probably at best are unethical entities or at worst caverns of criminality, so they most likely believe they are doing Americans a favor by throwing more people into prison. One only can feel sympathy for people and their families who at the present time have no idea that someone from the US Department of Justice is planning to wreck their lives over at worst what might be a legal technicality.
After months of assuring the world that the Federal Reserve would soon be ending its zero rate interest policy, the FOMC blinked on Thursday. Citing “[r]ecent global economic and financial developments,” the Federal Reserve decided to further postpone the inevitable pain that will come from taking away the financial punch bowl.
While the decision may have shocked few Fed followers, Jeff Deist, President of the Mises Institute, reminds us to not lose perspective of what the Fed’s decision really means for the world’s economy:
After so many years of the “new normal,” we have to be reminded just how extraordinary — and unprecedented — the Fed’s actions since 2008 have been. But does it not occur to bankers, much less the media breathlessly covering stock and bond markets, that these actions have set America on a hopelessly dangerous and unsustainable path? Or that placing so much economic power in the hands of a select few might not end well?
Appearing on Bloomberg TV shortly after the Fed’s announcement, Ron Paul also skewered the very notion of a world so dependent upon a central bank:
The whole idea that one person or twelve people might know what the interest rate should be is preposterous. ... There is never going to be a “right thing” to do because it is absolutely impossible for individuals to calculate the right answer. You can’t plan an entire economy by manipulating interest rates.
Our guest this week on Mises Weekends is Patrick Barron, a professor of economics and a student of global currency markets. Patrick and I dissect the Fed’s big announcement this past week not to raise interest rates, and consider whether Janet Yellen and other central bankers really believe in what they’re doing. Is it all just to save themselves from the judgment of history, by kicking the can down the road? Have they read, or even considered, Austrian arguments on money and banking? Or are they simply so wedded to Keynesian orthodoxy that they literally don’t know what else to do? And what type of precipitating events might spell the end of US dollar imperialism?
And in case you missed any of them, here are this week’s featured Mises Daily articles and some of our most popular articles at Mises Wire:
In Thrall to the Federal Reserve by Jeff DeistGovernments Give Migrants a Disastrous Mix of Social Welfare and Bureaucracy by Justin MurrayProgressive-Era Economics and the Legacy of Jim Crow by William L. AndersonThe Fallacy of "Buy Land — They’re Not Making Any More" by Peter St. OngeVote with Your Feet: Free States Are Happier and Richer by Gabriel OpenshawTime to Raise Interest Rates by Randall G. HolcombeQuo Vadis, Federal Reserve? by Paul-Martin Foss
On August 27, 2015, seventy-one refugees were discovered suffocated in an abandoned, locked transport truck in Austria just across the border with Hungary. These individuals, reported as refugees fleeing from the civil war in Syria, made a trek of over 1,000 miles. This is just a long string in the growing refugee and migration crisis hitting Europe over the past few years, with 2,500 estimated deaths from capsizing ships in the Mediterranean alone, of the nearly half million people crossing into Europe over the course of 2014–2015.
The problem is not unique to Europe. Many of these same migrants find their way to Brazil then die through the various jungle crossings attempting to reach the United States. This was true for five migrants from Ghana, an African nation, found dead in the jungles along the Panama-Colombia border This is a terrible loss of life and while most agree that “something” must be done, we have to question first what the underlying cause of this migration is and what that “something” should be.
Underlying Cause of the MigrationMuch has already been written by the degree of instability caused by foreign war policy and the distorting effects of foreign aid that usually props up corrupt military dictatorships. The more interesting observation of the latest migration crisis is not that it is happening, but where the migrants are headed.
In the past, refugees usually trekked the minimal distance necessary to escape fighting with a few politically popular groups receiving airfare to further distant nations, like the Somali refugees relocated to Minneapolis, Minnesota. The rest find their way to the closest safety zone away from the fighting. However, this latest wave of refugees and migrants are passing through numerous safe nations, purchasing airfare across oceans and braving a travel path that is far more dangerous than remaining at home. For example, the aforementioned seventy-one Syrians found dead in Austria chose to bypass and ignore nearly a dozen other safe countries and make their way into Austria and, presumably, further on. It is odd that a Nepalese refugee will purchase airfare to Sao Palo, Brazil then travel by roads through the Amazon jungle and cross the US-Mexico border if it was just war or natural disaster that they were fleeing.
Public Benefits Create the IncentivesA major driver creating the incentives to make this dangerous, life threatening journey can be summed up with a single photo:
Above is a photo of a reference card created by human smugglers obtained by Frontex, the European Union’s border control agency. Smugglers throughout the Middle East, Turkey, and North Africa produce such cards and hand them to potential clients. In effect, refugees have ceased seeking the nearest safest refuge and are now shopping the best nations to flee to. This has created the issue that people are no longer fleeing from conflict or poverty, but fleeing toward the most lucrative benefit package. The above cards do warp the legal systems by implying that showing up is sufficient cause for asylum and the benefits are permanent and for life. However, the presence of such benefit packages does exist and is a major incentive for migrants. This explains why people fleeing Libya are crossing the Mediterranean in rickety, overcrowded boats and people are passing through four or five perfectly secure nations to reach the EU. Part of this large humanitarian crisis is generated by dangling the incentives that anyone who arrives will be given a host of benefits that are, relatively speaking to the recipient, opulent.
The United States provides similar resettlement benefits and even includes the possibility of full family unification. With the United States, further issues exasperate with the treatment of Unaccompanied Minors, who are advertised as given an almost full ride by showing up. This accounts for the surge of fifteen-to-eighteen-year-old males crossing the US border under dangerous conditions.
Lots of Government PaperworkAnother driver of this behavior is how states handle migration and border control. Legitimately crossing into the nations of the EU and North America is a bureaucratic nightmare. Migrants following the rules have to obtain identity documents that are not readily available in their home nations. For example, with the United States, the petition time tends to be lengthy, requires travel to inconvenient USCIS locations in the home nation and is limited to people who have existing families or job offers because of qualified skills. If one looks at the Green Card FAQ there is little recourse for a low-skilled worker seeking a better life apart from a narrow and difficult asylum process. The entry process into the EU is similarly difficult.
I can speak from personal experience traveling to Switzerland for my MBA that even as a US Citizen seeking a one year visa in the Schengen area is a complex, difficult task. It is hard to even comprehend what someone from Syria or Ghana has to go through to obtain legitimate entry. Even the $1,010 application fee, which provides no guarantee of acceptance, while not unreasonable by Western wealth standards, represents multiple years of earnings for some migrants. Even with legitimate refugees, the process is difficult and, with existing quotas, it would take nearly a decade to process just those displaced by the Syrian conflict.
By making legitimate entry points all but inaccessible to most desirable migrants, the migrants are funneled through non-standard routes such as the dangerous Panama-Colombia crossing or under razor-wire fences at the Hungarian border or associate with criminal cartels that will just as readily enslave, rob, or murder the migrants as assist them across borders. These routes are selected over safe alternatives because the safe alternatives have been made unavailable by government policy.
The Perfect StormEither of the above policies creates problems, but together, we get the perfect storm. By dangling a rich benefits package in front of potential refugees and migrants, governments are creating incentives for individuals to make the journey. But by making those said benefits impossible without running a dangerous gauntlet, we end up driving more people through quite literal meat grinders. This combination is almost cruel in a sense — great benefits, but near impossible to get to them.
The SolutionThe key solution to this problem is two-pronged. First, guaranteed public welfare subsidies for refugees needs to be curtailed or outright eliminated. By removing the incentives, people enticed to migrate for public benefits will disappear, greatly reducing the apparent reward for undertaking the trip. The cost of the dangerous trip remains, but the reward has just vanished. Those who are truly desperate will no longer have the incentives to travel beyond the nearest safe location.
Second, the Byzantine, lengthy and costly system of legal migration needs to be scrapped. This is not entering the debate on open borders, but whether one supports open borders or not, it is difficult to argue that the current system of migration is costly and difficult for all but the best educated and most well connected. Those who seek to migrate and contribute to the host society are by and large cut off from legal avenues, leaving only the very dangerous routes available.
While influential voices like the Pope are correct that this is a travesty, the policies promoted by him and other government officials will only make this worse. Offering assistance to migrants by rescuing them when they become troubled or allowing migrants to remain without changing the underlying bureaucratic issue will only create greater incentives for more and more people to take the same dangerous routes. Risk compensation has to be considered — the greater the safety mechanisms in place, the more risky the behavior will become. Unfortunately, the current solutions presented by officials will likely result in boats even more overloaded with people and even greater numbers traversing dangerous jungle passes.
The Supreme Court’s ruling to legalize gay marriage in the case of Obergefell v. Hodges has brought with it both celebration and outrage. What seems to be missing from this discussion, however, are the dire straits that has befallen the institution of marriage in the United States and the West in general.
Some, such as Rand Paul, have recommended getting the government “out of the marriage business altogether.” Indeed, what business does the government have defining marriage be they straight or gay? But this leaves aside the bigger problem that the government has done its best to wreck the institution with perverse incentives and punitive laws. Getting the government “out of the marriage business altogether” may be the only way to save it. But doing so will require a lot more than simply privatizing wedding ceremonies.
How Government Got Involved in MarriageThe institution of marriage has been a bedrock of civilization, but that had nothing to do with government. In fact, it’s important to note that governments didn’t become involved in the institution until relatively recently. And once involved, their role has been far from benevolent. Stephanie Coontz describes the history as follows:
For 16 centuries, Christianity also defined the validity of a marriage on the basis of a couple’s wishes. If two people claimed they had exchanged marital vows — even out alone by the haystack — the Catholic Church accepted that they were validly married.
Not until the 16th century did European states begin to require that marriages be performed under legal auspices. In part, this was an attempt to prevent unions between young adults whose parents opposed their match.
In the American colonies, marriages were required to be registered, but that was about it. Then came a combination of Jim Crow and the Eugenics movement and wise bureaucrats decided they needed to direct the decisions of their benighted citizenry.
By the 1920s, 38 states prohibited whites from marrying blacks, “mulattos,” Japanese, Chinese, Indians, “Mongolians,” “Malays’” or Filipinos. Twelve states would not issue a marriage license if one partner was a drunk, an addict or a “mental defect.”
Government’s War on MarriageIt shouldn’t be hard to see that the government has been disincentivizing marriage for a long time with welfare and other such programs. In the early days of welfare, it was so blatant as to simply not pay if a man was in the home. Today, it’s eased up on that requirement. Still, marriage is declining rapidly in the United States in every demographic. In 1960, 72 percent of people aged eighteen and over were married; in 2010 it was 51 percent and a record number have never married at all.
Welfare has reduced the incentives to maintain families and form them in the first place by substituting the government for the economic benefits that come with a live-in spouse. One particularly good example of this is the Seattle-Denver Income Maintenance Experiment. As John C. Goodman notes “Divorce increased 36% more among whites and 42% more among blacks. (In a New Jersey experiment, the divorce rate was 84% higher among Hispanics.)”
This has a particularly bad effect on children. Today, 40.6 percent of all children are born out of wedlock as compared to less than 5 percent from 1930 to 1960. In the black community, it went from around 15 percent in 1950 (substantially less than the current white rate of 28.6 percent) to a tragic 72.3 percent today.
This increase in out-of-wedlock births brought about by government incentives has unleashed some of its worst consequences on the children it is ostensibly trying to help. The NIS-4 study found that only 2.9 children out of 1,000 were abused in intact families as compared to between 10.2 and 33.6 for all other family structures.
Furthermore, the evidence is clear that the best interests of the children are in most cases to be raised by their biological parents. Children in such homes do better on almost every measure even when controlled for socioeconomic status. And even using such controls is questionable as poverty is highly correlated with family breakup and illegitimacy. Between 1967 and 2003, the poverty rate for every cohort (single mothers, married couples with children, etc.) went down substantially. For example, the poverty rate for single mothers fell from 67.3 percent to 44.2 percent. Yet the overall poverty rate remained almost unchanged because the rate of single motherhood had risen so drastically. Yes, many single mothers (and fathers) do a great job, but it is quite obviously a lot harder to raise children alone.
And government mischief runs into divorce as well. It’s no secret that some divorce settlements beggar belief. And women are by no means immune from this either. Madonna was forced to pay something like $76 million to her husband Guy Ritchie (who just happened to also be a multimillionaire) for a marriage of only eight years.
Splitting up millions between millionaires pales in comparison to what can happen to normal citizens, though. In his book Taken Into Custody, Stephen Baskerville describes the many ways divorce courts trample over basic Constitutional liberties. For example, he notes,
The Eighth Amendment’s prohibition of “cruel and unusual punishment” does not stop family courts from summarily depriving parents of professional licenses, drivers’ licenses, and passports that bare no connection with the alleged offense. Parents who are alleged (but again, neither formally charged nor proven) to be delinquent in child-support payments also have their cars booted and their names published in the newspapers.
Even debtor’s prisons — abolished in the United States’ a generation before slavery — have made a comeback.
The Fifth Amendment guarantees that “No person shall … be deprived of life, liberty, or property, without due process of law” does not prevent family courts from jailing parents on civil contempt for weeks, months, or even years without trial. In December 2003, in response to a letter from the American Civil Liberties Union, a Montgomery County, Pennsylvania, judge freed some one hundred prisoners who had been incarcerated without due process for allegedly failing to pay child support. The fathers were sentenced with no notice given of their hearings and no opportunity to obtain legal representation. ACLU lawyer Maila Brink says courts across Pennsylvania routinely jail such men for civil contempt without proper notice or in time for them to get lawyers. Fathers relate the hearings typically lasted between thirty seconds and two minutes, during which they are sentenced to months in jail or prison. … Nothing indicates that Pennsylvania is unusual … one hundred such prisoners in each of the America’s 3,000 counties is by no means unlikely.
In South Carolina, where Walter Scott was killed for running away from a cop trying to arrest him for being behind on his child support, a full one-eighth of the inmates were jailed over child support arrearages. Many of these child support judgments are simply absurd. As The New York Times reported that, “A 2007 Urban Institute study of child support debt in nine large states found that 70 percent of the arrears were owed by people who reported less than $10,000 a year in income. They were expected to pay, on average, 83 percent of their income in child support.” Some cases are even more of a farce. One man was ordered to pay $30,000 in child support for a child who wasn’t his and a 15 year old boy was ordered to pay child support to the 34 year old woman who statutorily raped him. And it can happen to women too.
Now certainly divorce is sometimes necessary. But even in those cases, the evidence shows that joint custody is usually in the best interest of the child. Of course, this isn’t always the case. If for example, a woman is being beaten by her husband, she should obviously leave him and take the kids with her. But generally, a standard of joint custody seems like a fairly obvious solution to divorce court malfeasance that the government has mostly avoided. Indeed, one study found that “Divorce rates declined nearly four times faster in high joint custody states, compared with states where joint physical custody is rare.”
Government has damaged marriage at every step of the way. Indeed it is time to get government “out of the marriage business altogether.”
It’s been noticed more than a few times that there aren’t many substantive differences between the Republicans and Democrats. While this is true in many ways for the parties themselves, the Left and Right certainly differ on a range of issues from welfare to abortion to gay rights.
What they have in common — at least the mainstream varieties — is a desire to use the state to shape society in whatever way they see fit. As Andrew Napolitano put it, “We have migrated from a two-party system into a one-party system, the big-government party. There’s a democratic wing that likes taxes and wealth transfers and assaults on commercial liberties and there’s a republican wing that likes war and deficits and assaults on civil liberties.” And both parties love prohibition, just of different things.
Alcohol Prohibition There aren’t many people left who believe the prohibition of alcohol in the 1920s was a good idea. Interestingly enough, it was the progressives of the time that pushed for that. As historian William Leuchtenburg noted, “It was a movement that was embraced by progressives.” On the other side, in the words of historian Daniel Okrent, were the “… economic conservatives who … pushed so hard for repeal.”
Prohibition turned out to be a disaster. A report from the Cato Institute found that after Prohibition passed in 1920, homicide rates increased, corruption increased, alcohol-related deaths were unchanged and after a short dip in 1921, alcohol consumption returned to what it had been before the law was passed. Furthermore, in the midst of this chaos, Al Capone and organized crime came to power. Indeed, black markets and prohibition go together like peas and carrots.
Drug Prohibition In the past, it was usually the progressives who wanted to use the state to tell people what they could and could not put in their own bodies. However, something must have changed among conservatives as the Right has generally been at the vanguard of the War on Drugs (although, with plenty of help from many on the Left). In 1971, Richard Nixon decided to try prohibition all over again, but this time with cocaine, heroin, and marijuana.
And of course, it has failed in every way imaginable.
According to the National Institute of Drug Abuse, “Illicit drug use in America has been increasing.” In 2012, “9.2 percent of the population” had used illicit drugs in the last month “… up from 8.3 percent in 2002.” So drug use has actually gone up despite spending over a trillion dollars on this massive boondoggle.
Meanwhile, the United States has the largest prison population in the world. Despite having only 5 percent of the world’s population, the United States has 25 percent of the world’s prison population. A large percentage of these prisonere are in prison for nothing more than non-violent drug charges.
Some think this is counterproductive and immoral. Others, like Michael Gerson, believe that those who want to legalize drugs have “second-rate values.” First-rate values include locking drug addicts in cages. So in accordance with Gerson’s first-rate values, instead of trying to help these poor addicts rebuild their lives, the government declared war on the substances, and thereby, the addicts themselves.
And to wage this war has required a massively invasive police state. “Victimless” crimes don’t leave many witnesses (or at least not many who want to talk about it). So the government must use more bellicose means. According to the ACLU, there are an estimated 45,000 SWAT raids every year and only about 7 percent are for hostage situations. The vast majority are for drugs. These raids sometimes end tragically. For example, David Hooks was shot twice while face down on the ground in one raid and a baby was put into a coma when a flash bang was dropped in another.
The evidence also shows that legalization works. Glenn Greenwald notes that “Since Portugal enacted its decriminalization scheme in 2001, drug usage in many categories has actually decreased when measured in absolute terms” and Forbes points out that “drug abuse is down by half.”
And despite some haranguing from conservatives, Colorado has done just fine since decriminalizing marijuana in 2014.
Gun Prohibition While conservatives have taken some notes from the progressives of old, progressives certainly haven’t given up on the idea of molding society through prohibition. Fortunately, in the United States, most of the debate about guns has to do with regulation and not prohibition. This is not the case in many other countries. And it has also not been the case in several US cities, until Supreme Court decisions overturned the gun bans in Washington, DC and Chicago. Still, many US cities have extremely arduous gun laws on the books.
John Lott did an extensive study and noted that,
The odds that a typical state experiences a drop in murder or rape after a right-to-carry law is passed merely due to randomness is far less than 0.1 percent. … The average murder rate dropped in 89 percent of the states after the right-to-carry law was passed. … There was a similar decline in rape rates.
Further, to make sure he controlled for every variable imaginable (or didn’t control for variables that would incorrectly skew the data) he ran “20,480 regressions” using every imaginable arrangement of possible criteria and concluded,
… all the violent-crime regressions show the same direction of impact from the concealed-handgun law. The results for murder demonstrated that passing right-to-carry laws caused drops in the crime ranging from 5 to 7.5 percent.
John Lott found twenty-six peer reviewed studies on concealed-carry laws, sixteen showed a reduction in crime and ten were inconclusive. Not one showed that crime rates increased.
We can all mourn tragic events such as the recent mass shooting in Charleston. But what is obviously problematic about restricting civilian gun use is that only law-abiding citizens will comply, criminals will not. (Like many other such massacres, the Charleston shooting took place in a “gun free” zone.) Indeed, criminals will likely have no harder a time getting guns then they do getting drugs, which means that restricting guns just disarms potential victims. A survey by Gary Kleck made him conclude that there were approximately 2.5 million incidents of defensive gun use each year. Although that number is almost certainly way too high, defensive gun use is still relatively common. For example, during a school shooting in Oklahoma, Mikael Gross and Tracey Bridges retrieved the guns from their vehicles and stopped the shooter before he could kill anyone else.
As stated above, while there are some in the United States who call for extreme restrictions on guns, or bans altogether, for the most part, outright prohibition is only an issue in other countries. Many will point to the higher murder rates in the United States than Britain as proof that gun prohibition stops murder (interestingly they don’t point to the property crime statistics as they are actually higher in Britain than the US).
But there are major problems with this simplistic analysis. For example, gun ownership has been increasing rapidly in the United States while gun crime has been falling. In addition, most guns are owned by people in rural areas, then suburban, then urban. Crime rates are exactly the opposite. Further, as Thomas Sowell points out in Intellectuals and Society,
Russia and Brazil have tougher gun control laws than the united States and much higher murder rates. Gun ownership rates in Mexico are a fraction of what they are in the United States, but Mexico’s murder rate is more than double that in the United States. Handguns are banned in Luxembourg but not in Belgium, France or Germany; yet the murder rate in Luxembourg is several times the murder rate in Belgium, France or Germany.
And what about that lower murder rate for Britain? Well, Thomas Sowell again, “London had a much lower murder rate than New York during the years after New York State's 1911 Sullivan Law imposed very strict gun control, while anyone could buy a shotgun in London with no questions asked in the 1950s.” What matters are the trends, not simplistic and vulgar comparisons. Instead, an international study done at Harvard noted,
To bear that burden would at the very least require showing that a large number of nations with more guns have more death and that nations that have imposed stringent gun controls have achieved substantial reductions in criminal violence (or suicide). But those correlations are not observed when a large number of nations are compared across the world.
Finally, when it comes to gun bans, the results are predictably terrible. John Lott again, “Every place around the world that has banned guns appears to have experienced an increase in murder and violent crime rates.” This includes Washington, DC, Chicago, Britain, Ireland, and Jamaica. One British newspaper ran the darkly humorous article “Gun Crime Soaring Despite Ban.” Change the “Despite” to “Because” and you have an accurate article.
Conclusion Penn Jillette has half-joked, “If you can convince the gun nuts that the potheads are ok and the potheads that the gun nuts are ok, then everyone's a libertarian.” Arguments about whether these things should be regulated and how much so would be the subject for a different article. But it’s hard to understand why many liberals think that prohibiting drugs creates black markets with drugs, but that it wouldn’t happen with guns. Does one really think that drug cartels couldn’t add guns to their list of products to push? And the same goes for conservatives in the reverse.
It’s really quite simple; prohibition doesn’t work. Freedom does.
I’ve noticed a phrase that is being used with increasing frequency in the media by pundits and commentators. It’s only used by the winning side in various controversies. The phrase is “settled public policy” or, sometimes, “settled law.”
We saw it recently when Mark Oppenheimer in TIME claimed that any “organizations that dissent from settled public policy” should be subject to draconian tax increases (i.e., have their tax-exempt status removed). Oppenheimer was writing on the recent gay marriage decision from the Supreme Court, and in the wake of the decision, he must have sensed his opportunity to declare all his ideological opponents to be heretics, and thus anathema to civilized human society.
Other examples abound as well. In an unsigned op-ed from 2014, The Los Angeles Times said that federal ownership of vast areas of land within states should never be questioned because “settled law” dictates that the matter is no longer open to debate.
So what is “settled public policy?” It is not a description of fact, but an assertion of correctness. For example, when a Supreme Court rules on something, as it did in the case of gay marriage — and which prompted Oppenheimer’s authoritarian diatribe — the supporters of the decision hail the matter as “settled” and no longer open to debate. It’s the secular version of Roma locuta est — causa finita est. The US government has spoken, the proponents of “settled public policy” proclaim. No more debate need be tolerated. But here’s the thing: There’s no such thing as “settled public policy.”
You know what was once “settled public policy”? The Dred Scott decision. After all, the Supreme Court ruled with notable finality that black people have “no rights the white man was bound to respect.”
In 1860, this was “settled law.” The Constitution, which is a blatantly pro-slavery document, was fairly clear on this matter. The chief justice at the time, Roger Taney, felt bound to rule according to the written text. And he thus concluded: blacks don’t have the same rights as whites. Case closed.
And yet it wasn’t. As I’ve noted before, politics trumps law, and as long as there is no such thing as “settled politics” — which there never is — there will never be “settled public policy.”
Here’s another example of settled law: Korematsu vs. the United States. In this Supreme Court case, the majority ruled that yes, it’s perfectly fine to round up people based on their race or ethnicity and put them in concentration camps. In fact, that ruling is still legally valid even today. The Court has never explicitly ruled against this precedent. But hey, it’s settled law, so anyone who opposes that sort of thing should just get over it.
Of course, you don’t have be the world’s biggest cynic to see why those who use this phrase use it in this context. It’s merely a political tactic — because its practitioners know politics trumps law — to shut the opposition up, and to demoralize critics of the government in an attempt to convince them that federal law can establish unchanging doctrine.
In fact, if one attempts to google the phrase “settled law” google returns this text at the very top of the search-returns page: “If you do a search for "settled law" on google most of the results revolve around either the ACA [“Obamacare”] or the Roe v. Wade decision. Both of which are highly contested.”
The fact that google highlights this connection to Roe and the ACA without being prompted tells us that activists and ideologues have been attempting to cast Roe v. Wade and the Affordable Care Act as “settled law.” But google, like any serious scholar (oddly enough), immediately recognizes that such laws are anything but settled. Even in the short-term, they are highly contested, and in the medium- or long-term, they are even less “settled.”
In spite of this, the appeal to settled law has a certain air of legitimacy for Americans. Deeply ingrained in the American mind — especially among conservatives — is the idea that there is some kind of final, unchangeable constitutional law out there. American rightists often rather fancifully believe that there once was a time when most everyone agreed on what the constitution said, and that its text was sacrosanct. So even today, for them, once something is determined to be “the law” it must be respected. The political weakness of this position is apparent.
At the same time, American leftists hold closely to what Murray Rothbard called the “Whig theory of history” in which humanity is forever progressing toward ever greater and more enlightened heights. And thus, whatever the latest ruling is from the courts, must be the “correct” and more enlightened one. If a court rules the “wrong” way, it is merely a temporary setback on the way to a correct ruling.
Europeans, on the other hand, are less prone to such unsophisticated thinking. They understand that political reversals of fortune and legal aberrations can be commonplace in the political world. Certainly, one could have argued in 1989 that the right of the Stasi to imprison people for thoughtcrimes was “settled law.” And then, one day, the Stasi was gone — through extra-legal means.
But let us never let actual history get in the way of pressing the political advantage. The slave drivers of old certainly used Oppenheimer’s “settled public policy” tactic with the Dred Scott decision, proclaiming that the northern nullifiers and abolitionists were criminals who opposed what all “reasonable” people could see was settled public policy. “Those reprehensible abolitionists,” they surely said. “They try to overturn our lovely and established rule of law.”
The same political tactics persist today, although the ideologies have changed. And it is ideology that lies at the core of the matter. Contrary to the risible myth that courts are above and indifferent to the ideological and political contests of their time, the courts — and especially the US Supreme Court — tend to toe a line very close to whatever will please powerful interest groups at any given time. This is true so long as the court thinks the public at large will at least tacitly accept the decision.
The Court certainly took no political risks when it declared Japanese-Americans to be second class citizens with Korematsu. Nor did it go out on a limb with Dred Scott. When it has miscalculated its own political strength, though, the Court has suffered significant blows to its prestige. For example, when the Court ruled in Worcester vs. Georgia (1832) that the Cherokees had a right to private property within the state of Georgia, President Jackson simply ignored the Court and sent the Cherokees on a death march to Oklahoma. The Court learned its lesson: always make sure your ruling will get support from either Congress or the president.
Certainly the recent gay marriage ruling presented no risk to the Court. It knew it had the full support of the executive branch and half of Congress. Even if most Americans are blissfully unaware of the fact, the Court knows that without political support, legal rulings are meaningless.
But, over time, what the public will accept, and what interest groups and institutions hold the reins of power can change considerably. As these variables change, so will the courts, and the legal interpretations that their judges make. Nothing is ever “settled.”
Although leftists often like to condemn nullification as right-wing kookery, the left is quite good at employing the tactic.
Certainly, the most successful nullification trend going on right now is in state refusals to enforce federal drug laws. Four states (Colorado, Washington, Oregon, and Alaska) have all unilaterally declared recreational marijuana to be legal.
Left-Wing Nullification While the successful passage of these measures did require support from libertarians and conservatives, the Colorado, Washington, and Oregon efforts especially benefited from support from people most would identify as so-called left-wing “liberals.”
Many other states have unilaterally legalized marijuana for medical use as well, and it’s in the GOP heartland (i.e., the South and Great-Plains Midwest) where resistance to this form of nullification remains the strongest. Indeed, GOP elected officials from the South and Midwest are currently suing Colorado to force greater federal enforcement of drug laws.
Meanwhile, leftists are the driving force behind the so-called “sanctuary city” movement in which local officials refuse to cooperate with federal officials on enforcement of federal immigration laws.
In addition to passing these nullification measures, the left then follows up with pressure on federal enforcement agencies to take no action. It’s not an accident that the Obama administration has decided to take a hands-off approach in both cases. The administration has been pressured by key interest groups within the party to let the whole thing slide.
Whether or not a Republican administration would be as laissez-faire in the matter is unclear, but in both drug nullification and local nullification of immigration law, the tactic is working, for now.
Right-Wing Nullification The conservatives have had some successes in their own way. Eight states (at the prompting of conservatives) have passed laws that nullify federal laws on guns within their own borders. Like the marijuana nullifiers, the gun-law nullifiers simply refuse to assist the feds in enforcing federal gun laws.
In addition to this, conservatives in Michigan helped pass a law prohibiting state officials from assisting the federal government in indefinite detention under the NDAA.
There’s also been much talk of nullifying Obamacare (via refusal to set up state-level exchanges) and nullification of the gay marriage mandate (via refusal to issue marriage licenses), but neither of these seem to be gaining much traction.
It would make sense that conservatives, who claim to be for so-called states’ rights and “local control,” would promote such measures. But conservatives are also among the most enthusiastic defenders of the NSA and the USA-PATRIOT Act, so we should not be surprised when conservatives attack their own on the nullification issue on the basis of its legality. The influential (among conservatives) Heritage Foundation, for example, back in 2012, issued a fact sheet condemning nullification as unconstitutional.
Other conservative groups have strongly opposed it as well.
Conservatives continue to be pre-occupied with the legality of nullification, and having correctly figured out that it is in fact illegal — because federal law says what the federal judges say it says — they quickly retreat to the more respectable and “legal” means of opposing federal power.
Leftists are then more than happy to pile on and condemn these conservative attempts at nullification while carefully avoiding mention of their own uses of the very same tactic.
Political Tactics vs. Legal Tactics Nullification has never been a legal tactic. It has always been an extra-legal and political one. Law and politics are two different things, and the fact that something is illegal does not mean it’s politically unfeasible or impossible.
Certainly, the nullification of the fugitive slave acts was highly successful, and also very illegal. It was so successful, in fact, that it was a major factor in Southern secession. We know this because the South Carolina declaration of secession specifically says so:
But an increasing hostility on the part of the non-slaveholding States to the institution of slavery, has led to a disregard of their obligations, and the laws of the General Government have ceased to effect the objects of the Constitution. The States of Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York, Pennsylvania, Illinois, Indiana, Michigan, Wisconsin and Iowa, have enacted laws which either nullify the Acts of Congress or render useless any attempt to execute them. In many of these States the fugitive [i.e., escaped slave] is discharged from service or labor claimed, and in none of them has the State Government complied with the stipulation made in the Constitution.
The South Carolinians won the legal argument, but even without the Civil War, they would have lost the political argument. Federal law was clear that the runaway slaves were a federal matter, and anyone who interfered with it was in violation of the law. But that didn’t stop those who lied to federal officers and helped slaves evade bounty hunters. Northern nullifiers simply weren’t going to respect federal law in this matter because they viewed it as immoral. The South Carolinians correctly concluded there was little they could do about this, and they included it among the reasons they seceded.
Nullification Works When You Want Government Inaction When nullification enjoys either the indifference or support of a sizable portion of the local population, and is based on encouraging government inaction, it tends to work. In the case of marijuana-law and immigration-law nullification, local governments have refused to enforce federal law, and the same was true with anti-slavery nullification. In fact, the slave owners, who were a very powerful interest group at the national level, and who had both the Constitution and the federal courts on their side, were at a lopsided disadvantage with individual states because the slave-owners needed more government action and enforcement of pro-slavery laws on the part of state governments. Even worse (from the pro-slavery perspective), enforcement was expensive. The anti-slavery activists, on the other hand, merely needed their state governments to look the other way.
Then as now, the federal courts were not on the side of nullification. But when the federal government is faced with enforcing federal law over the objection of local law enforcement — which is more sensitive to local sentiments — and when at least one branch of the federal government is on the side of the nullifiers, things become legally and politically murky.
And this, apparently, is what the left understands. They know that the feds can only do so much to enforce federal law on their own, without help from local government. Yes, the feds have their own federal agents, but federal police forces are actually quite small compared to state and local police forces (unless, of course, the feds call in the military.) But big, federal enforcement operations tend to be PR disasters, as in the case of the Bundy Ranch standoff.
It’s always better to get help from the locals, and when they refuse, it’s hard to force their hand.
The reverse, however, does not work as well. That is, if nullification consists of requiring an active role for state and local officials, follow-through is a problem. For example, if states attempted to nullify Roe vs. Wade, they would run into trouble, because that sort of nullification would consist of actively shutting down physicians and abortion clinics. That’s different than simply refusing to take action.
But even “do nothing” attempts at nullification remain on very shaky legal ground. According to modern interpretations of the Constitution, there is no legal provision for state and local officials (including state courts) to refuse to enforce laws that modern constitutional scholars claim are part of “the law of the land.” And if they so choose, federal officials can still selectively enforce the law using their own agents.
But on a practical level, these sorts of nullification laws do in fact limit the federal government’s ability to enforce its own laws. The feds can always call out the National Guard and force local compliance, but that can’t be done on a permanent basis. Moreover, the feds avoid big showy displays of federal supremacy, not because they are constrained by the law, but because they are constrained by political opinion. And political opinion is the crucial factor that conservatives tend to ignore. The right seems to think that legal realities trump political ones, while the opposite is more often true.
Includes an introduction by Llewellyn H. Rockwell, Jr. Recorded at the Mises Institute in Auburn, Alabama, on 20 July 2015.
Tate Fegley and Jeff Deist discuss what crime and punishment might look like in a libertarian society, and how to convince skeptical libertarians that private police can do a better job of dealing with violence, theft, and fraud.
Private, competing defense agencies would operate with completely different incentives than state police: unlike government cops, private cops get fired when crime goes up. Private police have a direct financial interest in avoiding escalation of conflicts, avoiding legal liability for death or injuries, and avoiding damage to their agency's reputation. And under a Hoppean insurance model, both insurance companies and property owners have a direct incentive to prevent, rather than merely respond, to crime.
Finally, they discuss how direct restitution, rather than lengthy taxpayer-funded incarceration, would be a more economically efficient and more humane approach to helping crime victims.
Last Friday came the unpleasant news that Ross Ulbricht, the 31-year-old former operator of the Silk Road site, has been sentenced by a federal court to life in prison without parole. This follows his conviction in February for typically dubious (nowhere in the Constitution) federal crimes including conspiracy, money laundering, and the circular “engaging in a continuing criminal enterprise.”
His sentence, which appears unduly sadistic even by today’s standards, was handed down with a lecture from Judge Katherine B. Forrest:
“[What] is clear is that you were captain of the ship as Dread Pirate Roberts and you made your own law. It was your opus, and you wanted it to be your legacy.” “What you did was unprecedented,” she told Ulbricht, “and in breaking that ground as the first person he had to be punished accordingly.”
"You are no better a person than any other drug dealer."
Too bad he wasn’t sentenced like any other drug dealer.
The central issue in the Ulbricht case, as always, is an evil and unbridled federal government. No human being should be locked away for engaging in (or facilitating) peaceful, voluntary commerce among willing participants. Dark sites like Silk Road, and the cyber payment systems they employ, exist because of state prohibitions on voluntary human conduct. They are natural market reactions to government interference. This cannot be overstated.
But is Ulbricht a commendable libertarian martyr by definition, simply by virtue of falling into the crosshairs of an immoral federal government waging an unjust drug war? Does lamenting his indefensible sentence mean celebrating him and his actions?
The libertarian blogosphere certainly seems to think so. Social media buzzed all weekend with praise for Ulbricht as a brave soul who created a safer alternative to buying drugs off the street. For many libertarians, he is worthy of praise for taking agorism to the next level via technology — for challenging the state head on, and paying the price.
Ulbricht himself is no longer so sure. He exhibits deep regret not only for throwing his young life away, but also for dragging his family through hell. And he apparently no longer shares the same view of maximum freedom that his libertarian champions hold:
“Silk Road was supposed to be about giving people the freedom to make their own choices, to pursue their own happiness,” he said. “I learned from Silk Road that when you give people freedom, you don’t know what they’ll do with it.”
Who can blame him for changing his tune in the end, whether to curry favor with the judge or not? After all, it won’t be his Facebook fans spending the next five or six decades in a supermax federal cell.
Furthermore, there are allegations by federal prosecutors that Ulbricht sought to have several people killed for threatening to disrupt the operation of Silk Road. Now of course we must rush to Ulbricht’s defense here: prosecutors are notorious liars, and undoubtedly they floated the solicitation of murder charge both to discredit him publicly and to deny him bail pending trial. Furthermore, even the most specious allegations often scare the daylights out of suspects and thus help secure plea agreements. So we shouldn’t put much faith into this, especially since the solicitation charges were not merely dropped by prosecutors — they were never brought at all (despite the sentencing judge’s contention that Ulbricht’s unambiguous journal entries prove he paid hit men — his mother thinks the entries are bogus).
It’s tempting to dismiss the simplistic power of the state’s narrative about Ulbricht. But hit men aside, do libertarians really want to create a cause célèbre out of a young man who used his intelligence and talents to sell drugs online? Even without thoroughly understanding his background and personality?
Agorism and its implications, however much they resonate with libertarians, have always been a losing proposition with the general public. The public might rally behind a medical doctor who supplies marijuana illegally to help a sick cancer patient, or an individual suffering with MS who uses a foreign online pharmacy to obtain prescription drugs not approved by the FDA.
But trafficking in “illicit” drugs — drugs used recreationally or by addicts rather than medical patients — is something different altogether. And while attitudes toward marijuana have changed considerably, organs like the DEA remain effective at portraying traffickers as ruthless and sinister criminals.
Unfortunately the Silk Road prosecution will only strengthen dark connections in the public hive mind between internet markets, privacy, cryptocurrencies, and real (i.e. not victimless) criminality. That these connections are mostly unfounded misses the point: the conflation of voluntaryist agorism with libertarianism is not likely to push the public in our direction.
Ulbricht is reputed to have read Rothbard. But Rothbard wrote the definitive contra agorism article way back in 1980, when online markets existed only in sci-fi novels. Engaging in a friendly joust with agorist figurehead Samuel Konkin, Rothbard demonstrated a decidedly negative view of agorism’s value to the libertarian movement:
It is no accident ... that the entire spectrum of the black market movement, from tax rebels to agoric theoreticians, are almost exclusively self-employed. ... Black marketeers might well benefit themselves in the micro sense, but they have no relevance to the “macro” struggle for liberty and against the State. Indeed, in a kind of reverse invisible hand, they might even be counterproductive. It is possible that the Soviet black market, for example, is so productive that it keeps the entire monstrous Soviet regime afloat, and that without it the Soviet system would collapse. This does not mean, of course, that I scorn or oppose black market activities in Russia; it is just to reveal some of the unpleasant features of the real world.
Much as I love the market, I refuse to believe that when I engage in a regular market transaction (e.g., buying a sandwich) or a black-market activity (e.g., driving at 60 miles per hour) I advance one iota nearer the libertarian revolution. The black market is not going to be the path to liberty, and libertarian theoreticians and activists have no function in that market.
In other words, black market entrepreneurs (like all entrepreneurs) will sink or swim without the assistance of libertarian theorists.
Clearly Mr. Ulbricht is the victim of shocking injustice. But his story serves as a cautionary tale about the priorities of those who seek a freer society. We should celebrate men and women of good character who wake up every day and provide us with value — whether economic, familial, social, civil, or religious. These are true libertarian heroes, individuals who go around, under, over, or through the state and its clutches in their everyday lives. It is not always the swashbuckling anti-hero, but often the quiet, sober, staid, bourgeois businessman who deserves praise for sustaining us.
Communities like Baltimore and Ferguson have been crippled by government regulations and the American nanny state. Now is the time to allow local residents to break free of government wage controls, government schooling, and government prohibitions, writes Mark Thornton.
This audio Mises Daily is narrated by Robert Hale.
The state prosecutor is the quintessential bureaucrat — powerful and unaccountable. Whither this unaccountable and bureaucratic prosecutorial rule? The words of Maryland State Attorney Marilyn Mosby from May 1, 2015 are telling:
It is my job to examine and investigate the evidence of each case and apply those facts to the elements of a crime, in order to make a determination as to whether individuals should be prosecuted. ... [T]o the youth of the city. I will seek justice on your behalf. ... You’re at the forefront of this cause and as young people, our time is now. [emphasis added]
Such is the powerful rule of prosecutors in America with unilateral authority to impose felony charges. Individual defendants, as in the Gray case, may be unilaterally charged by the prosecutor in certain states, without resort to a grand jury, all based on the temperature of a political issue or “cause,” not a reasonable, individualized assessment of guilt. Many American prosecutors have undoubtedly gone wild in an attempt to further their careers and obtain revenge on political enemies. The “grand jury” in Baltimore was composed of one politician. As with Angela Corey, the Florida prosecutor in the George Zimmerman case, career advancement is something obtained by way of the lives and reputations of others.
In a case involving a suspected homicide, perhaps police officers should be held to a higher standard particularly since they are entrusted with an arrestee’s safety. However, even if one agrees that the police officers in the Freddie Gray case acted maliciously based on the state attorney’s narrative of the evidence — and one can make a plausible case for charges of criminally negligent homicide —the fact that Mosby has opted for murder charges while posturing and declaring “our time is now” stretches the bounds of fairness or credulity.
Those encountering the prosecutorial buzzsaw within the United States are of many backgrounds. Unrestrained prosecutorial authority pressed hard against Aaron Swartz from 2011 to 2013. Swartz, then a former Harvard fellow, programmer, and internet freedom activist, committed suicide in January of 2013. A relentless smear campaign by the prosecuting U.S. Attorney set in motion Swartz’s life-ending spiral. Accountability, if it ever comes, is late, as in the 2006–2007 case of prosecutorial abuse involving lacrosse players at Duke University. In the well-known case of Edward Hanousek, a construction supervisor was criminally charged with the negligent actions of subordinates while he was off-duty.
The politically connected are not immune from nefarious treatment. A lengthy fishing expedition lacking a fig leaf of justice led to repeated attempts to prosecute former Alabama Governor Don Siegelman. He was convicted of bribery largely due to the testimony of a single witness threatened by prosecutors.
The law extends qualified immunity to prosecutors and effectively bars meaningful recourse by the maliciously prosecuted. Furthermore, the ubiquity of plea bargaining ensures that dubious charges go unchallenged. Professor Bennett Gershman has described the accretion of power by prosecutors as having gutted the adversarial legal system.
The Common-Law History of ProsecutionThe American common law is derived from the English, and public prosecution was to a large degree absent in England for most of that history. Criminal or quasi-criminal prosecutions in England were initiated by the aggrieved private parties. Privately-initiated criminal prosecution was a key feature of the common law tradition and a privately-initiated procedure might assist in holding unaccountable prosecutorial rule at bay. The existing “government by prosecution” framework offers little defense against an emboldened bureaucracy.
Our current police and gun control controversies are but the latest in a long tradition. The prosecutorial system and criminal procedure were longstanding, fitful political issues in most English communities and they aroused passionate opinions. The formal transition from private to public prosecution in England did not occur until 1879 and years passed before it could be implemented in practice. The English gentry had long been suspicious of both a public prosecution system and a professional police force.
Indeed, the private initiation of criminal prosecution in England was a curiosity to visitors. Among them was the French jurist Charles Cottu, who like many was unaware of the “traditional arguments of English gentlemen against a constabulary and state prosecution,” according to legal historian Douglas Hay. Those Englishmen believed, in Hay’s characterization, that the power of prosecutorial institutions could lead to a “political police serving the Crown.” This opposition to public prosecution has been cast by law professor Bruce P. Smith as an example of old England's “national commitment to civil liberties.”
It was a relatively ancient practice those Englishmen sought to preserve. Since early medieval England, long before the Norman invasion of England, criminal actions had been instituted by aggrieved private parties. They were primarily settled by compensation or restitution, and not imprisonment, capital punishment, or even the blood-feud that was common in much of Europe. For most offenses, specific civil fines and compensation were established.
Maitland and Pollock’s classic discourse on English law describes how, during the age of Alfred, it was illegal to initiate a feud following a homicide until the proper compensation had been demanded of the perpetrator and the demand refused. The affirmative role of the victim or next of kin initiated the legal process. Particularly heinous offenses requiring more than “mere” intentional homicide, were often excluded from the realm of compensatory remedy. As process, judges were appointed to preside over the courts and enforce the decisions made by the assembled freemen of a district. Policing and law bore elements of democracy.
The laws and punishments of the Saxons were quite mild by most historical accounts. Ethelred (978–1016) stated that “the ordinance of our lord and of his witan is, that Christian men for all too little be not condemned to death.” Indeed, the developing Christian faith of the people made criminal penalties even less harsh than they already tended according to Maitland and Pollock. The system of compensation “among the Germanic peoples is parallel to and connected with the contemporary elaboration of the ecclesiastical system of penance, which is a system of atonements.”
Following the invasion, continental inquisitorial practices migrated to an England now experiencing further Norman influence. Prosecution and investigation by central authorities began forming a core function of the state. In essence, the center of gravity for criminal law shifted between 1066 and 1176 under the concept of the king’s peace. In legal historian G.W. Keeton's construction, “the king’s peace swallowed up the peace of everyone else.”
In those years following 1066, under the regime of William the Conqueror, the laws became rather brutal. Ordeal by water would represent one Norman introduction to English law. The Normans had brought with them Roman civil law and an administrative machine fixated upon a strong ruler and a plethora of crimes against the state’s interests. Joseph R. Strayer’s On the Medieval Origins of the Modern State explains that “justice” became a way for the king to expand royal powers.
The later introduction of the practice of prosecution by information further reveals the ominous trajectory of the law. John G. Bellamy relates that the use of prosecution by information encouraged the “clandestine reporting of rumours” to state powers. This new practice implicitly disavowed a system based upon the remedying of private wrongs among individuals. Accusation in notorious cases, at least, was increasingly by government officers — officers dependent on the crown.
By the Tudor era, it was asserted that “the prince, God’s gift to the nation, must never be resisted.” Under the Tudors, a royal house that historians long considered an archetype of tyranny, an incipient public prosecutorial system appeared. Statutory enactments proliferated with many creating mala prohibita regulatory offenses. Newly conceived laws prohibited conduct endangering the power or prestige of the crown. (See G.R. Elton's The Tudor Constitution.)
The tendency toward governance by prosecution thus made strides during this period. In the view of legal historian John Langbein, the seminal prosecutorial development occurred when state investigatory practices resembling continental European pretrial and prosecutorial procedure were enacted from 1554 to 1555. Prosecutorial functions were therefore partially removed from the community and transferred to appointed officials. And yet, despite the new justice of the peace system introduced in the Tudor era, English prosecutions were largely initiated by private persons, with the usual caveats, until late in the nineteenth century.
Of course, to realize some efficiencies while maintaining the private character of the process, modest property owners began creating associations for their mutual protection. These prosecution associations sometimes maintained patrols in troubled areas, advertised and offered rewards, and occasionally aided non-subscribers (see J.M. Beattie's Crime and the Courts in England 1660–1800). The gentry, remembering previous monarchical abuses and having observed the French monarchy’s use of spies and informers, often opposed the idea of professional police forces according to Hay.
Martin van Creveld has argued that this critical eighteenth century period was the time during which bureaucracy became a discrete type of government in the West and “master of civil society.” During this century, Jeremy Bentham would prescribe solutions to the “evils” of private prosecution though it was not until 1879, following decades of legislative commissions and debate, that the basis for a public prosecution system was constructed with the Prosecution of Offences Act.
In comparison to the English experience, the office of public prosecutor developed earlier in most of the American colonies. However, a variety of practices existed. In the Dutch colonies, according to historian Julius Goebel, Jr., some element of private initiation existed although the growing practice was the prosecution of crimes by peace officers. Private prosecution was common though in Philadelphia as late as the mid-nineteenth century, perhaps due to the Quaker influence and the Quaker system of mediation under the extensive history developed by Allen Steinberg in The Transformation of Criminal Justice: Philadelphia, 1800–1880.
Implications for the PresentRecent political fights and media fixations are unsurprising for several reasons, one of which is the entertainment culture that is pervaded by police and prosecutor programs. The worn motifs in fictional police, crime, and district entertainment essentially depict a world of civic decline and failure, a world to which Richard Weaver’s reference to communities “which are but people living together in one place” seems particularly apt.
Devolving some of the state’s prosecutorial powers might limit the scope of criminal codes and regulatory prohibitions or prevent malicious investigations. Local community and private societies might also be strengthened under a system of greater private responsibility. As Robert Nisbet asserted, these societies at one time acted as some restraint upon political powers by maintaining civic vitality. In contrast, the public prosecutor’s office represents industrial-strength bureaucratic justice. Individualized considerations are heavily minimized as the system levies its demands blind to justice.
That visitors to England took notice of the practice of private prosecution is revealing. Accustomed to more aggressive, elaborate state prosecutorial systems at home, they witnessed something unique that many thought worth preserving. Indeed, concerned Englishmen guarded this tradition of liberty. Many American citizens now fight to preserve the American Constitution and its equivalents to the rights of Englishmen. For them, this past serves as a reminder of a particular facet of liberty expunged from our communities and civic life. This abandoned tradition compels us to reconsider its wisdom.
The Bruno Leoni Lecture, sponsored by Christopher P. Condon. Recorded at the New York Area Mises Circle in Stamford, Connecticut, on 7 May 2015.
I am regularly asked what can be done to solve the problem of “urban blight” in places like Detroit. The question is usually asked with exhausted desperation and a shrug, as if there are no possible answers. The cause of this “blight” is the root of the problem, and when ignited by police brutality, sets off riots in cities like Ferguson and Baltimore. There are a whole range of answers that we know will work to at least improve the situation.
The root problem of urban blight is government. With this in mind I want to focus on seven areas that if you eliminate government from the scene will solve the problem, or at least reduce the scope of the problem. Some of these solutions can be easily adopted by cities; others will require state and federal governments to remove or modify various forms of intervention. Some aspects of urban blight, such as the deep-seated ideology of victimhood, are likely only to be solved — as with the problem of aging tenured professors — one funeral at a time.
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Grant “Urban Blight Status” to Free Communities from Regulatory Dead WeightWhat we need are more "real" jobs because gainfully employed people commit fewer crimes. The government creates all sorts of problems in labor markets other than the minimum wage law. City governments, or city elders, should be able to request what I’ll call “Urban Blight Status” for all of the city or parts of their city. Such status will allow for the removal of the minimum wage law and all licensing requirements. It will further remove property taxes and sales taxes. This will immediately create a competitive advantage for labor contracts in the “Urban Blight Zone.” Naturally, all of these measures are decidedly non-radical and would be considered “first steps” that should later be applied to the entire population nationwide.
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Lower TaxesAny person living below the poverty line, or some other relevant measure, should be allowed to opt out of Social Security. This will immediately create a competitive advantage for urban workers as employers would not have to pay “their share” of the Social Security taxes.
Such measures are badly needed given the high rate of unemployment prevalent among the young in urban areas, with some areas experiencing unemployment rates of 30 to 40 percent for young black men since 2011.
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Let Young Workers Learn Real SkillsAlso, students trapped in public schools will be able to opt of out the last three years of high school if they can maintain a job working at least thirty-two hours per week. Students will also be able to opt out of afternoon classes in grades seven through nine if they can pass a basic competency test and maintain a part time job.
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Legalize Self-DefenseIn addressing the problem of urban crime, the first thing that needs to be done is to remove gun control and gun restrictions in the cities where they exist. Gun ownership deters crime and violence. Recent state laws that allow citizens to carry guns have contributed to falling crime rates in recent years.
Moreover, victims of real crimes often find themselves on their own, thanks to drug war incentives, since police in recent decades have increasingly been prioritizing drug war enforcement over real property crime like burglaries and violent crime.
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End the War on MarijuanaOne of the most important reforms to reduce crimes is to legalize marijuana. This will reduce government budgets for police, courts, district attorney offices, jails, and prisons. As a result, fewer black and Hispanic males will be killed or locked up in prisons. The city of Philadelphia, for example, made marijuana possession the lowest priority for the police department and saves a good deal of money as a result. The violent crime rate in Colorado has fallen since marijuana legalization.
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Sell Off City PropertyCity governments should engage in true privatization. Property and buildings now controlled and maintained by city governments should be turned over to the private sector. Urban areas need properties for things such as private schools, safe parking lots, and new businesses. Maintaining the city government’s property is simply a burden on the taxpayer.
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Phase Out WelfareWelfare remains a major cause of family and social disintegration. Welfare benefits should be reduced and phased out, and the welfare that does remain should immediately come with strings attached such as work requirements and drug testing.
Expect OppositionNot everyone will be happy with these reforms. It is easy to imagine a great deal of political opposition from the likes of suburban businesses, licensed professional labor groups, unions, white collar workers, public school teachers, the private prison industry, police unions, public employee unions, and pharmaceutical industries, to name a few sectors.
There are things we can do immediately to begin solving the problem of urban blight and thus eliminate some of the factors that lead to riots such as occurred in Ferguson and Baltimore. It may all seem like a pipe dream, but remember Detroit, Michigan was forced into bankruptcy and had to slash its budgets. Detroit today is already seeing urban revival in an environment of relative laissez faire. The next economic crisis could send other major cities mired in debt into a Detroit-like death spiral. It is the nature of government to think it is the solution to every problem. As Detroit found out, it is the removal of government restrictions and edicts that gave the city and its impoverished citizenry the opportunity to rise up and build a second life.
At the time of their publication, Hayek’s writings represented a significant split from Léon Walras’s theories of perfect competition and, generally, mainstream microeconomics. As Hayek explained, perfect competition is an economic model in which “we assume that state of affairs already to exist.” A certain competitive equilibrium is considered to be the goal to reach. Within this competitive equilibrium, it is assumed that individuals “are fully adjusted to each other.” The concern behind the model of perfect competition is, therefore, about how to reach a pre-defined market structure in which competition will be “perfect.”
Hayek, however, saw competition as a discovery process, and the ideal way to encourage that process is to favor dynamic competition — and thus more realistic competition — over perfect competition. Many now recognize this, but antitrust authorities and the economic literature has long encouraged the perfect competition model, and sometimes they still do.
Antitrust and InnovationModern high-tech markets have characteristics which may give Hayek’s contribution to antitrust law a new meaning. As of today, antitrust authorities do not fully consider all aspects of “innovation” because they do not give dynamic efficiencies the place they should. For instance, the fact that disruptive technologies could emerge at anytime is not integrated in most antitrust analyses, which tend to confirm that these authorities are still running, at least in part, on the model of perfect competition.
High-tech markets consistently demonstrate unstable equilibrium and this should lead antitrust authorities to give a lesser importance to the concept of “network effects” which imply that a product with a large market share may have an insurmountable advantage over competing products. The possibility of the emergence of new products and innovations that constantly reshape the marketplace show us that barriers to entering an existing market are not the main issue since new technologies often create a new market. As a consequence, and as recent history undoubtedly shows us, market shares move faster and most so-called natural monopolies — those created without public intervention — disappeared as soon as they appeared. In other words, these markets better resemble Hayek’s spontaneous order than any perfect competition model.
Antitrust authorities have already been forced by new realities to take this into consideration. For instance, in the Microsoft anti-trust case, the Department of Justice recognized the temporary nature of domination in high-tech markets. American and European courts have also done so in several cases since then. The European Commission, in its Microsoft/Skype merger decision of 2011, addressed the fact that “market shares only provide a limited indication of competitive strength in the consumer communications services markets" and other “dynamic markets.” And recently, European Commissioner for Competition Margrethe Vestager underlined that Google operates in “fast moving markets.” Yet, regulators continue to place a tremendous emphasis on the barriers to enter a market because of the existence of “network effects,” as American and European legal experts did at the time of the Microsoft case.
Practical ReformsInstead of aiming at preserving a specific structure of the market regulators should be seeking to get out of the way of new technology breakthroughs. Yet, antitrust authorities often favor “sustaining innovations” over new disruptive ones. For instance, when the European Commission ruled that Microsoft must ensure that its products were broadly compatible with other products in the market, the Commission was simply seeking to sustain the current market that exists rather than facilitating the creation of new markets and new products.
Nevertheless, the anti-trust regulators remain focused on “switching costs,” “lock-in,” and “barriers to entry,” and continue to put emphasis on the old concept of “market shares” while the market is making such concepts less relevant by constantly changing the rules of the game.
Consequences for EntrepreneursAs Hayek shows us, it is the dynamic emergence of new products and new markets that create true competition and prevent the creation of effective monopolies in an unhampered marketplace. Obviously, the perfect competition model has little to tell us about how these real-world markets work. Regulators would do well to acknowledge all of the consequences related to the relinquishment of the perfect competition model. If they did, it would shift how companies are competing with each other because regulations and court decisions have often shaped companies’ behaviors and strategies. Entrepreneurship would then be enhanced and high-tech markets would be more competitive and innovative than ever.
[This article is adapted from “Friedrich Hayek's Contribution to Antitrust Law and Its Modern Application,” ICC Global Antitrust Review (2014): 199–216.]
In the context of the financial crisis, and the government’s ever expanding fiscal deficit, it is perhaps no surprise that the issue of taxation has become one of the most hotly debated topics in the United Kingdom’s upcoming election. Nor is it surprising that the establishment has successfully avoided any discussion of what makes dealing with the deficit so imperative, namely, the taxpayer bailout of the banking system.
What is worthy of some note is how the current debate has transformed into a witch hunt focused upon particular individuals deemed not to be fulfilling their moral obligation to pay their “fair share” of tax.
One person who recently ran afoul of this populist fervor is the ex-chairman of HSBC Stephen Green, who presided over the bank at a time when its private banking arm helped wealthy clients (including a number of celebrities) avoid taxes by squirreling their assets away in non-declared Swiss accounts.
This is rather embarrassing for the political establishment in the UK that previously lavished upon Green significant power and influence. However, to whatever extent Green was consciously responsible for what occurred, he should be lauded a hero. Far from being a transgressor of morality, he deserves recognition for aiding and abetting the only morality worthy of the name to flourish; the morality of self-ownership and private property that underpin the free market.
Voluntary Exchange vs. TaxationAssuming the bank's clients did not accumulate their fortune through violence or fraud, then clearly they became wealthy through providing products and services to fellow human beings who valued those services more highly than the amount of money they voluntarily parted with in the transaction.
Somewhat atypically for a modern bank, HSBC displayed a zealous regard for the safeguarding of their client's assets and their clients in turn were happy to accept protection. It was yet another consensual and thus “moral” transaction. Yet both parties are held out to be the quintessence of immorality. For they are said to have aggrieved a third party: the state. By depriving the state of funds, we are told, they obstructed the state’s ability to carry out its mission to secure the welfare of all of society. Furthermore HSBC and its customers benefited from the contributions of their fellow citizens without making good on their own required “contribution.” Thus, Chancellor of the Exchequer, George Osborne declared “people evading tax should be treated same as common thieves.”
That this logic can be so unquestioningly accepted attests to the extent to which the population fully accepts the violence required to collect taxes. Like a robber with a gun, the state generates its revenues through coercive appropriations as opposed to providing a product or service that can be offered in a mutually beneficial exchange. The only difference, as Lysander Spooner pointed out, is that the robber is not so pretentious as to declare himself your lawful sovereign in exchange for the “protection” he offers.
The appropriate, and indeed moral, response to the threat of state violence is to act precisely as the much maligned tax avoiders in HSBC’s scheme have done. As Rothbard argues:
Just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one’s house, so no one can be morally required to answer truthfully similar questions asked by the state e.g., when filling out income tax returns.
Nevertheless, a depressing combination of cynicism and guilt prevails. No one dares question the sacred duty owed by everyone to the health of the state, yet everyone goes about reducing the burden of that duty in whatever way they can.
The Fading Distinction Between Tax Avoidance and Tax Evasion“But certainly,” you may say, “a person acting in good faith should be permitted to openly and unashamedly reduce their tax burden within legal limits.”
Well, no. What has emerged from the recent fervor over tax avoidance is that such a distinction is no longer valid. It is true that the British courts did once recognize the distinction between “tax avoidance”; reducing a tax burden through propitious financial planning within the limits of the law, and “tax evasion”; reducing a tax burden in contravention of the law through dishonesty and concealment. This distinction was clarified in the infamous Duke of Westminster case where Lord Tomlin sensibly concluded that
Every man is entitled, if he can, to order his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.
Even this distinction, for those concerned with the moral status of the individual, should have been far from satisfactory. It acceded to Hobbes’s risible dictum that “the liberty of subjects consisteth in the silence of the law,” which is to say, individuals do not have the right to dispose of their lives and property at all; they only do so to the extent that the state hasn’t yet deigned to make a rule.
However, this notional reserve of liberty provided by Westminster is no longer beyond the Leviathan's reach. In December 2010, parliament rolled out the General Anti Abuse Rule (GAAR) which permits the courts, when considering the legality of an individual’s tax arrangements, to look beyond the letter of tax law to apply a twofold test as to whether:
(1) It would be reasonable to conclude that their main purpose, or one of their main purposes, was to obtain a tax advantage; and
(2) [the tax arrangements] are ‘abusive,’ which means they cannot reasonably be regarded as a reasonable course of action.
What the first limb of the test means is that the Westminister principle is dead. Obeying the law is no longer a guarantee of avoiding criminal sanction. Indeed, mere intent or mens rea, of diminishing a tax burden when embarking upon a particular financial action invokes criminal liability. Liability can only be certainly avoided if the main aim of a financial arrangement had nothing to do to with reducing tax (presumably where the motive is sudden necessity or extemporaneous fancy). Though designed to shut down complex tax avoidance schemes used by the rich and famous, when taken to its logical conclusion, this technically makes liable anyone utilizing what are presently considered uncontroversial financial planning techniques, like those who wait until retirement to cash in an investment to avoid paying higher rate of tax.
Of course, whether a person is ultimately liable depends on the second limb of the GAAR test; whether the transaction is “abusive.” Yet this is an arbitrary measure entirely dependent on judicial discretion. Rule of law and legal certainty are effectively dispensed with and power invested in the wise judge to peruse through any transaction and, looking to principles of ‘social justice,” the judge is permitted to determine it “unfair.” Specifically, the judge must bear in mind “the premise that the levying of tax is the principal mechanism by which the state pays for the services and facilities that it provides for its citizens, and that all taxpayers should pay their fair contribution.”
The sinister conflation of avoidance and evasion is therefore no longer a matter of verbal disingenuousness. It is a statement of law. There is no such thing as legitimate “avoidance.” To defy one’s sacred and moral duty to the state is actually criminal as George Osborne confirmed. For the foreseeable future then, we can expect more ironic spectacles of moral opprobrium being rained down upon people like Green, not for belonging to the fraudulent infrastructure of the state-central banking nexus, but rather for upholding, probably in spite of himself, the moral imperative to protect his client’s assets.
Image Source: Wikimedia
The battle for the North Pole is snowballing between national governments along the Arctic Circle, as they all have their eyes set on the vast natural resources residing in the Arctic region. Indeed, it’s estimated the Arctic Ocean floor contains 22 percent of all unused oil and natural gas in the world — the largest remaining untapped concentration.
From this year until 2017, the US will hold the chair of the Arctic Council (AC) — an international forum founded in 1996, comprised of member states Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US.The purpose of the AC is to
“provide a means for cooperation, coordination, and interaction among the Arctic States … [and] Arctic Indigenous communities … [for addressing] issues of sustainable development and environmental protection …”
It will be interesting to see, given recent antagonisms between the US and Russia, how aggressively the AC chair will be wielded and for what purposes. The US government has been receiving criticism for not expressing greater interest in the Arctic — Hillary Clinton in 2011 was the first US secretary of state to attend an AC meeting — but everyone knows a flip-flop is in order the moment Washington perceives a political gain to be had.
Meanwhile, the Russian Federation has been ramping up their propaganda machine with President Vladimir Putin being photographed in a submarine in the Baltic Sea, coinciding with announcing the reopening of old USSR Arctic military bases. During their Arktika 2007 expedition, they executed a PR stunt and planted a Russian flag on the sea bed of the North Pole in order to show symbolically that it’s theirs.
To complicate matters, Denmark petitioned the United Nations last year, calling dibs on 900,000 sq km — an area twenty times the size of Denmark itself! Canada too has been in the propaganda fray since their prime minister declared that Santa Claus is a Canadian citizen.
In fact, every member of the AC is clamoring for ownership of the Arctic, and even some non-member observers are taking a shot.
The Legal Basis for State Control of the ArcticThese claims are based on the United Nations 1982 Law of the Sea Treaty, which set new guidelines for delineating borders on the high seas, with particular relevance to the natural resources beneath. The treaty established the notion of an Exclusive Economic Zone (EEZ), areas over which a state is granted sole rights for exploring, mining, etc. EEZs extend 200 nautical miles off a nation’s coast.
The treaty also formally established the notion of continental-shelf-rights, which allow states whose “borders” extend via continental shelves beyond their EEZ, to claim this distance as well (note: this legalistic definition differs drastically from the geological one). Thus these conflicts are the result of overlapping EEZs. However, if a state can show that this disputed area adjoins their coastal baseline, then they may be able to overrule another state’s EEZ.
Despite former US President Harry Truman being the first to invoke the notion of continental-shelf-rights, the US still hasn’t ratified the Law of the Sea Treaty. It’s the only AC state government, and one of the only governments in the world, that has yet to do so.
Can Rothbard’s Ethics of Private Property Be a Guide?With such widely conflicting, even outlandish claims, a rational system of property rights is required to settle the debate. After all, why should any of these states — which themselves have little to no presence in much of the Arctic — have more of a right to the Arctic frontier than private explorers, industrialists, or natives?
A systematic theory of human-property rights was laid out by Murray Rothbard, in his 1982 classic, The Ethics of Liberty. The ideas set forth in this seminal book shed insight into the Arctic conflict, and really all property disputes that one may encounter.
Rothbard begins by asserting the truth of self-ownership, the idea that everyone has a property right in their own person, and thus a natural right to liberty, by virtue of each individual’s ownership over his own physical, bodily faculties. This control cannot be severed for as long as the person is alive, and the ownership of each person over him or herself is thus inalienable.
Rothbard then proceeds to show how property rights in land or in physical goods follow logically from property rights in one’s own body. The seventeenth-century Enlightenment philosopher John Locke is usually seen as the first to defend this principle of homesteading, which states that by “mixing one’s labor with the soil” — by using and transforming an unowned resource — the object in question becomes the just property of this person, the first user.
These ideas are echoed constantly in colloquial speech, with common phrases like “finders keepers” or “first come, first served.”
Of course everyone owns his or her own body, and common sense suggests that the first person to settle an uninhabited piece of land is the rightful owner of it. Moreover, as Rothbard argues, to deny these ideas is to argue that some people should be allowed to control others (slavery) or that it’s okay to divvy up someone else’s belongings for oneself and one’s friends (robbery).
So then who, if anyone, has homesteaded the Arctic and who are the would-be-usurpers? Except for the areas where there are inhabitants, only a tiny region of the Arctic Ocean and its continental shelf regions have been developed or settled. So, the legal claims being made by various states in the Arctic are not based on any economic realities or any real-world homesteading. That is, many states claim control of the region, but almost nowhere is this being done at the request of true owners. Without this key economic step — according to Rothbard — it is impossible to make a legitimate and moral claim to the Arctic.
The Political RealityThe ethics of liberty provides a map for assessing all of these claims to Arctic territory, but we find little regard for sound ideas of ownership in the region.
How does the homesteading model compare to governmental claims to the Arctic? Well, the state of Denmark isn’t using the 900,000 sq km of Arctic Ocean, or the unexplored, untapped land below it, so surely they have no right to it. The same goes for Russia, Finland, Sweden, or the US. None of them have any reasonable claim to any of it beyond a few tiny areas.
Complicating the matter is the fact that in many coastal areas, there are already indigenous people living in the Arctic, who are using this territory, and who do have claims to it that ought to be respected — without a state proclaiming sovereign-ownership over them.
There have been numerous instances of indigenous peoples, such as the Sami, being forced to pay taxes to multiple governments, despite their declarations of independence. Then there was the High Arctic Relocation of the 1950s (a “solution” to the so-called “Eskimo-problem”), where the Canadian government forcibly relocated Inuit families to the high Arctic in order to use them as “human flagpoles” on disputed territory.
The Likely OutcomeUnfortunately, history shows that governments are almost always more concerned, not with respecting property rights, but with finding fresh people and territory to control by the use of military force: in their eyes, might trumps right.
So whereas the natural law as explained by Rothbard provides a rational basis for peacefully and justly solving all types of property disputes, the governments’ raison d’état for Arctic expansionism is merely that he who holds the biggest guns deserves the loot.
Oppression of Arctic natives, unrecognized rights of explorers and industrialists, even armed conflict between Arctic states — these are the only alternatives to the ethics of liberty; and so long as Rothbard’s arguments are ignored, these are the inevitable outcomes to be expected. This is the twenty-first century after all, so perhaps it’s time to try something new, instead of the worn out, irrational political justifications of the past.
Image source: iStockphoto
The Ludwig von Mises Memorial Lecture, sponsored by James Walker. Recorded at the Austrian Economics Research Conference at the Mises Institute in Auburn, Alabama, on 14 March 2015. Includes an introduction by Joseph T. Salerno.
Legalizing recreational marijuana has begun. Marijuana for medical use is already legalized in twenty states. Marijuana is not a gateway drug as it has been viewed for almost one hundred years. Begin to be more afraid of government and current legal drugs, like prescriptions. Legal free markets in drugs would be incredibly beneficial. Here are ten ways to imagine such a free market.
This lecture was presented to the Auburn University Economics Club at the Mises Institute in Auburn, Alabama, on 18 February 2015.
Opponents of free markets sometimes describe market competition of dog-eat-dog, but that metaphor has nothing to do with markets and everything to do with politics and war, writes Gary Galles.
This audio Mises Daily is narrated by Dianna Keiler.
Interviewed by host Scott Horton, Mark Thornton discusses the relation between oil prices and the world economy, and how Colorado’s first year of marijuana legalization proves that ending drug prohibition doesn’t mean criminals and teenagers will run wild in the streets.
Would a libertarian society recognize patents as legitimate? What about copyright? In Against Intellectual Property, Stephan Kinsella, a patent attorney of many years’ experience, offers his response to these questions. Kinsella is altogether opposed to intellectual property, and he explains his position in this brief but wide-ranging book.
Narrated by Jock Coates.
Download the complete audiobook (seven MP3 files) here. This audiobook is also available on Apple Podcasts, Google Podcasts, and via RSS.
Few issues divide libertarians the way the Fourteenth Amendment to the United States Constitution does. Gene Healy has observed that "[c]lassical liberals of good faith have found themselves on either side of the issue."
On the one side are those who praise the amendment for circumventing the power of the states to prejudice, police, regulate, or otherwise use force to impose discriminatory laws on their citizens. On the other side are those who, while acknowledging the problematic nature of state misconduct and wrongdoing, are not willing to condone the transfer of power from states to the federal government, and in particular to the federal judiciary.
The divide comes down to one's views on federalism, i.e., on the balance or separation of the state and national governments.
The first and fifth sections of the Fourteenth Amendment are the most controversial. Section One consists of the Citizenship Clause, the Privileges or Immunities Clause, the Due Process Clause, and the Equal Protection Clause, and Section Five bestows on the US Congress the authority to enforce the amendment legislatively. These provisions have vested increased powers in the national government, allowing federal courts to bring states into compliance with federal laws regarding certain individual rights — or alleged rights.
The United States Supreme Court in Barron v. Baltimore (1833) held that the Bill of Rights — the first ten amendments to the US Constitution — bound only the federal government and not state governments. Through the Fourteenth Amendment, which was officially ratified in 1868, the United States Supreme Court and inferior federal courts have gradually "incorporated" most of the provisions of the Bill of Rights to apply against the states. The federal government has thereby empowered itself to bring state governments into compliance with provisions originally intended to restrain only federal abuses.
If the federal government were the only or the best mechanism for reducing the type of discrimination and rights violations prohibited by the Fourteenth Amendment, the Fourteenth Amendment would be welcome and warranted. But it is not the only conceivable corrective, and besides, isn't it counterintuitive for libertarians to applaud and champion an increase in both the scope and degree of federal power, even if that power has, on some occasions, brought about admirable results?
In contexts unrelated to the Fourteenth Amendment, it is almost never controversial for libertarians to promote nongovernmental, local, or decentralized cures for unfair, discriminatory laws and practices. It is often alleged that industry and trade and plain economics are better mechanisms for reducing discriminatory behavior, whether it is based on race, class, sex, gender, and so forth, than is government force. Yet frequently those libertarians who raise alarm about the Fourteenth Amendment's governmental, federal, and centralized approaches to discriminatory laws and practices are disingenuously treated, in the place of argument, as supporters of those laws and practices rather than as principled opponents of federal, centralized reparations for social harms.
Any debate over the Fourteenth Amendment must address the validity of its enactment. During Reconstruction, ratification of the Fourteenth Amendment became a precondition for the readmittance of former Confederate states into the Union. Healy has called this "ratification at the point of the bayonet" because, he says, "[t]o end military rule, Southern states were required to ratify the Fourteenth Amendment." The conditional nature of this reunification belies the claim that the Fourteenth Amendment was ratified by any mutual compact of the states.
Federal Judges Regard the Purpose of the Amendment as IrrelevantIn 1873, Justice Samuel F. Miller, joined by four other justices, held that the Fourteenth Amendment protected the privileges and immunities of national and not of state citizenship. The case involved state regulations of abbattoirs to address the health emergencies resulting from animal blood that was seeping into the water supply. Justice Miller opined that the Fourteenth Amendment was designed to address racial discrimination against former slaves rather than the regulation of butchers:
[T]he war [i.e., the Civil War] being over, those who had succeeded in re-establishing the authority of the Federal government were not content to permit this great act of emancipation to rest on the actual results of the contest or the proclamation of the Executive [the Emancipation Proclamation], both of which might have been questioned in after times, and they determined to place this main and most valuable result in the Constitution of the restored union as one of its fundamental articles.
Justice Miller's point is that the meaning and purpose of the Fourteenth Amendment — protecting and preserving the rights of freed slaves — are cheapened when they are taken to justify federal intervention into the everyday economic affairs of a particular state industry. State regulation of animal slaughtering is not the same type or degree of oppression as the enslavement of people based on their race. To argue otherwise is to minimize the gravity of racist ideology.
Justice Miller acknowledged that the state regulation at issue was "denounced not only as creating a monopoly and conferring odious and exclusive privileges upon a small number of persons at the expense of the great body of the community of New Orleans," the city effected by the slaughterhouses in question, but also as a deprivation of butchers' right to exercise their trade. Nevertheless, Justice Miller did not believe the federal government was entitled under the Constitution to interfere with authority that had always been conceded to state and local governments.
Having established the limited reach of the privileges or immunities clause in the Slaughterhouse Cases, the Supreme Court would later turn to the Equal Protection Clause and the Due Process Clause to strike down state laws under the Fourteenth Amendment. But the Supreme Court has not stopped at state laws: gradually it has used the Equal Protection Clause and the Due Process Clause as a pretext for regulating private citizens and businesses. The Fourteenth Amendment, which was intended to reduce discrimination, has even been used, ironically, to uphold affirmative-action programs that discriminate against certain classes of people.
Ceding power to federal judges does not predispose them to liberty. Because Section Five of the Fourteenth Amendment permits Congress to pass amendments or enact laws dealing with state infringements on individual liberty, it isn't necessary or constitutionally sound for the federal judiciary to assume that role. Members of Congress, unlike federal judges who enjoy life tenure, are accountable to the voters in their states and are thus more likely to suffer from their infidelity to the Constitution.
At a conceptual level, moreover, it seems odd for libertarians to champion domestically what they decry in foreign relations, namely, the paternalistic doctrine that a more powerful central government ought to use its muscle to force smaller political units into compliance.
The Legacy of the AmendmentHas the Fourteenth Amendment generated constructive results? In many areas, yes. Are some of the ideologies it has targeted deplorable? In many cases, yes. Were anti-miscegenation statutes, school segregation statutes, and statutes barring African-Americans from sitting on juries bad? Yes, of course. It does not follow, however, that just because some cases under the Fourteenth Amendment have invalidated these bad laws, the Fourteenth Amendment is necessarily or unconditionally good, especially in light of the slippery slope of precedent that over time distances rules from their intended application. "If courts begin using the Fourteenth Amendment to enforce libertarian natural rights," cautions Jacob Huebert in Libertarianism Today, "it would be but a small step for them to start using it to enforce non-libertarian positive rights."
Scholars on the left such as Erwin Chemerinsky, Charles Black, Peter Edelman, and Frank Michelman have advocated for the protection and enforcement of "rights to subsistence" under the Fourteenth Amendment. These would include rights to government supplied food, healthcare, and a minimum wage. State laws that abridged these rights — that failed to provide these welfare benefits — would be deemed unconstitutional; the federal executive would then ensure that every citizen within the transgressing states receives health insurance, food insurance, and a basic income, all subsidized by taxpayers.
I'm willing to admit not only that as a practical matter I would litigate under provisions of the Fourteenth Amendment to competently and ethically represent my client (imagining a system in which federal power is not so entrenched is useless to litigators in a real system in which federal power is deeply ingrained) but also that, in a more ideal world, there might be other, less deleterious vehicles for fighting discrimination and rights violations than the Fourteenth Amendment. The workshop of everyday activity does not service hopeful abstraction. One cannot unmake a system overnight; lawyers must advocate with the laws available to them and cannot invent new ones for their cases or hang their hats on mere policy. Not if they want to succeed.
Absent the Fourteenth Amendment, many individuals and businesses with valid complaints might be without constitutional remedies. That doesn't mean, however, that the terms and effects of the Fourteenth Amendment are unquestionably desirable or categorically good. One can celebrate the victories achieved through the Fourteenth Amendment while recognizing that there must be a better way.
The Fourteenth Amendment is not itself a positive good but a dangerous animal to be handled with care. Libertarians as a class have manifest undue devotion to its operation. We need instead an open, honest, and collegial debate about the merits and function of this amendment, lest other creatures of its likeness rear their head in the future, and at the expense of our cherished liberties.
Image source: iStockphoto.
When people want to add extra “oomph” to negative depictions of self-owners acting without coercion — that is, market competition under capitalism — they turn to name-calling. One of the most effective forms is describing such competition as dog-eat-dog. When that characterization is accepted, the mountain of evidence in favor of voluntary social coordination can be dismissed on the grounds that it involves a vicious and ugly process so harmful to people that it outweighs any benefits.
Unfortunately, dog-eat-dog imagery for market competition is entirely misleading. It not only misrepresents market competition as having properties that are absent in truly free arrangements, but those properties are essential characteristics of government, the usual “solution” offered to the evils of dog-eat-dog competition. Further, it frames the issue in a way that precludes most people from recognizing why the analogy fails.
To begin with, dog-eat-dog is an odd way to characterize anything. I have never seen a dog eat another dog. I don’t know anyone who has. In fact, some trace the phrase’s origin back to the Latin, canis caninam not est, or “dog does not eat dog,” which says the opposite (and makes more sense, as an animal may try to protect its feeding grounds against competing predators, but it does not eat those competitors). It is nonsensical to rely on an analogy to something that doesn’t actually happen in animal behavior as a central premise toward condemning market systems as ruthless and hard-hearted.
Market Exchange Is Purely VoluntaryThe dog-eat-dog characterization of capitalist systems is the polar opposite of reality. The private property on which capitalism is based mandates solely voluntary arrangements. Since the weak do not voluntarily consent to aggression that violates their rights, it protects them against coercion based on superior ability to harm others. In Herbert Spencer’s words, it is “an insistence that the weak shall be guarded against the strong,” which stops dog-eat-dog predation, the default setting in the absence of respect for individual rights.
Further, when one sees coercion in the private sector, it represents the failure of government to deliver on the only conceivable means by which it could advance everyone’s welfare — uniting citizens in mutual defense of their property to provide all a more secure basis on which to build mutually beneficial arrangements. As John Locke put it, “the end of government” is “the preservation of property,” protecting all citizens’ rights against predation, including that imposed by government. When force or fraud is enabled, government has rented or sold out this end to the highest political bidder. However, the problem is not in mutually acceptable arrangements, but in government that enables piracy whose prevention is its sole defensible rationale.
“Dog-Eat-Dog” Describes the Non-Market Events Known as War and PoliticsDog-eat-dog can be descriptive of behavior during war, which can cause desperation-induced atrocities. But war is not a market failure. It is aggression by a government or governments against others. In the process, it also involves government aggression against its own citizens through higher taxes, implicit inflation “taxes” and government expropriation of resources and citizens, as with military drafts.
Dog-eat-dog language is also increasingly descriptive of politics. As Bruno Leoni noted, politics has increasingly become used “merely as a means of subjecting minorities in order to treat them as losers in the field,” as in war. In such a world, as Friedrich Hayek noted in The Road to Serfdom, the massive payoffs to political hegemony lead the worst rise to the top. Along the way, we observe continued escalation of what former President Clinton called “the politics of personal destruction,” in scorched-earth electoral marches to Washington.
All of the above abuses can be seen as dog-eat-dog in nature — humans predating on other humans. But they are that way because government made them so, not because they are in any way inherent in freely chosen arrangements.
Despite the dog-eat-dog analogy’s usefulness in describing government behavior, how has it bait-and-switched people into blaming freedom and free markets? By directing attention away from two essential ways that market competition differs from predators in the animal world. The animal kingdom’s competition is a zero-sum fight for fixed resources provided by nature. But that zero-sum fight occurs only because animals do not trade, and therefore do not produce for other animals. But people do produce for others, and all parties can then benefit via trade. That makes market competition an incredibly positive-sum “game” in which each benefits him- or herself by finding ways to benefit others, made necessary by the need to get mutual agreement. As George Reisman noted, the result is very different — “one man’s gain is positively other men’s gain.”
People Exchange Goods Because It Benefits ThemThese core insights are of fundamental importance. And without the distraction of dog-eat-dog and other similarly mischaracterizing language, people paying the slightest attention to economics would not miss them. After all, they are the focus of the second chapter in Adam Smith’s The Wealth of Nations, “On the Principle which gives occasion to the Division of Labor.”
Adam Smith there highlighted individuals’ “propensity to truck, barter and exchange,” as “common to all men, and to be found in no other race of animals.” And what was his illustration? “Nobody ever saw a dog make a fair and deliberate exchange … with another dog.” Other species do not make contracts, nor do they have a means of persuading others by offering or negotiating mutually beneficial voluntary arrangements. But for man, “the greater part of his occasional wants are supplied by … treaty, by barter, and by purchase,” which, in turn, “gives occasion to the division of labor,” and the massive expansion of output that makes massive expansions of consumption possible.
What Smith saw was that the fixed, nature-given resources that inform “dog-eat-dog” imagery are completely overridden by the human ability to create and exchange with others, and the consequent gains from specialization to produce more effectively for others than they can for themselves. And Smith is hardly the only economist to call attention to this. For instance, the textbook I used as an economics principles student — Alchian and Allen’s Exchange and Production — put those issues at the very core of economic analysis.
Dog-eat-dog imagery does offer some insight into understanding war, politics, and the failures of government, all because of their subversion of freedom. But it makes no sense to portray economic freedom, constrained to respect participants’ rights, as creating a desperate battle for survival, where “anything goes.” Such “I win, you lose” behavior traces back to given, limited resources, which is the constraint faced only in the absence of production and voluntary exchange. But that is not at all the case with capitalism, which has done more than any other social “discovery” to replace such behavior with win-win possibilities. As long as people’s ownership of themselves and their production is respected, that is, as long as arrangements are voluntary, production and exchange is the process by which all gain. And humans benefiting one another is a far cry from a dog-eat-dog world.
Image source: iStockphoto.
Interviewed by host Paul Molloy on the Freedom Works radio program, Mark Thornton discusses how the Harrison Narcotics Tax Act impacted the American public and shaped the 'War on Drugs' we know today.
Recent events surrounding Ferguson, Missouri and the choking death of Eric Garner have brought police misconduct to the forefront. Libertarians rightfully point out that police (unlike private actors) are largely immune from criminal prosecution, civil liability, or even losing their jobs. And because police forces obviously are not subject to market discipline, the incentives are all wrong: the worse crime gets, the more their budgets grow. But the mainstream media fail to understand that police are merely the visible business end of the state: it’s the state itself that’s out of control, and abusive police are but one symptom of this larger problem.
Since neither Left nor Right have a serious answer to police malfeasance, we asked the inimitable Bob Murphy to join us and make sense of how private defense agencies might work in an anarcho-capitalist society.
What do Rothbard and Hoppe have to say about this? How would an insurance model compare to the state’s growth model? And how do we overcome common objections by those who insist that government must have a monopoly over the use of force?
Judge Napolitano discusses ways in which the state fails to protect people's life, liberty, and property. Recorded at the Mises Circle in Costa Mesa, California, 8 November 2014.
Featuring Ron Paul, Judge Andrew P. Napolitano, Lew Rockwell, Jeff Deist, and David Gordon.
The speakers answer audience questions on topics of a stateless society, such as private defense, privately produced money, the role of markets, and how stateless legal systems would work.
Recorded at the Mises Circle in Costa Mesa, California, 8 November 2014.
Interviewed by Freedom Works host Paul Molloy, Mark Thornton discusses recent advancements in recreational marijuana legislation, as well as the stigma surrounding marijuana and its users, and its possibly beneficial uses.
Jeff Deist and Joseph Becker discuss the illusion of judicial remedies for most Americans; how Becker is attacking cronyism in Nevada; how a Rothbardian legal system might deal with torts, crimes, and externalities; and how the statist 20th century courts created a phony legal distinction between fundamental liberties and economic liberties.
Drug warriors rely on bad and manipulated data to make the claim that respecting private property rights in Colorado is “terrible public policy,” writes Mark Thornton. This audio Mises Daily is narrated by Keith Hocker.
This article is also available as an Audio Mises DailyFirst the good news. The House Financial Services Committee has held a hearing on “Legislation to Reform the Federal Reserve on its 100-year Anniversary.” The hearing focused on a bill introduced by Scott Garrett and Bill Huizenga which would require the Fed to provide Congress with a clear rule to describe the course of monetary policy. Now for the bad news. The rule is to be an equation showing how the Fed would adjust interest rates in response to changes in certain economic variables. And the star witness before the committee proposing his own version of such a rule is renowned neo-Keynesian economist, ex-Bush official Professor John B. Taylor.
Inputs into the so-called “Taylor Rule” involve key magnitudes such as “the neutral rate of interest” and “the natural rate of unemployment” as well as the “targeted rate of inflation.” One might have hoped that the Republicans by now would have realized that monetary reform should involve first and foremost jettisoning neo-Keynesian economics. Even the most talented Fed official cannot know the neutral level of interest rates (whether for short, medium, or long maturities) or the natural level of unemployment. And as to inflation targets, these should be scrapped in any monetary reform and replaced by the aim of monetary stability broadly defined to include absence of asset price inflation and a very long-run stable anchor to goods and services prices.
First, Set Interest Rates FreeAn essential component of monetary reform should be setting interest rates free. This means no more official pegging or guidance of short-term interest rates and no attempt to manipulate in various ways long-term interest rates. Markets can do a better job of discovering the neutral rates of interest (across different maturities) and positioning market rates at any time relative to these so as to guide the economy along an equilibrium path than any set of well-informed and even well-meaning Fed officials. This is all on the big assumption that the reformers can design a monetary system around a suitable firmly placed pivot.
Under the gold standard the pivot was a fixed price for gold alongside the widespread use of gold coins. And so the amount of high-powered money in the world grew in line with the above ground stock of yellow metal, which occurred at a glacial, but flexible pace. The demand for high-powered money was itself a fairly stable function of income and wealth. And so the system was well-anchored. Yes, there were imperfections, including the advent of fractional-reserve banking which meant that the demand for high-powered money became less stable. Yet given the absence of deposit insurance and too-big-to-fail and only limited lender of last resort roles banks could be counted upon to have a strong demand for reserves (mainly in the form of gold) to back their deposits. Moreover the obligation to convert customers’ deposits into gold coin on request buttressed this demand for high powered money from the banks.
More Steps Toward Proper ReformAs a matter of practical politics the Republican Congressmen may well conclude that an imminent return to gold is unfeasible. But they could consider in the light of these considerations how best to re-secure the pivot to the US monetary system by creating high-powered money for which demand would be stable and the rate of increase in supply flexibly very low. The steps toward this end would include:
· Abolishing the payment of interest on bank reserves.
· Strict curtailment of lender of last resort function.
· Long-term abolition of deposit insurance.
· Fed withdrawal from creating liquidity in debt markets (no more eligible bills, repo-transactions, etc.).
· Issuance of large-denomination notes (adding to the demand for currency, a key component of high-powered money).
· A legal attack on monopoly power in the credit card business which results often in payers of cash not enjoying a discount.
In this suitably reformed system there would be a huge demand for high-powered money (whether in the form of currency or reserves held by the banks) highly distinct in function from any alternative assets. This demand would not depend on legislating artificially high reserve requirements which bank lobbyists would surely whittle down over time. That was the Achilles heel of the briefly successful monetarist experiment in Germany during the 1970s and early 1980s, as the bankers were finally able to bring political pressure toward lowering reserve requirements such that monetary base no longer was a secure pivot to the monetary system. Accordingly, the Bundesbank gradually shifted to explicit pegging of short-term interest rates albeit subject to a medium-term target for wider money supply growth.
Turning back to the US, even with the reforms suggested, there would still be the difficult question of how to determine the growth in supply of high-powered money. Without a gold connection there has to be some degree of discretionary control in this process, albeit constrained by a quantitative guide (such as an average 1 to 1.5-percent rate of expansion per annum, similar to the expansion rate of above ground gold over the past century) and ultimately constitutionally-embedded legal restrictions.
High-powered money as defined by such a monetary reform would be a far cry from the present situation where the size of the Federal Reserve balance sheet has been recording explosive growth for many years and where the main form of high-powered money, excess reserves, pays interest at above the market rate to the banks. The Republicans in their pursuance of monetary reform would do well to propose some initial steps which would prepare the way for bolder change at a later date with the aim of creating a stable supply and demand for high-powered money.
A key step would be the immediate suspension of interest payments on reserves (which only started in 2008) coupled with a rapid timetable for disposing of the Fed’s massive portfolio of long-term fixed-rate bonds. The Bernanke Fed, and now the Yellen Fed, has used this portfolio as a means of manipulating long-term interest rates (with this depending on an emperor’s new clothes effect whereby markets attach unquestioning importance to the Fed’s massive holdings in forming their expectations of bond prices) and of scaring investors into real assets so adding to the strength of their asset price inflation virus injections.
One suggestion for a rapid timetable would be the Treasury and Fed entering into a deal in which the long-term fixed-rate T-bonds held by the Fed would be converted into long-term floating rate debt and into short- or medium-term T-bills. This would mean less accounting profit under the present structure of yields for the Fed and a lower cost of borrowing for the Treasury. But who really cares about such bookkeeping between the federal government and its monetary agency? In turn the Treasury would announce a long-term timetable for raising the ratio of long-maturity fixed to floating rate debt in the overall total outstanding.
Rome was not made in a day. And the Republicans are certainly not in a position to legislate radical monetary reform. But that is no excuse for a careless decision by the would-be reformers to veer into a cul-de-sac under the misleading directions of Professor Taylor.
Image source: iStockphoto
This article is also available as an Audio Mises Daily
[Adapted from Rothbard’s book review of Freedom and the Law by Bruno Leoni. This review first appeared in New Individualist Review, edited by Ralph Raico.]
[In his book Freedom and the Law,] Professor [Bruno] Leoni's major thesis is that even the staunchest free-market economists have unwisely admitted that laws must be created by governmental legislation; this concession, Leoni shows, provides an inevitable gateway for State tyranny over the individual. The other side of the coin to increasing intervention by government in the free market has been the burgeoning of legislation, with its inherent coercion by a majority—or, more often, by an oligarchy of pseudo-"representatives" of a majority—over the rest of the population. In this connection, Leoni presents a brilliant critique of F.A. Hayek's recent writings on the "rule of the law." In contrast to Hayek, who calls for general legislative rules as opposed to the vagaries of arbitrary bureaucracy or of "administrative law," Leoni points out that the real and underlying menace to individual freedom is not the administrator but the legislative statute that makes the administrative ruling possible. Leoni also presents an effective critique of Hayek's defense of special "administrative courts." If there is to be one law for bureaucrats and yet another for ordinary citizens, then there is no equality under the law for everyone, and therefore there is no genuine "rule of law." Here, as elsewhere, Leoni rehabilitates the stringent rule of law championed by the great 19th-century English jurist, A.V. Dicey, as contrasted to the weaker modern versions of Hayek and C.K. Allen. It is not enough, demonstrates Leoni, to have general rules applicable to everyone and written down in advance; for these rules themselves may—and generally do—invade freedom.
Leoni's great contribution is to point out to even our staunchest laissez-faire theorists an alternative to the tyranny of legislation. Rather than accept either administrative law or legislation, Leoni calls for a return to the ancient traditions and principles of "judge-made law" as a method of limiting the State and insuring liberty. In the Roman private law, in the Continental Civil Codes, in the Anglo-Saxon common law, "law" did not mean what we think today: endless enactments by a legislature or executive. "Law" was not enacted but found or discovered; it was a body of customary rules that had, like languages or fashions, grown up spontaneously and purely voluntarily among the people. These spontaneous rules constituted "the law"; and it was the works of experts in the law—old men of the tribe, judges, or lawyers—to determine what the law was and how the law would apply to the numerous cases in dispute that perpetually arise.
If legislation is replaced by such judge-made law, says Leoni, fixity and certainty (one of the basic requirements of the "rule of law") will replace the capriciously changing edicts of statutory legislation. The body of judge-made law changes very slowly; furthermore, since judicial decisions can only be made when parties bring cases before the courts, and since decisions properly apply only to the particular case, judge-made law—in contrast to legislation—permits a vast body of voluntary, freely-adopted rules, bargains, and arbitrations to proliferate as needed in society. Leoni brilliantly shows the analogy between these free rules and bargains, which truly express the "common will" of all participants, and the voluntary bargains and exchanges of the free market.This contrasts to the mocking claim of "democratic" legislatures — which coercively impose their rules upon dissenters — to be expressions of the "common will." To be "common," Leoni points out, the common will must be a unanimous one. The twin of the free-market economy, then, is not a democratic legislature ever grinding out new diktats for society, but a proliferation of voluntary rules interpreted and applied by experts in the law.
While Leoni is vague and wavering on the structure that his courts would take, he at least indicates the possibility of privately competing judges and courts. To the question, who would appoint the judges? Leoni answers with the question, who now "appoints" the leading doctors or scientists in society? They are not appointed, but gain general and voluntary acceptance on their merits. Similarly, while in some passages Leoni accepts the idea of a governmental supreme court, which he admits becomes itself a quasi-legislature,At one point, Leoni seems to believe that the requirement of unanimity on the Supreme Court bench for any change over previous rulings would approximately establish the "Leoni model" on the American scene. But here all depends on the "zero point" at which a unanimity requirement is introduced. In the present heavily State-ridden world, a unanimity requirement for change would tend to fasten our Statist regulations permanently upon society. he does call for the restoration of the ancient practice of separation of government from the judicial function. If for no other reason, Professor Leoni's work is extremely valuable for raising, in our State-bemused age, the possibility of a workable separation of the judicial function from the State apparatus.
A great defect in Leoni's thesis is the absence of any criterion for the content of the judge-made law. It is a happy accident of history that a great deal of private law and common law is libertarian—that they elaborate the means of preserving one's person and property against "invasion"—but a good deal of the old law was antilibertarian, and certainly custom can not always be relied on to be consistent with liberty. Ancient custom, after all, can be a frail bulwark indeed; if customs are oppressive of liberty, must they still serve as the legal framework permanently, or at least for centuries? Suppose ancient custom decrees that virgins be sacrificed to the gods by the light of the full moon, or that redheads be slaughtered as demons? What then? May not custom be subject to a higher test—reason?
The common law contains such antilibertarian elements as the law of "conspiracy," and the law of "seditious libel" (which outlawed criticism of the government), largely injected into the law by kings and their minions. And perhaps the weakest aspect of the volume is Leoni's veneration for the Roman law; if the Roman law provided a paradise of liberty, how account for the crushing taxation, the periodic inflation and currency debasement, the repressive network of controls and "welfare" measures, the unlimited imperial authority, of the Roman Empire?
Leoni offers several different criteria for the content of the law, but none are very successful. One is unanimity. But while superficially plausible, even explicit unanimity is not necessarily libertarian; for, suppose that there are no Moslems in a country, and everyone unanimously decides—and it passes into custom—that all Moslems should be put to death. And what if, later, a few Moslems should appear in the land? Further, as Leoni recognizes, there is the problem of the criminal; certainly he does not join in favoring his own punishment. Here Leoni falls back on a tortured construction of implicit unanimity, i.e., that, in such a case as murder or theft, the criminal wouldagree to the punishment if anyone else were the criminal, so that he really agrees to the justice of the law. But suppose that this criminal, or others in the community, have the philosophical belief that certain groups of people (be they redheads, Moslems, landlords, capitalists, generals, or whatnot) deserve to be murdered. If the victim is a member of one of these abhorred groups, then neither the criminal nor others holding this belief would agree to the justice of either the general law against murder or to the punishment of this particular murderer. On this ground alone, the implicit-unanimity theory must fall.
A second proffered criterion for the content of the law is the negative Golden Rule: "Do not unto others what you would not wish them to do unto you." But this too is unsatisfactory. For one thing, some acts generally considered criminal would still pass the negative Golden Rule test: thus, a sadomasochist can torture another person, but since he would be delighted to be tortured, his act, under the negative Golden Rule, could not be considered criminal. On the other hand, the Golden Rule is much too wide a criterion; many acts would be condemned as criminal that certainly should not be. Thus, the Rule decrees that men shouldn't lie to each other (a man would not want to be lied to) and yet few would urge that all lies be outlawed. Also, the Golden Rule would decree that no man should turn his back on a beggar, because the former would not want the beggar to turn his back on him were they to change places—and yet it is hardly libertarian to outlaw the refusing of alms to a beggar.A critical error — in this and other places — is Leoni's tendency to make the test of criminality the subjective feelings of participants, rather than their objective actions.
Leoni hints at a much more promising criterion: that freedom be defined as the absence of constraint or coercion—except against constrainers. In this case, the initiation of coercion is outlawed, and the "governmental" function becomes strictly limited to coercing the coercers. But, most unfortunately, Leoni falls into the very same trap that snared Hayek in his Constitution of Liberty: "coercion" or "constraint" is not defined in a proper or cogent manner.For an excellent critique of Hayek's conception of coercion, see Ronald Hamowy, "Hayek's Concept of Freedom: A Critique," New Individualist Review (April, 1961), pp. 28–31. At first, Leoni gives promise of a correct understanding of coercion when he says that a man cannot be said to "constrain" another when he refuses to buy the latter's goods or services, or when he refuses to save a drowning man. But then, in his unfortunate chapter 8, Leoni concedes that constraint may occur when a religiously devout person feels "constrained" because another man does not observe the former's religious practices. And this feeling of constraint may appear to justify such invasions of liberty as Sunday blue laws. Here again, Leoni errs in placing his test of constraint or coercion not on the objective acts of the defendant but on the subjective feelings of the plaintiff. Surely this is an extremely wide highroad for tyranny!
Furthermore, Leoni apparently does not see that taxation is a prime example of coercion, and is hardly compatible with his own picture of the free society. For if coercion is to be confined to the coercers, then surely taxation is the unjust coercive extraction of property from a vast body of non coercing citizens. How, then, is it to be justified? Leoni, again in chapter 8, also concedes the existence of some legislation in his ideal society, including, mirabile dictu, some nationalized industries!Thus, Leoni asserts that, in those fuzzy cases where criminality or constraint cannot be objectively determined, there exists room for coercive legislation on the subject. But surely the proper — and libertarian — rule is that fuzzy cases be decided in favor of "laissez-faire" — of letting the activity go on. One specific nationalization favored by Leoni is the lighthouse industry. His argument is that a lighthouse could not charge individual consumers for its service, and that therefore it should be supplied by government.
The basic answers to this argument are threefold:
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the taxation for lighthouses imposes coercion and is therefore an invasion of freedom;
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even if the lighthouse could not charge individuals, what prevents shipping lines from constructing or subsidizing their own lighthouses? The usual reply is that then various "free riders" would benefit from the service without paying. But this is universally true in any society. If I make myself a better person, or if I tend my garden better, I am adding to the benefits enjoyed by other people. Am I then entitled to levy tribute upon them because of this happy fact?
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In fact, lighthouses could easily charge ships for their services, if they were permitted to own those surfaces of the sea which they transform by their illumination. A man who takes unowned land and transforms it for productive use is readily granted ownership of that land, which can henceforth be used economically; why should not the same rule apply to that other natural resource, the sea? If the lighthouse owner were granted ownership of the sea surface that he illuminates, he could then charge each ship as it passes through. The deficiency here is a failure not of the free market but of the government and the society in not granting a property right to the rightful owner of a resource.
On the necessity of taxing for government lighthouses and other services, Leoni adds the astonishing comment that "in these cases the principle of free choice in economic activities is not abandoned or even put in doubt." (p. 171) Why? Because "it is admitted" that people would be willing to pay for these services anyway, if available on the market. But who admits it, and to what extent? And which people would pay?
Our problem can be solved, however; a cogent criterion does exist for the content of libertarian law. That criterion defines coercion or constraint, simply, as the initiation of violence, or the threat thereof, against another person. It then becomes clear that the use of coercion (violence) must be confined to coercing the initiators of violence against their fellow men. One reason for confining our attention to violence is that the unique weapon employed by government (or by any other enforcing agency against crime) is precisely the threat of violence. To "outlaw" any action is precisely to threaten violence against anyone who commits it. Why not then use violence only to inhibit those who are initiating violence, and not against any other action or nonaction that somebody might choose to define as "coercion" or "constraint"?
And yet the tragic puzzle is that so many quasi-libertarian thinkers have, over the years, failed to adopt this definition of constraint or have failed to limit violence to counteracting violence, and have instead opened the door to statism by using such vague, jumbled concepts as "harm," "interference," "feelings of constraint," etc. Decree that no violence may be initiated against another man, and all the loopholes for tyranny which even such men as Leoni concede—blue laws, government lighthouses, taxation, etc., —would be swept away.
In short, there exists another alternative for law in society, an alternative not only to administrative decree or statutory legislation, but even to judge-made law. That alternative is the libertarian law, based on the criterion that violence may only be used against those who initiate violence, and based therefore on the inviolability of the person and property of every individual from "invasion" by violence. In practice, this means taking the largely libertarian common law, and correcting it by the use of man's reason, before enshrining it as a permanently fixed libertarian code or constitution. And it means the continual interpretation and application of this libertarian law code by experts and judges in privately competitive courts.
Professor Leoni concludes his highly stimulating and important book by saying that "law-making is much more a theoretical process than an act of will" (p. 189). But certainly a "theoretical process" implies the use of man's reason to establish a code of law that will be an unbreachable and unflawed fortress for human liberty.
Image source: iStockphoto
This article is also available as an Audio Mises DailyMost attentive parents today rarely allow their children to go unsupervised, particularly in public. It starts with the wireless baby monitor for the crib and ends with the ever-present cell phone at college graduation.
This is what makes reports from the US-Mexican border so perplexing to most Americans. It is hard to believe that parents would send their children, even young children, to travel many hundreds of miles, up to 1,600 miles without guardianship, or under the control of “mules” who guide the children with the hope of a safe voyage to the United States.
The journey is both harsh and dangerous. The northern regions of Central America (i.e., Guatemala, Honduras, and El Salvador) and Mexico are some of the most dangerous areas of the world. The climate can be harsh, roads and travel conditions are mostly poor, and the children are subjected to robbers, kidnappers, rapists, government police and soldiers, drug cartel members, and bandits of all sorts.
As unbelievable as it seems, Central American parents are sending their children, or more often asking their children to join with them in the United States, in large numbers. In many cases the children flee on their own accord without any guardian.
A decade ago US Border Patrol agents apprehended only several hundred unaccompanied children per year. Over the last nine months they have caught nearly 50,000. Official estimates project the capture rate to reach 10,000 per month by this fall. Those numbers actually hide the enormity of the problem because historically the problem was largely restricted to Mexican children who could be immediately returned to Mexico. During the last couple of years, the majority of growth has come from children from Central American countries and these must be processed and turned over to the Office of Refugee Resettlement (part of HHS).
One suggested reason for the explosion of child immigrants from Central America is the perception and rumors that children from Central America who cross the border will receive a “proviso” which might suggest a permit to stay in the US legally. However, it seems that the proviso is really just a notice to appear in immigration court for deportation proceedings. Whether this gives the children more time in the US, or whether it increases the probability of them being allowed to stay in the US for humanitarian reasons is unclear. In one report, only 1 of 404 children specifically mentioned the possibility of benefiting from US immigration reform.Children on the Run, p. 31.
Even if the proviso rumor was having an impact, it does not explain why the children and their parents would risk such a dangerous journey in the first place.
The Role of the Drug WarThe underlying cause for this mass dangerous migration is the US’s war on drugs. Central American countries have become the conduit by which illegal drugs move from South America across the US border. Unlike conventional media sources, who will sometimes vaguely mention violence and instability in Central America as a cause, The Economist“The drug war hits Central America: Organised crime is moving south from Mexico into a bunch of small countries far too weak to deal with it,” The Economist, April 14, 2011. quite correctly found the source of the problem in America’s war on drugs:
Demand for cocaine in the United States (which, unlike that in Europe, is fed through Central America), combined with the ultimately futile war on drugs, has led to the upsurge in violence. It is American consumers who are financing the drug gangs and, to a large extent, American gun merchants who are arming them. So failing American policies help beget failed states in the neighbourhood.
The result has been that the drug cartels have a great deal of control over much of northern Central America. The cartels control the governments, judges, police forces, and even some prisons and some of the military through a combination of bribery, threats, and outright force.
As a consequence of this control drug gangs and cartels can operate in the open or they can operate deep within the jungle beyond the reach of the law. In turn, the drug cartels can act above the law and as a result they have created a culture of violence, building on the civil wars of previous decades.
The countries in the northern Central American region, Guatemala, Honduras, and El Salvador, have the highest murder rate of any region in the world. The region’s murder rate is 7.5 times the murder rate of the North American region.
Globally, the top murder rate in any given year since the 1990s has been Honduras or El Salvador. In 2012, nearly 1 out of every 1,000 citizens in Honduras was murdered. In addition to murder, there are high rates of other types of violence, crime, and intimidation. A very large percentage of the entire Salvadoran-born population has migrated, mostly to the United States.
In addition to violence, the war on drugs has been a disruptive force for the Central American economies. After reading about the region, is anyone likely to make travel plans to go there, or to consider opening a business there? Obviously, the war on drugs has been highly disruptive for job creation, commerce, and international investment outside the drug cartels themselves. Therefore it would be more correct to say that it is not so much the attraction of opportunities in the US, but the lack of and reduction in opportunities in Central America that are spurring emigration, and that this is directly linked to the war on drugs.
When you try to make sense of parents sending their children on such a dangerous undertaking, just remember it is just another despicable result of the war on drugs with few solutions.
The Economist recommends the repeal of the war on drugs and the legalization of drugs globally as the solution. Its second best solution is for the United States to finance an effort to rebuild the institutions (i.e., police, courts, prisons, etc.) and infrastructure (i.e., military, transportation, and education systems) in the countries of Central America:
Such schemes will not, however, solve the fundamental problem: that as long as drugs that people want to consume are prohibited, and therefore provided by criminals, driving the trade out of one bloodstained area will only push it into some other godforsaken place. But unless and until drugs are legalised, that is the best Central America can hope to do.
In other words, ending the war on drugs is the only solution.
Image source: Wikipedia
From the Editors:
Today Scotland votes on a referendum concerning political independence from the United Kingdom.
For libertarians, the politics surrounding both sides of the vote are suspicious. The globalist banking class, ever fearful of decentralization of power, warns that Scotland needs Westminster’s economic assistance (read: welfare), Westminster’s military might, and Westminster’s currency. The largely socialist Scots, meanwhile, argue for a more “egalitarian” society administered by Holyrood and a new alliance with their more enlightened fellow travelers in Brussels — leaving one master for another.
As always, libertarians should focus on first principles. Murray Rothbard’s 1993 essay,“Nations by Consent: Decomposing the Nation-State,” does just that.
Rothbard asks the correct questions: What is a nation? What makes a nation legitimate? Are nation-states needed for collective security? When is secession allowed? Should open borders and open immigration be allowed? How should citizenship and voting rights be conferred? How would a completely private, anarcho-capitalist country operate?
These are the questions we must ask and answer as we argue against the state, against central banks, and against an increasingly global crony political class.
Nations By Consent: Decomposing the Nation-Sateby Murray N. Rothbard
Libertarians tend to focus on two important units of analysis: the individual and the state. And yet, one of the most dramatic and significant events of our time has been the re-emergence — with a bang — in the last five years of a third and much-neglected aspect of the real world, the “nation.” When the “nation” has been thought of at all, it usually comes attached to the state, as in the common word, “the nation-state,” but this concept takes a particular development of recent centuries and elaborates it into a universal maxim. In the last five years, however, we have seen, as a corollary of the collapse of communism in the Soviet Union and in Eastern Europe, a vivid and startlingly swift decomposition of the centralized State or alleged nation-State into its constituent nationalities. The genuine nation, or nationality, has made a dramatic reappearance on the world stage.
I. The Re-Emergence of the NationThe “nation,” of course, is not the same thing as the state, a difference that earlier libertarians and classical liberals such as Ludwig von Mises and Albert Jay Nock understood full well. Contemporary libertarians often assume, mistakenly, that individuals are bound to each other only by the nexus of market exchange. They forget that everyone is necessarily born into a family, a language, and a culture. Every person is born into one or several overlapping communities, usually including an ethnic group, with specific values, cultures, religious beliefs, and traditions. He is generally born into a “country.” He is always born into a specific historical context of time and place, meaning neighborhood and land area.
The modern European nation-state, the typical “major power,” began not as a nation at all, but as an “imperial” conquest of one nationality — usually at the “center” of the resulting country, and based in the capital city — over other nationalities at the periphery. Since a “nation” is a complex of subjective feelings of nationality based on objective realities, the imperial central states have had varying degrees of success in forging among their subject nationalities at the periphery a sense of national unity incorporating submission to the imperial center. In Great Britain, the English have never truly eradicated national aspirations among the submerged Celtic nationalities, the Scots and the Welsh, although Cornish nationalism seems to have been mostly stamped out. In Spain, the conquering Castilians, based in Madrid, have never managed — as the world saw at the Barcelona Olympics — to erase nationalism among the Catalans, the Basques, or even the Galicians or Andalusians. The French, moving out from their base in Paris, have never totally tamed the Bretons, the Basques, or the people of the Languedoc.
It is now well known that the collapse of the centralizing and imperial Russian Soviet Union has lifted the lid on the dozens of previously suppressed nationalisms within the former U.S.S.R., and it is now becoming clear that Russia itself, or rather “the Russian Federated Republic,” is simply a slightly older imperial formation in which the Russians, moving out from their Moscow center, forcibly incorporated many nationalities including the Tartars, the Yakuts, the Chechens, and many others. Much of the U.S.S.R. stemmed from imperial Russian conquest in the nineteenth century, during which the clashing Russians and British managed to carve up much of central Asia.
The “nation” cannot be precisely defined; it is a complex and varying constellation of different forms of communities, languages, ethnic groups, or religions. Some nations or nationalities, such as the Slovenes, are both a separate ethnic group and a language; others, such as the warring groups in Bosnia, are the same ethnic group whose language is the same but who differ in the form of alphabet, and who clash fiercely on religion (the Eastern Orthodox Serbs, the Catholic Croats, and the Bosnian Muslims, who, to make matters more complicated, were originally champions of the Manichaean Bogomil heresy).
The question of nationality is made more complex by the interplay of objectively existing reality and subjective perceptions. In some cases, such as Eastern European nationalities under the Habsburgs or the Irish under the British, nationalisms, including submerged and sometimes dying languages, had to be consciously preserved, generated, and expanded. In the nineteenth century this was done by a determined intellectual elite, struggling to revive peripheries living under, and partially absorbed by, the imperial center.
II. The Fallacy of “Collective Security”The problem of the nation has been aggravated in the twentieth century by the overriding influence of Wilsonianism on U.S. and world-wide foreign policy. I refer not to the idea of “national self-determination,” observed mainly in the breach after World War I, but to the concept of “collective security against aggression.” The fatal flaw in this seductive concept is that it treats nation-states by an analogy with individual aggressors, with the “world community” in the guise of a cop-on-the corner. The cop, for example, sees A aggressing against, or stealing the property of, B; the cop naturally rushes to defend B’s private property, in his person or possessions. In the same way, wars between two nations or states are assumed to have a similar aspect: State A invades, or “aggresses against,” State B; State A is promptly designated “the aggressor” by the “international policeman” or his presumptive surrogate, be it the League of Nations, the United Nations, the U.S. President or Secretary of State, or the editorial writer of the august New York Times. Then the world police force, whatever it may be, is supposed to swing promptly into action to stop the “principle of aggression,” or to prevent the “aggressor,” be it Saddam Hussein or the Serbian guerrillas in Bosnia, from fulfilling their presumed goals of swimming across the Atlantic and murdering every resident of New York or Washington, D.C.
A crucial flaw in this popular line of argument goes deeper than the usual discussion of whether or not American air power or troops can really eradicate Iraqis or Serbs without too much difficulty. The crucial flaw is the implicit assumption of the entire analysis: that every nation-stare “owns” its entire geographical area in the same just and proper way that every individual property owner owns his person and the property that he has inherited, worked for, or gained in voluntary exchange. Is the boundary of the typical nation-state really as just or as beyond cavil as your or my house, estate, or factory!
It seems to me that not only the classical liberal or the libertarian, but anyone of good sense who thinks about this problem, must answer a resounding “No.” It is absurd to designate every nation-state, with its self-proclaimed boundary as it exists at any one time, as somehow right and sacrosanct, each with its “territorial integrity” to remain as spotless and unbreached as your or my bodily person or private property. Invariably, of course, these boundaries have been acquired by force and violence, or by interstate agreement above and beyond the heads of the inhabitants on the spot, and invariably these boundaries shift a great deal over time in ways that make proclamations of “territorial integrity” truly ludicrous.
Take, for example, the current mess in Bosnia. Only a couple of years ago, Establishment opinion, Received Opinion of Left, Right, or Center, loudly proclaimed the importance of maintaining “the territorial integrity” of Yugoslavia, and bitterly denounced all secession movements. Now, only a short time later, the same Establishment, only recently defending the Serbs as champions of “the Yugoslav nation” against vicious secessionist movements trying to destroy that “integrity,” now reviles and wishes to crush the Serbs for “aggression” against the “territorial integrity” of “Bosnia” or “Bosnia-Herzegovina,” a trumped-up “nation” that had no more existence than the “nation of Nebraska” before 1991. But these are the pitfalls in which we are bound to fall if we remain trapped by the mythology of the “nation-state” whose chance boundary at time t must be upheld as a property-owning entity with its own sacred and inviolable “rights,” in a deeply flawed analogy with the rights of private property.
To adopt an excellent strategem of Ludwig von Mises in abstracting from contemporary emotions: Let us postulate two contiguous nation-States, “Ruritania” and “Fredonia.” Let us assume that Ruritania has suddenly invaded eastern Fredonia, and claims it as its own. Must we automatically condemn Ruritania for its evil “act of aggression” against Fredonia, and send troops, either literally or metaphorically, against the brutal Ruritanians and in behalf of “brave, little” Fredonia? By no means. For it is very possible that, say, two years ago, eastern Fredonia had been part and parcel of Ruritania, was indeed western Ruritania, and that the Rurs, ethnic and national denizens of the land, have been crying out for the past two years against Fredonian oppression. In short, in international disputes in particular, in the immortal words of W. S. Gilbert:
Things are seldom what they seem,Skim milk masquerades as cream.
The Beloved international cop, whether it be Boutros Boutros-Ghali or U.S. troops or the New York Times editorialist had best think more than twice before leaping into the fray. Americans are especially unsuited for their self-proclaimed Wilsonian role as world moralists and policemen. Nationalism in the U.S. is peculiarly recent, and is more of an idea than it is rooted in long-standing ethnic or nationality groups or struggles. Add to that deadly mix the fact that Americans have virtually no historical memory, and this makes Americans peculiarly unsuited to barreling in to intervene in the Balkans, where who took what side at what place in the war against the Turkish invaders in the fifteenth century is far more intensely real to most of the contenders than is yesterday’s dinner.
Libertarians and classical liberals, who are particularly well-equipped to rethink the entire muddled area of the nation-state and foreign affairs, have been too wrapped up in the Cold War against communism and the Soviet Union to engage in fundamental thinking on these issues. Now that the Soviet Union has collapsed and the Cold War is over, perhaps classical liberals will feel free to think anew about these critically important problems.
III. Rethinking SecessionFirst, we can conclude that not all state boundaries are just. One goal for libertarians should be to transform existing nation-states into national entities whose boundaries could be called just, in the same sense that private property boundaries are just; that is, to decompose existing coercive nation-states into genuine nations, or nations by consent.
In the case, for example, of the eastern Fredonians, the inhabitants should be able to secede voluntarily from Fredonia and join their comrades in Ruritania. Again, classical liberals should resist the impulse to say that national boundaries “don’t make any difference.” It’s true, of course, as classical liberals have long proclaimed, that the less the degree of government intervention in either Fredonia or Ruritania, the less difference such a boundary will make. But even under a minimal state, national boundaries would still make a difference, often a big one to the inhabitants of the area. For in what language — Ruritanian or Fredonian or both? — will be the street signs, telephone books, court proceedings, or school classes of the area?
In short, every group, every nationality, should be allowed to secede from any nation-state and to join any other nation-state that agrees to have it. That simple reform would go a long way toward establishing nations by consent. The Scots, if they want to, should be allowed by the English to leave the United Kingdom, and to become independent, and even to join a Gaelic Confederation, if the constituents so desire.
A common response to a world of proliferating nations is to worry about the multitude of trade barriers that might be erected. But, other things being equal, the greater the number of new nations, and the smaller the size of each, the better. For it would be far more difficult to sow the illusion of self-sufficiency if the slogan were “Buy North Dakotan” or even “Buy 56th Street” than it now is to convince the public to “Buy American.” Similarly, “Down with South Dakota,” or a fortiori, “Down with 55th Street,” would be a more difficult sell than spreading fear or hatred of the Japanese. Similarly, the absurdities and the unfortunate consequences of fiat paper money would be far more evident if each province or each neighborhood or street block were to print its own currency. A more decentralized world would be far more likely to turn to sound market commodities, such as gold or silver, for its money.
IV. The Pure Anarcho-Capitalist ModelI raise the pure anarcho-capitalist model in this paper, not so much to advocate the model per se as to propose it as a guide for settling vexed current disputes about nationality. The pure model, simply, is that no land areas, no square footage in the world, shall remain “public”; every square foot of land area, be they streets, squares, or neighborhoods, is privatized. Total privatization would help solve nationality problems, often in surprising ways, and I suggest that existing states, or classical liberal states, try to approach such a system even while some land areas remain in the governmental sphere.
Open Borders, or the Camp-of-the Saints Problem
The question of open borders, or free immigration, has become an accelerating problem for classical liberals. This is first, because the welfare state increasingly subsidizes immigrants to enter and receive permanent assistance, and second, because cultural boundaries have become increasingly swamped. I began to rethink my views on immigration when, as the Soviet Union collapsed, it became clear that ethnic Russians had been encouraged to flood into Estonia and Latvia in order to destroy the cultures and languages of these peoples. Previously, it had been easy to dismiss as unrealistic Jean Raspail’s anti-immigration novel The Camp of the Saints, in which virtually the entire population of India decides to move, in small boats, into France, and the French, infected by liberal ideology, cannot summon the will to prevent economic and cultural national destruction. As cultural and welfare-state problems have intensified, it became impossible to dismiss Raspail’s concerns any longer.
However, on rethinking immigration on the basis of the anarcho-capitalist model, it became clear to me that a totally privatized country would not have “open borders” at all. If every piece of land in a country were owned by some person, group, or corporation, this would mean that no immigrant could enter there unless invited to enter and allowed to rent, or purchase, property. A totally privatized country would be as “closed” as the particular inhabitants and property owners’ desire. It seems clear, then, that the regime of open borders that exists de facto in the U.S. really amounts to a compulsory opening by the central state, the state in charge of all streets and public land areas, and does not genuinely reflect the wishes of the proprietors.
Under total privatization, many local conflicts and “externality” problems — not merely the immigration problem — would be neatly settled. With every locale and neighborhood owned by private firms, corporations, or contractual communities, true diversity would reign, in accordance with the preferences of each community. Some neighborhoods would be ethnically or economically diverse, while others would be ethnically or economically homogeneous. Some localities would permit pornography or prostitution or drugs or abortions, others would prohibit any or all of them. The prohibitions would not be state imposed, but would simply be requirements for residence or use of some person’s or community’s land area. While statists who have the itch to impose their values on everyone else would be disappointed, every group or interest would at least have the satisfaction of living in neighborhoods of people who share its values and preferences. While neighborhood ownership would not provide Utopia or a panacea for all conflicts, it would at least provide a “second-best” solution that most people might be willing to live with.
Enclaves and Exclaves
One obvious problem with the secession of nationalities from centralized states concerns mixed areas, or enclaves and exclaves. Decomposing the swollen central nation-State of Yugoslavia into constituent parts has solved many conflicts by providing independent nationhood for Slovenes, Serbs, and Croats, but what about Bosnia, where many towns and villages are mixed? One solution is to encourage more of the same, through still more decentralization. If, for example, eastern Sarajevo is Serb and western Sarajevo is Muslim, then they become parts of their respective separate nations.
But this of course will result in a large number of enclaves, parts of nations surrounded by other nations. How can this be solved? In the first place, the enclave/exclave problem exists right now. One of the most vicious existing conflicts, in which the U.S. has not yet meddled because it has not yet been shown on CNN, is the problem of Nagorno-Karabakh, an Armenian exclave totally surrounded by, and therefore formally within, Azerbaijan. Nagorno-Karabakh should clearly be part of Armenia. But, how then, will Armenians of Karabakh avoid their present fate of blockade by Azeris, and how will they avoid military battles in trying to keep open a land corridor to Armenia?
Under total privatization, of course, these problems would disappear. Nowadays, no one in the U.S. buys land without making sure that his title to the land is clear; in the same way, in a fully privatized world, access rights would obviously be a crucial part of land ownership. In such a world, then, Karabakh property owners would make sure that they had purchased access rights through an Azeri land corridor.
Decentralization also provides a workable solution for the seemingly insoluble permanent conflict in Northern Ireland. When the British partitioned Ireland in the early 1920s, they agreed to perform a second, a more micro-managed, partition. They never carried through on this promise. If the British would permit a detailed, parish by parish, partition vote in Northern Ireland, however, most of the land area, which is majority Catholic, would probably hive off and join the Republic: such counties as Tyrone and Fermanagh, southern Down, and southern Armagh, for example. The Protestants would probably be left with Belfast, county Antrim, and other areas north of Belfast. The major remaining problem would be the Catholic enclave within the city of Belfast, but again, an approach to the anarcho-capitalist model could be attained by permitting the purchase of access rights to the enclave.
Pending total privatization, it is clear that our model could be approached, and conflicts minimized, by permitting secessions and local control, down to the micro-neighborhood level, and by developing contractual access rights for enclaves and exclaves. In the U.S., it becomes important, in moving toward such radical decentralization, for libertarians and classical liberals — indeed, for many other minority or dissident groups — to begin to lay the greatest stress on the forgotten Tenth Amendment and to try to decompose the role and power of the centralizing Supreme Court. Rather than trying to get people of one’s own ideological persuasion on the Supreme Court, its power should be rolled back and minimized as far as possible, and its power decomposed into state, or even local, judicial bodies.
Citizenship and Voting Rights
One vexing current problem centers on who becomes the citizen of a given country, since citizenship confers voting rights. The Anglo-American model, in which every baby born in the country’s land area automatically becomes a citizen, clearly invites welfare immigration by expectant parents. In the U.S., for example, a current problem is illegal immigrants whose babies, if born on American soil, automatically become citizens and therefore entitle themselves and their parents to permanent welfare payments and free medical care. Clearly the French system, in which one has to be born to a citizen to become an automatic citizen, is far closer to the idea of a nation-by-consent.
It is also important to rethink the entire concept and function of voting. Should anyone have a “right” to vote? Rose Wilder Lane, the mid-twentieth century U.S. libertarian theorist, was once asked if she believed in womens’ suffrage. “No,” she replied, “and I’m against male suffrage as well.” The Latvians and Estonians have cogently tackled the problem of Russian immigrants by allowing them to continue permanently as residents, but not granting them citizenship or therefore the right to vote. The Swiss welcome temporary guest-workers, but severely discourage permanent immigration, and, a fortiori, citizenship and voting.
Let us turn for enlightenment, once again, to the anarcho-capitalist model. What would voting be like in a totally privatized society? Not only would voting be diverse, but more importantly, who would really care? Probably the most deeply satisfying form of voting to an economist is the corporation, or joint-stock company, in which voting is proportionate to one’s share of ownership of the firm’s assets. But also there are, and would be, a myriad of private clubs of all sorts. It is usually assumed that club decisions are made on the basis of one vote per member, but that is generally untrue. Undoubtedly, the best-run and most pleasant clubs are those run by a small, self-perpetuating oligarchy of the ablest and most interested, a system most pleasant for the rank-and-file non-voting member as well as for the elite. If I am a rank-and-file member of, say a chess club, why should I worry about voting if I am satisfied with the way the club is run? And if I am interested in running things, I would probably be asked to join the ruling elite by the grateful oligarchy, always on the lookout for energetic members. And finally, if I am unhappy about the way the club is run, I can readily quit and join another club, or even form one of my own. That, of course, is one of the great virtues of a free and privatized society, whether we are considering a chess club or a contractual neighborhood community.
Clearly, as we begin to work toward the pure model, as more and more areas and parts of life become either privatized or micro-decentralized, the less important voting will become. Of course, we are a long way from this goal. But it is important to begin, and particularly to change our political culture, which treats “democracy,” or the “right” to vote, as the supreme political good. In fact, the voting process should be considered trivial and unimportant at best, and never a “right,” apart from a possible mechanism stemming from a consensual contract. In the modern world, democracy or voting is only important either to join in or ratify the use of the government to control others, or to use it as a way of preventing one’s self or one’s group from being controlled. Voting, however, is at best, an inefficient instrument for self-defense, and it is far better to replace it by breaking up central government power altogether.
In sum, if we proceed with the decomposition and decentralization of the modern centralizing and coercive nation-state, deconstructing that state into constituent nationalities and neighborhoods, we shall at one and the same time reduce the scope of government power, the scope and importance of voting and the extent of social conflict. The scope of private contract, and of voluntary consent, will be enhanced, and the brutal and repressive state will be gradually dissolved into a harmonious and increasingly prosperous social order.
[Originally appeared in the Journal of Libertarian Studies 11, no. 1 (Fall 1994): 1–10.]
The Free Market 32, no. 3 (March 2014)A Libertarian Critique of Intellectual Propertyby Butler ShafferMises Institute, 2014, 62 pgs.
Few topics in recent years have aroused as much interest among libertarians as intellectual property. What place, if any, would IP — patents, copyrights, trademarks and the like — have in a libertarian society? Ayn Rand and her Objectivist followers view IP as the most basic of all property rights. Diametrically opposed are those who say, “You cannot own an idea”: ideas are not in the economic sense scarce goods and thus property rights in them are at odds with the purpose of property rights, avoiding conflict over the use of such goods. Still others shift the argument from rights to the benefits and costs of IP. Does IP promote valuable inventions and creativity, or does it impede them?
Faced with a welter of arguments in conflict, what is the perplexed libertarian to do? Butler Shaffer’s superb new monograph offers an easy way to unravel the IP puzzles. He starts from a fundamental principle basic to libertarianism and explains how the implications of this principle shed light on IP issues. What is this principle? It is that rights stem from “the informal processes by which men and women accord to each other a respect for the inviolability of their lives — along with claims to external resources (e.g., land, food, water, etc.) necessary to sustain their lives.” (p. 18) The “informal processes” that Shaffer mentions proceed without coercion. In particular, law and rights do not depend on the dictates of the state, an organization that claims a monopoly over the legitimate use of force in a territory.
In adopting this stance, Shaffer puts himself at odds with much that passes in our day for wisdom among professors of law. “In a world grounded in institutional structuring, it is often difficult to find people willing to consider the possibility that property interests could derive from any source other than an acknowledged legal authority. There is an apparent acceptance of Jeremy Bentham’s dictum that ‘property is entirely the creature of law.’” (pp. 18–19)
What follows for IP if one accepts Shaffer’s libertarian starting point? Then, we must ask the further question, would people who respect each other’s life and property recognize IP rights? To ask this question, though, raises a further issue. How are we to find out what people in this imagined situation would do? We live, after all, in “a world grounded in institutional structuring.” In our world, IP exists: how do we know what would exist in a stateless world?
Shaffer solves this difficulty by moving to a question that we can answer: How in fact has IP arisen? Was it recognized by the common law or has it been imposed by the state? Shaffer has no doubt about the answer: “The common law system got it right: because the essence of ownership is found in the capacity to control some resource in furtherance of one’s purposes, such a claim [of common law copyright] is lost once a product is released to the public. The situation is similar to that of a person owning oxygen that is contained in a tank, but loses a claim to any quantity that might be released — by a leaky valve — into the air.” (pp. 25–26)
IP today goes far beyond the limited protection afforded by common law copyright. In the modern IP system, the state grants monopoly privileges, and this is inconsistent with libertarian principles: “If copyrights, patents, or trademark protections are not recognized among free people — unless specifically contracted for between two parties — by what reasoning can the state create and enforce such interests upon persons who have not agreed to be so bound? ... Among men and women of libertarian sentiments, one would expect to find a presumption of opposition to the idea that a monopolist of legal violence could create property interests that others would be bound in principle to respect.” (p. 22)
One might raise an objection to Shaffer’s argument. Even if people have not in fact voluntarily agreed to laws protecting IP, does this suffice to show that they could not do so? Shaffer allows contracts in which two people agree to limits on the right to reproduce an item that is purchased, but can one not imagine such contracts extended further? Could one not devise a complicated contract in which everyone agrees to IP protection? A contract of this sort would resemble agreements that some have proposed to supply public goods in an anarchist society.
I do not know how Shaffer would respond, but the imagined contract creates little trouble for the thesis he wishes to defend. He need not deny the bare possibility of a contract of this sort. He has only to insist once more that this contract would bind only those who had agreed to it, and it in that way does not resemble our present IP arrangements.
If Shaffer is right that a libertarian society would not recognize IP, we must now ask another question. Is this an unfortunate feature of a libertarian society as Shaffer conceives of it? Some have thought so, fearing that IP protection is needed to stimulate inventions and to promote creativity in the arts.
Shaffer finds no reason to accept this contention. After mentioning a large number of tools and inventions from prehistoric times, he says, “All of these early inventions and creations were accomplished, as far as is known, without a violence-backed monopoly to prevent others from copying them.” (pp. 35–36)
In his discussion of innovation, Shaffer avoids a bad argument that, I regret to say, has beguiled several opponents of IP. It is correctly pointed out that ideas are not scarce, in one meaning of that term. Any number of people can make use of an idea at the same time. By contrast, economic goods are scarce: one’s use of economic goods excludes others from using them. In brief, ideas are non-rivalrous. From this, it is wrongly concluded that the creation of new and valuable ideas poses no problem: If ideas are not scarce, then they are abundant. Obviously, then, IP protection for them is absurd. It makes no more sense than property rights in air, a good which in normal circumstances anyone can have as much as he wants.
A parallel argument will serve to expose the fallacy. A common criticism of the free market is that it cannot supply public goods, such as national defense, in the economically optimal quantity. A public good is non-rivalrous: my consumption of defense, e.g., does not impede your consumption of it. It is alleged that this leads to undersupply of the good.
It would be a very poor answer to this complaint against the market to say, “This is not a problem! Just as the opponent of the free market has said, defense is a public, non-rivalrous good. If so, it is abundant — we need not then worry about its supply.” The error here is apparent: the fact that an indefinite number of people can consume a good at the same time does not show that there is as much of the good as people want. The application of this to the IP argument canvassed above is, I hope, sufficiently obvious.
Shaffer’s monograph contains much else of great value. He points out that “the patenting process, as with government regulation generally, is an expensive and time consuming undertaking that tends to increase industrial concentration.” (p. 42) This, he holds, is a development much to be deplored. In his fear of the malign effects of undue organizational size, Shaffer has been influenced by Leopold Kohr, an original but neglected thinker.
Shaffer aptly concludes his monograph in this way: “Can one, consistent with a libertarian philosophy, respect any ‘property’ interest that is both created and enforced by the state, a system defined by its monopoly on the use of violence? I regard the proposition as indefensible as would be the question of a libertarian defense of war.” (p. 54)
Volume 9, no. 1 (Spring 2006)The Eastern European countries have been going through a transition phase since the liberalization of their economies with the collapse of communist regimes in the early 1990s. The attempts at transition from a centrally planned economy to a market based one has provided a fascinating laboratory for research in both theory and practice. The problems of how to make the transition are not fully resolved. Economists are still debating various strategies. While the neoclassical economists focus on the macroeconomic issues of the transition process, the Austrian School puts the focus on the microeconomic issues. Part of the ongoing debate among neoclassical economists is whether state owned industries need to be restructured before they can be privatized. Romania is an interesting case.
Jeff Deist and Marc J. Victor discuss what's happening in Ferguson, our disappearing legal rights, and how having Butler Shaffer as a law professor radicalized him and shaped his libertarian views.
Volume 4, No. 2 (Summer 2001)This monograph by Professor Michael Krauss of the George Mason University School of Law is a well-written and accessible critique of the recent government lawsuits against the tobacco and firearms industries. These recoupment suits have been criticized by many conservatives and libertarians, who have described these lawsuits as, among other things, “executive taxation,” “regulation through litigation,” and “extortion.” Professor Krauss’s monograph is a primer from that perspective. Krauss explains how these recoupment suits are based on a general misapplication of private law to public disputes, and he discusses the specific legal and economic flaws of these lawsuits.
Volume 17, No. 2 (Summer 2014)It has been 40 years now since South Royalton conference on Austrian Economics. Already by the 25th anniversary, one participant had declared that conference to be the moment of rebirth for the school. (Vaughn, 2000) The number and youth of the participants at this 40th anniversary gathering confirms that Austrian economics is alive and well. But is alive and well enough?
In the introduction to the proceedings of the South Royalton conference, IEdwin G. Dolan, (ed.dolan@sseriga.edu) is Professor of Economics (retired) at the Stockholm School of Economics, Riga, Latvia. is Professor of Economics (retired) at the Stockholm School of Economics, Riga, Latvia. suggested that Austrian economics had the potential not just to survive but also to achieve what Thomas Kuhn (1962) calls a scientific revolution. Such a revolution would fundamentally change the way practitioners of a field saw the world as a new paradigm came to replace the dominant one. What can we say of the success of Austrian economics in that regard?
As I noted then, the Austrian school does possess one key component of a scientific revolution, a distinctive paradigm, but that is a necessary, not a sufficient, condition. To assess the progress toward a real scientific revolution, we have to ask three additional questions.
• Have Austrian economists addressed problems that people think are important?
• Have they been able to offer proposals of practical value to economic policy, or is their work limited to pure theory?
• Do they offer unique solutions to economic problems, or just different ways of reaching the same results as the dominant paradigm?
Papers presented at this conference range from marketing and entrepreneurship, to history and method, to money and macroeconomics. Such a broad scope shows that it would be impossible to survey all of Austrian economics as it has developed over the past four decades. Instead, in this presentation, I will take a case study approach. The case I have chosen to focus on is Austrian environmental economics, a field I have followed more closely than others over the years.
PREMISES OF AUSTRIAN ENVIRONMENTAL ECONOMICSThe Austrian paradigm, as applied to environmental economics, has three components.
The first is a characterization of environmental issues as problems coordination. As Roy Cordato (2004, p. 7) puts it, they are “not about harming the environment, but about human conflict over the use of physical resources.”
The second component is a comparative institutional method. Rather than trying to maximize efficiency or social welfare, as in the neoclassical approach, Austrians ask what set of institutions can best facilitate (or, perhaps better, least impede) coordination among the conflicting plans of various potential users of environmental resources.
The third component of the paradigm specifies that property rights are the key to resolving environmental problems. To quote Cordato again, “it is logical that both the origin and the solution of the problem is to be found in a lack of clearly defined or enforced property rights.” (2004, p. 9)
These three components of the Austrian paradigm lead naturally to policy prescriptions that envision a minimal role for government. Graham Dawson (2011, p. 18), addressing climate change, expresses a view that Austrian writers extend to environmental problems of every kind:
The policy implication is that government has no cause to intervene in market exchange where property rights have been allocated and legislative procedures exist that that make it possible for the victim to take legal action against the polluter....
The Austrian or libertarian policy must therefore be to privatise “climate change policy,” repealing all existing climate change legislation…. There simply should not be a public policy towards “climate change.” Instead, the courts should build up a body of common law and establish precedents to guide the actions of the users of fossil fuels.... (Dawson, 2011, p. 19)
It all sounds easy, but between the statement of theoretical principles and their practical implementation lie several significant challenges.
CHALLENGE NO. 1: THE INSTITUTION GAPThe first question to ask is, how successful have Austrian writers been in specifying the property rights and enforcement mechanisms they see as necessary to achieve environmental coordination? The answer requires turning from easily stated generalities to some of the more difficult details. In doing so, we will pay particular attention to the distinction between normative legal principles—the way the law should look if it is to serve the purposes of economic coordination and libertarian justice—and principles of positive law as actually practiced today.
What Property Rights?Many Austrian writers have strong ideas about how property rights should be defined. In one of the most widely cited treatments, Murray Rothbard (1982) begins from the bedrock principle of homesteading, or first use. Polluters should be allowed to homestead the right to dispose of wastes in unused waterways or air space. People who later “come to the nuisance” by buying land near a smelly feedlot or a polluted waterway have no valid claim to relief. Elsewhere (1998, p. 63), he extends the principle of homesteading to land that is legally owned but unused.
Rothbard makes it clear that these are normative principles that today’s courts do not consistently follow. The resulting gap between normative and positive law is of more than theoretical importance. For example, if courts were to recognize homesteading of owned but unused property, they would frustrate the efforts of conservationists like Ted Turner or environmental organizations like Ducks Unlimited who buy up millions of acres of critical habitat for the specific purpose of leaving it unused.
What Courts?Austrian writers loosely refer to “the courts” as the instruments for enforcement of property rights, but just what courts? Unfortunately, the courts we have now are not always diligent in upholding property rights.
For example, consider how U.S. courts have treated regulatory takings. The Fifth and Fourteenth Amendments to the Constitution provide that “private property shall not be taken for public use without just compensation.” Libertarians have long held that this language should apply not just to cases in which the government takes title to property, but also to those in which regulation reduces its value or the ways the owner can use it.
Suppose, for example, I own a property that I intend to use for farming. A new regulation then defines part of it as a protected wetland, no farming allowed. Let’s stipulate that wetland protection is something that many people value. No matter—the Fifth Amendment would, on the face of it, seem to require that I be compensated for the loss to my farming operation. Yet in practice, U.S. courts have consistently held that if a regulation serves a public purpose, no compensation need be paid as long as the government does not actually take title to the property in question.
For another example, consider the Fourth Amendment’s restrictions on unreasonable searches and seizures. Unreasonable searches and seizures, whether they are stop-and-frisk searches for drugs by local police or searches of cell phone records by the NSA, are violations of property rights. The idea of a constitutional prohibition on overly broad searches came out of the experience of colonial-era merchants like John Adams and Elbridge Gerry who objected to raids on their homes and businesses by British officials, acting under “general writs,” in search of seditious documents or contraband tea or whatever. Sadly, today’s courts are even less willing to stand up against the NSA than against the EPA.
Why don’t our courts protect property as diligently as Austrian writers think they should? Part of the reason, I am sure, lies in the selection of judges by political appointment or popular election. It is not just Democratic judges who are shaky in their support of property rights. Republican judges, rather than being pro-market, often reach the bench because they are “pro-business”—a code word for subservience to corporate rent seekers. If Austrian environmental economics is to rest on a solid institutional foundation, the issue of how to get better courts and judges deserves more attention.
What Standards of Proof?Even with clear definitions of property rights and courts truly dedicated to enforcing them, plaintiffs would have to prove violations of their rights in each specific case. Rothbard and other Austrian writers have clear ideas about the standards of proof that courts should apply, but again, these often differ from current practice.
For example, in many, if not most, civil cases, the prevailing standard of proof is preponderance of evidence, also known as balance of probabilities. Austrian writers instead tend to favor beyond a reasonable doubt. The distinction is hardly trivial. Imagine a case in which plaintiffs claim that their property is being harmed by climate change. Would a court be convinced by existing scientific evidence that climate change is harmful and that human activity contributes to it? Quite possibly yes, if the standard of proof were preponderance of evidence, but no, if the standard were beyond a reasonable doubt.
The choice between negligence and strict liability is another example. A negligence standard, which today’s courts commonly apply in tort cases, is not entirely toothless. Properly implemented, it at least encourages people to take cost-effective measures to safeguard other people’s property. However, most Austrians prefer the less frequently applied standard of strict liability, which requires people to take responsibility for harm they cause even when it is unintentional.
Taking these three issues together—what property rights, what courts, what standards of proof—we see that there is a major gap between existing institutions for defining and enforcing property rights and the ideal versions of Austrian theory. The gap matters, especially when we move from theory to policy. Unless Austrians can at least outline the crucial institutional bridge between the ideal and the possible, they risk falling into what Harold Demsetz (1969, p. 1) calls the nirvana approach:
The view that now pervades much public policy economics implicitly presents the relevant choice as between an ideal norm and an existing “imperfect” institutional arrangement. This nirvana approach differs considerably from a comparative institution approach in which the relevant choice is between alternative real institutional arrangements. In practice, those who adopt the nirvana viewpoint seek to discover discrepancies between the ideal and the real and if discrepancies are found, they deduce that the real is inefficient. Users of the comparative institution approach attempt to assess which alternative real institutional arrangement seems best able to cope with the economic problem; practitioners of this approach may use an ideal norm to provide standards from which divergences are assessed for all practical alternatives of interest and select as efficient that alternative which seems most likely to minimize the divergence.
If we replace the neoclassical term efficiency with the Austrian term coordination, Demsetz’s point is highly relevant. To argue that an ideal set of courts could do a better job of resolving environmental problems than can existing government regulations is to follow the nirvana approach, yet writers like Rothbard, Cordato, Dawson, and others tread perilously close to doing just that.
That is all the more striking, since Austrians are quick to condemn neoclassical economists when they slip into nirvana mode. Consider the economics of antitrust. The traditional neoclassical approach has been to compare existing market processes with the ideal construct of perfect competition. Finding that the messy realities of the former fall short of the perfect efficiency of the latter, they declare a “market failure” and recommend a set of remedial laws and regulations. The Austrian approach instead, is to compare the messy details of real-world markets with the even messier institutions of real-world antitrust law and policy. Dominick Armentano, an alumnus of the South Royalton conference, has used this comparative institutional method to build a strong case for antitrust repeal. (Armentano, 1999)
The bottom line here is that if Austrian environmental economics is to be fully persuasive, its policy proposals need to be better rooted in a comparison of the existing policy regime with alternatives that have real institutional meat on their normative bones. As we will see in the next section, the property rights approach to environmental issues has made more progress in this regard when dealing with some kinds of environmental issues than with others.
CHALLENGE NO. 2: THE PROBLEM OF ENVIRONMENTAL MASS TORTSIn areas like grazing, conservation, forestry, fisheries, and urban development, the property rights approach has made real progress, not just in theory, but also in practice. Examples abound. National organizations like the Nature Conservancy and local ones like the San Juan Preservation Trust, in the small community where I live, protect millions of acres of critical habitat. In doing so, they use a full range of property rights tools, including not just purchases, but also conservation easements, mitigation banks, and more. (Dolan, 2011). Terry Anderson and Donald Leal (2001) of the Property and Environment Research Center show how the property rights approach has led to better coordination of the varying interests of ranchers, farmers, hunters, and conservationists in the American West. In an urban context, property developers use covenants, easements, and other devices to coordinate the conflicting interests of individual owners in condominiums and planned developments. David Zetland (2014) has detailed how markets and property rights can help coordinate the overlapping plans of farmers, homeowners, and industry for use of scarce water resources.
However, there are limits. The property rights approach works best when the number of parties involved in environmental dispute are few and proximate. When they are many and remote, neither face-to-face bargaining nor common law litigation works well. Many of the most important environmental issues of our times fit this pattern, including urban smog, acid rain, ozone depletion, ocean acidification, and anthropogenic climate change. I will refer to this class of problems as environmental mass torts.
As Anderson and Leal put it, air pollution and related mass torts “challenge the paradigm.” (2001, p. 8) Poorly defined property rights are part of the problem, but even if rights were clearly established, the larger issue would be the procedural barriers and burdens of proof that pollution victims would face in any attempt to prevail in court. These do not arise solely from the shortcomings of laws and courts as they now exist. On the contrary, it would be even harder for pollution victims to prevail before an ideal court that followed the rigorous standards proposed by Rothbard and those who follow his lead.
Here is Rothbard’s (1982, p. 87) succinct statement of those standards, as applied to air pollution:
Aggression may take the form of pollution of someone else’s air, including his owned effective airspace, injury against his person, or a nuisance interfering with his possession or use of his land. This is the case, provided that: (a) the polluter has not previously established a homestead easement; (b) while visible pollutants or noxious odors are per se aggression, in the case of invisible and insensible pollutants the plaintiff must prove actual harm; (c) the burden of proof of such aggression rests upon the plaintiff; (d) the plaintiff must prove strict causality from the actions of the defendant to the victimization of the plaintiff; (e) the plaintiff must prove such causality and aggression beyond a reasonable doubt; and (f) there is no vicarious liability, but only liability for those who actually commit the deed.
Later in the same article, Rothbard (1982, pp. 93–97) specifies additional standards for joint torts and joint plaintiffs. He limits compulsory joinder of defendants to cases where polluters have acted in concert, and joinder of plaintiffs to cases where each plaintiff actively and voluntarily participates and common interests predominate.
Consider how these standards would work out in the case of a hypothetical Vermont farmer, call her Nancy Norman, who claims that acid rain is harming her maple trees.
• Defendants, such as Midwestern power plants, could argue that their emissions began before Norman purchased her property, so that she was “coming to the nuisance.” Unless she had inherited her farm from a line of ancestors dating back before the industrial age, older pollution sources would be off the hook and she could only go after more recent ones.
• Because Rothbard treats harm from invisible and insensible gases like SO2 and NOx as a nuisance, not a trespass, Norman would have to prove actual damage. In any legal action, she would have to bear the cost of expert testimony regarding the science of acid rain, and would have to rebut defendants’ testimony that some other agent, say a fungus, might be harming her maple trees. The testimony would have to establish her contentions beyond a reasonable doubt.
• Norman would have to sue each polluter individually, unless she could prove they acted in concert, which presumably they do not. She would have to prove strict causality, not just regarding the point that acid rain in general damaged her trees, but that each individual defendant contributed causally to the damage. (Rothbard approvingly quotes an authority who says, “Currently, a party who has been damaged by air pollution must prove in court that emitter A damaged him. He must establish that he was damaged and emitter A did it, and not emitter B. This is almost always an impossible task.”)
• Finally, it would be difficult to undertake a class action. Although Norman might be able to join with other maple farmers, if she could secure their active participation, she could not, under Rothbard’s standards, join with defendants claiming that acid rain caused other forms of damage, say, to fisheries, buildings, or personal health.
Taking all of these considerations together, Rothbard acknowledges that an individual pollution victim would have no chance at all of prevailing in a tort action against multiple, remote polluters:
The prevalence of multiple sources of pollution emissions is a problem. How are we to blame emitter A if there are other emitters or if there are natural sources of emission? Whatever the answer, it must not come at the expense of throwing out proper standards of proof, and conferring unjust special privileges on plaintiffs and special burdens on defendants. (Rothbard, 1982, p. 88)
Instead, he says, if the burden of proof is insurmountable, then pollution victims “must assent uncomplainingly.”
Not all advocates of a property rights approach agree with Rothbard on these points. For example, Martin Anderson (1989), as quoted approvingly by Block (1990), puts it this way:
If you took a bag of garbage and dropped it on your neighbor’s lawn, we all know what would happen. Your neighbor would call the police and you would soon find out that the disposal of your garbage is your responsibility, and that it must be done in a way that does not violate anyone else’s property rights.
But if you took that same bag of garbage and burned it in a backyard incinerator, letting the sooty ash drift over the neighborhood, the problem gets more complicated. The violation of property rights is clear, but protecting them is more difficult. And when the garbage is invisible to the naked eye, as much air and water pollution is, the problem often seems insurmountable....The only effective way to eliminate serious pollution is to treat it exactly for what it is—garbage. Just as one does not have the right to drop a bag of garbage on his neighbor’s lawn, so does one not have the right to place any garbage in the air or the water or the earth, if it in any way violates the property rights of others.
What we need are tougher clearer environmental laws that are enforced—not with economic incentives but with jail terms.
Although this passage does not use Rothbard’s careful legal language as Rothbard, it clearly takes a different approach. Its key features include:
• A tilt toward the rights of victims rather than polluters when procedural considerations make it hard to protect both perfectly.
• The implication that a public prosecutor could act to prevent known harm even when specific victims have not filed suit or even been identified.
• The possibility of injunctive remedies or criminal sanctions in addition to, or instead of, payment of damages under tort law.
Despite their differences, Rothbard’s approach and the move toward a victim-friendly alternative have one thing in common: Neither does much to solve the coordination problem in cases of environmental mass torts. Under Rothbard’s approach, polluters would have little incentive to accommodate themselves to the conflicting plans of remote pollution victims. Under the alternative version, it might be the polluters who, because of the difficulty of negotiating pollution easements with downwind property owners, would have to “assent uncomplainingly” to costly abatement measures.
The bottom line: There can be no coordination unless the property rights of both polluters and their victims are clearly defined and diligently enforced. In the case of environmental mass torts, that appears to be a practical impossibility, as proponents of the property rights approach themselves acknowledge.
CHALLENGE NO. 3: BRINGING THE PRICE SYSTEM TO BEARIn the hands of Rothbard, Cordato, and other Austrian writers, the property rights paradigm leads to a dead end when applied to urban smog, acid rain, ozone depletion, climate change, and other large-scale forms of pollution. It turns out to be incapable either of ensuring equal justice for polluters and victims, or of resolving the coordination problem. Much of the reason, I think, is that these writers take an excessively legalistic approach. Yes, property rights are important, but it is wrong to focus on direct negotiations backed by tort law as the principal mechanism through which they achieve coordination. Something is missing.
Fortunately, we do not have to look outside Austrian framework to find the missing piece. As famously articulated in Friedrich Hayek’s (1945) essay on the use of knowledge in society, the price system, not property rights per se, is the key mechanism that facilitates economic coordination among large numbers of widely scattered actors. That being the case, we can restate the problem as one of how to bring the price system to bear on the problem of environmental mass torts.
Where property rights are adequately defined and enforceable, prices arise naturally from the interplay of supply and demand. Hayek uses the market for tin as an example. Sellers expand supply when the price is higher than their estimated cost of production. Consumers buy more when the price is below the maximum they are willing to pay for an additional unit. Coordination occurs without the need for face-to-face negotiation or even the knowledge of who your customers are or why they want your product. The law is there as a backstop, but only as a last resort in cases of fraud or breach of contract. Most of the time, mutual self-interest and the desire to protect commercial reputations are sufficient to ensure that the parties carry out their agreements.
Things are not so simple, though, when the legal backstop is missing, as it is when property rights are murky and enforcement is impracticable. Since prices and markets do not emerge naturally in such a setting, the only choices are to get along without them altogether or to take artificial measures to bring them into play. In Hayekian terms, we might think of it as artificial insemination of knowledge—not nature’s way, but better than nothing when nature fails.
The two leading approaches for doing this are emissions trading and pollution fees. I think Austrian economists succumb to the nirvana fallacy when they dismiss these policy alternatives too quickly. The comparative institutional method demands that these proposals receive unbiased evaluation. It turns out that there is much to like about them, even from an Austrian point of view. Let’s look first at the positive features of these policies and then at some common objections to them.
Emissions TradingAn Austrian case for emissions trading follows naturally from Rothbardian homesteading of pollution easements. Rothbard (1982, p. 77) uses the example of noise pollution from an airport. At time T, he imagines, an entrepreneur sets up an airport in an open area with no one nearby to be bothered by the noise. The facility emits X decibels of noise into the surrounding unused airspace, thereby homesteading the right to X decibels. If someone builds a house nearby at time T+1, says Rothbard, they have no cause for action against airport, since they have “come to the nuisance.” However, if the homeowner bought the property for a price that reflected ambient noise of X decibels, and at time T+2 the airport increases its noise emissions to 2X decibels, the homeowner would have a cause of action for 1 decibel of excess noise.
Rothbard specifies that the titles to pollution easements created by homesteading are transferable by sale, gift, or bequest. Furthermore, they are separable, in the sense that it is permissible to sell them without selling the airport itself.
If purchases and sales of noise easements became frequent, some entrepreneur would no doubt set up an exchange to trade them in standardized units. Soon a fully developed, fully private emissions trading scheme would spontaneously emerge, with the supply of easements for each type of pollution capped by the number that had been legitimately homesteaded. Once population density increased to the point that no part of the relevant airspace or watershed remained unused, there could be no further homesteading and the caps would become permanent.
Such a spontaneously emergent emissions trading scheme would facilitate coordination of the plans of the various affected parties in a way completely consistent with Austrian principles. The mechanism of coordination would be the price of easement units as traded on the exchange. For example:
• The airport would use the price of easement units in deciding how much to invest in abatement technologies like noise deflecting walls and berms.
• It would communicate the value of easements to airlines through the price it charged for landing fees. Airlines, in turn, would use that price in scheduling flights and perhaps in negotiating lower landing fees in return for investments in quieter engines.
• As the local community grew in size and wealth, property developers or voluntary community associations could buy up some easement units to hold them off the market, with a payback through lower noise levels and higher property values.
In short, if we accept the homesteading principle, then nothing about emissions trading per se is offensive to Austrian principles.
Pollution FeesPollution fees are another way to inject prices artificially into a world where muddled property rights and imperfect courts prevent them from emerging spontaneously. I find that neoclassical economists tend to like pollution fees better than emissions trading, but for Austrians, they are probably an even harder sell. They object that pollution fees are a form of tax, and that all taxes are bad. Even so, that does not mean they are equally bad.
Yes, taxes can pose barriers to coordination. Payroll and income taxes make employment less attractive to workers and hiring less attractive to employers. Corporate taxes distort incentives for choosing one form of business organization rather than another. But, within a comparative institutional framework, the critique of such taxes presumes that the alternative would be coordination through functioning, tax-free markets for labor, capital, and their products.
Pollution fees have a different status. As we have seen, though, where property rights are not clearly defined and or adequately enforced, markets for pollution cannot emerge and coordinating conflicting uses of environmental resources becomes problematic. That changes matters in two key ways.
First, it means that the effects of pollution fees must be compared not with the operation of a nonexistent tax-free market, but with a situation in which pollution goes altogether unpriced. Whatever one’s distaste for taxes, the latter situation is, arguably, even less congenial to economic coordination.
Second, it means that the effects of pollution fees must be compared to those of other taxes. No one that I know of proposes just adding pollution fees on top of all other sources of government revenue. The proper approach is that of a revenue-neutral tax reform in which pollution fees would replace payroll taxes, corporate taxes, or whatever other existing taxes are most harmful to coordination. In that context, it is appropriate to reject pollution fees only if they are worse than any other tax.
Again, we have to choose between the nirvana approach and that of comparative institutions. For many Austrians, nirvana means a society with no taxes at all. As libertarian philosophy or science fiction, I find such an anarcho-capitalist utopia quite charming. However, there is also a less radical, more practically minded thread within the Austrian tradition, that of Hayekian classical liberalism, which envisions a limited government supported by limited, minimally intrusive forms of taxation. From a classical liberal point of view, pollution fees deserve a fair hearing.
The Calculation ObjectionLet’s turn now to three objections that Austrian writers have raised against both emissions trading and pollution fees. The first is the calculation objection. Cordato states it this way:
[B]oth of these approaches are fundamentally forms of market socialism and suffer from all of the problems that Austrians have typically made against central planning. Most specifically, a central authority must know in advance what the efficient outcome is. In the case of the tax, a central authority must know in advance the exact amount of the externality costs being imposed by the polluter, and the correct price and output, not only for the good in question but, since efficiency only makes sense in a general equilibrium context, for all other affected goods and services. In the case of tradable permits, the knowledge requirements are essentially the same. This is because the central authority must first determine the “efficient” level of emissions for the particular pollutant, which also must be determined within the context of a general equilibrium solution. (Cordato, 2004, p. 11)
Art Carden (2013, p. 30) echoes this, saying:
Tradable permits and Pigovian taxes are market-like, but they still rest on a planner’s conceit that the optimal amount of a particular activity can be known independent of what is revealed by trade (or more generally, by consent).
For several reasons, I think this objection misses the mark. First, the context is wrong. As Cordato himself notes, the origins of the objection lies in the socialist calculation debate. There, Austrian economists sought to establish that real markets could better solve the coordination problem than could central planning or “market socialism.” That debate centered on ordinary goods like coal, cement, or clothing, for which markets, backed by clearly defined and enforced property rights, actually existed. In the socialist calculation debate, the socialists were the ones who succumbed to the nirvana fallacy by invoking optimal central planning or pseudo-market mechanisms to balance supply and demand in imitation of perfect competition. Austrians, meanwhile, grounded their arguments firmly in a comparison of real world markets with real world socialism.
In the case of air pollution, the shoe is on the other foot. The starting point is a reality in which there are no markets for pollution and no prices. Cordato and others point out that this reality falls short of their nirvana of clearly defined and consistently enforced property rights, but they offer no institutionally practicable alternative.
Second, it is wrong to say that environmental administrators would have to know every detail of the optimal outcome in order to improve coordination. The correct comparison is neither the utopian concept of perfect efficiency nor the nonexistent ideal of perfect enforcement of property rights, but rather, the set of environmental policies that we now have. Arguably, the current mish-mash of command-and-control policy, CAFE standards, ethanol blend ratios and the rest is a mess. Emissions caps or pollution fees could miss the neoclassical optimum by a considerable margin and still be an improvement over the status quo.
Third, those Austrians who employ the calculation objection seem to forget their own concepts of how markets actually work. In real life, relatively few decisions are guided by exact calculations. To take an example from business, engineers at an auto company might, with a fair degree of precision, be able to calculate the optimal mix of fuel and air for the engine of a new model. However, marketing managers tasked with setting the level of advertising for the new model would have to rely on implicit knowledge and rules of thumb. They would be well aware that the difficulty of measuring some quantity does not constitute proof that its optimal value is zero. Better to guess at the proper advertising budget than not to advertise at all.
Matters would be much the same for a common law court. If a farmer successfully sues a railroad for emitting sparks that burn a field of wheat, the court might be able to use data on wheat prices, acreage, and crop yields to calculate damages with reasonable accuracy. But instead, suppose a spill from a plastics plant contaminates an adjacent well and the well owner comes down with cancer. Assuming that the plaintiff can prove causation, what are the appropriate damages? Medical costs only? Medical costs plus time lost from work? The above plus pain and suffering? The above plus punitive damages to discourage similar abuses in the future? There is no exact answer; the court must give a reasoned judgment based on rules of thumb established by precedent. Yet the inability of judges to perform exact calculations in cases like this does not seem to keep Austrians from placing great faith in tort law.
The Compensation ObjectionA second Austrian objection is that emissions trading and pollution fees solve only part of the coordination problem. Yes, if properly implemented, such policies could deter pollution, but they don’t compensate victims. Failure to compensate is not only unjust; it distorts choices about the use of environmental resources and inhibits coordination.
By analogy, consider shoplifting from grocery stores. As intermediaries in the market for apples, grocers facilitate coordination between farmers and consumers. Shoplifting interferes with that function. To offset losses, grocers have to lower the prices they pay to farmers. Given misleading information about the value of apples, farmers might mistakenly convert their land to housing developments. Shoplifting losses also causes grocers to raise prices to consumers, who might turn to snack alternatives they would otherwise find less satisfying, say cookies. The result would be more houses and cookies, and fewer apples, than we would find under full coordination.
In an ideal world of clearly defined and strictly enforced property rights, grocers could hire private guards to nab the shoplifters, take them to court, and demand restitution to cover the value of the stolen goods plus the costs of the guards and court proceedings. With their losses made whole, grocers could then pay more to farmers and charge less to consumers. Coordination would improve.
Suppose, though, that instead of private guards, government police nab the shoplifters and throw them in jail without compensating anyone. Like pollution fees or emissions trading, jailing shoplifters deters the unwanted behavior but does so without making the victim whole. Still, criminal sanctions offer a partial solution to the coordination problem, in that less shoplifting allows grocers to somewhat raise prices paid to farmers and somewhat reduce those charged to consumers.
The same goes for policies like emissions trading or pollution fees. When it is not possible both to deter aggression and to compensate victims, it is better at least to do the one than to do neither.
The Stolen Property ObjectionWalter Block (2004) raises yet another objection against emissions trading. Markets in emissions quotas are illegitimate, he says, not because trading itself is objectionable, but because they are trading in stolen property, like selling stolen televisions from the back of a truck.
Block is not entirely clear from whom the relevant emissions rights have been stolen. If he has in mind a framework of Rothbardian homesteading, then the rights would be stolen from polluters. If he has in mind that downwind property owners have a right to protect themselves against trespass and nuisance, then the tradable permits are stolen from the victims. In either case, they are stolen.
This is a legitimate objection to some versions of emissions trading, but it seems to me that proper design of the trading scheme could overcome it, at least in part. Without going into great detail, I see several possibilities.
First, if one believes that existing pollution levels have been legitimately homesteaded under a “first user” theory, then the solution would be to grandfather in that level of pollution when the trading scheme is instituted. That would fully protect polluters’ rights since they would not have to sell their emissions quota unless they chose to do so.
Alternatively, if polluters are not seen as having legitimately homesteaded the rights, then the trading scheme could include some mechanism to compensate victims. Perhaps the original allocation of permits could be sold at auction. The proceeds could then be distributed through a victim compensation fund or simply through a general tax rebate if all taxpayers were seen as equally victimized by the pollution. True, it might not be feasible to negotiate release of the relevant property rights with each individual victim. If so, the state might have to invoke eminent domain, as it would when taking property for a highway. Even in that case, the “stolen property” objection would be mitigated if the government observed Fifth and Fourteenth Amendment principles to compensate pollution victims for the regulatory taking.
CONCLUSIONSWhat does all this mean for progress toward an Austrian scientific revolution in environmental economics? Let’s take a last look at the questions posed at the beginning of this paper.
First, in taking on the coordination of conflicting plans for the use of scarce environmental resources, Austrian economists have definitely addressed a problem that other economists agree are important. My only disappointment here is that when they encounter difficult cases like climate change, some Austrian writers try to duck the economic issues by retreating into amateur criticisms of the relevant science. That is a problem I dealt with at length in an earlier paper (Dolan, 2006), so I won’t repeat myself here. In my view, Austrian economists qua economists have to deal with climate change and the like in the spirit of “What if Chicken Little is right this time?” That is, they need to propose solutions that would work if at some point real scientists persuade them that climate change is a real threat.
Second, Austrians have offered proposals of practical value to economic policy, as judged by a comparative institutional standard, for problems such as land management, water rights, forestry, urban land use, and others where the parties are few in number and proximate to one another. Unfortunately, Austrians have contributed little if anything to the solution of the problems of mass torts that remain the headline environmental problems of our day.
Third, even where Austrian writers have successfully addressed environmental problems, it is hard to say that their successes spring from their unique Austrian paradigm. There is not always a great practical difference between the conclusions reached by Austrians and those reached by others who ground their approach to property rights in the neoclassical tradition. The one case where I see the possibility of a uniquely Austrian approach—a version of emissions trading based on Rothbardian homesteading—has been completely neglected.
Taken together, these shortcomings leave Austrian environmental economics with a split personality. On a theoretical level, Austrian writers delight in claiming the moral high ground, condemning polluters as aggressors against property rights. On a practical level, however, they leave pollution victims in the lurch. They invite them to sue, but propose a set of legal standards that would guarantee that polluters would always win. They oppose all government measures to reduce pollution, whether through regulation or through measures to make polluters pay. As a result, at least in cases of environmental mass torts, the Austrian paradigm is a polluter’s dream and a victim’s nightmare. It offers far too little of any practical value toward securing property rights, too little toward facilitating environmental coordination, and too little toward promoting libertarian justice. Much work remains to be done.
Volume 17, No. 2 (Summer 2014)MyArt Carden wcarden@samford.edu is Assistant Professor of Economics, Brock School of Business, Samford University. The title is taken from Buchanan (1964). education in Austrian Economics began in earnest shortly before I started grad school at Washington University in Saint Louis. The Center for the Study of American Business had just become the Murray Weidenbaum Center and had left a small mountain of books on a table in the Economics Department’s mailroom for anyone to take. Among the books I picked up were Ludwig Lachmann’s Capital, Expectations, and the Market Process and a book that was central to the “Austrian Revival” of the 1970s: Edwin Dolan’s edited volume Foundations of Modern Austrian Economics. I was therefore flattered to see myself cited in his paper “The Austrian Paradigm in Environmental Economics: Theory and Practice” and to be invited to offer a comment. Dolan’s call for applied research that makes distinctively Austrian contributions, addresses important problems, and offers suggestions for public policy is important, and it should inspire scholars to look for specific areas to which the Austrian paradigm contributes. It’s a call that has been answered by Austrian-influenced scholars like Elinor Ostrom, and, in turn, the people Ostrom and others have influenced.
My position on Dolan’s paper could best be described as “qualified agreement.” Dolan is exactly right: Austrian economics offers a “distinctive paradigm,” and this is “a necessary, not a sufficient, condition” for “a scientific revolution.” Some scholarship in the Austrian tradition today opens itself to the charge that it is textual exegesis—what did Mises really mean? What did Rothbard say about X? Which block quote from The Constitution of Liberty is most relevant to this particular issue?—rather than applied scientific investigation. It would be easy to dodge Dolan’s challenge, appeal to Hayek’s claim that one of our jobs as economists is to make the politically impossible possible, and go on asking about how a perfect Austrian/Libertarian Utopia would actually work. This takes up the scientific challenge Karl Marx and the socialists ignored, but Dolan is correct in noting that there are still serious institutional difficulties that make the real world a much more complicated place than our models (mainstream or Austrian) suggest.
As matters of abstract theory, exercises that assume perfect (or nearly-perfect) institutional environments can help us identify the relevant moving parts. Consider the powerful insight we get from a version of the Coase Theorem: if property rights are clearly-defined and well-enforced, and if transaction costs are low, then people will bargain to efficient outcomes. What Dolan suggests is not a substitute for abstract theorizing but a complement to and application of such work. Dolan is right that Austrians and libertarians commit their own version of the Nirvana Fallacy by assuming that the courts work. “Why would we expect them to,” “why don’t they,” and “what are the sources of transaction costs that prevent coordination” are powerful and important research questions. Adding a richer institutional environment to the analysis is a next step now that the theoretical groundwork is in place.
Dolan valuably exhorts people to adopt a comparative institutional perspective on how property rights emerge and how societies develop ways to cope with collective action problems and manage common pool resources. Here I want to be clear: I am referring to “property rights” in a positive sense rather than a normative sense. Positive political economy—or wertfrei praxeology—is in the business of explaining the implications of different arrangements of institutions, not of determining whether a particular institution is just or not.
There are obvious examples in which a crime has clearly been committed: a neighbor who dumps garbage on my yard has clearly violated my property rights and should be made liable for any damage. Things are not so clear when my neighbor burns garbage. This is an example from Martin Anderson (1989) as quoted by Block (1990) and discussed by Dolan.Identifying and enforcing property rights is costly, and there remains a lot of valuable empirical work to be done on the cases in which invasions become so onerous that people start to take legal action. Empirically, does the pleasant smell of burning leaves or burning garbage tend to offset the pollution damage? Do the external costs and benefits matter at the margin?
This is an empirical question, but I would suspect that any private court willing to jail people for minor trespasses (like trace amounts of smoke from my neighbor’s grill invading my lungs) will not stay in business for very long. Custom and the institutions of civil society are also extremely important, as Block (2008) acknowledges, and this is where the legal gray areas emerge. We take for granted in our neighborhood that it is OK for people to grill out or burn yard waste in a fire pit occasionally, and informal social approbation or sanction will often be sufficient to make sure that legal intervention is not necessary.
Austrian and libertarian analyses of environmental problems—or of all problems—would benefit from deeper engagement with the history of property rights as they have actually evolved. Hasnas (1996, 2009) has explored the history of property rights and has noticed that the evolution of law has little to do with abstract justice and a lot to do with facilitating coordination and cooperation. Todd (2009) offers a brief and accessible treatment of the history of property rights that would help scholars working in the Austrian tradition to offer the richer institutional and historical context Dolan wants. The growing field of environmental history would benefit from engagement with economics, and in turn economists interested in environmental issues can likely find the detailed historical case studies that provide the analytical stuff of robust, unique, and policy-relevant contributions.
Pigovian taxes and emissions trading are clear improvements over command-and-control, but they come with their own institutional baggage. The knowledge-and-calculation problems Cordato (2004) and Carden (2013) explore are clear, but there are other germane questions in political economy that are relevant to taxes and emissions trading. In addition to the problems highlighted by Cordato (2004) and Carden (2013), Pigovian taxes and emissions trading schemes will likely create unintended (and negative) consequences when markets are incomplete. Taxing carbon emissions, for example, will move production and consumption decisions from the taxed margin to untaxed margins. While this might lead to environmental improvements, it also might lead to greater emissions of even more dangerous greenhouse gases like methane.
Second, the calculation objection to emissions trading schemes is more than a simple “how do you know?” conversation stopper. Finding the “right” amount of emissions to allow might require some trial and error, but credible commitment remains an important potential obstacle. What incentive is there for a state to specify a particular level of carbon emissions that will be allowed each year and then not change this in response to political pressure? The information needed to know whether a particular regulation “works” quite literally does not exist, and the key difference between firms and governments is that firms trying to decide how much to advertise have market tests for their decisions. Governments do not.
We need to do a better job separating Austrian economics from libertarian political philosophy. I worry that Dolan has conflated the two as he uses “Austrian” and “libertarian” interchangeably throughout his article. While it is easy to switch between one and the other in analyzing environmental problems or law, they have to be kept separate for analytical purposes. Positive questions like “What happens given secure private property rights?” “What kinds of property rights do we observe in practice?” and “How do those property rights emerge?” are different questions from the normative question about which property rights are actually property rights.
Fortunately, scholars are already doing what Dolan suggests. There are a lot of people who publish in Austrian journals and who attend scholarly meetings like the Austrian Economics Research Conference and the Society for the Development of Austrian Economics who are doing work exploring how people manage common pool resources or address collective action problems. I do not need to rehearse an exhaustive list here, but Peter Leeson’s work on anarchy and piratical communities and Christopher Coyne’s work on institution-building should be required reading for anyone in the social sciences. My former undergraduate student Trey Carson is, as of this writing, working on a project at George Mason University discussing how private and government actors reacted to the Memphis Yellow Fever Epidemic of 1878.
One obviously does not need to publish in Austrian journals or attend Austrian meetings to make contributions that are either a part or a complement to the Austrian tradition. Elinor Ostrom is a perfect example; her work on polycentric order, institutions, and emergent governance was influenced by Hayek and won her a well-deserved Nobel Prize in 2009. Anthropologist Jean Ensminger’s work on land titling in Africa shows how developing property titles at odds with underlying cultural rules and norms can be destined to fail (Ensminger, 1992). William Easterly, another Hayek devotee, has written three books about our failure to create economic development from the top down, and in his most recent book (Easterly, 2014) he explores the development debate that never happened between F.A. Hayek and Gunnar Myrdal and goes on to explain development experts’ enthusiasm for top-down as opposed to bottom-up approaches to poverty.
Dolan offers a powerful exhortation toward better, more applied research that answers important empirical questions. Austrian economists have a unique set of tools, and the abundance of raw material emanating from law, history, and other fields means that we have an almost unlimited number of ways to use those unique tools to improve our understanding of a complex world and how it works. We should follow Ronald Coase’s advice and “look out the window” to see how it actually works. Ostrom did, and she changed the world of scholarship on these issues.
So let us get to work. As Dolan points out, we have an entire world to understand and a unique set of tools with which to understand it.
Volume 17, no. 2 (Summer 2014)ABSTRACT: We welcome Professor Dolan’s (2014) contribution to Austrian economics, and the contributions of all economists associated with the Austrian school of thought to environmental issues. Although not an Austrian economist himself, Dolan has made more of a contribution to the praxeological school than perhaps any other non-Austrian economist. An expert in environmental economics, Dolan (2014) is an attempt to assess the Austrian contribution to this field. He finds it wanting. Sad to say, I must make the same assessment of Dolan (2014). My (Walter BlockWalter Block, Ph.D. (wblock@loyno.edu), holds the Harold E. Wirth Eminent Scholar Endowed Chair and is Professor of Economics at the Joseph A. Butt, S.J. College of Business, Loyola University New Orleans.) claim is that his misunderstanding of Austrian economics is only matched by his mischaracterization of free market environmentalism.KEYWORDS: Austrian school, economics, environmentalismJEL CLASSIFICATION: Q0, A11, A12, B25Professor Edward Dolan, a mainstream not an Austrian economist, is nevertheless a good candidate for the prize to be awarded to an outsider for the greatest contribution to the praxeological school. He did this by editing Dolan (1976), a very important bulwark of Austrian economics.Enquiring minds must be excused for wondering why a non-Austrian economist was chosen to edit this very important Austrian book, and who was responsible for this decision. In Dolan (2014) our author once again enters into the deep and treacherousIt is deep and treacherous because it appears that Austrian economics is so easily misunderstood by non-Austrians such as Dolan. waters of Austrian economics. This time he attempts to assess the contributions, if any, of praxeology to environmental issues. He does not find much with which to agree, and is quite forthright in rejecting this literature. The present paper is an attempt to defend Austrian economics against his many critiques of it.
Dolan (2014) starts off on the wrong foot, by announcing he will judge Austrian economics on the basis of three criteria:
• “Have Austrian economists addressed problems that people think are important?
• Have they been able to offer proposals of practical value to economic policy, or is their work limited to pure theory?
• Do they offer unique solutions to economic problems, or just different ways of reaching the same results as the dominant paradigm?”
The first one is problematic. The answer is unclear. Praxeologists are well-known for studying issues such as banking, unemployment, inflation, socialism, etc. Surely, there are at least some people who think these are important. However, there are very few people who do. Most are concerned more with football, or boxing, or gardening, or poker or bowling or clothing or music.
So, do “people” think what Austrians do is important? It is difficult to know how to answer this. Suppose we were to ask this question of physicists, or botanists, or chemists or mathematicians, or other physical or social scientists. Such disciplines would also fail this criterion, if we take a head count. Would not a better criterion along these lines be: “have Austrian economists arrived at truth?” This, surely, is the question we should ask of other intellectual schools of thought, from whatever discipline. It is almost but not quite irrelevant what the masses of people think of our analyses.
The second one also presents difficulties. Economists, at least qua economists, do not “offer proposals.” They are limited to studying cause and effect. They pose and answer questions such as the following: If A occurs, will it lead to B? C is already in existence. What caused it? Economists may properly offer “if-then” statements: If you want to reduce unemployment for low-skilled workers, lower the level of or entirely eliminate the minimum wage law. If you want to increase unemployment for low-skilled workers, then introduce the minimum wage law and/or increase its level. But, to “offer a proposal” such as “introduce the minimum wage law and/or increase its level” or “lower the level of or entirely eliminate the minimum wage law” is surely beyond the scope of the economist, qua economist.Dolan (2014) accuses mainstream economists of “trying to maximize efficiency or social welfare.” Surely, some of them do, nay, most of them do, but when they engage in such activity they are no longer doing so as positive economists. They are entering the area of normative economics. Dolan unfairly condemns the entire “neoclassical approach” for this error. But, surely, there is at least one neoclassical economist who refrains from such confusion. Do not ask me to mention one, since this is indeed a common error on their part. Even if we cannot point to a single extant example, as a theoretical matter it is unfair to condemn all those who espouse the dominant paradigm because its basic principles do not necessarily lead in this direction. It takes him out of the realm of the value-free positive economics, and places him in the arena of normativity. Surely, we must distinguish between the normative and the positive.Dolan (2014) himself distinguishes between normative and positive law, but, unhappily, fails to apply this insight to economics. For example, he writes: “we will pay particular attention to the distinction between normative legal principles—the way the law should look if it is to serve the purposes of economic coordination and libertarian justice—and principles of positive law as actually practiced today.” See on this distinction between normative and ositive economics: Barnett (1995), Block and Cappelli (2013), Rothbard (1960, 1997).
As to the third criteria, an objection can be made to the word “just.” Even were it true that Austrians reached identical conclusions about how the economy works as members of the mainstream paradigm, this would still be an important contribution. After all, it would serve as a check on our neoclassical colleagues in the dismal science, and one day we might diverge. But, in the event, we already have. Austrians dissent from the dominant paradigm in terms of their analysisNote, I do not say “public policy recommendations.” of socialism, central planning, anti-trust, welfare economics, the business cycle and a whole host of other issues.
Dolan (2014) would have been greatly improved had he distinguished between Austrian economics and libertarianism. He thinks that “the third component of the (Austrian) paradigm is that property rights are the (key) to resolving environmental problems.”Material in parentheses supplied by present author. Nothing could be further from the truth. First of all, no economic school of thought, Austrianism certainly included, “resolves” anything. The dismal science qua dismal science is limited to exploring and explaining economic reality. Economists, but not in their official capacity, along with everyone else, may then use these findings to “resolve” things. But as value free social scientists, they are precluded from making public policy recommendations.
Secondly, while property rights are indeed the key to resolving environmental problems, this is a basic element of libertarianism, a normative pursuit, not economics, a positive one. Dolan (2014) favorably quotes Dawson (2011, 19) who says “The Austrian or libertarian policy must therefore be to privatise ‘climate change policy,’ repealing all existing climate change legislation….” In other words, Austrian economics and the libertarian political philosophy are synonyms. Anyone who says this or anything like this, whether it be Dolan or Dawson, is committing one of the most basic errors in all of social science. Yes, there are libertarian “policies”: those compatible with the non-aggression principle (NAP) and private property rights. But there are no, there can be no, Austrian “policies.”Nor is this any slip of the tongue or the finger on the part of Dolan. He commits this error elsewhere. For example, he writes “Many Austrian writers have strong ideas about how property rights should be defined.” No, no Austrian writers, qua Austrian economists, have any ideas about this, strong or weak. Dolan (2014) cites Rothbard (1982) in this regard, but the latter, while certainly an Austrian economist, wrote that essay not as a value-free economist, but as a value-oriented libertarian.
Our author now launches into his formal critique of libertarianism, not Austrianism, his views on this to the contrary notwithstanding, under the heading of three different challenges. We shall respond to them in the order mentioned by Dolan.
CHALLENGE NO. 1: THE INSTITUTION GAPDolan’s first critique focuses on the libertarian theoryNot the Austrian economic theory; I shall not again mention this point. of justice in property titles. It is of course based on the Lockean-Rothbardian-Hoppean theory of homesteading.To mention the three authors who have made very significant contributions to this theory. For other explications and defenses of homesteading, see Block (1990, 2002a, 2002b), Block and Edelstein (2012), Block and Yeatts (1999–2000), Block vs. Epstein (2005), Bylund (2005, 2012), Grotius (1625), Hoppe (1993, 2011), Kinsella (2003, 2006), Locke (1690), Paul (1987), Pufendorf (1673), Rothbard (1973, p. 32), Rozeff (2005), Watner (1982). In order to achieve just title to property, one must “mix his labor” with the virgin territory to be owned. Dolan objects to this crucially important element of libertarianismNot Austrianism; I know, I know, I promised, but I just can’t resist. on the grounds that it “would frustrate the efforts of conservationists like Ted Turner or environmental organizations like Ducks Unlimited who buy up millions of acres of critical habitat for the specific purpose of leaving it unused.” My first reaction to this objection is: we need not be unduly concerned with Ted Turner and Ducks Unlimited. If they do not like this libertarian notion of awarding property rights to the first user of unowned areas, let them lump it. What possible criterion should be employed to determine who owns what other than this method? Should it be command? Here, the sovereign determines who shall own what property. But what right does the sovereign have to distribute property? Should it be claim? Then, whoever claims anything gets to own it. I hereby claim ownership of the sun, the moon, and the other planets in the solar system. Note how moderate I am: I do not lay claim to all heavenly bodies. An economist was asked: “How is your wife?” Came the answer: “Compared to what?” Even if the homesteading theory were imperfect in that it did not satisfy the crucially important desires of worthies such as Ted Turner and Ducks Unlimited, it is far and away the best possible method of dividing up land not yet used. Fortunately, however, we need not rely, solely, on these defenses of homesteading. Block and Edelstein (2012) show how we can have our cake and eat it too: how homesteading can be upheld, and also satisfy the fervent not-to-be-denied desires of the likes of Ted Turner and Ducks Unlimited to own totally virgin territory.
Our author instructs libertarians that the Fifth Amendment requires compensation for government takings, and yet U.S. courts have not upheld this requirement.Epstein (1985) will be glad to learn of this from Dolan (2014). See also Whitehead and Block (2002). Dolan (2014) also waxes eloquent in criticism of libertarianism that “today’s courts are… (not) willing to stand up against the NSA.” He also upbraids libertarians for somehow not realizing that the bench does not support the NAP on “preponderance of evidence” versus “beyond a reasonable doubt” and on “negligence” versus “strict liability.”Parenthetically, I must also object to Dolan’s (2014) use of the phrase “rent seekers” to depict corporate capitalists. For reasons in favor of rejecting this terminology, see Block (2000, 2002c).
On the basis of all of this, Dolan presses his criticism; he accuses libertarians of being guilty of what Demsetz (1969) has called the “nirvana fallacy.” States the latter: “those who adopt the nirvana viewpoint seek to discover discrepancies between the ideal and the real and if discrepancies are found, they deduce that the real is inefficient.”
How can libertarianism be defended against these not very powerful denigrations? In several ways. First, it is just plain silly to think that libertarians fail to realize that actual courts do not uphold private property rights and the NAP. Unfortunately, Dolan (2014) does not offer any cites to the literature where libertarians claim we are now living in the fully free society. This criticism thus fails. With as much reason, Dolan might just as well have accused libertarians of thinking that modern courts have legalized all victimless crimes.
Secondly, Dolan (2014) completely misconstrues Demsetz’s (1969) very valuable nirvana fallacy. Let us first apply this to equilibrium. There are certain economic welfare benefits that pertain to equilibrium states, but not to the real world of disequilibrium. We of course never reach the evenly rotating economy, but we are always heading in that direction. That is, plan coordination is only fully realized in the imaginary construction of the evenly rotating economy. The mainstream economists seize upon this, and claim free enterprise to be a “market failure” since the real world economy does not possess these characteristics. Demsetz’s (1969) nirvana fallacy can put paid to this criticism of the free enterprise system.
Here is what Dolan (2014) says about perfect competition:
Austrians are quick to condemn neoclassical economists when they slip into nirvana mode. Consider the economics of antitrust. The traditional neoclassical approach has been to compare existing market processes with the ideal construct of perfect competition. Finding that the messy realities of the former fall short of the perfect efficiency of the latter, they declare a “market failure” and recommend a set of remedial laws and regulations. The Austrian approach instead, is to compare the messy details of real-world markets with the even messier institutions of real-world antitrust law and policy. (p. 202)
The problem with this, the disanalogy, is that while equilibrium has several undoubted beneficial aspects, the same cannot be said for “perfect competition.” Indeed, a case can be made that this type of industrial organization would be a disaster (Barnett, Block and Saliba, 2005). But even if we posit (contrary to fact conditional coming up), that perfect competition is ideal, is an aspect of nirvana, Dolan’s (2014) attempt to equate this with the supposed failure of libertarians to realize they do not now live in a fully free society cannot be maintained. In other words, Dolan is making the following argument: LibertariansIt is of course Austrian economists who do this, not libertarians. attack mainstreamers for setting up an ideal system, perfect competition, and then complaining that the real world does not live up to this bit of nirvana. But libertarians are guilty of the same exact fallacy. They set up an ideal system, courts that uphold the NAP, and then complain that the real world does not live up to that ideal.
Why does this fail? It flops because there is a relevant difference between the two complaints. That is to say, yes, there are two ideals: free enterprise courts for libertarians, and perfect competition (or equilibrium) for neoclassical economists. But when perfect competition (or equilibrium) fails to occur in the real world, the mainstream paradigm scholars blame this on market imperfections. They call for (more) government intervention in order to address this problem. Whereas in sharp contrast, libertarians do not at all favor more statism in the face of judges who would not know a private property right if it bit them in the nose; rather, they advocate the exact opposite, e.g., economic freedom. Here is another disanalogy. Libertarians are fully aware that current courts do not support private property rights, despite Dolan’s (2014) claims to the contrary. There is no analogue in the other cases.
CHALLENGE NO. 2: THE PROBLEM OF ENVIRONMENTAL MASS TORTSHere is Dolan’s (2014) opening salvo:
The property rights approach works best when the number of parties involved in environmental dispute are few and proximate. When they are many and remote, neither face-to-face bargaining nor common law litigation works well. Many of the most important environmental issues of our times fit this pattern, including urban smog, acid rain, ozone depletion, ocean acidification, and anthropogenic climate change. I will refer to this class of problems as environmental mass torts. (p. 204)
Our author employs a “hypothetical Vermont farmer, call her Nancy Norman,” maintains that she would be unable to stop Midwestern power plants from harming her maple trees, and implies this would be unfair, uneconomic, problematic. Why? There are several reasons. Let us consider each in turn.
First, if the Midwestern power plants polluted first, our girl Nancy is “coming to the nuisance.” Thus, she should not win her case against them. But what is wrong with that? If Midwestern power plants indeed homesteaded the right to place pollutants into the air, homesteaded them in effect, then they would have the property right to continue to do so. If airports were there first, engaging in noise pollution, that is allowing airplanes to take off from and land on their property, then Dolan’s argument would presumably shut them all down, if some Johnny-come-lately to the neighborhood objected. That is, the newcomer would be “coming to the nuisance” and would have no proper choice other than to accept the extant level of pollution.
Second, “Norman would have to prove actual damage. In any legal action, she would have to bear the cost of expert testimony regarding the science of acid rain, and would have to rebut defendants’ testimony that some other agent, say a fungus, might be harming her maple trees. The testimony would have to establish her contentions beyond a reasonable doubt.” But what, pray tell, is wrong with that? If I accuse Dolan of stealing my car, I would have to prove this claim before any court, even an extant one, would award me damages. And proving this might be expensive to me. But surely Dolan would not want the court to compel him to pay me under any other circumstances. Why should Nancy not have to jump through the same type of hoop? The burden of proof properly rests with those who wish to overturn property titles, not the other way around.
Third,
Norman would have to sue each polluter individually, unless she could prove they acted in concert, which presumably they do not. She would have to prove strict causality, not just regarding the point that acid rain in general damaged her trees, but that each individual defendant contributed causally to the damage.” (p. 205)
Now this is a far more serious complaint than the other two. Here, at last, there is a real problem, an important challenge put forth by Dolan for us to consider.
There are two responses that can be made by the libertarian who favors private property rights as a solution to this difficulty. On the one hand, consider a different kind of pollution, one emanating from automobiles. Each car, even with a catalytic converter, lets off an insignificantly small amount of toxin. It would be cumbersome in the extreme for Nancy or anyone else to sue them all. Each one could hide behind a de minimus defense. Rothbard (1982) offers the following solution:
While the situation for plaintiffs against auto emissions might seem hopeless under libertarian law, there is a partial way out. In a libertarian society, the roads would be privately owned. This means that the auto emissions would be emanating from the road of the road owner into the lungs or airspace of other citizens, so that the road owner would be liable for pollution damage to the surrounding inhabitants. Suing the road owner is much more feasible than suing each individual car owner for the minute amount of pollutants he might be responsible for. In order to protect himself from these suits, or even from possible injunctions, the road owner would then have the economic incentive to issue anti-pollution regulations for all cars that wish to ride on his road. Once again, as in other cases of the “tragedy of the commons,” private ownership of the resource can solve many “externality” problems.
This nails it.For the case on behalf of road privatization, see Block, 2009b. To be sure, not every case of what Dolan calls environmental mass torts can be handled in this manner. But, surely some of them can, preeminent amongst them roads and highways.
On the other hand, consider just how far extant law has deviated from what libertarian jurisprudence would be, based on private property rights and the NAP. Another quotation from Rothbard (1982) will make this clear:
In the classic case of Holman v. Athens Empire Laundry Co. (1919), the Supreme Court of Georgia declared: “The pollution of the air, so far as reasonably necessary to the enjoyment of life and indispensable to the progress of society, is not actionable.”
But this sort of thing has been going on since at least as early as the 1870s (Horwitz, 1977). Polluters have been given a legal carte blanche since that time. Is it any wonder that firms have taken advantage of this lacuna in the law? Any company that kept its airborne garbage to itself when not required by law to do so would put itself at a disadvantage via its competitors.
Under proper libertarian law pollution would indeed be “actionable” as a trespass of soot particles. If so, then several effects helping out “Nancy” would come to fruition. Whenever the Nancy of the day was beset by dirt emanating from the local factory, she could have availed herself of a lawsuit. There, if she offered evidence buttressing her complaint, she would be granted damages and an injunction against such further incursions. Since she would have had to prove her case, there would have been an incentive for the market to promote environmental forensics. This would have led, via the “invisible hand,” plants to use cleaner burning, albeit more expensive anthracite coal, rather than the cheaper but dirtier sulfur variety. Firms would have had more of an incentive to install smoke capturing or prevention devices in their chimneys, thus keeping more of this effluent to themselves, and allowing less to seep out to the Nancys of the world.
From early days of the U.S. until about 1870, these phenomena were actually taking place (Horwitz, 1977). But then, at the outset of the progressive period, the legal philosophy of Holman started to take root. If pollution was no longer actionable, this called a halt to environmental forensics, to meshes in chimneys, to cleaner burning fuels, etc. So, of course Nancy is in trouble nowadays. She can no longer sue those who trespass on her property. But posit that the earlier quasi-libertarian legal philosophy had prevailed uninterrupted until the present day. Suppose that modern technology were harnessed in the direction of enhanced and sophisticated environmental forensics, meshes in chimneys, cleaner burning fuels, etc. Then, Nancy’s predicament would all but disappear.
The trouble with Dolan’s analysis is that he looks at the modern world and finds it wanting. He blames this on free enterprise and private property rights. He does not seem to realize that present conditions are a function of the law, and legislation and court findings were not, to put it mildly, in favor of protecting property rights in pollution since at least the late 19th century. It is as if Dolan were to blame unemployment, inflation, the business cycle, poor housing conditions, etc., on the free enterprise system, when these difficulties actually emanate from phenomena such as minimum wages, unions, the federal reserve system, rent controls, etc.
Let us take another hack at this. Contrary to Dolan, there is no problem, no problem whatsoever, with specifying an ideal system, criticizing present reality on the ground that it does not measure up and working to rectify matters so that we make improvements toward the goal. In my own view, this all depends upon the case in point. That is, the “devil is in the details.” It is the specifics that can be problematic. For example, the medical researcher posits a world in which there is no cancer. He notes that at present this dread disease afflicts people. He attempts to improve the situation through medical research. If anyone thinks this presents a difficulty, he should have his head examined. On the other hand, if this medical researcher is so filled with venom for cancer, so determined that no one shall die of this affliction, that he shoots all cancer patients in order that they not die from that malady, then there is indeed something rotten in Denmark. Or, consider a criminologist who wants to reduce crime, and notices that at present, this ideal situation has not yet been reached: there are still rights violations. If the means through which he wants to decrease criminal behavior is to legalize all drugs, then bless him. On the other hand, if he intends to achieve this goal by making legal crimes such as murder, rape and kidnapping, then we are in great difficulties.
The problems with neoclassical economists regarding perfect competition are two-fold. First of all, it is by no means an ideal situation to have an indefinitely large number of firms in every industry, limited to selling homogeneous products. Worse, if anything, is their fetish to break up large corporations, simply because they are big, into teeny, tiny mom-and-pop firms.
A similar difficulty arises regarding equilibrium. This, too, is not an ideal situation, one toward which we should strive in the real world. Mises (1922) says the following about this concept:
To assume stationary economic conditions is a theoretical expedient and not an attempt to describe reality. We cannot dispense with this line of thought if we wish to understand the laws of economic change. In order to study movement we must first imagine a condition where it does not exist. The stationary condition is that point of equilibrium to which we conceive all forms of economic activity to be tending and which would actually be attained if new factors did not, in the meantime, create a new point of equilibrium. In the imaginary state of equilibrium all the units of the factors of production are employed in the most economic way, and there is no reason to contemplate any changes in their number or their disposition.
Posit, however, arguendo, that despite Mises’s clear, concise and correct analysis, that for some reason it is “good” to move our present economic situation toward, or even to attain, equilibrium. Again, the means toward this end are crucial. One of the aspects of the evenly rotating economy is that there will be no profits earned. So, one way to make our economy congruent with equilibrium would be to ban profits at present. Needless to say, that would be highly problematic. But another way to achieve this end would be to ban all government laws such as rent control, tariffs, minimum wages, that retard our ability to act in a coordinated way with each other. That, of course, would be highly desirable.
Let us now return, finally, to the libertarian desire to see heaven on earth: a situation in this vale of tears where the NAP is no longer broken. To this end, the libertarian works to end all cases of murder, theft, rape, arson, kidnapping, etc. Why is this a problem, if all the means used, too, are also compatible with the NAP? It is clearly not. Thus we can see Dolan’s error. He falsely analogizes between the libertarian desire to promote peace and justice, and the goal of mainstream economists to impose perfect competition. Yes, in both cases an ideal situation is compared to an actual one, and the goal is to transform the latter into the former. But of this a valid analogy cannot be made. Just because it is unjust and improper to make the world safe for perfect competition via anti-trust legislation does not at all imply it is illicit for libertarians to try to shape the world in the direction of the NAP.
The problem rests not with trying to change reality so that it matches some ideal. It all depends upon how this is done, and which ideal we are talking about. In the libertarian view, imposing perfect competition violates the NAP. However, introducing the libertarian legal code is an unmitigated good. Dolan argues that because the imposition of perfect competition has all sorts of drawbacks, this must also pertain to installing the NAP as the law of the land. Nothing could be further from the truth.
A last minor point in this section: I cannot see my way clear to agreeing with Dolan (2014) that there is any disagreement between Rothbard (1982) and Anderson (1989). The latter urges jail sentences for incessant polluters who drop garbage on other people’s property whether in the macro sense (orange peels, egg shells, coffee grinds) or the micro (these types of things, but all ground up into dust). The former would agree, given that this was proven beyond a reasonable doubt. Does Dolan think Anderson would acquiesce to prison terms for the accused in the absence of any proof? Nothing I read in Anderson leads me to that conclusion. Anderson is no wild man watermelon, calling for jail sentences for those who exhale.
CHALLENGE NO. 3: BRINGING THE PRICE SYSTEM TO BEARThere is a difficulty in this section right at the outset: it is mislabeled. Dolan characterizes this as bringing the price system to bear; but what he really has in mind are not at all market prices. Instead, he is defending something very different: tradable emissions rights, emissions trading, pollution fees, taxes, etc.
If someone fails to distinguish between a market price on the one hand and tradable emissions rights, emissions trading, pollution fees, taxes on the other, it is highly problematic. For this is a most basic distinction. A price is an amount of money someone voluntarily gives up in order to attain a good or service. A commercial interaction where prices play a role is necessarily a non-coercive one. These other entities are at best semi- or demi- or quasi-prices. They do not occur in free markets, but rather under market-like circumstances. It cannot be denied that there are certain similarities between the two. Perhaps that is what has confused Dolan. But if we are to make sense of these phenomena, we must peer beneath the surface to the underlying reality, something not undertaken by this author.For a critique of these socialist schemes, see McGee and Block, 1994. We must sharply, maniacally even, separate in our minds what is agreed upon by all parties (prices) from what is not (taxes, government fees, etc.).
Dolan (2014) attempts to hoist Rothbard (1982, p. 77) by the latter’s petard. He defines tradable emissions rights (TERs) markets as the purchase and sale of homesteaded,What happened to Dolan’s (2014) previous critiques of homesteading, pray tell. Here, he relies on them fully. and therefore legitimately owned rights to pollute. In other words, for this author, what is traded in a TER is something owned by the seller, under libertarian law. Let us allow Dolan (2014) to speak for himself on this matter:
An Austrian case for emissions trading follows naturally from Rothbardian homesteading of pollution easements. Rothbard (1982, p. 77) uses the example of noise pollution from an airport. At time T, he imagines, an entrepreneur sets up an airport in an open area with no one nearby to be bothered by the noise. The facility emits X decibels of noise into the surrounding unused airspace, thereby homesteading the right to X decibels. If someone builds a house nearby at time T+1, says Rothbard, they have no cause for action against airport, since they have “come to the nuisance.” However, if the homeowner bought the property for a price that reflected ambient noise of X decibels, and at time T+2 the airport increases its noise emissions to 2X decibels, the homeowner would have a cause of action for 1 decibel of excess noise.
Rothbard specifies that the titles to pollution easements created by homesteading are transferable by sale, gift, or bequest. Furthermore, they are separable, in the sense that it is permissible to sell them without selling the airport itself.
If purchases and sales of noise easements became frequent, some entrepreneur would no doubt set up an exchange to trade them in standardized units. Soon a fully developed, fully private emissions trading scheme would spontaneously emerge, with the supply of easements for each type of pollution capped by the number that had been legitimately homesteaded. Once population density increased to the point that no part of the relevant airspace or watershed remained unused, there could be no further homesteading and the caps would become permanent. (p. 209)
There are problems with this. First a minor one. I think there is a typo here. Dolan (2014) should have said “the homeowner would have a cause of action for 1X decibels of excess noise.” That is, “1X decibels,” not “1 decibel.” The major difficulty is that Rothbard is talking about emissions, noise in this case but it could have been soot, or smells, or anything else, that was homesteaded. That is, these rights were legitimately owned by the seller. But this is not at all what tradable emissions is all about. Rather there is no recognition in mainstream depictions of this phenomenon.
The typical case is as follows. There are three firms, call them A, B and C, that together emit into the air and/or water 50 tons each of pollution, or 150 tons total. These emanations are trespasses onto the physical property and bodies (lungs) of innocent victims. Due to hockey stick considerations, the authorities have decided that 100 tons of such lawlessness is optimal. How to achieve this goal? In the bad old not TER method, called “command and control,” each firm would be legally required to cut back from 50 to 33.3 tons, and that would be the end of it. This order could be mandated in the form of a regulatory requirement or a very high tax on any emissions in excess of the 33.3 tons, it matters not which for our purposes. There is not even a hint that these 150 or 100 tons emissions are justified on the basis of libertarian homesteading. The new presumably good method, the one based on quasi-market principles (TERs), is to allow each of these three companies to purchase and/or sell rights to engage in pollution to their heart’s content. Possibly, there will be no purchases or sales, and each company will cut down its rate of emissions by one third. Or, one of them, A, perhaps with newer plant and equipment will decrease by 50 percent or more because it can do so relatively cheaply, and B may stand pat, while C may even increase its tonnage, and pay A for this privilege of not only not having to cut but to actually increase its level of emissions.
The point is, Dolan (2014) is extrapolating from a case where the rights to emit noise, or whatever, was licitly owned, to one where it most certainly is not. Thus, his failure is to distinguish NAP violations from non-NAP violations. It cannot possibly be underestimated how important this distinction is. Without it, we might as well have markets in rape rights, or murder rights, or kidnapping rights, or theft rights. What we are talking about here is nothing less than a contradiction in terms on Dolan’s part.
Next, Dolan (2014) considers pollution fees. States he on this matter:
Pollution fees are another way to inject prices artificially into a world where muddled property rights and imperfect courts prevent them from emerging spontaneously. I find that neoclassical economists tend to like pollution fees better than emissions trading, but for Austrians, they are probably an even harder sell. They object that pollution fees are a form of tax, and that all taxes are bad. Even so, that does not mean they are equally bad. (p. 210)
Obviously, this author should have mentioned libertarians, not Austrians, since only the latter, not the former, can say anything even remotely resembling the claim that “all taxes are bad.” Libertarians, of course, must agree with Dolan (2014) that some taxes are worse than others. For example, an income tax of 5 percent is worse than one of 4 percent. But our author is not content with this truism. He goes further:
…the effects of pollution fees must be compared not with the operation of a nonexistent tax-free market, but with a situation in which pollution goes altogether unpriced. Whatever one’s distaste for taxes, the latter situation is, arguably, even less congenial to economic coordination. (p. 210)
And here again we must agree with Dolan: it is difficult to say which is worse: a tax or allowing some to trespass pollutants onto other people’s property. It all depends upon the extent of each. However, there is no reason to believe that these are the only realistic options. As we have seen in our criticism of Dolan above, the market is indeed capable of not so much “pricing” of pollutants, but forbiddingSue the road owner not the individual motorist; improvements in forensics technology. them.Well, illegitimate ones that have not first been homesteaded.
Dolan (2014) now considers, and rejects, objections to TERs and pollution taxes. The first is the calculation objection: governments have no way of knowing the proper, efficient taxes, nor the optimal amount of pollution (150 tons in our example). He does so on the ground that libertarians “offer no institutionally practicable alternative” to the present system. Nonsense. Rothbard (1982) entirely fits this bill.Others who support Rothbard on this matter include: Block (1994, 1998, 2009a, 2011a, 2011b, 2012), DiLorenzo (1990), Horwitz (1977), Lewin (1982), McGee and Block (1994). Second, he maintains that the proper comparison is between TERs and pollution taxes on the one hand, and “the current mish-mash of command-and-control policy, CAFE standards, ethanol blend ratios and the rest (which) is a mess.” But what about full free enterprise? Not some “nonexistent ideal of perfect enforcement of property rights,” but rather an actual system based roughly on the property rights system stemming from homesteading that was working until about the 1870s, coupled with advances in modern forensic technology. Is this free market system to be swept down the memory hole, merely because during the progressive period (Horwitz, 1977) it was jettisoned? Here, Dolan (2014) is making the mistake that might well be characterized as misplaced concretes: the government does not allow free enterprise to work, therefore market cannot be efficacious. Contrary-to-fact conditionals would appear to be beyond his ken.
Dolan (2014) next errs when he conflates two very different things. First is the undoubted fact that it is difficult, well-nigh impossible, for a court, any court, to come to a precise estimate of damages for contaminants that cause cancer. Second are the very well-founded critiques of Cordato (2004) and Carden (2013) to the effect that TERs are subject to the Austrian critique of socialist central planning. Dolan argues in effect that since the first is factual, and it is, we may safely ignore the second. Not so, not so. Our author argues in this manner because he really cannot appreciate that libertarian law can deal with what he calls environmental mass torts. His arguments on that score have been found wanting. The present mistake is but an implication of that one. Try this as a mental experiment. Assume that U.S. law and court decisions pre-1870, coupled with modern progress in environmental forensics, really could function adequately, at least as well as it did before that turning point in our history. Then, would Dolan (2014) be in a position to reject the contributions of Cordato (2004) and Carden (2013)? I contend that Dolan would then not be able to take on this perspective. Dolan (2014) underestimates the power of the argument put forth by Cordato (2004) and Carden (2013). Yes, the judge has no objective way to award damages. But the market processDolan’s appreciation of the market process is not as robust as it could be. Perhaps he could benefit from reading some of the Austrian literature on this subject: Boettke and Prychitko (1998), Cowen and Parker (1997), Ebeling (1985, 1990), Ekelund and Sauman (1988), Fink (1982), Foss and Mahnke (2000), Foss and Christensen (2001), Gordon (1995), Kirzner (1982, 1992, 1997), Lachmann (1976, 1977), Langlois (2001), Robertson and Yu (2001), Thornton (1994), Wagner (1989), Yeager (1986). can achieve objective prices; if they are the wrong prices, someone will lose profits and go bankrupt. True, only in equilibrium will the prices generated by the market be the ones that maximize utility of all participants in commerce. But, we are always and forever tending in that direction. In sharp contrast, the judge has no such market process working in his favor, at least not the one employed by the state apparatus.
Dolan (2014) makes a good point in his defense of TERs on the grounds that they do not compensate this victim of pollution. He offers a second-best argument: they are better for coordination purposes when the prices of emissions are raised without making the victim whole than when they are not raised and the victim is still not compensated. True enough. But, we must insist, libertarian law in a realistic setting is still preferable to the TER system in that it does both.
The last objection to TERs dealt with by Dolan (2014) is that they in effect support stolen property. Who is the theft from? Why, from the victims of pollution. They have had their property and their lungs inundated with trespassing dust particles. Who are the thieves? This is as readily answered: the trespassers. Why does our author reject this criticism? He sees this as a “legitimate objection” but still defends TERs on the ground that “proper design of the trading scheme could overcome it, at least in part.” But if this is a “legitimate objection” which can only be overcome in part by proper design,“Proper design” would appear to be part of the Nirvana fallacy against which Dolan (2014) constantly inveighs. why not reject TERs as socialistic (McGee and Block, 1994)?
CONCLUSIONA fair summary of what appears above is that Dolan (2014) consists of a tissue of errors. Nonetheless, the Austro-libertarian community, I think, must be grateful to this author for his efforts to undermine the veracity of this school of thought. Why? Because these are important challenges. If we cannot answer them, we might as well pack up shop. Hopefully, Dolan (2014), plus the present response, will convince others who might be on the fence on these matters that the Austrian school of economics, and the libertarian political philosophy, are still going concerns. Who knows? Possibly Dolan himself might come to that precise conclusion.
Let me close with one substantive point, where Dolan (2014) does not appear to have done his homework. He says: “In my view, Austrian economists qua economists have to deal with climate change and the link in the spirit of ‘What if Chicken Little is right this time?’ That is, they need to propose solutions that would work if at some point real scientists persuade them that climate change is a real threat.” Obviously, the absolute last time this will be mentioned, Dolan confuses Austrianism and libertarianism; he should have posed this challenge to the latter, not the former.
In the event, he has been anticipated on this very point. This appears in Block (2012): Question: “…how can we solve the problem of global warming without infringing the property rights of the emitter?” Response (Block, 2012):
If we are still in arguendo mode, positing a vast polluter, then we are not at all violating his rights when we compel him to cease and desist. Hey, he is in effect a murderer. We stop him in self-defense, just as we would a guy running at us, screaming and brandishing a knife or gun.
In other words, if Chicken Little is right, and underarm deodorants,See The Dangers of Deodorants: How You Can Be Eco-Friendly and Still Smell Good. aerosols,See Scholarly articles for aerosols effects on global warming. refrigerants,See Natural Refrigerants. etc. really cause global warming, which in turn leads to cancer and other dread diseases,We are now deeply into argumentum arguendo. then by gum and by golly, the libertarian would prohibit them at the point of a gun. Using these products would under these wild-eyed assumptions be akin to shooting howitzers up into the air, with no consideration of where they may land. But the point is, libertarians have already responded to this “spirit” called for by Dolan. And the answer is clear. Then, they would be NAP violations.
Volume 7, No. 4 (Winter 2004)Economic analysis can be applied to the phenomenon of crime. In the present paper, we will deal with an approach to the economics of crime that is built on the foundations of neoclassical welfare theory. We will call the school of thought that has developed this approach the “classical school of crime” (CSC). The contribution of the CSC model is to apply standard tools of economic analysis to a field that has been mostly reserved to psychologists and sociologists. The CSC model is based on the assumption that criminals are rational and act according to the costs and gains of their actions. Although the CSC model brought some improvements in how to analyze criminal behavior by using the tools of economic analysis, it was not accomplished with a satisfactory methodology. These errors constitute different pit-falls and point to the necessity of finding an alternative approach.
Volume 7, No. 4 (Winter 2004)In the context of legal analysis, one important praxeological doctrine is the distinction between action and mere behavior. The difference between action and behavior boils down to intent. Action is an individual’s intentional intervention in the physical world, via certain selected means , with the purpose of attaining a state of affairs that is preferable to the conditions that would prevail in the absence of the action. Mere behavior, by contrast, is a person’s physical movements that are not undertaken intentionally and that do not manifest any purpose, plan, or design. Mere behavior cannot be aggression; aggression must be deliberate, it must be an action. This result is compatible with the framework advocated herein. The subtle insights, analysis, and examples provided in Reinach’s century-old paper are clearly still useful in constructing a praxeologically sound theory of legal causation today.
Volume 7, No. 4 (Winter 2004)Both the establishment of property rights and their violation spring from actions: acts of appropriation and expropriation. However, in addition to a physical appearance, actions also have an internal, subjective aspect. This aspect cannot be observed by our sense organs. Instead, it must be ascertained by means of understanding (verstehen). The task of the judge cannot—by the nature of things—be reduced to a simple decision rule based on a quasi-mechanical model of causation. Judges must observe the facts and understand the actors and actions involved in order to determine fault and liability.
Volume 7, No. 4 (Winter 2004)The title of this symposium is Austrian Law and Economics: The Contributions of Adolf Reinach and Murray Rothbard. The second part of this title is not at all problematic; these two authors have made many and important contributions to both law and economics. It is therefore of great interest to compare and contrast their eerily similar—but far from identical—ways of proceeding.
Volume 7, No. 4 (Winter 2004)The praxeological method is an efficacious way to investigate the fundamental theoretical questions at the heart of any study of human endeavor. Unfortunately, however, Austrian economists have often erred in portraying the method as subjective and nonempirical. It is neither. It is rooted in empirical reality and concentrates on valuations that are relational and objective. For some Austrians those distinctions are, more than anything else, just semantic differences. For another branch of the Austrian School, they represent significant conceptual differences, and result in a departure from the foundational work of Carl Menger.
Volume 7, No. 4 (Winter 2004)The present number of the QJAE features the proceedings of a symposium held on March 29–30, 2001 at the Mises Institute. The theme “Austrian Law and Economics: The Contributions of Reinach and Rothbard” brought together economists, jurists, and philosophers. The purpose of the meeting was to explore the relationships between law and economics from an Austrian perspective.
Volume 13, No. 4 (Winter 2010)
In Who Owns the Sky? The Struggle to Control Airspace from the Wright Brothers On, UCLA law professor Stuart Banner examines how the United States moved from the ad coelom rule to the current regime, under which landowners have no right to the sky above them, anyone (with government permission) can fly most anywhere, and governments assume the right to limit access to the air however they see fit. One might reasonably expect such a book to entail a tedious slog through case law, and in some scholars’ hands it might. But the first and foremost thing to say about Who Owns the Sky? is that it is unusually dynamic, engaging, and accessible.
Volume 2, No. 4 (Winter 1999)To Serve and Protect is a breath of fresh air in the fog of mainstream recommendations concerning security, crime, and punishment. In the mainstream literature, liberals typically regard the offender as the victim of an egoistic society and conservatives typically say that the only way to reduce crime is to increase the severity of punishment. Benson brilliantly shows that the solution to the problem of criminal justice does not rest with increasing law-enforcement budgets or imposing harsher punishments, but with privatization.
Volume 2, No. 4 (Winter 1999)The Structure of Liberty is an important new work by one of libertarianism's most significant and thoughtful legal scholars. Its primary substantive deficiency is its over-reliance on the Hayekian knowledge paradigm, but the work nonetheless arrives at the private -property norms that address the more relevant issue of interpersonal conflict. The book is full of subtle insights regarding standards an burdens of proof, restitution, the workings of the common law, and the operation of anarcho-capitalism. It is a must-reading for all serious libertarian theorists, especially libertarian lawyers and legal theorists.
Volume 1, No. 4 (Winter 1998)Patents have a long history as a proxy for inventive activity. Although these data lost ground in the early 1960s to other measures of technical innovation, they have once again become fashionable in the last decade. There are many reasons to justify their use, ranging from their availability to the fact that they are by definition related to inventiveness and that they appear to be based on an objective and only slowly changing standard. There are, however, many empirical issues and problems in drawing inferences from these data, some well-known, others rarely mentioned. It is the purpose of this article to demonstrate that these drawbacks are major and that consequently patent data give, at best, a very partial and misleading picture of innovation and technical change.The use of patent data as a proxy for economic and inventive activity is not new. Such data have been used in numerous studies of the relationship between firm size on the one hand and the volume of investment or the rate and direction of innovative activities on the other. They have also been used as indicators in studies on a wide range of topics, e.g., long-run development, long wave theories, and the relationship between economic and technological change have been studied in this way. Comparative studies of industries and countries have also been undertaken using patent data as indicators (Basberg 1987; Cooper 1991b).Although they lost ground in the early 1960s to other measures of technical innovation such as product count, research and development (R&D) spending, number of skilled personnel and Standard Industrial Classification (SIC) information, patents have once again become fashionable among scientometrists (Callon et al. 1992), economic historians (MacLeod 1988; Sokoloff 1988), economists (Jaffe et al. 1992; Jaffe and Palmer 1996; Lanjouw et al. 1996; OCDE 1996) and economic geographers (Ceh 1997) in the last two decades. It is no wonder that the idea that something interesting might be learned from patent data tends to be rediscovered in each generation, for in the desert of good measures of technical progress, as one economist puts it, “patent statistics loom up as a mirage of wonderful plentitude and objectivity. . . [they] are available; they are by definition related to inventiveness, and they are based on what appears to be an objective and only slowly changing standard” (Griliches 1990, p. 1661).The use of patent statistics rests, of course, on the assumption that they reflect inventive activity and innovation.
After all, a patent does represent a minimal quantum of invention that has passed both the scrutiny of the patent office as to its novelty and the test of the investment of effort and resources by the inventor and his organization into the development of this product or idea, indicating thereby the presence of a non-negligible expectation as to its ultimate utility and marketability. (Griliches 1990, p. 1669)
Other economists have added:
Among measures of the extent of innovation patents are unique in both the richness of the information they contain and in the breadth of their coverage. Patent documents contain detail on the characteristics of individual innovations (e.g., its technological area, or its citation to related innovations) and their inventors (both the inventor per se and the owner or the assignee of the patent) not available elsewhere. Moreover, unlike R&D expenditure data, which is at best available for a subset of larger firms, patent data is available for all firms and individuals over a very long time period. . . . These features of patent data make it possible to use them to study the efficacy of policies tailored to particular technological areas or specific types of firms, the cross country flows of benefits from the patent system, externalities in the knowledge generation process, and many related phenomena. (Lanjouw et al. 1996, pp. 1–2)
There are, however, many problems, most of them well-known, in using these sorts of data, although they are rarely dealt with in a serious manner by those using them. For example, there are a number of methodological problems in the collection of patent statistics. Some people will claim patents for a variety of reasons that are not related to the practical use of a given innovation. Another major problem is that there are most certainly many more people who have not gone through the trouble of seeking patents for their innovations than there are recognized patent holders. All in all, it can probably be said that, taken as a whole, what comes out of a patent office is at best representative of the technological potential of a given number of innovations, but certainly not of their technological actuality.Although most researchers using patents—or for that matter most indicators of technological change—are quick to point out that these data are only indirect measures, “the data are used as if real reservations had not been made” (Basberg 1987, p. 138). In doing so, most researchers follow Schmookler’s famous dictum (1966, p. 56): “We have a choice of using patent data cautiously and learning what we can from them, or not using them and learning nothing about what they alone can teach us.”Austrian economists, on the other hand, have long been hostile to the use of economic statistics and to the patent system (Oakman 1986; Rothbard 1993). There is no need, however, to invoke Austrian theory to oppose the use of dubious economic indicators such as patent data because, even on strictly empirical grounds, the case against these statistics is nothing short of overwhelming. It will therefore be argued that, no matter what the corrective strategies adopted by the researcher, patent data do not provide a reliable measurement of economic and inventive activity and have nothing in particular to teach us.This article will first deal with the traditional rationales for and against the patent system, so as to put the data in perspective. It will then cover the main problems associated with patent data as a proxy for inventive activity by looking at a number of findings from older studies dealing directly or indirectly with the patent system. Even though the purpose of this article is not to deal with the functioning of the patent system or with its rationale, overlaps with these topics cannot be avoided.
The Patent System in Theory and PracticeThe Theoretical Nature of PatentsIn theory, a patent is an official document that confers proprietorship (i.e., the exclusive right to make, use, or sell) of an invention on the recipient. It is granted by an official of the State in accordance with patent law and is enforceable in the courts. Grant of a patent is preceded by examination of applications by the patenting authority, but the final responsibility for validating or invalidating a patent lies with the courts. If a patent is granted, a public document is created containing information about the inventor, his employer, and the technological antecedents of the invention. Among this information are claims that serve, along with “references” and “citations,” the legal function of delimiting the scope of the property right that the patent constitutes. The right embedded in the patent can be assigned by the inventor to somebody else, usually his employer, or it can also be sold to or licensed for use by somebody else. In order to be eligible for patent protection in America, an invention must be: (1) new and not obvious; (2) not previously achieved by someone else; (3) useful and important; and (4) not injurious to public morals and health. Patents may be obtained on machines, manufactures, compositions of matter and processes, as well as on combinations of these. In addition, patents can also be obtained on certain designs and on genetically engineered organisms.A patent grants its owner the right to exclude others from making, using, and selling the invention for a period of 20 years from the filing date. There are special circumstances where a patent owner cannot use his own invention because it would infringe on the patent rights of others.[1] In return for the right to exclude those who copy the invention and those who independently discover the same thing, the inventor must disclose the invention to the public at the time of the patent’s issue. This disclosure, contained in the patent itself, must be sufficiently detailed so that those “ordinarily skilled in the art” may copy and utilize the invention after the patent’s expiration or without undue experimentation (this is known as “enablement”). While the patent is in force, however, the inventor is given the right to control the use of his knowledge. It should be noted here that some American states allow a person who invented something patented independently and before the patentee, to continue applying the invention for which the patent was issued (this practice is usually known as “prior user right”).
The Case for the Patent SystemThe rationale for the patent system is completely utilitarian. Intellectual property is said to be property no less than a house or a car and, as most will acknowledge, property rights are a critical prerequisite for economic growth. Supporters of the patent system usually argue that it is an important incentive to entice the inventor to put in the work required to produce an invention. Without it, it is said, there would be no suitable way for the innovator to appropriate a decent part of the social benefits of his invention.To put it briefly, the social returns from innovative activities are held to be very high, but it does not necessarily follow from this that the private returns (i.e., the returns to the innovating firm or individual) are also high. Once new information is produced, it is deemed to have become what most economists call a free or a public good (i.e., its use does not diminish its stock and it cannot be appropriated by individuals). If information about inventions is made available as soon as it is discovered, there might then be no incentive for anyone to take the risks involved in spending money on necessary research and development. Inventors can not therefore reap the benefits of their work without special safeguards, because once their inventions have been implemented or otherwise disclosed, they can be freely copied by others in the absence of protection. Why then should an inventor devote time or money on developing a better mousetrap if a competitor who does not need to recoup the R&D costs can undercut him? The absence of a patent system, it is therefore argued, adversely affects the development of inventions.The stated purpose of patents is thus to encourage innovation and technical progress by providing a temporary monopoly for the inventor and by forcing the early disclosure of the information necessary for the production of an item or the operation of a new process. It is argued that any welfare losses due to the restrictions in disseminating an invention are outweighed by the incentive to invention they provide. It is therefore commonly said that patents promote technological ingenuity, enrich nation’s economies, offer a proper measure of the technological and economic state of a society, and compensate deserving individuals for their hard work (Silberston 1967; Taylor and Silberston 1973; Walker and Bloomfield 1988).Rosegger (1986, pp. 146–47) has summed up the main economic arguments usually put forward by proponents of the patent system: (1) well-defined and protected property rights are essential to a market economy in which rational self-interest guides the behavior of individuals; (2) although patents confer monopoly rights, the fact that the technological bases for these rights are made public contributes to the body of generally accessible information; (3) the patent system provides the necessary incentives for further investment in technological advancement; (4) even in the age of large-scale corporate inventing, patent protection is essential, because many modern technologies require large investments and long time periods for the development and commercialization of new ideas; (5) to the extent that patents cover successful process innovations, lower costs of production and lower market prices will result even if the patentee behaves like a rational monopolist (i.e., short-run profit is maximized); and (6) the patent laws encourage the development of improved products, because they allow firms to extend their monopoly positions through improvement patents.
The Case Against the Patent SystemThere has always been a set of thorny questions about the patent system. Historian of technology George Basalla (1990, p. 120) has stressed the most frequent ones: (1) Who is to judge if an invention is truly novel, useful, or important?; (2) On what grounds should these judgments be made?; (3) Should we accept the inventor’s word about originality in evaluating an invention?; (4) Are patents inherently elitist, monopolistic, and therefore antidemocratic?; and (5) Are some discoveries—scientific laws, mathematical theorems—truly unpatentable?Rosegger (1986, pp. 147–48) has also summed up the traditional economic arguments against the patent system: (1) patents create monopolies, and all monopolies involve a misallocation of society’s resources; (2) in a socially optimal system of knowledge production must reflect the fact that the marginal cost of using existing information is zero and therefore the creation of “artificial” property rights is wasteful; (3) patent holders may capitalize on inventions by suppressing their development, even though these inventions would benefit the public; (4) patents lead to waste by inducing others to invent around or “patent around”[2] protected monopoly positions; (5) because there is no legal presumption of the validity of a patent, the equal burden of proof falling upon patentee and alleged infringer is anything but equal in economic terms. It must be pointed out that there is in fact a legal presumption of validity of patents; and (6) patent protection is unnecessary as an incentive for technological effort, because inventors can rely on other technical and institutional factors to achieve quasi-rents.Analytical and historical examinations of patents and their meaning for technology and economic growth are generally deemed inconclusive. The general conclusion is that we must be cautious about accepting at face value the many flattering assessments of the modern patent system, because patents do not play anything like a dominant role among the various mechanisms by which returns from innovation are captured. A number of studies conducted by several authors over a span of more than 40 years (1957 to the present) have asked whether inventors find patents useful for excluding imitators and/or capturing royalty income. The answer uniformly found was that patent grants are not useful for either purpose in most industries (Svetos 1996; Hippel 1988).In general, while the results vary by industry, the imitation-cost increases caused by patents are quite modest, and the speed of imitation is fairly rapid even with patents. Also, most patented products and processes would have been introduced even without patent protection. The only industry that appears to be a real exception to the rule that patents are relatively unimportant is the pharmaceutical drug industry. The most frequently cited reasons for that state of affairs are that unusually strong patents are obtainable in the chemical field, of which pharmaceuticals is a part, and that it is often difficult to invent around a pharmaceutical patent. The fact that the pharmaceutical industry is by far the most heavily regulated of all makes the importance of patents in it understandable (Hippel 1988; Winter 1989; Svetos 1996). This issue will be explored further in the following section.Skeptics concerning the true effect of the patent system also point toward a number of factors, such as the inefficient allocation of resources due to the patent system, the prominent role of “patenting around,” changes in the allocation of research funds, increased secrecy, substantial legal and administrative costs, an arbitrary incentive to focus on the sorts of research which are patentable, and differential effects depending on the stage of industry development. Besides, as will be shown in more detail, all innovations are not patented and conversely not all patents are innovations.
Patents as Economic and Innovation IndicatorsThere is an impressive array of studies using patent statistics as a proxy to the process of innovation and technical change. The main advantages of patent data for quantitative analysis are fairly obvious: they are easily available and relatively cheap; they provide plenty of technical and geographical information about the invention, the inventor and his employer; and, they come in nice time-series that can go back to the middle of the nineteenth century (even further back for some countries). In fact, it is readily acknowledged by most practitioners that the current popularity of patent data probably owes much more to the growing availability of machine readable data files and on-line databases, and to the easy statistical treatments they allow, than to a newfound value in their validity as measures of innovative outputs (Statistique Canada 1985; Basberg 1987; Griliches 1990; OCDE 1994).[3] But there are still many problems with the use of patent statistics as economic and innovation indicators that were identified long ago. They are usually classified under two broad categories of problems: identification and intrinsic variability.Problems of identification are those that are related to the correct measurement of a phenomenon, in all places and at all times. In the particular case of patents, these problems are generally viewed as twofold: one, not all innovations are patentable; and not all patentable innovations are patented (Statistique Canada 1985). We will, however, add two other considerations under this umbrella: there are strong biases in the delivery of patents related to the type of innovation under consideration, the size of the firm that produced the innovation, and the industry of origin of the innovation; and second, there are important data gathering and classification problems that are not corrected within patent data.Problems of intrinsic variability refer to the fact that patents differ considerably in their technical and economic significance and can therefore not be “weighted” appropriately. There are a number of drawbacks here: (1) some patents prove to have some economic value, whereas others will not be worth anything; (2) the purpose of some patents is purely defensive; and (3) patent requirements have evolved drastically over time and geographical space. Most authors using patent statistics usually acknowledge some of these problems and have come up with a variety of answers, ranging from the classic response that “patents are the best indicator available” to postulating a statistical relationship between the numbers of patents emitted and the true number of innovations in a given economy (Statistique Canada 1985; OCDE 1996). We will now look more closely at these various problems.
Many Inventions are Not PatentableThe boundary between what is and what is not patentable is sometimes fairly arbitrary and in some cases seems to reflect what can be feasibly administered by a patent office. Criteria will vary between countries, but the principle generally holds good that an invention can be patented only to the extent that it has a particular application in what economists normally think of as production.[4] Thus there can not be a patent upon an abstract philosophical principle, a mathematical algorithm, or a computer program, though a chip with a particular program coded into it might be patented. In Canada, scientific principles, theorems, simple ideas, ways of doing business, computer programs as such and medical treatments cannot be patented (OPIC 1994). Some very innovative things that can turn out to be of great economic value are therefore not patentable. This is especially true with new technologies where there might be some uncertainty as to the patentability of new inventions or innovations (Basberg 1987).It has already been mentioned that a patent must theoretically be a description of an invention that is fully workable without further assistance from the patentee. This usually means that a patentable invention must be a physical result or a physical means of attaining some result, not a purely human means of attaining it. This brings in the question of local conditions and of tacit knowledge and technical know-how in innovative work. It is now well-known that the details of a process may vary greatly with the local conditions under which it operates or the purpose for which it is used, and that it is not always clear that an advance of knowledge can be put into words within the constraints of a patent application. Taylor and Silberston were thus told by many firms in the engineering fields that patent clearance on its own is seldom worth much compared with unpatented expertise:
In most specific cases of selectivity in these fields that we investigated from the licensor’s point of view, secret know-how or highly specific technical skills emerged as the effective barriers to imitation, and patents were rarely if ever a critical factor. (Taylor and Silberston 1973, p. 185)
As Winter also reminds us:
Improvements in this sort of knowledge can occur, at the individual level, without conscious awareness of how improvement has been achieved or perhaps even of the fact that improvement has occurred. Similarly, coordination improvements in organizations may occur for reasons that are imperfectly and diversely understood by the participants therein. Knowledge advances of these types fall outside the realm of statutory subject matter for patents. Furthermore, the requirement that a patent application contain “a written description of the invention . . . in such full, clear, and concise terms as to enable any person skilled in the art to which it pertains . . . to make and use the same” (35 U.S.C. sec. 112) is an extremely demanding requirement when even moderately severe difficulties in articulation are present. In effect, it demands that the application be a complete instruction book for a “person skilled in the art.” The fact that instruction books are not generally an efficient means of conveying improvements in skills is resoundingly attested by the fact that how-to books have not yet rendered firsthand instruction obsolete. (The exclusion from protection of processes that require “a mental step to be performed” is another quite explicit bar to the protection of tacit knowledge.) (Winter 1989, p. 51)
It must, however, be kept in mind that “numerous inventions depending substantially for their implementation on unpatented know-how are patented and this represents a departure in practice from the law’s intention” (Taylor and Silberston 1973, p. 8).
Most Inventions are Not PatentedAn invention is likely to be protected in one way or the other if it is thought to have some economic value, but there are at least two alternatives; patenting and secrecy. And as Taylor and Silberston (1973, p. 186) put it long ago: “At the risk of undue generalization, we would say that the existence of unpatented manufacturing know-how seems an overwhelming factor.” In short, not all patentable inventions are patented. Some inventors can rely on other technical and institutional factors to earn a return on their investment. In these situations, the cost of patents, the fear of litigation, risk of disclosure, and the ease of inventing around a patent all play a role. Other inventors might simply want their new product in the public domain as quickly as possible in order to set a new standard and to establish themselves as leaders in their branch of industry.There are a number of ways by which inventors can protect their innovations. The most obvious one is through secrecy, especially when the risk of disclosure and patenting around are high. A product or process improvement can be kept secret through ordinary steps, such as placing the process off limits to non-employees and then limiting in various ways the security hazard inherent in the access provided to employees. Trade secrecy protection theoretically lasts indefinitely and does not require a costly registration process. Of course, no inventions will remain forever secret; in time, reverse engineering or employees changing jobs will put an end to this situation. Despite this, there are still a number of ways to try to slow down that process. Companies thus routinely require provisions in employment contracts that preclude employees from disclosing the companies’ proprietary information, both during and after employment; publications by employees can be screened to prevent disclosure of proprietary information, etc. Probably the most famous example of trade secret protection is the formula for the syrup for Coca-Cola, which has been held secret for many decades.But secrecy is not everything. In cases where technological advances are very rapid, difficult to police, or costly to copy, patent protection may not seem worthwhile. In many industries technology might in fact be progressing too rapidly and the lives of new products might prove to be so short that they may well be obsolete before a patent is issued. In this situation, inventions go unpatented because the patents would be literally valueless when issued. The head start of the inventor may be quite adequate to deter copyists, especially where industrial application of the invention is a relatively complicated matter. Other considerations, such as customers’ brand loyalty or economies of scale, can also play a role in these situations.The fact that firms in newly-developed and growing-product markets do not play a zero-sum game for some fixed amount of total sales is also well-known. Thus until the late 1980s, Digital Equipment Corp. (DEC) encouraged other companies to use its technology to make add-on products that would raise demand for its computer (Coy et al. 1993). The patent holder for a superior new product might also confront resistance from industrial customers who do not want to rely on a single supplier. Automobile manufacturers were thus unwilling to make the modifications to wheel rims necessary for adopting tubeless tires as long as such tires were available only from the original patentee, B.F. Goodrich. Only by conceding the invention to its competitors could B.F. Goodrich generate any demand for its new product (Rosegger 1986, p. 141).There is also another important reason why some firms will not want to patent their innovations. As was mentioned earlier, a patent gives a patentee the right to exclude others from using it, but it does not give him the right to use it if it infringes on the patents of others. Hippel has argued that not patenting an innovation is usually a better option.
For example, Fairchild Semiconductor has a patent on the so-called planar process, an important process invention used in the manufacture of integrated circuits. If firm B invents and patents an improvement on that process, it may not use its improvement invention without licensing the planar process from Fairchild and in turn that firm may not use the improvement either without licensing it from firm B. Thus, in rapidly developing technologies where many patents have been issued and have not yet expired, it is likely that any new patent cannot be exercised without infringing the claims of numerous other extant patents. Given this eventuality, the benefit of a particular patent to an inventor would very probably be diminished because the patentee might be prevented from using his own invention or might be forced to cross-license competitors holding related patents in order to practice his invention. (Hippel 1988, pp. 51–52)
Many social scientists relying heavily on patent data to study technical change have, however, come up with various results showing that the propensity to patent patentable inventions is rather high (OCDE 1996). Based on a survey of 100 firms, Mansfield (1987) has thus argued that between 66 and 87 percent of patentable inventions were filed for patents. A survey done by L’Office européen des brevets on European firms of up to 1000 salaried workers has shown that a quarter of these firms were trying to patent more than 90 percent of their patentable inventions, whereas another quarter were trying to patent between 50 to 90 percent of their patentable inventions. The PACE survey[5] has come up with results showing that 15 percent of firms try to patent between 80 and 100 percent of their product innovations, whereas 37 percent were doing so for less than 19 percent of theirs (OCDE 1996, p. 25).It might, however, be argued that it is doubtful that these figures have any meaning whatever, because of the subjectivity involved in determining what is a patentable invention. Actually, it is possible to file any number of patents on the same invention as long as you file terminal disclaimers along with them so as not to extend the terms. There are also many things that are patentable but that are commercially worthless, so no one ever considers filing for patent protection. It is also the impression of this writer that far less than the amount of inventions that companies’ employees come up with are patented, if only because the shop floor worker who comes up with an innovation in a company usually doesn’t get the credit for it (for example, the engineer in charge of production will put his name on the patent instead of the name of the true originator).A different kind of research on innovation also illustrates the problem. Through a number of interviews in the residential construction industry, Slaughter (1991; 1993) has documented all significant innovations relating to a single technology, the stressed-skin panel.[6] Of the 34 innovations[7] sampled, 28 were made by users and 6 by manufacturers. Eight of these user innovations in stressed-skin panels were commercialized by manufacturers, while 20 were not. More interestingly though, only 5 of the 34 innovations sampled were or would possibly be under patent protection. These were: a modified air-compression nailgun, a clip connection system, a cam-lock joint, a rolled steel joint, and the insecticide-impregnated foam core (Slaughter 1993, p. 85). In a similar type of research on Silicon Valley’s semiconductor industry, Rogers (1982, p. 118) has found that most of his respondents considered that “much technological information is not patented by private firms.”
Bias in the Propensity to PatentMany inventions are not or cannot be patented. There are, however, a number of biases in the propensity to patent which can be related to the type of invention that is patented, the size of the firm that is patenting, and the industry of the firm that is patenting.Type of Invention: It is generally agreed that process innovations (i.e., mostly production methods and special techniques) are much less likely to be patented than product innovations, secrecy being deemed much more efficient to protect process innovation than the patent system (Statistique Canada 1985, p. 20; OCDE 1996, p. 44). Respondents to the Yale survey of R&D executives have thus pointed out that with a single exception (petroleum refining), patents were rated more effective in preventing product duplication than process duplication. On a seven point scale, two-thirds of the scores in the product column were above the midpoint level of 4 (“moderately effective”), while roughly two-thirds of those in the process column were below that level (Winter 1989, p. 48). The results of the PACE survey (OCDE 1996, p. 24) were even more drastic; according to this study, only 7 percent of the surveyed firms said that they frequently used patents for process innovations, whereas 57 percent said that only in very rare occasions would they try to patent process innovations.Size of the Firm: The size of the firm is also an important factor in the propensity to patent. Although some authors have argued that patenting underestimates the innovation output of big firms, which appear to show a lower propensity to patent than their smaller counterparts[8] (Mansfield 1987), it is widely recognized that the patent system does not do much to encourage the lone inventor or the small firm and that it instead tends to make industry structures more rigid than they would otherwise be. There are many reasons for this situation, ranging from the huge amounts of money needed to use the patent system successfully (to file applications, to manage a portfolio of patents in many countries, to renew patents, to engage patent agents, and to sue alleged infringers in courts) and to the fact that small firms or lone inventors, unlike large firms, do not employ patent lawyers and other personnel solely for that purpose. Many simply cannot afford these costs or consider the expected return on their investment as uncertain or lower than the costs incurred.As one critic has put it:
There are many issues involved with the transfer of intellectual property. One is the time it takes to get a patent, the legal hassles, and the other negotiations that have to take place in any kind of intellectual property scenario. The intellectual property process often intimidates and impedes the entrepreneurial process and seemingly takes forever. (Ball 1992, p. 58)
One principal argument supporting this claim is the growth of patents held by corporations which rose in the United States from 18 percent at the turn of the century to more than 60 percent in the early 1970s (Silberston 1967). Recent studies also show that fewer than 700 firms in the United States now claim more than 60 percent of patents (OCDE 1996). Many critics have thus argued that patents are usually nothing more than license to litigate or even protection money. Although this is undoubtedly true in some instances, it should be pointed out that most of the evidence suggests that most firms do their best to avoid the cost of litigation.[9] There are a number of reasons for that, ranging from the large scope for compromise to the unlikelihood of achieving outright victory,[10] to the time and cost of a court hearing.[11]Industry of Origin[12]: Besides differing according to firm size, the propensity to patent also differs across industries. This is mostly related to the possibility of “inventing around” patents and to the pace of innovation in a given industry, where an invention might be obsolete before the patent is granted. For example, it appears that patents in chemicals are much stronger than in those of mechanical inventions (Hippel 1988; Winter 1989; Edson 1993).[13] These sectoral biases are not new, although there have been a number of changes in the industries which were better covered by the patent system (MacLeod 1988).These days the pharmaceutical industry comes out on top in every study of the propensity of industries to patent, while fields where technology is changing rapidly, especially in the area of electronics, are ranked at the bottom (Taylor and Silberston 1973; Winter 1989; OCDE 1994 and 1996). Thus according to a survey of 100 firms covering the years from 1981 to 1983 inclusively, but excluding very small firms, patent protection was judged to be essential for the development or introduction of 30 percent or more of the inventions in only two industries, pharmaceuticals and chemicals (Mansfield 1987). In another three industries (petroleum, machinery, and fabricated metal products), patent protection was estimated to be essential for the development and introduction of about 10 to 20 percent of their inventions. In the remaining seven industries (electrical equipment, office equipment, motor vehicles, instruments, primary metals, rubber, and textiles), patent protection was estimated to be of much more limited importance. Indeed, in office equipment, motor vehicles, rubber and textiles, the firms were unanimous in reporting that patent protection was not essential for the development or introduction of any of their inventions. The PACE survey has similarly shown that 54 percent of firms in the pharmaceuticals industry try to patent more than 80 percent of their product innovations, whereas virtually no firm in the basic metal sector has anything to do with patents (OCDE 1996, p. 43). Furthermore, 77 percent of all firms surveyed only try to patent between zero and 19 percent of their product innovations; and the percentage of firms surveyed that never use patents is estimated to be 10 percent in Germany, 15 percent in Italy and in small European countries, and 17 percent in the United Kingdom (OCDE 1996, p. 44). It can also be pointed out that public institutions such as universities and research laboratories used to show a much lower propensity to patent than private institutions such as firms and private laboratories, but that they have in recent years become much more active players in that respect (OCDE 1996; Svetos 1996).
Methodological Problems in Patent DataThere are a number of methodological problems in the supposedly neutral information contained within patent data. There is about no consistent practice with respect to the names to which corporate patents are assigned. As was pointed out, corporate patents can be signed by a designated lawyer or engineer, not by the actual inventor (who may be a shop floor worker). The location of the origin of an invention is also problematic. For example, when patent statistics are used to analyze the spatial distribution of innovative activity, a locational problem typically arises; namely, the risk that patents generated in the area analyzed may be granted to firms or subsidiaries in other locations and that patents granted to a firm located in a specific area may actually be related to innovations generated elsewhere. The risk is especially significant when large multi-plant corporations are concerned (Antonelli 1986).Another serious problem has to do with industrial classification and the inter-industrial flow of knowledge. One aspect of the problem here is that firms frequently change their principal Standard Industrial Classification from one census year to the next, depending on which of the many products they make were in greatest demand at the time of the most recent census. The other is that many, if not most, technologies are linked across industries. Such inter-industry linkages mean that advances in one industry will depend on progress in a second and will set conditions for the evolution of a third.If squeezing a firm into a somewhat arbitrarily defined industrial sector is often problematic, it usually pales in comparison with the classification of patents by industry. To put this succinctly, patent classification and industry classification are not comparable in any direct way. The industry of origin for a patent is not known by the patent office, because neither the inventor nor the firm for which he works (if any, of course) is asked to identify themselves by industry. All that the patent office usually knows is the technical nature of the invention. The United States Patent Office classifies patents into about 400 main classes with about 100,000 subclasses. This classification system is based primarily on technological and functional principles and is only rarely related to economists’ notions of products or well-defined industries.[14] As Jacob Schmookler noted long ago:
[A major] deficiency arose from the fact that I could not assign many inventions to a single industry. In part this resulted from my own ignorance, but often it reflected the interindustry character of technology. Thus, a given improvement in the diesel engine may be used in generating electricity or driving a locomotive, a given bearing may be used in a shoemaking machine or a lawn mower, and a given knife may be used in harvesting or in kitchens. In consequence, the patent statistics used below generally do not include power plant inventions, electric motors, bearings, or other instruments or materials whose industry of origin was either multiple or simply not evident. Unfortunately, this means that the railroad data do not include inventions in the field of the steam or diesel engines, and that neither the farm nor the construction data include inventions on tractors. (Schmookler 1966, p. 23)
Griliches (1990, p. 1666) also adds some examples of his own. Thus a subclass dealing with the dispensing of liquids contains both a patent for a water pistol and for a holy water dispenser. Another subclass relating to the dispensing of solids contains patents on both manure spreaders and toothpaste tubes.The problem of classification is thus real. Before any classification is attempted, the investigator has to face the inherent ambiguity of the task. Does he want to assign the invention to the industry in which it was made (industry of origin), to the industry that is likely to produce it (producing industry),[15] or to the industry that will use the resulting product or process and whose productivity may thereby benefit (destination or industry of use)?
Consider, as an example, the case of a new plow invented in a chemical firm’s research laboratory as part of its project on new combined fertilizer and tillage systems. It depends on what question is to be asked of the data. If we want to study the returns to R&D expenditures we may wish to count it in the chemical industry whence the money came to develop it. If we want to analyze the impact of technological change on the rate of investment, on the sale of new equipment, we may wish to count it in the farm equipment industry. If we are interested in its effects on measured productivity we are more likely to count it as being relevant to agriculture. This difference in questions reflects itself also in different classification strategies pursued by different researchers. (Griliches 1990, p. 1666)
There has always been a number of strategies to deal with this problem, but most of these have proven to be arbitrary and lead to a number of serious problems, most notably double counting (OCDE 1996). It can, however, be noted that for the last 25 years the Canadian patent office has compiled data on the “potential industries of use” for each patent. But to quote a respected writer on this topic: “most of the basic questions of classification still remain to be answered” (Griliches 1990, p. 1667).
Problems of Intrinsic VariabilityAs was mentioned earlier, besides problems of identification, there are also a number of problems of intrinsic variability with the use of patents as economic indicators. The study of Thomas Edison’s patents will afford a first illustration. Israel and Rosenberg (1991) have compared the information available about Edison’s inventions from artifacts and notebooks with the timing and descriptions of those inventions in patent specifications. They made the following observations: (1) Edison described and drew things that he could not construct; (2) he did not always patent aspects of his work that seem significant in retrospect; (3) the nature of the patent examination process could lead to very misleading claims in the issued patent without recourse to the full patent application record[16]; (4) Edison did not himself create his applications in their final forms and sometimes his attorneys “garbled almost to incoherence” several of his specifications; and (5) the patent application process can also lead to incorrect assumptions regarding time of inventive activity—even the date of filing[17] and execution[18] (when the inventor signs the application) have sometimes proven deceptive. The Edison case, although admittedly an ancient one, is a cautionary tale, and many of the same problems are still present in today’s patent data.In the remainder of this section, we will look more closely at the most serious problems of intrinsic variability: some patents prove to have some economic value whereas others will not be worth anything, the purpose of some patents is purely defensive, and patent requirements have evolved drastically over time and geographical space, making international and historical comparisons impossible.
Heterogeneous Economic Value of PatentsObviously, if patent data are to have any practical value as indicators of technological change, it is necessary to show that the number of patents which indeed do lead to innovations is significant. But the fact that patents differ greatly in terms of their positive economic significance (i.e., the capacity of the innovation they describe to create true wealth) is well acknowledged and has been addressed in a number of ways (Griliches 1990, p. 1679; OCDE 1996, p. 25). The problem here, however, is that there are still no satisfactory measures of the significance of individual patents. Taken as a whole, patents are at best representatives of technological potential and not of technological achievement. It is therefore not an overstatement to say that most patents are almost valueless and that they end their lives unused in the files of corporations, patent offices, or lone inventors. To quote one strong believer in the use of patents as economic indicators: “Evidence shows that the vast majority of patents is worth very little and that the bulk of the inventive system is based on a relatively small number of very valuable patents” (Griliches 1990, p. 1699). In 1869, United States Commissioner of Patents Samuel S. Sparks estimated that 10 percent of all patents had commercial value. Although nearly a century later economist Jacob Schmookler estimated the figure was 50 percent, many modern commentators still agree that Sparks’s estimate holds true even now (Basalla 1988, p. 69). Some even write that the true number of economically worthless patents is probably closer to 95 percent (Poirier 1997).There is, however, a more general issue at stake here, which is the true nature of the human creative process and its relation to the patent system. In short, it might be true that some inventions form the basis of entirely new industries or radically change existing technologies. These are very rare occurrences and may prove nothing more than an arbitrary selection of a basic intellectual breakthrough which remained for a long period afterwards far from a state of technical feasibility. Others provide small improvements in minor devices. The remaining, and largest, group have little or no economic impact (Basalla 1988, p. 115).A point that is now well taken by most analysts of technological change is that innovation does not proceed through major breakthroughs by specific individuals, but through small and cumulative improvements that yield over time novel and useful artifacts (Rosenberg 1982). The patent system, however, is built on an entirely different view of technological change. Within it, an invention is uniquely identified with its inventor and its associations with existing artifacts are obscured. All of patent law is based on the assumption that an invention is a discrete and novel entity that can be assigned to the individual who is determined by the courts to be its legitimate creator. Thus, the patent system converts the continual stream of made things into a series of distinct entities and has historically led a number of well-known inventors such as Samuel Morse, Eli Whitney, and Thomas Edison to lie in court about the true nature of their inventions (Basalla 1988, pp. 60–61). But despite its intellectual underpinning, the patent system cannot entirely obscure the true nature of technological change. F.M. Scherer thus noted that: “as the bleary-eyed reviewer of some 15,000 patent abstracts in connection with research . . . [he] was struck by how narrowly incremental (adaptive?) most ‘inventions’ are” (Scherer 1987b, p. 124). Even the Canadian Intellectual Property Office had to confess that 90 percent of all patented inventions are minor improvements on existing patented devices (OPIC 1994, p. 8). And even though many technical people might believe what they have been told, i.e., that in the past there were revolutionary changes, it usually doesn’t accord with their experience.
Spokesmen in a number of firms said that in recent years there have been no technical developments of real importance in their fields from which patents have barred them. Several ventured the view that the era of the “master” or “basic” patent has largely gone and, although others (particularly in chemicals) would not agree entirely with this, it seemed commonly accepted among engineering and electronics firms that basic patents of great commercial significance (comparable to Western Electric’s transistor patents in the 1950s or, on a lesser scale, the pre-war patents on xerography) are nowadays extremely rare.
A second and not unrelated answer was encountered typically among manufacturers of plant and machinery: this was that in lines of activity where the basic technology is well established and has passed into the public domain, firms attempt to secure recognition for their products through variations in design and minor improvements which are either not patentable, or if patented, can be easily circumvented. (Taylor and Silberston 1973, p. 184)
Defensive Nature of Many PatentsMost social science studies that refer to patent use or to patents as a proxy of innovative activity typically do not emphasize what might be termed the defensive uses of patents, i.e., that patents can be used as bargaining chips or as means of reducing competition. It is thus well-known that many corporations protect the technology they are currently utilizing by accumulating hundreds of patents that form a protective fence around their products and processes. They are supposed to make it increasingly difficult for competitors to invent around, but the real goal of these patents, whose vast majority will remain undeveloped, is often to provide a shield behind which a corporation can retreat and protect itself from the potential threat of innovating competitors.James Watt, for example, held a patent that covered noncondensing engines “wrought by the force of steam only.” This claim effectively blocked the development of a high-pressure engine, even though Watt himself firmly opposed this and did not plan to develop one (Mokyr 1990, p. 247). Nineteenth-century bicycle manufacturer Albert Pope sought from the outset monopolistic protection by purchasing virtually every patent connected with the bicycle, some dating from the velocipede craze of the 1860s. By 1881 he had secured a patent monopoly that would not begin to deteriorate until 1886. Until he lost his patent position, Pope extracted a fee of $10 per bicycle from other manufacturers. When he first began selling bicycles, two other firms also made high-wheelers, yet his patent monopoly helped drive both companies out of business (Hounshell 1991, p. 199). The patent conflict between Thomas Edison’s and Alexander Graham Bell’s patents is well-known[19]; actually Western Union had encouraged the then young Edison “to patent as many different designs as possible in order to block rival companies from exploiting the systems of other inventors” and had on that occasion given him financial support to build his new laboratory at Menlo Park in the spring of 1876 (Gorman and Carlson 1990, p. 147). Indeed, the rise of almost all industrial research laboratories has been closely related to patent struggles between corporate rivals (Basalla 1988, pp. 124–29).To understand the defensive nature of many patents an important feature must first be pointed out. The patent system places the burden of detecting infringers and suing for redress on the patentee. It is probably fair to say that such suits are notoriously long and expensive and that both defendants and plaintiffs tend to avoid them assiduously. It has been pointed out that although 11,962 patents were granted in the United Kingdom between 1770 and 1850, only 257 patent cases came before the courts (Dutton 1984, p. 71). Hippel (1988, p. 53) has described what he perceives to be a typical “avoid the courts” situation: Firm A’s corporate patent department will wait to be notified by attorneys from firm B that it is suspected that A’s activities are infringing B’s patents. Because possibly germane patents and their associated claims are so numerous, it is in practice usually impossible for firm A—or firm B—to evaluate firm B’s claims on their merits. Firm A therefore responds—and this is the true defensive value of patents in industry—by sending B copies of “a pound or two” of its possible germane patents with the suggestion that, although it is quite sure it is not infringing B, its examination shows that B is in fact probably infringing A. The usual result is cross-licensing, with a modest fee possibly being paid by one side or the other. Who pays, it is important to note, is determined at least as much by the contenders’ relative willingness to pay to avoid the expense and bother of a court fight as it is by the merits of the particular case.It must, however, be pointed out that Hippel’s statement was first written in a journal article in the early 1980s, when courts were much more hostile to the patent system than they have become in recent years. It has subsequently been argued that the more recent pro-patent sentiment and the legal climate of American courts have made patents more valuable in a company’s asset inventory (Edson 1993).There have historically been a number of drawbacks to a system where patents challenged in court were likely to be held valid, especially following the radical shift in the granting of patents from inventors to corporations. A classic argument is that one person or corporation may gain control over a large number of patents, and then attempt to acquire others in order to dominate an industry, excluding competitors from the field by preventing them from using alternative processes. Another means whereby large firms may gain control through patents is to acquire licenses on the patents of weaker firms by threatening to oppose the grant of their patents or even to petition for their revocation in the courts. The expense of such an action is often beyond the means of small firms—and certainly of the vast majority of lone inventors—who feel compelled to grant the licenses concerned. Other devices with monopolistic consequences are the accumulation of patents through time in order to perpetuate the exclusive position of a company even after the original important patents have expired.[20]It is thus widely believed that the cost of patent litigation is often enough to intimidate lone inventors and small businesses or drive them out of the field regardless of the merit of their infringement case. It has often been said that for every inventor who prevailed in court against a big firm, or even got to plead his case, hundreds have lacked the stamina or finances to wage the arduous, expensive, and risky battle required. Many inventors over the years have also reportedly given up their court battles in frustration and many victories by the lone inventors have proven to be Pyrrhic, with litigation costs exceeding settlements.[21] Among the famous inventors who were destroyed by patent litigation were the flying shuttle’s inventor John Kay, the engineer Jonathan Hornblower, and Charles Goodyear, the inventor of the rubber vulcanization process. Eli Whitney’s patent wars over the cotton gin led to his arrest by his opponents and almost bankrupted him. The Foudrinier brothers, who introduced mechanical papermaking into Britain, went bankrupt in 1810 and spent much of the rest of their lives in prolonged and expensive patent litigation (Mokyr 1990, p. 249).The relationship between the small inventor or firm and big corporations deserves closer examination. Taylor and Silberston who studied this question most carefully have given a balanced picture.
Very few of those [big firm managers] consulted could recall instances of inventions submitted from individuals or very small firms that had been accepted, although one or two isolated cases were mentioned to us, but all said they were ready to welcome promising cases. Most of the inventions submitted are relatively simple-minded, although some show genuine technical expertise or ingenuity, and the main reasons for refusing to take them up are either that the idea is an old one or that it is simply not a commercial proposition. So far as we could tell, there seems no substance at all to the claim that the small man receives scant attention from the large firm, much less that the large firm attempts to pirate the small man’s inventions after showing him the door. (Taylor and Silberston 1973, p. 322)
Taylor and Silberston (1973, p. 102) also mentioned that “the adverse publicity that tends to attach to a large company involved in a court action, especially where its opponent is an individual or a very small firm” always acts as a powerful deterrent against unethical behavior.If it is true that most large firms use their patents in a somewhat legitimate manner, there have undoubtedly been cases where large firms have abused the system at the expense of small firms. The reverse is also true, although it is doubtful that these cases are very numerous.[22] It must, however, be noted that the number of actions between giant firms has soared in the last decades, especially between American and European firms on the one hand and their Japanese competitors on the other. Thus following its winning lawsuits against Korean and Japanese semiconductor companies, Texas Instruments has been receiving millions of dollars in licensing fees on patents that the company never developed into products of its own (Auriol and Pham 1993; Coy et al. 1993; Edson 1993).
Evolution of Patent Requirements over Time and SpaceThe Evolution of National Patent Systems: Patent systems vary greatly across countries and, to a large extent, over time because of judicial, geographical, economical, and cultural factors.[23] Even the OCDE has to conceded that international comparisons of the number of patents delivered in each country are meaningless (OCDE 1994, p. 17).Edison’s patents will once again afford an illustration. In the nineteenth century, British and Canadian patent law allowed far broader coverage in a single patent than did American law. Consequently, Edison applied for system-wide protection for his quadruplex telegraph and electric lighting with specifications that revealed the relations of components that he had to patent separately in the United States. It has also been pointed out that foreign patents also may be indicative of differences in competitive environments. Edison thus patented a telephone switchboard in Britain, but not in the United States (Israel and Rosenberg 1991, p. 1100).Generally in terms of costs and procedures, the Japanese patent system is designed to encourage innovators to disclose strategic information sooner than the American system. On the other hand, American patents used to be much more detailed than their Japanese counterparts due to the fact that until recently the Japanese filed single claim patents, whereas in other countries each patent contains several claims. United States protection is broader than in most other countries, particularly Japan, partly due to the doctrine of equivalents, which can broaden protection beyond the claims in the patent according to similarity of function (Ordover 1991; Scotchmer 1991; Callon et al. 1993; OCDE 1994). And although there is a European Commission on Patents, there are still important differences between European countries (Auriol and Pham 1993). As one Italian researcher has put it: “Italy belongs to the group of countries where the Patent Office’s examination is essentially based on formal aspects and not on the evaluation of the novelty of the invention” (Sirelli 1987, p. 158).A major philosophical difference between patent systems is the first-to-file versus the first-to-invent provision. The United States, along with Jordan and the Philippines, have a first-to-invent system under which an individual applicant for a patent must prove that he had the idea first, not simply that he won the race to the courthouse. He can assert this priority to the invention at any time. He is entitled to a patent if thereafter he has not suppressed, abandoned, or concealed the invention. This philosophy, which has guided the United States patent system since Jefferson, was established to protect the inventor who lacks the resources to keep up a stream of patent applications merely to invoke their priority (Edson 1993). The rest of the world has, however, adopted a first-to-file system on the contention that it better serves the public because it is simpler and conforms with the systems in almost all other countries. Moreover, it is argued that it spurs inventors to file for patents earlier and to disclose their inventions sooner, thus speeding the progression from idea to finished product. There are, of course, a number of drawbacks to this system, for example, the unlikely possibility of someone stealing the profits of an invention from the true inventor by beating him to the courthouse steps.[24] A more likely outcome is that patents will be put in very general terms in order to cover as much ground as possible.[25] The most plausible result, though, is an astronomical number of defensive patents and the litigation or licensing that will result from this.There are also a number of other differences between countries having to do with pre-grant disclosure (i.e., the requirement that a patent “lay open” for a length of time after filing), pre-grant opposition (i.e., third parties can oppose the granting of a patent before it is delivered), licensing, royalties, etc. (Ordover 1991). Other arrangements are also possible. For example, in the pharmaceutical realm, Indian officials only grant patents on processes and not on products (Eswaran and Gallini 1994). There can also be differences that are cultural and not technical. For example, Japanese business culture is said to have valued patents much more than elsewhere in the post-war decades.The filing and granting rates vary considerably between countries for a variety of reasons. In Japan in 1990, 380,000 patents were filed, while there were only 160,000 in the United States the same year (Auriol and Pham 1993). The granting rate has been over 90 percent in France (until the mid-1970s), about 80 percent in the United Kingdom, and only about 35 percent in Germany. It has varied in the United States from a low of 58 percent in 1965 to a high of 72 percent in 1967 (Griliches 1990, p. 1663). As we have seen, this can also be explained by differences in the procedures and resources of the various patent offices, therefore implying differences in the average quality of a granted patent across countries and periods. In short, these numbers don’t mean anything.Historical Changes in Patent Systems: A patent is granted if it passes certain minimal standards of novelty and potential utility. These standards, however, can change over time, both as a result of changes in perception of what is an innovation and because of changing applications pressure on a relatively fixed number of patent office workers.[26] Basberg (1987, p. 135) has pointed out that three conditions must be met for a long and complete time-series of patents to have any value: first, the quality of an average patent must remain more or less unchanged; second, the relationship between patents and inventions in a chosen area must remain constant; third, attitudes as to the use of the patent system must remain substantially constant. It is doubtful that these preconditions are often met.In discussing the incestuous relationship between the Munn & Co. Patent Agency—which was also the owner of Scientific American—and the United States Patent Office in the middle of the nineteenth century, noted historian of technology Eugene Ferguson has pointed out that: Scientific American soon became the leader and chief member of the patent lobby, bringing whatever pressure it could command for more examiners and less rigorous examination of applications. The law that reformed the Patent Office in 1836 gave examiners no clear guidance in their decisions regarding the merits or novelty of an invention. (Ferguson 1989, p. 56)Moreover, a change in the resources of the Patent Office or in its efficiency will typically introduce changes in the lag structure of grants behind applications, and may produce a rather misleading picture of the underlying trends. It has thus been argued that the decline in the number of American patents granted in the 1970s was almost entirely the result of the fluctuations in the Patent Office, culminating in the sharp dip in 1979 due to the absence of a printing budget for the approved patents (Griliches 1990, p. 1690). It has also been pointed out that due to understaffing, the officials of the United States Patent Office have had a tendency to interpret the usefulness criterion so loosely that patent applications have rarely been turned down for failure to meet the requirement. In fact, it has been said that only the idea for a perpetual-motion machine would likely to be turned down (Rosegger 1986, p. 131).The use of patent data as a proxy for inventive activity has a long history. There are many reasons to justify their use, from their availability to the fact that they are, by definition, related to inventiveness and that they appear to be based on an objective and only slowly changing standard. There are, however, a host of identification and intrinsic variability problems in these statistics. For example, it is highly plausible that patent counts in a field of industry may decline while the underlying innovative activity may be increasing; or on the contrary, that the number of patents issued in one field of industry may rise because a small number of firms are building their patent war chest. To sum up the main deficiencies in the use of patent data as economic and innovation indicators: (1) not all innovations are patentable; (2) not all patentable innovations are patented; (3) there are strong biases in the propensity to patent depending on the industry of origin, the size of the firm and the type of invention; (4) there are important reliability problems in patent data; (5) some patents prove to have an economic value, but most do not; (6) many patents are of a purely defensive nature; and (7) patent requirements have evolved drastically over time and geographical space. As was mentioned, most studies using patents as economic and innovation indicators treat very lightly the key problems in those statistics.A number of ways of improving patent statistics have been suggested over the years,[27] but in the eyes of this writer, none has been able to overcome the subjectivity involved in assessing the quality of a patent. There are also other important problems in the data used in these studies, most notably that typically only large firms (or more specifically people in charge of patenting in these firms) or atypical creative geniuses are thoroughly studied. Innovation done in small firms or by more typical inventors who cannot afford the cost of a patent is therefore usually left out.Austrian economists have long been hostile to the use of economic statistics (Rothbard 1993), but their epistemological claims have not been echoed in the mainstream of the profession which, for a number of reasons, has always been fond of patent statistics. The purpose of this article was therefore to demonstrate that, even on strictly empirical grounds, the drawbacks associated with patent statistics are nothing short of major and that even in the best circumstances, these data only give us a partial picture of the technological potential of a small number of innovations. Doing empirical studies of innovation is a worthy goal, but this does not justify the use of bad indicators on the grounds that they are the only ones that fit well with the dominant methodologies.
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Pp. 224–38.Sirelli, Giorgio. 1987. “Patents and Inventors: An Empirical Study.” Research Policy 16: 157–74.Slaughter, Sarah. 1991. “Rapid” Innovation and Integration of Components: Comparison of User and Manufacturer Innovations Through a Study of Residential Constructions. MIT Ph.D. Dissertation (Management of Technology).———. 1993. “Innovation and Learning During Implementation: A Comparison of User and Manufacturer Innovations.” Research Policy 22: 81–95.Sokoloff, Kenneth. 1988. “Inventive Activity in Early Industrial America: Evidence from Patent Records, 1790–1846.” Journal of Economic History 48: 813–50.Statistique Canada. 1985. Les brevets en tant qu’indicateurs de l’invention (catalogue 88–504F Hors Série). Ottawa: Ministère des approvisionnements et services. (Also available in English as Catalogue 88–504E).Svetos, Michele. 1996. “Biotechnology and the Utilitarian Argument for Patents.” Social Philosophy and Policy 13, no. 2.Taylor, Christopher T., and Z. Aubrey Silberston. 1973. The Economic Impact of the Patent System. A Study of the British Experience. Cambridge, U.K.: Cambridge University Press.Walker, Charles E., and Mark A. Bloomfield. 1988. Intellectual Property Rights and Capital Formation in the Next Decade. New York: University Press of America.Winter, Sidney G. 1989. “Patents in Complex Contexts: Incentives and Effectiveness.” In Owning Technical and Scientific Information. V. Weil and J.W. Snapper, eds. New Brunswick, N.J.: Rutgers University Press. Pp. 41–60.[1] For example, inventor Jones patents a device comprised of components A, B, and C. Inventor Smith improves on Jones’s invention by adding D. Smith can then get a patent on the new device with components A, B, C, and D. Inventor Smith can prevent everyone from using the device with components A, B, C, and D, however, Smith cannot use it either because it infringes on Inventor Jones’s patent. On the other hand, Jones cannot add component D to his patented device because that would infringe on Smith’s patent. What results then is a cross-license between the original and improvement patent owners.[2] Winter (1989, pp. 48–49) has defined patenting around in the following way: At the benign extreme, this term may simply mean providing through independent inventive activity an effective functional substitute for the patented process or product, so that the patent does not block the achievement of some larger innovative goal. The knowledge borrowed from the prior inventor’s contribution could be limited to, at most, the insight that the function in question is a useful one to perform. Nothing remotely approaching patent infringement may be involved. At the other extreme, however, the new solution skirts the edges of the existing patent’s scope with just enough room to spare to make a successful infringement action unlikely—and the judgment about what is enough room may invoke assessment not only of the legal scope of the existing patent, but also of the strategic stakes, resources, alertness, and litigation-proneness of the patent holder. In between these extremes there lies a broad interval where the borrowing from the prior inventor is very real but probably noninfringing under prevailing patent law.As is well-known, most important inventions will be patented around long before their patents expire (Mansfield 1987).[3] For a detailed survey of these databases, see OCDE (1994).[4] As we have already seen, machines, manufactures, and compositions of matter, or combinations of these, as well as certain designs and genetically engineered organisms are patentable.[5] The European and Japanese follow-up to the Yale survey.[6] A stressed-skin panel is a sandwich of a solid core of plastic insulative foam laminated to the facing materials, where the facing materials or “skin” carry some portion of the building load. The panel acts similarly to an I-beam to distribute the load. The facing materials can be made of plywood, other structural wood sheets, gypsum board, or metal. The plastic foam core is not only a connecting web between the facing sheets to distribute the load, but is also a thermal insulating material.[7] In this study, an innovation is defined as anything new actually used in a project (Slaughter 1993, p. 85).[8] For example, small Canadian enterprises typically patented one invention per $275 million (in sales) in 1975. Large Canadian inventive enterprises usually patented one invention per $131 million (in sales) in 1975 (Ceh 1997, p. 69).[9] This issue is more thoroughly dealt with in the section “Defensive Nature of Many Patents.”[10] During the 1960s and 1970s, 72 percent of all litigated patents were declared in various courts to be invalid (Edson 1993, p. 25).[11] Legal fees in patent-infringement suits can run a half-million dollars or more, and long delays are common.[12] It should, however, be pointed out that there are a number of problems with the usual industrial classification. This topic will be addressed in more detail in the subsection “Methodological Problems in Patent Data.”[13] There have, of course, been a number of exceptions. The Polaroid and the xerography processes are cases in point.[14] Griliches (1990, p. 1666) even adds that the economist’s notion of a well-defined industry “may be a mirage anyway.”[15] Perhaps the most valiant attempt at attributing an industry of origin to patents is Scherer (1987a).[16] Israel and Rosenberg (1991, p. 1096) In Edison’s application for a siphon recorder for his automatic telegraph he initially claimed that the device would minimize the use of chemicals, a key feature of this instrument. On being notified that this claim had been registered for a previously patented device, Edison changed his claim to cover the placement of the receiving wires. This aspect of the invention allowed him to minimize the use of chemicals but had been only mentioned in passing in the original application. The patent as issued consequently tells the reader nothing about the real purpose of the instrument.[17] Edison’s attorneys sometimes held an application for months before filing, for no obvious reason. The modern tale of Stanley Cohen and Herbert Boyer, usually referred to as the modern fathers of biotechnology, can also illustrate this point. While collaborators at Stanford, they came up with inventions with regard to the recombinant DNA process in unicellular organisms and products made by recombinant DNA techniques. These inventions were developed without thought as to their patentability and it was nearly too late to file when an administrator at Stanford read about their research and contacted Cohen (Svetos 1996).[18] Israel and Rosenberg (1991, p. 1098) Although Edison rushed to his patent attorney to cover the development of his electromotograph on the day he realized its uniqueness, he executed the application for his universal private-line printer, a fairly successful instrument, a full year after beginning commercial production. The reasons for the difference between these two cases are fairly clear—the former was an unexpected, potentially important new development, whereas the latter was developed under a contract with a company that controlled nearly all patents in printing telegraphy and was thus virtually immune to danger from other inventors. Between these extremes, though, are many instances of patent applications and caveats executed weeks or even months after Edison recorded their conception or development in his notebooks.[19] The legal battle was, however, waged between Western Union and the American Bell Telephone Company.[20] It is worth noting that under United States laws, building a protective fence through a company’s own R&D efforts is legal, whereas buying up other firms’ patents may be considered a violation of the law (Rosegger 1986, p. 145).[21] A famous case in the United Kingdom was Killick v. Pye, where the winner went bankrupt after her action (Taylor and Silberston 1973, p. 327).[22] These actions by small firms or inventors are facilitated by “first-to-invent” patent system. Many authors have also written about “submarine patents,” i.e., legal torpedoes issued to obscure inventors who convince the Patent Office that they had an idea first and then sock corporate giants for millions in royalties. To be more specific, a submarine patent is one that an inventor files, say, in 1950, and for which he keeps spawning continuations and divisional to keep it alive, but secret for decades, while in the meantime industry independently develops and implements these ideas. Much later, say 1980, the patent finally issues, and surfaces like a submarine to make it now illegal to practice what has been done for many years.[23] For a brief comparison of the European, American, and Japanese patent systems, see OCDE (1994).[24] An interesting historical case is that of Guglielmo Marconi who, upon moving to England in 1896, “immediately and dramatically [applied and received] a patent on a method of transmitting signals by means of electrical impulses.” This patent, the first issued anywhere in the world for radio telegraphy, encompassed virtually the entire technological application of the scientific work of Maxwell and Hertz. Marconi brought little that was new or original to the patent, but he was the first to claim existing methods, equipment, and circuits as property. Under British law this claim was all that was needed to justify his right to a broad patent covering electromagnetic signaling (Basalla 1990, p. 100). More recently, a biotechnology firm, Agracetus, has been given patents on all genetically engineered cotton and soybeans, regardless of the process used to engineer them or the traits engineered (Svetos 1996).[25] As one British patent specialist in a pharmaceutical firm put it more than a quarter of a century ago: It is rare for the complete [specification] to contain a really full and adequate disclosure for commercial operations but this is not because of secretiveness. Rather it is an inevitable result of the “first to file” system. Under this, it is essential to obtain an early priority date and invariably commercial exploitation will not take place for three or four years, and in the pharmaceutical field often five to ten years. (Taylor and Silberston 1973, p. 95)[26] For a more detailed introduction to this topic, see Cooper (1991a).[27] For a concise summary, see Basberg (1987).
Volume 18, Number 1 An Interview With Hans-Hermann Hoppe
Hans-Hermann Hoppe, a senior fellow of the Ludwig von Mises Institute, is professor of economics at the University of Nevada, Las Vegas, where he taught with Murray N. Rothbard from 1985 to 1995. He is the author of Handln und Erkennen (1976), Kritik deer Kausalwissenschaftlichen Sozialforschung (1983), Eigentum, Anarchie, und Staat (1987), A Theory of Socialism and Capitalism (1989), and The Economics and Ethics of Private Property (1993), as well as many articles in the former Review of Austrian Economics . He is co-editor of The Quarterly Journal of Austrian Economics and the Journal of Libertarian Studies, general editor of the Scholar's Edition of Human Action, and author of the introduction to the new edition of Ethics of Liberty (1998). He earned his PhD (1974) and Habilitation (1981) at Frankfurt's Goethe University.
AEN: As a student in Germany did you read Mises's Nationalökonomie?
HOPPE: No, because until very recently, you needed a detective to find it. Meanwhile, Human Action, which has never been translated into German, was readily available. Nationalökonomie came out in Geneva under the most unfortunate circumstances. It was cut off from the German public because of the war. The Swiss publisher then went bankrupt. There was no later edition. Nothing ever happened to it.
So I learned Austrian economics from English texts. Recently, I read the German editions of Socialism and Liberalism to write the prefaces for the new editions. I've also been reading Im Namen des Staates, which translates In the Name of the State. It too was published in Geneva, in 1938, and later served as the basis for Omnipotent Government, published in 1944 in the U.S. The writings of Hayek are readily available in Germany, but not Mises. It is the English-language market that keeps Mises alive.
AEN: What will be in the introduction to the new edition of Human Action?
HOPPE: We're in the research stages right now, but this will be a resurrection of the first edition, the original 1949 book Mises wrote as an English edition of National?konomie. The saga of these books, and the later editions of Human Action, is interesting indeed. Working with other Mises Institute scholars, I'm detailing the differences between them and evaluating their significance.
For example, Nationalökonomie contained comments and notes on German intellectual history that he removed for the English edition. We are translating these missing paragraphs to reprint in them in the new introduction. Mises's 1949 book is obviously a landmark in the history of economic science, and the first fully integrated treatise in the history of the Austrian School. It deserves to be in print in the highest-quality edition.
AEN: You teach in Germany in the summers, and where else?
HOPPE: This past year, I was in Romania teaching at the University of Bucharest, and I will be teaching in Prague this summer. The Austrian School is unique in the social sciences for being a truly international school of thought. Austrian books are available in every major language. And unlike trendy articles in the mainstream literature, Austrian works written from Menger to the present day claim universal and immutable scientific validity.
It is this pure theory aspect of the Austrian School that gives us a huge advantage. These days, probably only Marxism can compare with the Austrian School in its worldwide scope. An advantage of having the old Review of Austrian Economics become The Quarterly Journal of Austrian Economics is that it will be cheaper and more accessible to domestic and foreign audiences alike.
AEN: The Austrian School hasn't always been this international?
HOPPE: Well, in the early 1930s, Mises gave the impression in his own writings that he thought the Austrian School was economics as it was understood everywhere. He believed the Austrians had won. So he de-emphasized the differences between the Austrian School and the Lausanne School, for example.
But by the early 1940s, he reversed his judgement. He spelled out why in his memoirs. He says that the Austrian School sees economics as concerned with action and uncertainty. The Lausanne School is an equilibrium school, which is the opposite of action, the opposite of uncertainty. And of course Keynesian macroeconomics was in the process of becoming dominant.
Only then did Mises accept that he was indeed very different. He finally accepted this label of "Vienna" or "Austrian," which he previously thought was almost unnecessary. We should not forget this label was pinned on the School. It was never a self-description until after the war.
Also after the war, the Austrian School became basically an American school. Even Hayek, in his 1978 forward for the German edition of Mises's memoirs, says the Austrian School is almost exclusively an American phenomenon, and exclusively a Mises school, with some ties to Böhm-Bawerk. The other traditions within the Austrian School, he says, have not fulfilled their promise, mentioning the Meyerian branch in particular. He also clearly does not include himself in this Mises tradition.
AEN: Did your teacher Jeurgen Habermas, certainly Germany's leading postmodernist, introduce you to Mises?
HOPPE: No, but Habermas gave me a taste for rationalist philosophy. He has a reputation as a hermeneutician, but he was also profoundly aware of the limits of hermeneutics. He always said there are disciplines like math and geometry where it plays no role whatsoever. He admitted that economics might be one of these disciplines entirely outside the hermeneutical framework. But he simply had no opinion on economics.
I was aware of Habermas's politics, but I was a leftwinger myself, just as everyone else was. So this was never a point of contention between us. Later, I became disillusioned by Marxian politics as a result of Böhm-Bawerk's critique. It convinced me that Marxism was untenable.
AEN: Did you just happen to stumble across this book?
HOPPE: Böhm-Bawerk was a well-known critic, but most leftists never bother with reading their critics. What I had liked about Marxism is that it made the attempt to provide a rigorous, deductively derived system. Back then, unlike now, Marxists accepted standards of logic. I thought this approach was superior to having ad hoc opinions on various subjects. With deductive systems, it is easier to discover whether they deliver the promised goods or collapse. Of course, Marxism collapses.
AEN: Was it a straight shot to the Austrian School?
HOPPE: I went through a brief period as a moderate, accepting some Popperian views, at least as far as the social sciences are concerned. I also became a social democrat on politics. I began to write my habilitation thesis on the foundations of economics and sociology, arguing that there exist disciplines whose theorems cannot be falsified. I knew there was such a thing as a priori knowledge, but I doubted it existed in the social sciences.
At the same time, I was surprised by the claims of people like Milton Friedman. He said that economic theorems have to be tested and cannot be known through deduction. But he would give examples like the quantity theory of money, which I always thought was true by definition: as more money is produced, the value of existing money relative to goods it can purchase falls, all else being equal. This is a statement of logic that does not need to be empirically tested to discover whether it is true.
AEN: Since then, you have been the strongest defender of the Austrian method, praxeology, since Rothbard.
HOPPE: Independently, I had concluded that economic laws were a priori and discoverable through deduction. Then I stumbled on Mises's Human Action. That was the first time I found someone who had the same view; not only that, he had already worked out the entire system. From that point on, I was a Misesian.
Mises took the idea of synthetic a priori--the idea that there are true statements about reality, derived from axioms and logic, that do not need to be tested--from Immanuel Kant. But Mises added an extremely important insight: Kantian mental categories can be understood as ultimately grounded in categories of action. With this, Mises bridged the gulf in Kantianism that separates mental from physical; what we think from the outside, physical world.
If you start with the concept of action, you immediately realize that action involves a subject and an object. Action means: I do something with something in order to reach certain goals. That implies a theory of casuality, which had been a sticking point in Kantianism and remains so in positivism. There were hints of this in Kant, but nothing as explicit as you find it in Mises.
AEN: In applying this a priori approach to ethics, were you attempting to supplant natural rights.
HOPPE: No, not at all. I was attempting to make the first two chapters of Rothbard's Ethics of Liberty stronger than they were. That in turn would provide more weight to everything that followed. I had some dissatisfaction with rigor with which the initial ethical assumptions of libertarian political theory had been arrived at. Intuitively, they seemed plausible. But I could see that a slightly different approach might be stronger. Murray never considered my revisions to be a threat. His only concern was: does this ultimately make the case? Ultimately, he agreed that it did.
AEN: Your approach also holds out the prospect of bringing the fields of economics and ethics more closely together.
HOPPE: This is also what Murray tried to accomplish. The concept that both fields have in common is private property. In economics, we know that you must control certain things in order to act. In ethics, we need to provide a justification for the fact that you hold resources in order to act. So private property is the link between these two areas of theorizing.
Both Habermas and Karl Apel have used the phrase priori of argumentation, which is the basis of my proposed ethics of laissez-faire. Apel, who is probably the better and more rigorous philosopher of the two, had no interest in economics; but if he is right, we can also show that there must be certain practical or praxeological preconditions fulfilled in order to communicate and raise truth claims, namely private property and the Lockean rule on property appropriation.
AEN: What do you see coming out of the new edition of Ethics of Liberty?
HOPPE: This is one of Murray's least-read books. It has not been in print for a very long time. Many people might have felt that they already knew the Rothbardian system. In fact, this book should be considered a pillar of the Rothbardian system, revealing far more about the political ethics and their application than any of his other works. With this book, we can reach a much higher level of philosophical sophistication and unification that we have previously.
The ideas from Rothbard's 1956 article "Toward a Reconstruction of Utility and Welfare Economics" are in here, but in a more well developed form. In the old paper, he begins his theory with the idea of exchange. But in here, he develops a theory of the acquisition of property titles that precedes the theory of exchange.
There is a close connection between welfare theory and ethics, even if economists don't always recognize it. The Chicago School of Demsetz, Coase, Alchian, and Posner attempt to substitute an efficiency standard for a justification of ethical principles. This entire project is built on fallacy. There exists no nonarbitrary way of measuring, weighing, and aggregating individual utilities or disutilities that result from some given allocation of property rights. The attempt is just pseudo-science in service of judicial interventionism.
AEN:You have also argued that a connection exists between monetary intervention and cultural values.
HOPPE: True, but the central bank, through inflationary policy and easy credit, exports this short-term orientation to the whole economy. If you expect the value of money to fall in the future, you are more interested in the fast buck. The central bank makes exaggerated levels of borrowing possible, creating the temporary illusion of wealth but not its reality.
Democracy and legislation have some of the same effects. In particular, they generate high time preference. In the old days, the principles of law never changed over time. The rules of property, exchange, and contract were always the same. Kings did little to change this because their own claim to sovereign rule was also tied to property rights. They wanted to be the owner of the entire realm and to preserve its capital value.
But matters change one you have public property, democracy, and free entry into the governmental system. The democratic ruler does not invoke the principle of private property to show that he is the legitimate ruler. He invokes the principle that no property is entirely private. It follows that these people are tempted to think of law as simply legislation.
Under democracy, you can change law whenever you want. No one knows what the laws will be tomorrow. In fact, hardly anyone knows what the laws are today, because there are so many. In this way, democracy undermines the value of property and undercuts long-term planning and decision making. People become engaged in shorter production processes than they otherwise would.
AEN: Some years ago, you wrote a paper arguing that taxes shorten the structure of production.
HOPPE: That was a specific application of this more general principle. Taxation is a present expropriation and an expected future expropriation. Because of it, present and future income is reduced. The time preference schedules rise and people become more short-term oriented. Taxation, legislation, inflation, credit expansion, bankruptcy law, and all the rest, also bring this about.
The entire structure of government itself is an expression of high time preference. Mises says that in the long run all our interests are harmonious. Everyone gains if private property rights are respected. Even the tax men, in the long run, would become richer if there were no taxation at all. All that is true.
But, of course, this does not imply that every real person has a long-run orientation. In the short run, after all, tax men are better off with government. In the short run, I'm always better off ripping you off. Government institutionalizes the high-time-preference motivation to rip people off instead of producing.
AEN: You mentioned bankruptcy law. What about the claim that the market would underproduce risk-taking in its absence?
HOPPE: Risk taking in a market requires fixed rules of private property. For example, people are not permitted to undertake the risk of murdering people to see if they can get away with it. Instead, everyone is obliged to respect the life of others. Similarly, there is no place in a free market for a person who takes risks by trampling on property rights. If he does, he must be fully liable for the damage he creates.
In a free market, the level of risk people undertake is proscribed by property rights and strict liability. A person is bound by the terms of contract, even if it means giving up everything he owns. In bankruptcy law, the state permits a certain group to act in violation of the contract they have agreed to. These types of laws create legal uncertainty and socialize risk.
AEN: What happens, then, if a debtor doesn't have the money to pay his creditors?
HOPPE: It is the obligation of the creditor to see to it that he is protected against these types of contingencies. The outcome is dictated by the terms of the contract. The borrower may pay out of future income. If there is no provision in the contract for the borrower's going belly up, that's the lender's tough luck. He made a stupid contract.
Repealing bankruptcy laws would bring about a significant change in the economic culture, where stiffing property owners is now common. Bankruptcy laws on the individual level are replicated on an international scale, where we see these huge bailouts by the Fed and the IMF. They do nothing but reward financial mismanagement and allow extortion on a global scale. The culture of extortion now extends from individual to international corporate finance.
AEN: If society were based entirely private property and exchange, most people would say there would be no thing as community and order.
HOPPE: The market's speciality is producing things that people want, and that is certainly true of conditions like community and order. A main means of achieving them is the right of exclusion, which, in a market economy, property owners can always exercise. This allows owners to keep up the value of their property and to encourage civilized behavior.
Part of the terrible trend in modern government has been to trample on the right of exclusion. That is essentially what civil rights law does. Employers cannot hire and fire as they see fit. Teachers cannot kick students out of school. Businesses must accommodate customers who are detrimental to the long-term interest of the firm. In light of this, cultural decay and rotten behavior are to be expected. Even the right of parents to be the ultimate judge in their own household is under attack.
The covenant is a crucial market institution that affirms the right to exclude. Groups of people, usually with one founder, lay down all sorts of rules to which all people who are part of the group are required to adhere. The ultimate owner determines the rules based on consent. And there are competitive markets for covenantal property arrangements themselves, offering varying degrees of strictness.
AEN: The restrictions are then attached to the property itself?
HOPPE: Let's say you buy some property within a larger covenantal structure. You also buy the restrictions, which are presumably in your favor, since the rules are a crucial key to the value of your property. The terms of the covenant can be adjusted according to a process established by the bylaws of the community. If the overarching community is purchased from the full owner, in terms dictated by the covenant, the covenant can also be changed to more fully accord with market conditions.
This mechanism, which rests on the right of property owners to exclude and to dictate rules, is a source of community and order within the matrix of voluntary exchange. But the state hates covenantal arrangements because they form competitive systems of law. The democratic state hates them as much as it hates the right of a businessmen to refuse service or the right of an employer to fire an employee.
AEN: So you see no real distinction between private life and commercial life?
HOPPE: There should be no difference so far as property ownership and rights are concerned. Every person has the right to determine who does and does not eat dinner in his own home. Similarly, every business owner has the right to determine who does and does not eat dinner in his restaurant. The only difference is that restaurant owners hope to facilitate more diners. He would likely have to have an extremely good financial motive for exclusion.
But if we believe in property rights, he should have the right of exclusion on any grounds. From the point of view of the state, it is easier to start the attack on property by taking away the right of exclusion from commercial properties. Then the state can gradually invade the last bastion of undisputed private property, the family household.
AEN: You recently gave a paper on the failure of classical liberalism? What was that failure?
HOPPE: It was the belief in the possibility of a minimal state, and that the state can play a purely protective role. If the state is defined as the institution that has the right to impose taxation and has the compulsory territorial monopoly of jurisdiction, then it is easy to show that this sort of institution is inherently incapable of providing what these classical liberals want the state to provide, that is protection and security.
Once you grant an institution the right to determine unilaterally how much you have to pay to be protected, this institution will have the tendency, by virtue of its self interest, to increase expenditures on protection while reducing that actual production of protection.
The state asks itself the question: how much money is needed in order to protect people from violence? The answer is always that it needs more. And since there is disutility attached to labor, the less actual protection the state produces, the better off its employees are.
Every state, even if it starts out as a minimal state, then, will end up as a maximal state. To think that the problem of protection can ever come from an institution such as the state is an illusion. It is a myth and a patent error of the grandest scale.
One of the most important services on earth--to be protected from aggression by other people--should not be assigned to an institution that can tax you in order to do it and prevent you from seeking out other protectors. All of the incentives are wrong and it sets up potential disaster.
AEN: So the classical liberals were too tolerant of the state?
HOPPE: Far too much. Once you admit the basic principle that the state is an essential provider of security, you give up all counterarguments. Take the example of the case of the social safety net that most free-market advocates say we must have. If you ask them how high the provision of a guaranteed income should be, they can't tell you. They know that if it is too high, people will work less; but if it is too low, they say people will be too poor to recover. But the dividing line between the two is completely arbitrary.
Yet through it all, they take the position that there must be such a thing as a social safety net. If there is no question that the must be such a thing, then you have already admitted that private property rights, the rights of contract, free association, and voluntary trade are not the essential source of security and no longer supreme. There are some considerations that override all these institutions.
If you make these sorts of exceptions, it is very difficult to argue that the exceptions should not apply more broadly. What argument do you have? You have already admitted that some people can be legally expropriated for socially important reasons. The only task for statists is to make the purposes seem important enough to allow for expropriation. Everything then becomes possible.
AEN: Compromise becomes the order of the day.
HOPPE: Indeed, today's ideological landscape is filled with people who claim to want selective cuts in government or to bring about what they call limited government. Then, to ward off the charge that they are too radical, they assure the public that they do not oppose government as such--indeed it is a necessary thing; they just oppose its present size and present policies.
And to prove that they are respectable, then, they lend support to some aspects of the regime, usually its war-making power, its educational apparatus, its regulatory regime, or its social-safety net. By their own logic, they end up trying to improve government rather than dismantle it. This is why they are ultimately no threat to anyone in power. Those who advocate merely "limiting" intervention rather than eliminating it are always ripe for co-option by the state. Mises once observed that anyone who has ever had something new to offer humanity had nothing good to say of the state or its laws.
AEN: Was Mises better than the classical liberals on the question of the state?
HOPPE: Mises thought it was necessary to have an institution that suppresses those people who cannot behave appropriately in society, people who are a danger because they steal and murder. He calls this institution government.
But he has a unique idea of how government should work. To check its power, every group and every individual, if possible, must have the right to secede from the territory of the state. He called this the right of self determination, not of nations as the League of Nations said, but of villages, districts, and groups of any size. In Liberalism and Nation, State, and Economy, he elevates secession to a central principle of classical liberalism. If it were possible to grant this right of self-determination to every individual person, he says, it would have to be done. Thus the democratic state becomes, for Mises, a voluntary organization.
AEN: Yet you have been a strong critic of democracy.
HOPPE: Yes, as that term is usually understood. But under Mises's unique definition of democracy, the term means self rule or self government in its most literal sense. All organizations in society, including government, should be the result of voluntary interactions.
In a sense you can say that Mises was a near anarchist. If he stopped short of affirming the right of individual secession, it was only because of what he regarded as technical grounds. In modern democracy, we exalt the method of majority rule as the means of electing the rulers of a compulsory monopoly of taxation.
Mises frequently made an analogy between voting and the marketplace. But he was quite aware that voting in the marketplace means voting with your own property. The weight of your vote is in accord with your value productivity. In the political arena, you do not vote with your property; you vote concerning the property of everyone, including your own. People do not have votes according to their value productivity.
AEN: Yet Mises attacks anarchism in no uncertain terms.
HOPPE: His targets here are left-utopians. He attacks their theory that man is good enough not to need an organized defense against the enemies of civilization. But this is not what the private-property anarchist believes. Of course, murderers and thieves exist. There needs to be an institution that keeps these people at bay. Mises calls this institution government, while people who want no state at all point out that all essential defensive services can be better performed by firms in the market. We can call these firms government if we want to.
AEN: The strongest evidence against Mises as a radical anti-statist is the passage in Human Action that endorses conscription.
HOPPE: This passage is very peculiar. It, and the several paragraphs that precede it and the one that follows it, is not in the first edition. It makes its first appearance in the 1963 edition. It comes out of the blue, and has no foundation in his overall thinking. To me, this addition appears completely ad hoc.
You just have to remind yourself about his general position on government. Every group and, if it can be technically done, every individual, can secede from the government. Accordingly, conscription, in this sense, is completely illegitimate. If you read the 1949 edition of Human Action, there is nothing at all that would seem to lead to these particular funny conclusions.
AEN: Perhaps the Cold War explains it.
HOPPE: But the likelihood that he would make a statement like this is the greatest in prior editions. In 1940, he was in Switzerland, surrounded by Nazi forces. In 1949, he had just seen the old Europe smashed by war and imperialism; what better time to endorse the draft so it could be used to stop this type of thing in the future? But he did not. Why, then, does he do this in 1963? There is no major war going on. Vietnam was in its early stages. The Cold War is not at a peak, and the Soviet Union was in its post-Stalinist period. These passages cry out for explanation.
AEN: You have been very critical of public goods rationales for the state.
HOPPE: The mistake of public goods theory is to presume that economists can detect that something that is needed but is not being provided by markets, either at all or in sufficient quantity. But this is just an observation that we don't live in a Garden of Eden. At all times, people want goods and services that do not exist or are unaffordable. But just because we want something to be made available does not mean that it should be made available.
If we have to consult with economists to discover whether there are not enough lakes and roads, shouldn't we also check with them to see if are too many tennis shoes and toothpaste brands on the market? Ultimately, public goods theory is a rationale for central planning and an attack on the market itself. The real question is whether it is economically beneficial and economically justified to override voluntary transactions and market verdicts, and forcibly transfer property from private owners to the state. I don't think it ever can be justified.
AEN: On what ground have you criticized free immigration?
HOPPE: Imagine a society where all property is owned by some private individual or group. One has to consider what would happen in such a territory. A very complex picture results. There would be certain regions and institutions where people could come and go as they please with very few conditions attached. We might say that churches, soup kitchens, and other charitable institutions that allow relatively free access within certain rules.
There are also places where entry is dependent on minimal conditions, like paying an entry fee. Private recreational facilities like Disney World operate like this. No one gets in without meeting the conditions of the contract; most anyone can meet those conditions provided they have the means to do so and adhere to the rules once there.
But also in a market economy, there are also extremely exclusive areas like gated communities. In these places, you can only enter if you are an owner or if you have the direct permission from the owners. If you are an owner, you must adhere to extremely strict guidelines on how to behave, and you are responsible for how your guests behave.
In no case is unrestricted access allowed. If all property were private, we would see these conditions replicated more broadly. Some regions, like tourist areas, would have the incentive to attract as many people as possible without reducing the value of the property. Others would be utterly and completely off limits.
AEN: So you liken free immigration to a right to trespass.
HOPPE: Look at what the free immigrationists propose. They want the complete and untrammeled right for people from anywhere to enter and exit property, with no right of exclusion whatsoever. But there is no market arrangement anywhere that replicates that situation. It is completely contrary to the way markets work and property owners behave. Obviously, such a free-for-all can only be brought about on a mass scale if property rights are not assigned to private owners but instead are given to the state.
Making it all the more perverse, government is supposedly charged with protecting property rights from invasion. Instead, in the case of free immigration, it makes possible the untrammeled invasion of property rights. If government is to allow immigration, at minimum it should make sure that the immigrants have an invitation by a property owner. That owner must then assume full liability for their presence.
There is nothing wrong with Microsoft bringing software programmers from around the world to work in its buildings. But it is not okay that these immigrants would then have guaranteed housing, schools, welfare, voting rights, or anything else that invades or presumes the right to invade other people's property. So long as the complete right of exclusion can be exercised by every other property owner, free migration of labor is fine. Citizenship, of course, is an entirely different matter.
AEN: But there is a danger, isn't there, with putting the government in charge of determining who can and cannot immigrate?
HOPPE: There is of course a danger. Absent full privatization, then, the solution is to decentralize the decision-making process away from the federal government to states, counties, villages, towns, and city blocks. They should all make their own exclusionary rules. Through this means, you can prevent to the largest extent possible, the phenomenon of forced integration.
From an economic perspective, it is essential to have free trade, in part because in its absence puts tremendous pressure on people from low wage countries to immigrate to where wages are higher. The more free trade you have, the less incentive there is to move. If goods don't cross borders, armies of people will.
AEN: What do you say to the critique that the private-property society as you describe it appears quite authoritarian?
HOPPE: This is a left-egalitarian critique. They claim that authority should play no role in social life and that there should be no rank or position. But of course, there can be no society without structures of authority. In the family, there is always a hierarchy. In communities, there are always leaders. In firms, there are always managers.
But in a market, none of these authorities have taxing power. Their rule depends entirely on voluntary consent and contact. But the state attempts to break down these competitive centers of authorities and establish a single authority overriding all others. If you don't comply, the state cracks down.
It is a ridiculous idea that we need the state to tell social authorities that they need to adhere to a uniform set of rules and obey a single master. Society does not need uniform modes of association. Market exchange makes social harmony possible even within the framework of radical diversity.
Today's so-called multiculturalists don't see that there is a difference between having a globe with many different cultures and imposing that diversity on each point on the globe. It is a difference between a regime of private property and a statist regime where the rest of us merely obey. Ultimately, those are the only two systems from which we have to choose.
Volume 23, Number 4 (Winter 2003)
Sudha Shenoy is interviewed in this edition of the Austrian Economics Newsletter.
Volume 9, Number 2 (Winter 1988)Professor Hans-Hermann Hoppe discusses political economy and philosophy, as well as private property.
Volume 6, Number 3 (Fall 1986)Robert B, Ekelund, Jr discusses Friedrich von Wieser's book, Social Economics.
Right-to-work laws substitute one government mandate for another, writes Logan Albright. This audio Mises Daily is narrated by Robert Hale.
Rothbard explores Bruno Leoni’s call for a return to the ancient traditions and principles of "judge-made law" as a method of limiting the state and insuring liberty. This audio Mises Daily is narrated by Allan Davis.
Peter Klein discusses property rights, privilege, and free markets, in light of the U.S. Supreme Court's recent Burwell v. Hobby Lobby decision. Peter G. Klein is Carl Menger Research Fellow of the Mises Institute and professor of entrepreneurship at Baylor University's Hankamer School of Business.
In this monograph, Butler Shaffer addresses an important question that has aroused much interest among libertarians: What is the status of intellectual property? Are patents and copyrights legitimate? This is a major contribution to libertarian legal theory and an indispensable guide to a vital topic.
Narrated by Clay Barnett. Music by Kevin MacLeod (incompetech.com).
Interviewed by host Alan Butler, Mark Thornton discusses the failed War on Drugs, and the current state of the U.S. economy.
Canada, a federal state consisting of 13 federal units — ten provinces and three territories — has a relatively long history of agricultural policy. While sometimes similar to American agricultural policies, there are key differences with Canadian agriculture that may help illustrate the economic costs of intervention in differing economies.
While the US Farm Bill draws its origins from 1933 New Deal legislation as an attempt to increase prices of agricultural commodities, Canadian agricultural policy originated in the late nineteenth century with the massive inflow of migrants into areas now known as the Prairie Provinces (Manitoba, Alberta, and Saskatchewan). This migratory expansion was primarily subsidized by the state in the nineteenth century as part of an unofficial “race” for territory between the British Dominion of Canada and the United States. The Prairies were rapidly populated by immigrants from Eastern Europe to whom the state allotted free land for farming. One of the main motives was to settle that territory and thus lay claim to it as part of the Dominion of Canada. The state, of course, had to make sure that the immigrants it brought into the west remained on the land and thus agriculture became a policy for accomplishing national territorial goals.
One of the first pieces of legislation intended to keep farmers on the land was the Canadian Western Grain Transportation Act of 1897, which remained in power for almost 100 years — until 1995. The Act put in place legal obligations for the government to subsidize transportation of grain from western to eastern Canada. After this act was repealed in 1995, it became more profitable to ship Canadian grain southward into the US than to sell it domestically. In this case, the US consumers benefited from the abolition of this Canadian law.
While the US policy has retained its focus on regulating the prices farmers receive for specific commodities, Canadian policy tended to echo the whole-farm support approach of the nineteenth century policies. The 2014 US Farm Bill provides price support provisions for most agricultural crops and profit margin guarantees for raw milk. In addition, the Bill guarantees certain levels of farm revenue for most crops. On the other hand, Canadian farm support programs focus on subsidizing the whole farm profit margin rather than controlling prices or revenues associated with different agricultural commodities.
As an illustration, a US corn farmer would receive a payment from the government covering most of his “losses” if the average price of corn in 2014 fell below the so-called reference price, which is currently $3.70 per bushel. The farmer would first sell his corn on the market at the current price, and the government would “top up” most of the difference between the reference price and the market price. However, even if the corn market price does not fall below the reference price, a farmer could collect payments from the government if his revenue from corn sales falls below his average revenue for the past five years, excluding the highest and the lowest revenue years. This is part of the so-called Average Revenue Coverage (ARC) program. If a farmer chooses not to participate in the ARC program, he still has an option to purchase crop insurance where the government subsidizes 65 percent of the premium. Some estimates suggest that, from 1995 to 2012, the US government spent about $60 billion on crop insurance. Put into perspective, this is approximately the yearly GDP of Croatia, a country with 4 million inhabitants.
In Canada, however, it’s the whole farm profit margin that is being subsidized rather than crop prices or farm revenues. Under the program called AgriStability, farmers pay into an income support account where 45 percent of the premium is paid by the farmer and the remaining 55 percent comes from the federal and provincial government budgets. The second program (the so-called AgriInvest Program) includes an option to pay into an interest-bearing savings account that receives a matching government contribution. If in any given year a farmer’s profit margin falls below the level of the past five years’ average, excluding two years with the highest and the lowest margins, (i.e., the reference margin), most of this loss can be covered by the two income-support programs.
For example, if a farmer’s reference margin is $100,000, and his current year’s income is $40,000, the farmer could receive a payment of up to about $50,000 from the two income support programs. Larger farms could receive up to $3 million in income support payments. In fact, there is evidence that large farms are the major beneficiaries of the government income support programs. In addition to the income support from these two programs, farmers may be eligible for a payment from a subsidized crop insurance program if the income loss was due to a crop yield shortfall.
Income support programs are aimed directly at improving the stream of farm income, but there are also pieces of legislation that affect farm income indirectly. These laws pertain to the sales of some agricultural products such as grains, poultry, eggs, and milk. There are organizations legally authorized to be the sole buyers and sellers of agricultural commodities. The purpose of these organizations, which is usually called marketing boards, is to provide farmers a better bargaining position in relation to the processors of agricultural commodities. These marketing boards are legalized cartels that eliminate competition among farmers and raise the price of farm output. While this makes it possible for farmers to obtain a higher price for their product, it also makes it illegal for them to sell their product to anyone other than the marketing board for that specific commodity.
There are also laws that allow some marketing boards to limit the amount of production in the province and thereby directly raise the market price. This is the case with milk, poultry, and eggs. In order for these programs to function, there are additional legal restrictions on the import of cheaper milk, poultry, and eggs from the world market. For example, Canada allows for up to about 5 percent of domestic demand for dairy products to be imported. All imports that exceed that amount are taxed at a rate of over 200 percent, which effectively prevents further imports. There are debates and negotiations at the level of the World Trade Organization that these restrictions on imports be relaxed, but the final round of negotiations has been ongoing since 1996 and there haven’t been any major changes in import laws.
For example, for the past 40 years, the production of milk in Canada has been legally regulated at the federal and provincial levels. At the federal level, production is limited to about 79 million hectoliters per year. Each province has a strictly defined share in the total national production that cannot be exceeded. For the whole system to function, milk can be produced only by a farmer that is registered with a provincial marketing board. Every farmer is allowed to supply a precisely defined quantity of milk, which is referred to as a quota. A farmer may increase his quota only if another farmer is willing to sell his quota. The exchange of quotas is also regulated in detail and must be approved by provincial marketing boards. Currently, farmers are willing to pay more than $30,000 in exchange for transfer of rights to increase their dairy herd by one dairy cow. However, the soaring quota prices have created barriers for new entrants into the industry. A person that wants to start a small dairy farm first needs to pay more than $1 million just to be allowed to produce milk. These barriers to entry have triggered quota price controls in Ontario and Quebec, the major dairy producing provinces. The price controls, in effect, have reduced the willingness of farmers to sell their quotas. Now the Ontario milk marketing board is offering quotas at subsidized prices to a limited number of new entrants (i.e., not more than ten per year).
Although restrictive agricultural policies bring benefits to many farmers in the form of higher output prices, less competition pressure, and higher quota values, they also restrict their freedom to make business decisions independent of the marketing boards. One popular example of a dairy farmer who thought this loss of freedom was too high of a price to pay for the alleged financial security offered by the quota system is Ian Cumming. Cumming sold his farm in Ontario and moved to New York state to continue farming. Michael Schmidt is another dairy farmer fighting against the provincial regulations. He is advocating for the legal recognition of farmers’ rights to sell unpasteurized milk to willing buyers. Farmers even ended up in jail when they tried to sell their products without the approval of the provincial marketing board. But, not only farmers are trying to circumvent policy restrictions. Recently, we have been getting prohibition-era-style news stories about Canadian pizza restaurants trying to smuggle cheaper US cheese into Canada with the help of corrupt police officers.
Despite these unintended consequences of agricultural policies, the domestic support by the producer groups seems to remain strong. Consumers tend to be unaware of how policies are affecting them, but many see agriculture as a symbol of national pride and may be willing to pay the price of agricultural support policies.
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Supreme Court justices are politicians, who behave in the manner Public Choice theory tells us they should, and they seek to preserve and expand their own power, writes Ryan McMaken. This audio Mises Daily is narrated by Keith Hocker.
Listen to the Audio Mises Wire version of this article.
[Editor’s Note: This is a selection from “On Political Power and Personal Liberty in The Prince and The Discourses” from the spring 2014 issue of Social Research.]
Although liberty is a recurring concern in Machiavelli’s writings, there is no consensus regarding either the definition of the concept or its relevance for his overall political thought. One direction of Machiavellian interpretation that has gained prominence in recent decades has focused on the concept of “libertas” in relation to a republican mode of government, even though Machiavelli’s use of liberty cannot be simply equated with republicanism. In tracing the various occurrences of the term in Machiavelli’s political works, Marcia Colish has pointed out that in the context of internal affairs “Machiavelli often connects libertà with certain personal rights and community benefits that characterize free states regardless of their constitutions.” She specifies, in fact, that “he clearly identifies freedom with the protection of private rights.”Marcia L. Colish, “The Idea of Liberty in Machiavelli,” Journal of the History of Ideas 32, no. 3 (1971): 323–50, esp. 325.
The most extreme form of aggression on private property is that upon one’s own person, negating the most basic right of self-ownership. In The Discourses, for example, uprooting men from their land is considered an act so horrendous that it is metaphorically equated with treating humans like animals. Commenting that Philip of Macedon “moved men from province to province as shepherds move their sheep,” Machiavelli remarks that this inhuman cruelty goes against universal law: “Such methods are exceedingly cruel, and are repugnant to any community, not only to a Christian one, but to any composed of men.” Indeed, in an uncompromising espousal of ethics over exigency, Machiavelli declares that not even the power of kingship can justify infringing upon human freedom in this way: “It behooves, therefore, every man to shun them, and to prefer rather to live as a private citizen than as a king with such ruination of men to his score.”Niccolò Machiavelli, The Discourses (London, New York: Penguin, 2003), p. 177.
Machiavelli imagines, moreover, how a condition of entitlement can be set into place ex nihilo through sheer political and military force:
Where considerable equality prevails, no one who proposes to set up a kingdom or principality, will ever be able to do it unless from that equality he selects many of the more ambitious and restless minds and makes of them gentry in fact and not in name, by giving them castles and possessions and making of them a privileged class with respect both to property and subjects; so that around him will be those with whose support he may maintain himself in power, and whose ambitions, thanks to him, may be realized. As to the rest they will be compelled to bear a yoke which nothing but force will ever be able to make them endure.Ibid., p. 247.
In this scenario, political power both creates and feeds off a system of privilege and parasitism. Citing Marc Bloch’s seminal Feudal Society, [Murray] Rothbard defines feudalism as “the seizure of land by conquest and the continuing assertion and enforcement of ownership over that land and the extraction of rent from peasants continuing to till the soil.”Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, NJ: Humanities Press, 1982), p. 67n. In agreement with Locke’s ideas on the origin of rightful property ownership, Rothbard states: “It should be clear that here, just as in the case of slavery, we have a case of continuing aggression against the true owners—the true possessors—of the land, the tillers, or peasants, by the illegitimate owner, the man whose original and continuing claim to the land and its fruits has come from coercion and violence.”Ibid., p. 65. Feudalism is thus one of the classic ways in which “the State provides a legal, orderly, systematic channel for predation on the property of the producers; it makes certain, secure, and relatively ‘peaceful’ the lifeline of the parasitic caste in society.”Murray N. Rothbard, For a New Liberty: The Libertarian Manifesto (Auburn, AL: Mises Institute, [1973] 2011), p. 62.
I would contend, moreover, that Machiavelli goes beyond the specific issues related to taxation and private property to dissuade the prince from intervening in civil society (il vivere civile) more generally as well. During this period, it was not uncommon to find collusion between political and economic forces in society. Renaissance princes “pledged mining and trade monopolies”Lauro Martines, “The Renaissance and the Birth of Consumer Society,” Renaissance Quarterly 51, no. 1 (1998): 193–203, esp. 195. while privileged families were “concerned about controlling the political situation in order to profit from the monti (public funds), to be able to obtain reductions on taxes and forced loans, to establish international relationships of privilege, or even to set up monopolies via official missions and with the backing of popes and kings.”Vittore Branca, “Introduction” to Merchant Writers of the Italian Renaissance: From Boccaccio to Machiavelli, ed. Vittore Branca and trans. Murtha Baca (New York: Marsilio, 1999), p. xi. The Medici family was particularly notorious for using political power for economic advantage (and vice versa)…
In contrast to the various forms of state corporatism operating in his day and continuing in our own, Machiavelli separates economic endeavors from political activity. As he wrote in a letter to his friend Francesco Vettori, “Fortune has seen to it that, since I do not know how to talk about either the silk or the wool trade, or profits or losses, I have to talk about the state.”John Najemy, Between Friends: Discourses of Power and Desire in the Machiavelli-Vettori Letters of 1513–1515 (Princeton, NJ: Princeton University Press, 1993), p. 225. In pointing to his own limitations, Machiavelli is also envisioning economics and politics as two independent spheres, each requiring a different kind of expertise. In fact, in his political writing, he makes a point to assert that civil society can best flourish in the absence of government intrusion. In The Discourses he states that the common utility (commune utilità) of a free state (vivere libero) is “the possibility of enjoying what one has, freely and without incurring suspicion…, the assurance that one’s wife and children will be respected, [and] the absence of fear for oneself.”Machiavelli, Discourses, p.154.
The Supreme Court’s recent decision on prayer at government meetings reminds me that Supreme Court “season” is upon us, and for the next two months or so, we can expect to see the court decide on a variety of cases that can have profound impacts on the lives of citizens and non-citizens alike. The court’s decision in Town of Greece vs. Galloway has produced a lot of commentary on both sides, with much discussion about the dynamics between justices, and how Justice Kennedy must have been in a pro-prayer mood that day, since his decisions appear to be made on a variety of unknowable whims.
Nearly all of this commentary contains the assumption that it is perfectly normal, and probably laudable, that the Supreme Court has the power to decide the legality of virtually everything under the sun, from the death penalty to where local governments can build strip malls.
If there was ever any doubt that public schooling has been an immense success when it comes to conditioning children to blindly accept even the most implausible myths of governance, we only need look to the high regard in which most Americans hold the Supreme Court. The fact that nine modern philosopher kings are empowered to sit in judgment of every American law and custom, right down to whether or not a city council meeting, in a town virtually no American could find on a map, can include some bland prayer time, is uncritically accepted. It troubles no school child that he is taught that democracy is the source of legitimacy for all governments one minute, and then the next minute is told he should fully trust nine lawyers in robes in Washington, D.C. to have the final word on law for 300 million Americans.
The proposition that nine people should tell 300 million people what sorts of laws they should make is rather ludicrous on its surface, but the justification largely rests on the assertion that the judges are somehow above politics and make decisions based on nearly pure reason. Political scientists and most people with experience in the legal profession no doubt know this is nonsense, but the average American is far more likely to be accepting of the long-standing myth that the court is a sort of backstop that prevents “bad” American laws from being allowed to stand. “Sure,” they might say, “Congress and the president, which are infected by vulgar politics, can do many horrible things, but the Supreme Court will dispassionately evaluate them and decide laws strictly on their legal merits.”
This view of the court is of course hopelessly fanciful, and the truly political nature of the court is well documented. Its politics can take many forms. For an example of its role in political patronage, we need look no further than Earl Warren, a one-time candidate for president and governor of California, who was appointed to the court by Dwight Eisenhower. It is widely accepted that Warren’s appointment was payback for Warren’s non-opposition to Eisenhower’s nomination at the 1952 Republican convention. The proposition that Warren somehow transformed from politician to Deep Thinker after his appointment is unconvincing at best. Or we might point to the famous “switch in time that saved nine” in which Justice Owen Roberts completely reversed his legal position on the New Deal in response to political threats from the Franklin Roosevelt administration. Indeed, Supreme Court justices are politicians, who behave in the manner Public Choice theory tells us they should. They seek to preserve and expand their own power.
The court, jealous of its power, and reluctant to hand down decisions that might actually cause the court to lose prestige, is at times careful to reflect the majority opinion regardless of how atrocious it might be. To see this, we need look no further than Korematsu vs. The United States in which the court declared it perfectly legal to round up American citizens and throw them into concentration camps.
The court forever plays a careful balancing act with both the public and with other branches of the federal government in which if continually pushes the bounds of federal power without rocking the boat to the point of calling its legitimacy into question among the majority of the population. Naturally, Congress and the presidency, themselves committed to untrammeled federal power, have no problem with most of this on most occasions, except perhaps in the details.
Bizarrely, however, the court has even managed to cultivate a reputation as a limit on the power of government, and that justices will rein in the state because it is committed, however imperfectly, to the Constitution of the United States. This is wishful thinking in the extreme, however, since the Constitution is nothing more than what the Supreme Court says it is, and this has been well established since Justice Marshall first introduced judicial review into the court’s decisions. If the Constitution was designed to prevent rule by judges (which may or may not be the case), it has clearly failed in its mission. Moreover, the court acts to insert intellectual legitimacy into laws and policies that formed out of nothing more that interest group lobbying, political payoffs, and even outright corruption. Once these laws receive the imprimatur of the Supreme Court, they cease to be political acts, questionable in origin, and take on the life of perpetually established law and precedent.
The public’s deference to the court and its decisions is the key factor in the court’s immense power, and the myth of the court as the protector of what’s left of the Constitution is especially powerful. But, as Ludwig von Mises noted in Liberalism, as an agent of the Federal government, the idea of the court as a friend to limited government is an absurdity:
The tendency to impose oppressive restraints on private property, to abuse political power, and to refuse to respect or recognize any free sphere outside or beyond the dominion of the state is too deeply ingrained in the mentality of those who control the governmental apparatus of compulsion and coercion for them ever to be able to resist it voluntarily. A liberal government is a contradictio in adjecto. Governments must be forced into adopting liberalism by the power of the unanimous opinion of the people; that they could voluntarily become liberal is not to be expected.
Naturally, the court does not limit itself at all, but it knows it is nonetheless limited by public opinion at least as well as anyone else. The court’s strenuous efforts to maintain an aura of majesty and intellectual loftiness can be seen in its refusal to allow television cameras in its hallowed halls or any sort of direct observation by the public at large. The judges wear academic robes and sit on their high bench. They could just as easily do their jobs in business suits while sitting at the same height as everyone else. Of course, if that were the case, the justices would just look like the glorified county commissioners they are, and the court’s propaganda war against the public is essential in maintaining its near total immunity from any meaningful oversight from anyone at all.
Image source: iStockphoto
Interviewed by host Alan Butler, Mark Thornton discusses the failed War on Drugs, and how a return to sanity is possible if the intellectual, scientific, and ideological communities rise up against it. He also talks about Janet Yellen, the Fed, and our current economic situation.
This article is also available as an Audio Mises DailyWell, another Equal Pay Day has come and gone. This year it came on April 8th to represent how long into 2014 a woman would have to work to make what a man did in 2013. The highlight this year was when White House Press Secretary Jay Carney tried to explain away the pay gap between men and women in the White House by saying that when men and women hold similar positions, they are paid the same. And while the federally commissioned CONSAD report from a few years back found virtually the same thing nationwide, the Obama administration still pushed forward its executive order to end the gender wage gap.
This is nothing new of course. Equal Pay Day and other things of that sort have always required a large degree of cognitive dissonance. Back in 2012, the adult actress Sasha Grey made a PSA (a very explicit one at that) for the Belgium version of Equal Pay Day saying “porn is about the only way to make more than men.” In its analysis of the PSA Jezebel accuses the ad of sending “mixed messages.”Jezebel, March 12, 2012 [Warning: Sexually-explicit content.] The first mixed message one might wonder about is why, if women are discriminated against, is such discrimination not relatively uniform? After all, not only do adult actresses make more than their male colleagues, but the same goes for models. Indeed, in 2013, the top ten male models made only about one tenth of what the top ten female models made. Why is this?
Furthermore, don’t left liberals basically believe, as Vladimir Lenin once said, that “the capitalist will sell you the rope with which we will hang them,” (i.e., capitalists care about nothing but money). If that’s true, it would make sense that female models and adult stars would make more given current market demands. However, since liberals tend to blame any gap in wages between two groups solely on discrimination, apparently capitalists don’t only care about money. They care about being sexists, too.
When we look in more detail at the facts, however, a more complex picture emerges. Women earn only 77 cents on the dollar compared to men, but employers apparently switch teams from time to time even when they are employing people who are expected to keep their clothes on. For example, as Warren Farrell notes, “When women and men work less than 40 hours a week, the women earn more than the men.Warren Farrell, Why Men Earn More (AMACOM, 2005), p. 79. According to the 2003 Census Bureau Current Population Survey, women earn 134 percent of what men do when both work between 25 and 34 hours a week and 107 percent of what men do when both work between 35 and 39 hours a week.
In addition, never-married men with no children between the ages of 40 and 64 have consistently earned less than never-married women with no children in the same age group. In 2001, such men earned $40,000 a year while such women earned $47,000 a year. Warren Farrell, Why Men Earn More (AMACOM, 2005), p. 79. Why do employers discriminate so erratically?
And speaking of women, there are some strange discrepancies between groups of women most wouldn’t expect. Discussing the 1960s, economist Walter Williams noted,
One of the best-kept secrets of all times and virtually totally ignored in the literature on racial differences in earnings is that black/white female professional income ratios do not exhibit patterns even remotely similar to their male counterparts. ... [Black female college graduate] income was 102% of that of white female college graduates.Walter E. Williams, The State Against Blacks (New York: Manahattan Institute, 1982), pp. 55-56.
I am not sure why employers would decide to be prejudiced against white women in this instance. And furthermore, when it comes to race, employers also have an odd preference for Asian Americans. The median per capita income for Asian-Americans in 2005 was $27,331 whereas it was only $26,496 for whites. Are white people being discriminated against ever so slightly here?
And the list goes on:
Jews make more money than other AmericansResidents in northern states make more money than residents of southern statesTall men make more money than short menAtheists make more money than ChristiansJapanese-Americans make more money than Korean-AmericansAfrican immigrants make more money than native born African-AmericansLesbian women make more money than straight womenGay men make just slightly more money than straight menOlder people make more money than younger peopleBlack-Americans make a little more money than Hispanic-Americans, although blacks have a higher unemployment rateAmong Mexican-origin Hispanics, American-born make more money than foreign-bornPeople in urban areas make more money than people in rural areasAll of this must of course only be caused by discrimination, including the interesting (and encouraging) development that black incomes in Queens, New York surpassed whites in 2005, right?
In reality, of course, all of these statistics mean absolutely nothing by themselves. Immigrants may have different characteristics than those who decided not to leave, the history of the Japanese and Koreans in the United States is quite different, atheists make up a very small part of the population as do homosexuals (and those who are openly gay may have different characteristics than those in the proverbial closet), northerners don’t compete directly for the same jobs with southerners just as Americans don’t compete directly with the French, etc.
And that is the point. Gaps can be caused by discrimination — and of course discrimination exists to one degree or another — but especially since such discrimination would punish employers by forcing them to pay a premium for labor, it is simplistic at best to compare two groups without making any other considerations, For example, as Tom Woods observed,
The factors that actually account for income and other differences between various racial and ethnic groups in the United States (and elsewhere) are in fact many and varied. Consider this: fully half of Mexican-American women marry in their teens, while only 10 percent of Japanese-American women marry in their teens. This cultural factor alone would account for considerable difference in incomes between the two groups, since a young married woman will tend to have less mobility and fewer educational opportunities than a young single woman.Thomas E. Woods, 33 Questions About American History You Are Not Supposed to Ask (New York: Randon House, 2007), p. 143.
And then there’s age, which is often left out of inequality discussions all together. As Thomas Sowell noted back in 1984,
Age differences are quite large. Blacks are a decade younger than the Japanese. Jews are a quarter century older than Puerto Ricans. Polish Americans are twice as old as American Indians.Thomas Sowell, Civil Rights: Rhetoric or Reality (New York: William Morrow, 1984), pp. 42-43.
Indeed, when Walter Block was being accused of being a racist for not blaming white/black income differences on discrimination, one piece of evidence used against him was that when holding things constant like years of schooling, the wage gap remained. Walter responded with the obvious fact that “a given number of years of schooling spent in a white suburb are not exactly equivalent to the same amount of classroom time in an inner city neighborhood.”
Either inner city schools need to be fixed or there is discrimination in employment or both contribute part of the whole discrepancy. It is double dipping to blame the whole discrepancy on bad schools as well as blame the whole discrepancy on discrimination. And that goes for just about every difference one can find. As we have seen, to blame every income discrepancy on discrimination leads to some very odd conclusions. (Oh, those over-privileged part-time, atheist, Japanese, lesbian residents of northern states!) There is such a thing as discrimination and I agree it is a problem, but mere discrepancies don’t tell us anything close to the whole story. It’s about time we stopped pretending they do.
Image source: iStockphoto
Mark Thornton presents the case for selling beer at college football games.
This audio Mises Daily is narrated by Clay Barnett.
With the recent court decisions — and lack thereof — in the case involving Elaine and Jonathan Huguenin and their refusal to photograph the commitment ceremony of a lesbian couple, we find ourselves ever further down what appears to be a slippery slope to slavery.
A cursory review of the decision of the New Mexico State Supreme Court suggests it is merely an enforcement of a positive right granted to those who cross the threshold of any business. However, the decision has implications that reach far afield.
Since I object to the belief that the individual holds some sort of collective right to public accommodation against the wishes of a business owner, I already take issue with the prevailing opinion of the court. Nevertheless, upon further consideration, my disdain for this instance of jurisprudence grows.
One implication of a positive right to service from a business is the derivative positive right to quality service. So, it is not just that Elane Photography must take pictures of the commitment ceremony, it is that they must take quality pictures, as well.
Now, if I were to walk into a shop and discuss my desire for photography services, only to end up in a heated argument with the owner, I would not attempt to convince him to serve me. Instead, I would find someone who is interested in doing a good job, not someone simply going through the motions while holding a grudge.Nor would I initiate force via government to coerce him to serve me.
Inherent in the demand for service is the demand for quality — quality commensurate with the price, of course. Now, if I had some claim to the labor of someone else, it is fair to assume he would not welcome that claim and its implication of servitude. So it is not unreasonable to assume his efforts would be less than that exerted in a free exchange.
Based on the current direction of court decisions, if Elane Photography accepted the contract under duress and proceeded to take lousy pictures, the lesbian couple would have another claim against the studios — for providing an unequal level of service.
In other words, it is not enough that the studio takes pictures, the pictures must be equal — in the eyes of the couple, one would assume — to those taken at traditional weddings. It must be so.
And there is more. Suppose the photographer sent from the studio wore a t-shirt stating his disagreement with same sex-ceremonies. Would the courts allow such an act? In other words, can the photographer do anything that might disrupt the moment — in the eyes of the couple, once again?
Or suppose the photographer grimaced and showed outright contempt for the ceremony. Suppose he refused to shake hands, make eye contact, or engage in similar niceties. What if his boorish behavior spoiled the event? Would the courts allow that to stand? Of course not. If the courts permitted rebellion by individuals, their decision would be rendered meaningless.
Keep in mind the studio cannot opt out through any means, so a heckler’s veto of sorts must not be permitted, and any attempt at such a veto punished heavily. In other words, the studio and its employees must not act in a manner that would, under a free exchange, cause the couple to terminate the contract — the studio is bound by law to provide the service in the manner defined by the couple.
We all know where this is headed. Some will cry, “slippery slope fallacy,” but even they know their cry is disingenuous. Sure, tomorrow will look much like today. But looking back at today’s conditions a few years from now will reveal that the slope is real — similar to looking at today from a viewpoint of a decade ago.
And those who cheer the growth of government when it abuses someone else need to realize that what goes around, comes around, with government only too happy in the future to abuse them as well.The counterrevolution can be as violent as the revolution itself.
Ludwig von Mises noted that either negative rights to person and property are enforced or we are on the slope to slavery: there is no middle way.From Mises’s Liberalism: “There is simply no other choice than this: either to abstain from interference in the free play of the market, or to delegate the entire management of production and distribution to the government. Either capitalism or socialism: there exists no middle way.” Think you can pick a stopping point mid-slide? Good luck. The guy riding the slide in front of you is waxing away.
Image source: iStockphoto
The militarized siege of a cattle ranch near Bunkerville, Nevada has drawn national attention as dozens of federal agents, armed with machine guns, sniper rifles, helicopters, and more, have descended on the ranch to seize cattle, people, and generally show everyone who’s boss.
The conservative press has framed the story in a variety of ways, casting the story both as matter of outright federal seizure of private land, and as an absurd environmental crusade to save a tortoise from extinction.
The reality looks to be a little murkier, however, as is often the case when dealing with land ownership in the American West. Back in September, the Las Vegas Sun reported on the Bundy family and noted that troubles began 20 years ago when the family’s patriarch unilaterally determined that he would no longer pay the Bureau of Land Management use fees that have long been required to graze on federal lands. The exact legal and historical details of the Bundy family’s case will emerge slowly over time, but even if the family is completely in the wrong legally (which it probably is), it’s safe to say that taxpayer dollars might be better spent on things other than a shock and awe campaign waged against a tiny ranch in the middle of a Nevada desert. Nonetheless, this is just the latest dispute in a long history of ranchers jockeying with the Federal government over land use permits and land use regulations.The incorrectly-named Sagebrush Rebellion, for example, was not a rebellion at all, but simply a dispute between ranchers and environmentalists who sought to influence federal land-use regulations. It appears that the Bundy Ranch case merely continues these controversies.
While those who are unfamiliar with land use in the West may see this as some sort of new dastardly deed on the part of the federal government, it is in fact the case that leasing federal land for grazing (among many other things) has been the status quo in the West for more than a century, and the federal government has owned at least 40 percent or more of the land in many Western states ever since it was annexed to the United States in the nineteenth century. In fact, the nation’s 13 Western states are home to 93 percent of federal land, with two-thirds of all land in Utah, and 81 percent of all land in Nevada owned by the feds.
The image of the American West as a place of private property and blissful independence from government control has long been a myth, and the fact is that life in the West has involved the federal government much more so than life in the East much of the time. This is because the land and other natural resources in the West are controlled by a vast socialist bureaucracy governing water, land, and minerals going back to the late nineteenth century. Certainly, within the larger framework of federal control, heavily asserted by a central government bloated by the Civil War, there were many communities that did live extremely independently and in ways that might be considered anarchistic. However, since the 1890s, the overall economy of the American West is best viewed as one that has been dominated by federal land ownership, regulation, subsidies, and bureaucracy.
The Rise of the Federal Bureaucracy in the WestIn his history of the American West, Richard White writes:
Beginning in the 1890s, the central government ceased to be a nursemaid to the future states and a prodigal distributor of resources to the country’s citizens and corporations. Washington instead became a manager of Western land, resources, and, inevitably, people.Richard White, It’s Your Misfortune and None of My Own: A New History of the American West (University of Oklahoma Press, 1993), p. 399.
Behind this was the philosophy that the central government could best ensure that the resources of the Western U.S. were distributed and managed “efficiently.” This belief was the natural outcome of the stilted and error-laden classical economics of the time whose models depended on assumptions about idealized markets and competition that did not exist in the unindustrialized West. In other words, in the minds of nineteenth-century intellectuals, government intervention would be necessary to create the conditions necessary for the existence of efficient capitalism. As it had done with the railroads, the federal government would step in to ensure competition and efficiency in the new marketplaces of the frontier.
By 1903, Theodore Roosevelt’s Public Land Commission solidified the concept of public ownership throughout the West, thus ending the idea that all lands in the West should be distributed via the homestead acts, which were themselves artifacts of federal government programs.
The rise of the Bureau of Reclamation (which managed water) and the Bureau of Land Management ensured that both water and land would be controlled either directly or indirectly by federal government agencies indefinitely. Whatever the philosophical origins, the situation quickly degenerated into the all-too-familiar situation seen anywhere that the state dominates and controls the distribution of resources. Federal agencies became the target of lobbying efforts by interest groups large and small, with regulatory capture resulting. Leases for land for oil drilling, mining, and grazing quickly became important for doing business in the region, and naturally, maintaining influence within federal agencies under such conditions was a key to success.
Support for federal control in the region remained widespread among Westerners themselves. As a region that was poorer and less able to attract capital than the East, many Westerners quickly made peace with this system of federal ownership, not least of all because the Federal government, through subsidies, public works programs, and military spending, had become an economic driver in the West.
But competition for control of federal lands among various segments of the population continued all the same. Writes White:
Corporations tended to be more fickle allies of the federal bureaucracies, but on the whole, they, too, proved sympathetic to federal management; certainly they were more sympathetic than small businessmen. Large and small resource users in the West, all pursuing their own calculus of self-interest, split over particular proposals. ... Small stock grazers and small lumbermen tended to oppose the new federal presence which tended to thwart their ambition for expansion. Larger stock raisers and big timber companies, however, realized that federal supervision could serve their interests by helping restrain the overproduction that plagued their industries, by restricting the expansion of potential competitors, and by allowing them to turn their greater financial resources into privileged access to the federal domain.Ibid., p. 392.
In other words, private firms that dominated the Western economies liked the federal bureaucracy because it helped powerful firms keep prices high, and bar entry for competitors.
In later decades, the federal agencies would also be influenced by new environmental and conservationist groups, but for all the talk of preserving the desert tortoise in the Bundy Ranch case, it should not surprise anyone if we find later that major oil and gas firms are actually behind the drive to finally end desert access for small ranchers.
The Legacy of Empire in the WestWhen we see federal agents harassing ranchers, we should be reminded that the conquest of the American West was really an early exercise in empire that would set the stage for the enormous government that Americans now face today. While we now view the West as just another part of the United States today, it was once a colonial empire seized militarily from Indians and Mexicans, and then — through federal programs such as the homestead acts, land grants, and major infrastructure projects like railroads — turned into an enormous source of subsidies for American settlers and corporations. Those who inhabited the lands prior to annexation, such as the Indian tribes and the Hispanos of old New Spain, were rounded up and put in reservations or forced to abandon old economic and social systems.
Like most jurisdictions within colonial empires, the American West was administered not locally, but directly from the capital of the conquering state. It was in D.C. where the borders of new states where drawn, where officials were appointed, and where orders were given to federal troops who policed the region. Even after statehood was granted (by the central government, of course) the region remained dominated by the federal government. The overseas empire that began with the Spanish-American war was simply the natural outgrowth of the conquests in western North America during the nineteenth century. It was in the West that the United States government learned how to be an empire; to directly control enormous swaths of land, and to dominate and control local economies.
This legacy continues today. As we view the standoff in Nevada, we see the echoes of a previous conquest of those same lands decades earlier. Many in the West today now find themselves victims of the same federal government that their ancestors once cheered as it drove out the original inhabitants, laid down roads, and built dams. The federal government is a fickle master, however, and the fact that it never relinquished control of so many lands that it had seized makes it an undeniable force for all who wish to do business here.
The purpose of this course is to illustrate how Austrian monetary economics is used to analyze historical and current events and policies. The course will also cover controversies between Austrian and mainstream monetary theorists in interpreting the causes, consequences, and remedies for important episodes of monetary disorder. Topics will include:
Rothbard Versus Friedman: Were the 1920s Inflationary? Were the 1930s Deflationary?Deflation: Good or Bad?The War on CashWho or What Caused the Financial Crisis and Great Recession?Beware of False Gold Standards: From Bretton Woods to the Dollar Bill StandardWorld Currency Wars: Who Will Win and Who Will Lose?LecturesLectures will be Tuesdays at 5:30 p.m. Eastern time. They will be recorded and made available for enrolled students to download.
ReadingAll readings will be free and online. A fully hyper-linked syllabus with readings for each weekly topic will be available for all students.
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This article is part of a series. See Edward Snowden, the NSA, and the US Courts, FISA, the NSA, and America’s Secret Court System, and How the NSA Made Your Legal Defense Illegal.
We now look at the system of secret law that was developed behind a barrier of secrecy to give a legal veneer to the system of mass surveillance that has been created.
The legal story here revolves around a legal doctrine known as the “third-party doctrine,” which arose in a 1976 case called United States v Miller and a 1979 case called Smith v Maryland. Miller involved warrantless access by police to a suspect’s bank records and Smith involved a warrantless tap of a suspect’s phone using a device known as a “pen register.” In both cases the police had information leading them to have probable cause for suspicion that the suspects had committed a crime. Rather than seeking a warrant from a court they sought private records from a third-party provider. In Miller the police obtained bank records from the suspect’s bank and in Smith the police obtained a pen register on the suspect’s phone with the assistance of the phone company.
These became important Fourth Amendment cases, testing the scope of the protection provided by the US Constitution in matters where third party providers hold private records for a person. Miller and Smith both sought to exclude evidence obtained from these sources at their trials, arguing that the police use of their records involved an unreasonable search, in view of the fact that they had not obtained a warrant for obtaining the relevant material. The Supreme Court disagreed, holding in both cases that the suspects did not have a reasonable expectation of privacy in their records. Explaining their decision the court set out the relevant principle as follows:
This Court has held repeatedly that the Fourth Amendment does not prohibit the obtaining of information revealed to a third party and conveyed by him to Government authorities, even if the information is revealed on the assumption that it will be used only for a limited purpose and the confidence placed in the third party will not be betrayed.[1]
These opinions gave rise to a doctrine known as the “third-party doctrine,” essentially allowing that any information communicated to a third party could be obtained by the government without a warrant, without any objection in respect of the Fourth Amendment.
The third-party doctrine is quite a bizarre doctrine, and one which is clearly erroneous. The doctrine asserts that a person can only have a reasonable expectation of privacy in records if those records are not revealed to any third parties, and this purportedly applies regardless of the limited purposes or confidentiality expectations that apply in the relationship with the third party. Clearly this cannot be reconciled with many other contexts, such as where people communicate confidentially with lawyers, doctors, and other fiduciaries. Indeed, it is a quite bizarre logical implication of the third-party doctrine that there is supposedly no reasonable expectation of privacy in sensitive legal or medical information on the basis that it is sometimes disclosed to one’s own lawyer or doctor.
Unsurprisingly, this doctrine has been heavily criticized since its inception.[2] One legal scholar notes that, “[w]hile Smith and the Third Party Doctrine were heavily criticized even before the Internet age, the drumbeat of criticism has intensified.”[3] Some have argued that the doctrine should only extend to cases where the third party is a genuine recipient of information, and not merely a conduit for the transfer of information (as in the case of a phone company).[4] However, even here this would not accord with other contexts where there are clear and reasonable privacy expectations (e.g., dealings with lawyers, doctors, etc.). The more appropriate result would be for the doctrine to be overturned entirely. While communication of information with third parties is certainly a valid factor in determining whether there is a reasonable expectation of privacy, it certainly should not be a disqualifying feature — context is everything.
Despite the absurdity of the third-party doctrine, its existence has not been a major issue for courts until recently, since its application has generally been confined to small instances of police searches, involving cases where there is probable cause for suspicion of a crime. From the 1960s to the 1980s the doctrine was applied in several police cases, but later on the lower courts tended to distinguish the facts from the early cases in ways that would allow them to avoid application of this doctrine. The Supreme Court has not made any further ruling on the doctrine since these original cases, but there were remarks in one of its recent cases suggesting that the doctrine might be reconsidered in the future.[5]
In the past decade, with the advent of broader surveillance methods by the US government, the doctrine has become more far-reaching, and in the case of the NSA, it has spawned an entire system of secret law, purportedly justifying mass warrantless surveillance of the population. Behind the veil of secrecy of a system of secret courts the NSA and the FISA court have gradually developed a string of legal precedents extending the Miller and Smith cases and purporting to give a legal justification to the mass collection of all metadata derived from telecommunications. All of this has taken root on the flimsy basis of these two legal decisions, which were concerned with single instances of police searches of known suspects. From this slippery slope the NSA has successfully argued its case for mass surveillance to the FISA court, without any other parties present.
According to the NSA view, if police can legally install a pen register on a phone without a warrant in a particular case, then surely they ought to be able to hoover up all metadata running through the phone lines, and store it in massive data repositories, ready for access when needed. After all, this is similar in effect to the application of lots and lots of pen registers, all individually lawful, according to the third-party doctrine. If it is lawful to collect the metadata of one man without a warrant, then why not two, or three, or seven billion?
Beyond its reliance on the third-party doctrine as a brace against constitutional prohibition, the NSA has also relied on legislative provisions allowing it to use a special kind of warrant for its surveillance activities. Though we have already noted this in our previous discussion of the secret court system, it is worth highlighting that this forms a crucial part of the system of “secret law” that pervades the NSA operations. Whereas regular warrants issued to police involve the search of a particular specified place pertaining to a specified suspect, the NSA has established the practice of applying to the FISA court for general “procedure-based warrants” allowing the agency to conduct surveillance according to certain procedures, and subject to “minimization procedures.” Unlike individual warrants, these general warrants are not limited to any particular suspect or group of suspects. Instead the warrant allows the NSA full discretion to engage in surveillance on any target it desires, so long as the procedures in the warrant are followed. (Of course, the procedures may also specify the type of target, or a requirement for justification for a particular target.) While the legislative system for these warrants is public knowledge, the warrants themselves have been kept secret from the public.
This situation has prevailed without public knowledge until the leaks by Edward Snowden brought many of these secret judicial rulings into the public domain. At that time it became clear that the NSA had established a system of “secret law” which it used to give a legal veneer to its actions. Obviously this alleged legal justification is a large extension of the surveillance in Miller and Smith, and many scholars have argued that the extension to mass surveillance is not justified by those cases.[6] In the Klayman case Judge Leon found that Smith v Maryland was unhelpful in assessing the mass surveillance program of the NSA, due to changes in the nature of telecommunications and surveillance occurring in the 34 years since the case. In ACLU v Clapper Judge Pauley found that the case established a precedent that allowed the NSA to conduct mass metadata collection. While some have argued that the third-party doctrine provides constitutional cover for the NSA metadata programs, it would be more accurate to say that those programs provide the reductio ad absurdum showing the error of the doctrine, and perhaps also the initial decisions concerning its application.
In the recent cases where the NSA has been challenged on its activities, the agency has repeatedly argued that practical considerations in respect of its surveillance programs should be considered as a reason not to remove people from its databases. (Of course, such arguments have always been made while simultaneously refusing to admit that any particular person is even on their database!) The NSA has argued that its system of mass data retention would be threatened by any orders from courts for them to remove a particular person’s records, since this would create complicated exceptions to its general procedures and systems. This argument effectively invokes the NSA’s view that its activities are sufficiently complex that it should not be burdened by the Rule of Law — that the law should mould itself to NSA activities, rather than the other way around.
The Klayman case has now given judicial weight to the absurdity of the third-party doctrine, and the fact that this doctrine entirely subverts the protection of people against unreasonable searches by their government. According to Judge Leon:
The Fourth Amendment typically requires “a neutral and detached authority be interposed between the police and the public,” and it is offended by “general warrants” and laws that allow searches to be conducted “indiscriminately and without regard to their connection with [a] crime under investigation.” ... I cannot imagine a more “indiscriminate” and “arbitrary invasion” than this systematic and high-tech collection and retention of personal data on virtually every citizen for purposes of querying and analysing it without prior judicial approval.
In the coming years the third-party doctrine, and its application in mass surveillance, may well be retested in the US Supreme Court. This will do much to determine the degree to which the court will act as a legitimizing mechanism for the NSA. However, it will not change the fact that the court has been fully complicit in this system of secret law throughout the period prior to the Snowden leaks.
Although we have been referring to this prevailing regime as a system of “secret law,” it is important to note that it is, in truth, a program of secret lawlessness. Indeed, the very notion of “secret law” is oxymoronic, suggesting that people may legitimately be ruled by principles of law established behind closed-doors and kept hidden from them. The operations of the secretive FISA court has allowed the NSA to cloak its lawless activities in the mantle of judicial oversight, even as judges within the secret court gave secret rulings complaining of the misrepresentations and malpractice of the agency. The Supreme Court has aided and abetted this process, by preventing any challenge to the constitutional legitimacy of the programs.
From a libertarian perspective, it might be regarded as tiresome and irrelevant to analyze doctrines of “positive law” put forward by the government’s own legal instruments. Of what interest are constitutions and legislation written by the State to assert its own power? After all, such “positive law” is merely a system of commands of the sovereign government, prone to expand and justify its powers.[7] But even here, the positive law is of interest, since it is alleged to constraint the actions of governments, and is used to justify the power of government. It is part of the government’s claim to legitimacy that it operates according to the Rule of Law.
In view of this, it is interesting and instructive to see that, even by its own legal standards, created by its own institutions, governments still act in a lawless fashion. As with other governments, the US government exists in a precarious balancing act — attempting to expand its own power without constraint, while at the same time play-acting that it is subject to the Rule of Law. This has been particularly evident in the operations of the NSA, which has gradually implemented a regime of mass surveillance behind a wall of secret courts, secret evidence, and secret law.
Note: The views expressed in Daily Articles on Mises.org are not necessarily those of the Mises Institute.
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Notes
[1] United States v Miller (1976) 425 US 435, per Powell (for the Court) at 443.
[2] For discussion of various criticisms see Stephenson, S.E. (2011) “The Timely Demise of the Fourth Amendment Third Party Doctrine.” Iowa Law Review 96.
[3] Tolson, M. (2011) “Automation and the Fourth Amendment.” Iowa Law Review 96, p. 585. Italicization of case name added.
[4] Henderson, S.E. (2005) “Nothing new under the sun? A technologically rational doctrine of Fourth Amendment protection.” Mercer Law Review 56, pp. 507, 524-528.
[5] United States v Jones (2012) 565 US, per Sotomayer, p. 5.
[6] Harper, J. (2013)
“If you think that Smith v Maryland permits mass surveillance, you haven’t read Smith v Maryland”. CATO at Liberty, 20 August 2013.
[7] For discussion of “positive law” as a command system, see O’Neill, B. (2012) “Natural law and the liberal (libertarian) society.” Journal of Peace, Freedom and Prosperity 1, pp. 29-50.
[This article is part of a series. See “Edward Snowden, the NSA, and the US Courts” and “FISA, the NSA, and America’s Secret Court System.”]
We have seen how the NSA’s phony court system has acted as a substitute for genuine judicial review, allowing the NSA to build up precedents purporting to assist its constitutional claims. We have also seen that the NSA is able to obtain surveillance authorization through misrepresentations to the court, without any genuine consequence to the agency, even when discovered. In this Part, we now examine how the NSA shields its activities from review by the public court system, through the control of secret information that could be used as evidence against them.
By virtue of having its system of secret courts, the NSA has been eager to prevent any of its activities coming under scrutiny in the wider public court system. It has accomplished this goal by appealing to the public courts to dismiss claims against them prior to any assessment of the merits of the claim. This has been done by claiming that litigants who seek to challenge its programs lack standing to sue, and that the matters involve “state secrets” which cannot be raised in public courts. The former technique has been particularly successful for the NSA — it has engaged in mass surveillance while simultaneously relying on the fact that no individual litigant can prove that they are affected by the surveillance!
Before turning to the exact details of this argumentative technique, we first consider the general rules of disclosure occurring in litigation. In most legal cases, there are general principles which require the parties to give full disclosure of relevant documentary evidence to the other parties and the courts, in order to make sure that the legal matters are able to be discussed adequately. Of course, one would expect that in matters of security and surveillance there would certainly be some expectation of secrecy, and these general rules would be subject to some competing considerations. However, even in cases where there are legitimate expectations of secrecy, such that parties are not required to give full disclosure of all this evidence, there is still a general principle of litigation that the party in control of a relevant piece of evidence is the one that is expected to put forward that evidence, or suffer an adverse inference from the court if they refrain from doing so.There are some notable exceptions to this principle, such as the right of the defendant to avoid testifying (without any adverse inference) in criminal proceedings. Courts have generally required that when a party refrains from putting forward relevant evidence under their own control, and without good reason, it is advisable for the court to draw an adverse inference from this — i.e., if they don’t want us to see it, it must not do them any good.
Legal scholar Stephen Odgers has noted that, “[u]nder the common law, adverse inferences may be drawn from the failure of a party to give or call particular evidence, where such evidence would reasonably have been expected.”Odgers, S. (1998) Uniform Evidence Law (Third Edition). LBC Information Services: Sydney, p. 55. This legal text applies specifically to Australian evidence law, but similar principles can be found expressed in cases in other common law jurisdictions. This principle is manifested in several rules of evidence that have prevailed under common law. This includes the “Jones v. Dunkel rule” applicable in civil proceedings, saying that if one of the parties to a case is in control of some piece of evidence relevant to a disputed matter, then their failure to put forward that evidence may lead to an inference that this evidence would not have assisted their case.See Jones v Dunkel (1959) 101 CLR 298. This rule was expressed in an Australian High Court case, but sets forth a similar principle to that expressed in various English cases. This rule is most often used when a party to a civil case fails to call a witness who could have testified as to a particular disputed matter. In such a case the failure to call the witness may be taken as implying that the testimony of the witness would not have assisted the party’s case.
While some expectation of secrecy is legitimate in surveillance matters, in cases involving the NSA this principle has generally not been applied at all, and the NSA have been free to use their own undisclosed knowledge of the operations of their surveillance programs as a means to lock out critics from proving, or even arguing against the constitutional legitimacy of their surveillance programs. This has been most apparent in the many successful attempts by the NSA to preclude plaintiffs from challenging the constitutionality of their surveillance programs, by arguing that the challengers lack “legal standing” to sue. Briefly, courts require that a person cannot bring a legal case against a party without showing that they are somehow affected by the actions of that party — even if they can prove that the actions are unlawful, they must first show that they have “standing” to sue, in the sense of having been affected by the wrongful actions.
Until the recent whistleblowing against the NSA by Edward Snowden, the agency had created a wonderful legal Catch-22 around this doctrine, aided and abetted by delinquent US courts. In order for a plaintiff to challenge the constitutionality of the NSA’s illegal surveillance programs, the person first had to prove having been subjected to surveillance, in order to show that they have “standing” to bring the case. But of course, the very nature of the program is that it is kept secret, and all evidence which would prove that the plaintiff lies within the scope of the program is “classified.” To obtain this evidence, a plaintiff would have to access classified information, which would then lead them to legal dangers of another kind. Hence, a wonderfully absurd situation has prevailed. Every citizen in the US (and many outside the US) are subjected to this unlawful mass surveillance, but none, until Klayman, have been considered by the courts to have any standing to sue. Moreover, the reason that Klayman was successful in obtaining standing was because he was able to rely on documents leaked by Edward Snowden — leaks which the US government still regards as criminal espionage, punishable by death.
What this has meant, is that the public courts in the US have effectively ruled that to prove that secret mass-surveillance is unconstitutional, it first has to not be secret. This Kafkaesque legal approach has sunk several legal challenges to the NSA surveillance programs, including the high profile case of Clapper v Amnesty International.See Clapper v Amnesty International (2013) 568 US. See also Goodman, A. and González, J. (2013) ACLU blasts Supreme Court rejection of challenge to warrantless spying without proof of surveillance . Democracy Now, 27 February 2013. In that case the Supreme Court of the United States ruled that the plaintiffs lacked standing to challenge the constitutionality of the NSA programs, based on the allegedly speculative nature of their claim to have been targets of the surveillance. (Of course, it has since become indisputable that all plaintiffs were indeed within the scope of the surveillance programs.) The attorney for the ACLU described the disturbing trend of judgments that had led to the ruling:
They are supposed to be ensuring that the government’s national security policies are consistent with the Constitution. Instead what’s happening is many of these challenges are being thrown out at the threshold. Different — there are different reasons. Sometimes it’s standing. Sometimes it’s state secrets. Sometimes it’s immunity. But the common thread is that all of these cases are being thrown out even before the courts reach the merits. And that is a disturbing thing that ought to be of concern to everybody.Ibid, Goodman and González (2013), remarks of Jameel Jaffer, deputy legal director for the ACLU
In the Amnesty International case the majority of the Supreme Court relied on an assurance by the US government that NSA surveillance would be disclosed by prosecutors to criminal defendants, allowing them standing to challenge the program at a later time. Later prosecutions showed this to be false, and this effectively meant that the programs have been immune from judicial scrutiny.Liptak, A. (2013) A secret surveillance program proves challengeable in theory only New York Times, 15 July 2013.
In the many cases that have fallen before this doctrine, the NSA has claimed to the court that the claims by the opposing litigants to be within the scope of NSA surveillance are “speculative,” all the while perfectly aware that such claims are in fact true. It has not even been necessary for any NSA witnesses to deny that surveillance of the plaintiff has occurred, which would at least have meant that they would face a choice between disclosure and perjury. Instead, the NSA has simply argued that plaintiffs cannot prove that they are being subjected to surveillance, and therefore they cannot challenge the legality of the actions of the NSA in court. In light of the Snowden leaks this has been a particularly salutary lesson — a demonstration of how the government is able to shield its unlawful actions from judicial review simply by cloaking its operations in secrecy.
Of course, if one were to apply the general common law (and common sense) principles of evidence to this kind of situation, the solution to this impasse would have been quite simple. Since the NSA is the agency with full control of the programs and full knowledge of their scope and operations, they are the ones who should be expected to testify that a plaintiff does not, in fact, fall within the scope of any of its programs. If they fail to do this then the court should draw an appropriate inference. To assert that the plaintiff lacks standing, while hiding the evidence that would disprove this, and criminalizing its disclosure, flies in the face of this evidentiary rule.
In addition to this undermining of the normal rules for putting forward evidence, the NSA and its partners in the “Five Eyes” have further compounded the destruction of traditional legal principles by spying on privileged attorney-client communications. During trade talks involving the US government, Australian intelligence agencies (partnered with the NSA under the “Five Eyes” program) spied on confidential communications between the Indonesian government and its US attorneys, and communicated this information to the NSA.Hattam, J. (2014) Bar Association Protests NSA Spying. The Hill, 24 February 2014. This led to protests from the US Bar Association, in view of the erosion of attorney-client confidentiality.
Now that the activities of the NSA have come to light, constitutional scrutiny of the NSA programs is at last winding its way through the public court system. By virtue of the accommodating rulings of the US Supreme Court, the mass surveillance programs have enjoyed a decade-long vacation from constitutional scrutiny, under the de facto immunity imposed by the court. The Klayman case, which is the first to break through this wall, differed from the Amnesty International case in one key respect — the former was decided early in 2012, prior to the Snowden leaks, while the latter had a recent preliminary judgment which came after the Snowden leaks, and was able to rely on that material. This material showed unequivocally that the NSA does indeed engage in mass-surveillance, and that two of the plaintiffs fell within the scope of one of the metadata collection programs. Contrary to the Supreme Court’s suggestions in Clapper v Amnesty International, it was not any government disclosure that allowed standing — it was a disclosure made against the wishes of the government, and treated by them as an act of criminal espionage.
We begin our analysis of the legal machinations of the NSA by looking at the secret court system which supposedly practices judicial oversight over the agency. This Foreign Intelligence Surveillance Court (FISA CourtFISA refers to the Foreign Intelligence Surveillance Act 1978 (US) which established the court. or FISC) was created in 1978 as a result of recommendations of the Church Committee, composed after a series of intelligence scandals in the 1970s.Formally, this was the ‘US Senate Select Committee to Study Governmental Operations with respect to Intelligence Activities’. It is known informally as the ‘Church Committee’ since it was chaired by Senator Frank Church. The committee was formed in response to the Watergate scandal and other intelligence scandals, where the NSA, CIA and FBI had undertaken various unlawful activities.The court was purportedly created as an additional safeguard against unlawful activity by US intelligence agencies, which had been found to have committed various kinds of unlawful surveillance activities.
The goal of the FISA court, as originally conceived, was to place judicial oversight on the surveillance activities of the NSA, by requiring the agency to obtain warrants from the court before intercepting communications. This was to place the NSA under the same kind of legal constraints as regular police, with requirements for evidence being put before a court in order to obtain a warrant for search. However, unlike the court system for regular police warrants, the judicial system for the NSA is far more secretive. In order to give judicial scrutiny to preserve the secrecy of NSA activities, the FISA court meets in secret with only government representatives present at its proceedings. The hearings are closed to the public and the rulings of the judges are classified, and rarely released after the fact. (Some rulings have been partly declassified, but are still heavily redacted.) The judges in the FISA court hear applications from a representative of the NSA, and ask questions, allowing the agency to amend their applications to meet any shortcomings. Adversarial argument from other parties is absent, since there are no other parties at the hearing.
Some of this is similar to the operation of public courts for regular police warrants, but there is a great deal more secrecy, and a great deal more power granted to the government. One distinction between the FISA Court, and regular public courts issuing warrants for police searches, is the type of warrant system that is practiced under the FISA Court. For police searches it is generally the case that the police will apply for a warrant to surveil a particular person, or a small group or people, and give some evidence of “probable cause” for a search, i.e., the police must convince the court that there is reasonable suspicion for surveillance on a case-by-case basis. Under the FISA Court the warrants for the NSA are much wider in scope. Many of the warrants authorize the collection of communications data on a particular phone carrier, capturing the communications of millions of people over sustained periods of time. Other warrants are “procedure-based” warrants which authorize a proposed data-collection process, subject to various “minimization procedures” designed to confine the querying of data. These generally allow mass data-collection on a population, with application of the minimization procedures left to the NSA.
As with other law enforcement authorities, the record of the NSA in obtaining warrants from the FISA court is imposing. In the 33,949 applications that were resolved from 1979-2012, only 11 were rejected (0.0324%). See FISA Court Orders 1979-2012. Epic.org. The court has defended itself from this statistic by noting that many applications were withdrawn or amended by the NSA prior to final hearing; see e.g., Walton, R.B. (2013) Letter to Patrick Leahy (The rejection rate for other wiretap applications in state and federal courts is similarly low. See US Courts (2012) Wiretap Report 2012, Table 7.Though originally designed merely to issue secret warrants for surveillance, the powers of the FISA Court have expanded over time, with a large expansion of power occurring in 2008, when the Bush administration retroactively immunized any “electronic communication service provider” from any liability for their complicity in unlawful NSA surveillance.This was accomplished by the FISA Amendments Act 2008 (US) which provided a release from liability for any “electronic communication service provider” for providing information in accordance with an order/ request/directive from the Attorney General or Director of National Intelligence. Notably, the section does not refer to a lawful request or order, but just any request or order. This was understood to mean that there would be immunity even for complicity with unlawful actions by the NSA.
In order to deal with a large number of warrant applications, the powers of the FISA Court have expanded to the point that it has undertaken quasi-constitutional proceedings, allegedly validating the surveillance programs as being within the constitutional powers of the US government. Even in this latter function, the hearings have been closed to the public and have been conducted with only the government giving arguments to the court. Hence, the government has had free rein to be the only party represented at hearings which have purported to determine its own legal powers under the US Constitution. For this reason, one commentator has noted that, “[i]n truth, the FISC has basically become a parallel Supreme Court, but one which operates in almost total secrecy.” Whitehead, J.W. (2013) Kafka’s America: secret courts, secret laws, and total surveillance . Antiwar.com, 24 July 2013.
The effect of this secret court system has been to allow the NSA to build up 34 years of judicial precedents in favor of its expansive powers, with a large body of purported constitutional findings validating its own power. All of this has been conducted behind closed doors, without the inconvenience of opposing argument from other parties. Perhaps unsurprisingly, this secret court system has opened up opportunities for judicial capture for the NSA. As noted by legal scholar Elizabeth Goitein, “[l]ike any other group that meets in secret behind closed doors with only one constituency appearing before them, they’re subject to capture and bias.” Klein, E. (2013) Did you know John Roberts is also Chief Justice of the NSA’s surveillance state? The Washington Post, Wonkblog, 5 July 2013.
For former FISA court judge James Robertson, these remarks have rung true to such an extent that he has publicly complained about the ex parte nature of the FISA court proceedings. Roberts, D. (2013) US must fix secret FISA courts, says top judge who granted surveillance orders . The Guardian, 10 July 2013. According to this former member of the court, “[w]hat FISA does is not adjudication, but approval. This works just fine when it deals with individual applications for warrants, but the 2008 amendment has turned the FISA court into an administrative agency making rules for others to follow.”Ibid.
To the extent that judicial capture has been resisted by the court, it has nonetheless functioned as a compliant entity to the NSA, through the fact that any criticisms against the unlawful actions of the NSA have been kept secret, and have been without any serious legal consequence to the agency. When the Chief Judge of the FISA court was alerted to a mass of systematic misrepresentations to the court by the NSA, the consequence was a “stern rebuke” in a classified memorandum that was not available to the public until years later. Nakashima, E., Tate, J. and Leonnig, C. (2013) Declassified court documents highlight NSA violations in data collection for surveillance . The Washington Post, 10 September 2013. (In fact, the opinion was only declassified due to public pressure as a result of the Snowden leaks. If not for these leaks it is likely that the opinion would still remain classified today.) In March 2009, following breaches of the courts orders, the Chief Judge found that the testimony of General Keith Alexander setting out the NSA interpretation of the court’s orders “strained credulity” by interpreting a part of the orders as effectively being optional. FISA Court (2009) Order - In Re Production of tangible things from [Redacted] . Docket BR 08-13, p. 5. He also found that “[t]he minimization procedures proposed by the government in each successive application and approved and adopted as binding by the orders of the [FISA Court] have been so frequently and systematically violated that it can fairly be said that this critical element of the overall [metadata] regime has never functioned effectively.”Ibid, p. 11.Despite lacking confidence that the NSA would comply with future orders, the Chief Judge allowed the mass collection of metadata to continue, and allowed the government to continue to apply for access to this data on a case-by-case basis, or for imminent threats, until such time as they completed a review of their procedures. The NSA completed their review and the regular operation of the mass-surveillance program was restored shortly afterward.
Some commentators have taken this judicial rebuke by the FISA court as proof of the “toughness” of the court on the NSA, but in fact, it is proof of their subservience to the agency. Despite finding that there had been systematic misrepresentations to the court by the NSA, no action was taken against officials who had given false statements to the court. There was no disciplinary action of any kind against personnel of the agency, and the “rebuke” of the court remained a private classified document, only available to the agency being criticized. NSA officials who had systematically misled the court were free to read this rebuke knowing that no consequence would follow from it, since no member of the public could read about their actions. When the matter was later exposed to the public (as a result of the Snowden leaks) the Chief Judge complained that his court “... is forced to rely upon the accuracy of the information that is provided to the Court.” See Leonnig, C. (2013) Court: Ability to police U.S. spying program limited . The Washington Post, 16 August 2013. The surveillance programs of the NSA continued, with ongoing approval by the court, after a short period of technical review conducted by the NSA. Such “toughness” as this is what passes for “checks and balances” within the system of secret courts.
The dubious nature of the FISA court is well-understood within the wider judicial system, a fact which was clear in the Klayman preliminary judgment. The stark distinction between the secretive FISA court and the public court system was recognized by Judge Leon when he observed that, “... no court has ever recognized a special need sufficient to justify continuous, daily searches of virtually every American citizen without any particularized suspicion. In effect, the government urges me to be the first non-FISC judge to sanction such a dragnet.”Ibid, Klayman, emphasis added.It is notable here that Judge Leon felt that it was significant that he was the first non-FISC judge to consider the matter, a tacit recognition that the judgments of the FISC cannot be regarded as true constitutional scrutiny.
Legal scholar Randy Barnett has argued that surveillance programs by a secret court violates the requirement for “due process of law.” According to Barnett, “[s]ecret judicial proceedings adjudicating the rights of private parties, without any ability to participate or even read the legal opinions of the judges, is the antithesis of the due process of law.” Ibid, Barnett (2013).Though we refer to such an institution as a “court” system in the positive-law sense, in truth, such a “court” lacks many of the characteristics of a proper court. It is in fact more akin to bodies such as the English Star Chamber, which conducted judicial hearings in secret, issuing secret rulings affecting parties who were not represented in its hearings.
[This article is part of a series. See Edward Snowden, the NSA, and the US Courts.]
Many commentators following the NSA scandals have been eagerly awaiting the recommendations of the US government task force on the matter, and the proposed reforms to be implemented by President Obama to bring the spy agency under control. If you’re interested in this kind of thing, you can watch the president’s recent speech and nod your head approvingly when he talks about the “tradition of limited government” in the United States, and the constitutional limits his government is at pains to respect. Oh, and just for good measure, while you’re listening to this magnificent oration being replayed to you on YouTube, the NSA will be recording your internet browser history, or possibly even hacking your computer. This occurs under various programs, mostly for persons outside the US, but also for some people within the US. For further details, see e.g., B. Gellman and L. Poitras (2013), US, British intelligence mining data from nine US internet companies in broad secret program, The Washington Post, 7 June 2013; see G. Greenwald (2013), XKeyscore: NSA tool collects ‘nearly everything a user does on the internet’, The Guardian, 31 July 2013; D.B. Donaldson (2013), NSA reportedly hacks Americans via Facebook, YouTube, Twitter, LinkedIn, Liberty Voice, 29 December 2013. If you decide to click on the “like” or “dislike” buttons at the bottom of the video, that little nugget of political information can be added to their “metadata” archives, along with the rest of your internet activities. In fact, in the 42 minutes it will take you to watch the president’s speech, the NSA will have hoovered up around 40 million records of internet browsing from around the world.Calculation based on information about the collection capacity of the XKeyscore program; see Greenwald (2013), ibid. According to this source, “[i]n 2012, there were at least 41 billion total records collected and stored in XKeyscore for a single 30-day period.” This is equivalent to 39.86 million records every 42 minutes. Perhaps yours will be among them.
It is instructive to note that all of this will be done by the same government that operates under an explicit constitutional directive purportedly protecting people from “unreasonable searches and seizures” and specifying that “... no Warrants shall issue, but upon probable cause ... and particularly describing the place to be searched, and the persons or things to be seized.”US Constitution, Amendment IV. Indeed, one of the most instructive aspects of the NSA scandal is the way the agency has succeeded, for an extensive period of time, in warding off legal challenges to the constitutionality of its surveillance programs. This is instructive from the point of view of libertarian theory, since it illustrates the degree to which the much-vaunted “checks and balances” within the State apparatus, highlighted in the recent Obama speech, are really illusory. In practice, the judicial and executive branches of government tend to act as a legitimizing mechanism for the actions of government agencies, with rare “checks and balances” and “reforms” coming only when the legitimacy of the system is under potent attack from some outside source.
The NSA has taken great advantage of the symbiosis between the executive and judicial branches of the State, having implemented long-running programs of lawless surveillance and phony judicial review. The modus operandi of the agency in these matters has been to hide behind various secrecy requirements which have been used to hamstring attempts at open judicial review, ensuring that scrutiny of its programs and their legal basis is kept away from the prying eyes of the public. This has included the use of secret courts, where other parties are not represented and are not privy to proceedings. It has also included the use of secrecy requirements in evidence controlled by the NSA, which prevents people from showing that they have standing to challenge the agency’s programs in court, or mandates that such matters are “state secrets,” beyond the scope of judicial review. And of course, it has also included an extensive regime of secret judicial rulings and secret “law,” with proceedings conducted behind a legal wall chiseled with those two ominous words: top secret!
In fact, the Obama speech on NSA reform is but a sideshow to the real cracks that are starting to appear in the NSA’s legal fortifications. More important is the recent preliminary ruling in the case of Klayman v Obama which has opened the actions of the NSA up to some long-overdue judicial scrutiny in the public courts. In the preliminary ruling in December, the US District Court for the District of Columbia found that the NSA’s mass collection of metadata, as shown in its own leaked documents, “most likely” violates the Fourth Amendment to the US Constitution. (Since this was a preliminary hearing, the judge was unable to make a more definite ruling at that time. For those readers who are unfamiliar with proceedings for preliminary injunctions, the judge is not allowed to make a final determination on the matter, but must determine whether the applicant’s case has enough merit to proceed to trial, and to warrant a preliminary injunction. The judge does not make a final determination, but can give strong “hints” to the parties, as to how the case is likely to proceed at trial. When a judge in a preliminary hearing of this kind says that a particular program is “most likely” unconstitutional, and delivers the kind of judgment that was given, this can be a cautious way of saying that the program clearly is unconstitutional, but without wanting to make a final determination of the matter. In response to a preliminary application by plaintiffs seeking an injunction to stop the NSA from collection their metadata, Judge Richard Leon issued a scathing judgment against the NSA, dismissing several of its arguments as lacking common sense, and describing its mass surveillance technology as “almost-Orwellian.” See Klayman v Obama, per Leon at 49. The Klayman case was followed up almost immediately by a contrary ruling in ACLU v Clapper, where Judge William Pauley examined the same legal precedents and arguments and found that there is no constitutional protection against the mass collection of metadata by the NSA. The ruling relied heavily and uncritically on government reports on terrorist threats to the United States, and claimed that the NSA surveillance is crucial in combating terrorism. For discussion, see J. Harper (2013), Ratifying NSA spying, a court calls FISA ‘courts’ into question. CATO at Liberty, 27 December 2013. Harper notes that Judge Pauley falsely claims that NSA data collection could have foiled the September 11 attack on the World Trade Center.
So there you have it, the system is now in action! Obama is promising reforms! The courts have stepped in! The judges are restless! All hail the finely constructed checks and balances! If all goes well, the plaintiffs in Klayman v Obama and ACLU v Clapper will have their final hearing in court, and the NSA will have their actions assessed against the strictures of the US Constitution. Obama is promising more judicial oversight, and a “public advocate” for the NSA court system. Hurrah!
But still, one is left with an uneasy feeling. After all, this is far from the first case in which plaintiffs have sought to challenge the legal basis of the NSA programs, and it is long since the time Obama first took command of the national security apparatus. So what has changed? Why are there now promises of new reforms? Why has there been a breakthrough in this case, but not in previous cases of the same kind? For seven years the NSA’s PRISM program was under the oversight of the same judiciary, and subject to the same “checks and balances” as now. For most of those years it was under the direction of the current president. Why is it that the program now ruled to be “most likely unconstitutional” in one case has been proceeding unimpeded for so long — under the very same system of “oversight” and “checks and balances”— and challenges from previous litigants have been shot down in flames in case after case?
Well, we all know what has happened to make such a difference — Edward Snowden happened! The one antidote for the previously-operating regime of secret “law” has been the leaking of classified documents from within the NSA, revealed to the public by this whistleblower and “lawbreaker.” For discussion of why Snowden should not be considered a lawbreaker, see B. O’Neill (2013), The ethics of whistleblowing. Mises Daily, 8 July 2013. Concerned that the NSA was acting contrary to the US Constitution, Snowden released a treasure trove of documents to the media, setting out the unlawful activities of the NSA, all verified in its own words. The Klayman case represents the first post-Snowden case against the NSA, a situation where the judiciary now has to come to terms with a hostile public, which is well aware of what is hidden behind the legal walls erected around the NSA. The recent Obama speech also represents the first major reaction of the US government to the prospect that it may receive an adverse constitutional ruling discrediting its pretensions to legal observance.
The Klayman case is quite a breakthrough. Many have rightly regarded the case as representing a major breakthrough in judicial oversight of the NSA, but to put it more accurately, it represents the beginning of judicial oversight. In previous cases of this kind the NSA has managed to ward off constitutional challenges to its surveillance programs by arguing that all would-be plaintiffs lack “standing” to sue, and by appealing to the classified status of its secret programs, and the privilege of “state secrets.” It has hidden behind a regime of secret judicial orders and rulings, all inaccessible to the public. The Klayman case and the ACLU v Clapper case are notable and important because they are the first of their kind where the plaintiffs have been allowed to proceed with their arguments against the NSA activities, and the examination of the legal status of these activities has been allowed to proceed. This has been possible only because the leaks from Snowden allowed the plaintiffs to show that they had personally been subject to surveillance, something that has been impossible in previous cases brought against the NSA.
There is certainly cause to be cheerful about the recent court ruling in Klayman, as it is the first instance where the NSA programs have been subjected to constitutional scrutiny in a public court. In view of the facts of the case, the preliminary findings of Judge Leon are extremely sensible, and indeed, ought to be inescapable There are some competing opinions on this matter, especially with respect to the question of whether Judge Leon was correct to draw a distinction with the previous case of Smith v Maryland (1979) 442 US 735. Some have argued against the decision; see e.g., O. Kerr (2013), Preliminary thoughts on Judge Leon’s opinion, The Volokh Conspiracy, 16 December 2013. One legal scholar has instead argued that the constitutional question may actually recede if the program is found to have breached the statutory framework; see S. Vladeck (2013), Why the constitutional holding in Klayman wasn’t necessary. Just Security, 17 December 2013. Prior to the judgement, legal scholar Randy Barnett argued that the surveillance program is unconstitutional along similar lines; see e.g., R. Barnett (2013), The NSA’s surveillance is unconstitutional. The Wall Street Journal, 11 July 2013. The view of the present author is that theSmith v Maryland case is manifestly unsuitable to assist with scrutiny of theKlayman case, for the reasons set out by Leon. However, the case is far from over, with appeals expected to higher courts, a final ruling on the matter, and then probably more appeals. One legal commentator has suggested that the trial judge’s ruling in the Klayman case is “... best understood as a kind of [“friend of the court”] brief to the Supreme Court ...” B. Wittes (2013), Thoughts on Judge Leon’s section 215 opinion, Lawfare, 17 December 2013.
In view of this likely path of appeal, it is instructive to understand the complicity of the US Supreme Court in the previous regime of secrecy that has been perpetrated by the NSA. The ultimate arbiter of constitutionality in the US legal system has shown itself, in past cases, to be highly protective of the government in these matters, and has previously assented to some quite absurd doctrines and arguments to prevent any meaningful judicial review. The court has repeatedly taken assurances from the US government that the opportunity for constitutional review would arise in the future, but has consistently sided with their assertions that it cannot arise for this particular plaintiff, or this one, or this one. This has meant that while the illusion of judicial control has been maintained, the court has taken a policy of de facto immunity from constitutional scrutiny. As Larry Klayman put it, “most judges are just ‘yes men’ who rubber-stamp the federal government’s agenda.”See B. Logiurato (2013), Meet the “birther” conservative activist behind the NSA lawsuit that liberals love. Business Insider Australia, 18 December 2013.
Whether the challenge in Klayman v Obama ultimately succeeds or fails, the fact that it is heard at all is an initial cracking of the legal barriers that have been erected by the US government to cover its own lawlessness. While there is some cause for buoyancy, there is just as much reason to be disgusted that scrutiny of the illegal programs of the NSA has taken so long to get a genuine hearing before the public court system, and that the man responsible for allowing this to occur continues to be branded as a criminal and a traitor by the US government whose crimes he has exposed, and threatened with imprisonment or death.
Interviewed by host Marc Clair, Mark Thornton differentiates between the mainstream approach to an issue and an Austrian or free market approach. Mark also discusses some common objections to drug legalization, and articulates some of the lessons we can learn about prohibition from shows like “Breaking Bad” and “The Wire”.
Interviewed by host Thom Hartmann, Mark Thornton explains why the minimum wage actually hurts the workers it is supposed to help.
[Editor’s Note: Now available in the Mises Store, Butler Shaffer’s A Libertarian Critique of Intellectual Property is a new monograph on intellectual property exploring the topics of patents, copyrights, creativity, common law, science, and organizational complexity. The following is a selection from the book.]
The proposition that business firms are entitled to patent protection when they have produced variations in the genetic structure of plants (GMOs) conveniently ignores the fact that the pre-existing plants had, themselves, arisen from modifications or adaptations provided by our ancient ancestors. Are a few privileged descendants of those whose earlier efforts produced, for the benefit of all mankind, an improved means for sustaining life, to be granted an inviolable claim arising from their tinkering with what has been handed down to them in common with the rest of mankind?
It is one thing for the seller of seeds to insist upon a property interest in the bags of seeds it has produced and continues to own until such time as it exchanges its ownership claim with a buyer. Until the claim is transferred, the seller continues to exercise the control that is essential to ownership, a control that is then transferred to the buyer. But, analogizing to common law copyrights, the subsequent sale of its seeds would seem to constitute a “publication” of the content of these seeds and, with it, the loss of control. The metaphor of such claims being “tossed to the winds” finds literal expression in efforts by firms such as Monsanto to prosecute patent claims against farmers whose lands were unwanted recipients of Monsanto seeds blown onto them from other farms. The social implications of GMO patents may prove to be the Achilles-heel in the entire field of IP. As asked earlier, to the extent IP interests arise only by way of grants from the state, how can such claims be defended on the basis of libertarian principles grounded in individual liberty and respect for private property?
There are many other costs associated with IP that rarely get attention in cost-benefit analyses of the topic. One has to do with the fact that the patenting process, as with government regulation generally, is an expensive and time-consuming undertaking that tends to increase industrial concentration. Large firms can more readily incur the costs of both acquiring and defending a patent than can an individual or a small firm, nor is there any assurance that, once either course of action is undertaken, a successful outcome will be assured. Thus, individuals with inventive products may be more inclined to sell their creations to larger firms. With regard to many potential products, various governmental agencies (e.g., the EPA, FDA, OSHA) may have their own expensive testing and approval requirements before new products can be marketed, a practice that, once again, favors the larger and more established firms.
Increased concentration also contributes to the debilitating and destructive influences associated with organizational size. In addressing what he calls “the size theory of social misery,” Leopold Kohr observes that “[w]herever something is wrong, something is too big,” a dynamic as applicable to social systems as in the rest of nature. The transformation of individuals into “overconcentrated social units” contributes to the problems associated with mass size. One sees this tendency within business organizations, with increased bureaucratization, ossification, and reduced resiliency to competition often accompanying increased size. Nor do the expected benefits of economies of scale for larger firms overcome the tendencies for the decline of earnings and rates of return on investments, as well as the maintenance of market shares following mergers. The current political mantra, “too big to fail,” is a product of the dysfunctional nature of size when an organization faces energized competition to which it must adapt if it is to survive.
Walter Adams has provided a good overview of the impact of government regulation in fostering increased size.
In this era of big government, concentration is often the result of unwise, manmade, discriminatory, privilege-creating governmental action. Defense contracts, R and D support, patent policy, tax privileges, stockpiling arrangements, tariffs and quotas, subsidies, etc., have far from a neutral effect on our industrial structure. In all these institutional arrangements, government plays a crucial, if not decisive, role.
A common response of business firms to their own reduction of competitive resiliency occasioned by increased organizational size has been to call upon the state to create and enforce standardized business practices and products, as well as to restrict entry into industries and professions.
[product:10938]
The state’s creation of patent and copyright interests doesn’t, by itself, prevent innovation by others, but it does erect hurdles that often discourage research (e.g., the fear of defending a patent infringement suit, the possibility that the Patent Office might reject a subsequent application in the same product line as the previously patented creation, or the concern that one firm’s patent for preliminary research results might inhibit another firm from pursuing subsequent research). The “traditional enemies of innovation,” one observer has stated, are “inertia and vested interest,” factors contributed to by the government practice of providing some inventors protection from competitors.
When the coercive powers of the state are invoked to benefit some and to restrain others, the creative processes will always suffer and, as a consequence, so will the vibrancy of a civilization. The tendency of such behavior is to restrain the liberty of individuals to act within parameters suitable to established interests. To so constrain creativity would be akin to forcing painters to confine their work to within the boundaries of paint-by-the-numbers kits. Creative behavior depends upon synthesis and cross-fertilization, processes facilitated by what Arthur Koestler referred to as “creative anarchy.” The science philosopher, Paul Feyerabend, was even more forceful in his insistence upon unfettered liberty in fostering understanding. He noted that “[s]cience is an essentially anarchistic enterprise,” and that “theoretical anarchism is more humanitarian and more likely to encourage progress than its law-and-order alternatives.” He went on: “there is only one principle that can be defended under all circumstances and in all stages of human development. It is the principle: anything goes.” He then added that the “[p]roliferation of theories is beneficial for science, while uniformity impairs its critical power. Uniformity also endangers the free development of the individual.”
As experimentation with and the resulting production of genetically uniform crops continues, intelligent minds would do well to recall such lessons from history as provided by the Irish potato famine, the destruction of Ceylonese coffee plantations, and more recent damage to American corn and grape crops. Plants that were faithful copies of their own genetic organization (i.e., clones) might have enjoyed short-term benefits, but lacked a sufficient diversity to allow them to respond effectively to blights, diseases, and other conditions to which they were unaccustomed. Perhaps a million or more deaths in Ireland have been directly or indirectly attributed to the potato crop’s genetic lack of resiliency.
The threats to human survival implicit in the structured uniformity of systems upon which life depends are enhanced by the uncertainties inherent in complexity. The study of chaos informs us that complex systems are subject to too many variables, interconnected factors to permit predictions of outcomes. As Koestler and Feyerabend have reminded us, creativity is a process that depends upon individuals being free to experiment, and to find connections between or among the numerous — and often unseen — factors that make up our complex world.
What is the status of intellectual property? Are patents and copyrights legitimate in a free society?
Butler Shaffer is a distinguished libertarian legal theorist who has for many years taught at Southwestern Law School in Los Angeles. In this monograph, he addresses an important question that has aroused much interest among libertarians: What is the status of intellectual property? Are patents and copyrights legitimate?
Shaffer responds with an appeal to fundamental libertarian principles. Only arrangements that people freely negotiate with one another are acceptable: laws imposed by a coercive state are not. Judged by this standard, intellectual property fails. People may make contracts that limit the sale or transmission of ideas or books, but these bind only those who make them. Intellectual property laws, by contrast, apply to everyone, whether people accept them or not. These laws could not have arisen through voluntary agreements.
Defenders of intellectual property maintain that inventors and writers need protection for their work. Without patents and copyrights, inventions and creative work would be impeded. Shaffer responds that most of the great creators and inventors of the past worked without patent s and copyrights. Leonardo da Vinci and Shakespeare, for example, did rather well without this sort of state privilege.
A Libertarian Critique of Intellectual Property is a major contribution to libertarian legal theory and an indispensable guide to a vital topic.
Interviewed by Merlin Rothfeld and John O'Donnell, Mark Thornton discusses the legalization of Marijuana and its economic impact, as well as the current market and potential bubble situations brewing among many different asset classes.
US lawmakers reached a budget deal this week that will avert the sequester cuts and shutdowns. These fiscal “roadblocks” supposedly damaged investor confidence in 2013, although clearly no one told equity investors who’ve chased the S&P 500 up 26 percent this year. But even so the budget deal is seen by as only half the battle won, because it doesn’t deal with the pesky debt ceiling. Unsurprisingly, the old calls for a scrapping of the debt ceiling are being heard afresh.
Last week, The Week ran an opinion piece by John Aziz which argues that America (and all other nations for that matter) should keep borrowing until investors no longer want to lend to it. To this end, it is argued, the US should scrap its debt ceiling because the only debt ceiling it needs is the one imposed by the market. When the market doesn’t want to lend to you anymore, bond yields will rise to such an extent that you can no longer afford to borrow any more money. You will reach your natural, market-determined debt ceiling. According to this line of reasoning, American bond yields are incredibly low, meaning there is no shortage of people willing to lend to Uncle Sam. So Washington should take advantage of these fantastically easy loans and leverage up.
Here’s part of the key paragraph from Aziz:
Right now interest rates are very low by historical standards, even after adjusting for inflation. This means that the government is not producing sufficient debt to satisfy the market demand. The main reason for that is the debt ceiling.
What this fails to appreciate is that interest rates are a heavily controlled price in all of today’s major economies. This is particularly true in the case of America, where the Federal Reserve controls short-term interest rates using open market operations (i.e., loaning newly printed money to banks) and manipulates long-term interest rates using quantitative easing. By injecting vast amounts of liquidity into the economy, the Fed makes it appear as though there is more savings than there really is. But US bond yields are currently no more a reflection of the market’s demand for US debt than a price ceiling on gasoline is a reflection of its booming supply. Contra the view expressed in The Week, low rates brought about by contrived zero-bound policy rates and trillions of dollars in QE can mislead the federal government into borrowing more while at the same time pushing savers and investors out of US bond markets and into riskier assets like corporate bonds, equities, exotic derivatives, emerging markets, and so on.
Greece once thought that the market was giving it the green light to “produce” more debt. Low borrowing rates for Greece were not a sign of fiscal health, however, but really just layer upon layer of false and contrived signals arising from easy ECB money, allowing Greece to hide behind Germany’s credit status. As it turned out, a legislative debt ceiling in Greece (one that was actually adhered to) would have been a far better idea than pretending this manipulated market was a fair reflection of reality. Investors were happy to absorb Greece’s debt until suddenly they weren’t.
This is the nature of sovereign debt accumulation driven by easy money and credit bubbles. It’s all going swimmingly until it’s not. And there is little reason to think this time the US is different. Except that America might be worse. The very fact of the Fed buying Treasuries with newly printed money proves Washington is producing too much debt. China even stated recently that it saw no more utility accumulating any more dollar debt assets. If the whole point of QE is to monetize impaired assets, then the Fed likely sees Treasury bonds as facing considerable impairment risk. Theory and history are clear about the reasons for and consequences of large-scale and persistent debt monetization.
Finally, it is wrong to assert that the debt ceiling is the main reason for America’s fiscal deficit reduction. The ceiling has never provided a meaningful barrier to America’s borrowing ambitions, hence the dozens of upward adjustments to the ceiling whenever it threatens to crimp the whims of Washington’s profligate classes. America’s rate of new borrowing is falling because all the money it has printed washed into the economic system and found its way back into tax revenues. Corporate profits are soaring to all-time highs on dirt cheap trade financing. Corporate high-grade debt issuance has set a new record in 2013. Companies are rolling their short-term debts, now super-cheap thanks to Bernanke’s money machine, and issuing long, into a bubbly IPO and corporate bond market. The last time corporate profits surged like they’re doing now was during the credit and housing bubble that preceded the unraveling and inevitable bust in 2008/09.
These are money and credit cycle effects. The debt ceiling has had precious little to do with it. Moreover, US debt is neither crimped nor the US Treasury Department austere. Instead, the national debt is soaring, $60,000 higher for every US family since Obama took office and rising. Add to this the fact that the US Treasury’s bond issuance schedule is actually set to rise in 2014 due to huge amounts of maturing debt needing to be rolled over next year, and the fiscal significance of the debt ceiling fades even further.
The singular brilliance of the debt ceiling however, is that it keeps reminding everyone that there is a growing national debt that never seems to shrink. That is a tremendous service to American citizens who live in the dark regarding the borrowing machinations of their political overlords. Yes, politicians keep raising the debt ceiling, but nowadays they have to bend themselves into ever twisty pretzels trying to explain why to their justifiably skeptical and cynical constituents. Most people don’t understand bond yields, quantitative easing, and Keynesian pump-a-thons too well, but they sure understand a debt ceiling.
ConclusionThose who adhere to the don’t-stop-til-you-get-enough theory of sovereign borrowing, and by extension argue for a scrapping of the debt ceiling, couldn’t be more misguided. In free markets with no Fed money market distortion, interest rates can be a useful guide of the amount of real savings being made available to borrowers. When borrowers want to borrow more, real interest rates will rise, and at some point this crimps the marginal demand for borrowing, acting as a natural “debt ceiling.” But when markets are heavily distorted by central bank money printing and contrived zero-bound rates, interest rates utterly cease to serve this purpose for prolonged periods of time. What takes over is the false signals of the unsustainable business cycle which fools people into thinking there is more savings than there really is. Greece provides a recent real-world case study of this very phenomenon in action. In these cases we are likely to see low rates sustained during the increase in government borrowing, only for them to quickly reset higher and plunge a country into a debt trap which may force default or extreme money printing.
Debt monetization has a proven track record of ending badly. It is after all the implicit admission that no one but your monopoly money printer is willing to lend to you at the margin. The realization that this is unsustainable can take a while to sink in, but when it does, all it takes is an inevitable fat-tail event or crescendo of panic to topple the house of cards. If the market realizes it’s been duped into having too much before the government decides it’s had enough, a debt crisis won’t be far away.
Copyright originated hundreds of years ago as a legal and economic tool meant to protect and incentivize artistic creations. Indeed, the concept is explicitly listed in the United States Constitution as a means of securing for authors the exclusive right to their writings. However, copyright’s applicability wasn’t always so clear when technological advancements occurred at a faster pace than legislative amendments. The artistic creations that the Constitution described had been first and foremost a reference to literature and other written works.
The advent of film, especially as a creative medium, presented a challenge to this historical understanding. Filmmakers fought tooth and nail to change copyright statutes into a concept more fitting to the new economy, but decades passed before legislators took real initiative and laid the foundation for modern protections against artistic infringement.
It is natural that legislation be reactionary. Lawmakers’ failures to adapt to technological innovation is not a failure of government per se but rather an unavoidable fact that people can’t predict which inventions will come to fruition. So, it follows that legislators only had the chance to think about a potential copyright overhaul after films became more than a trend. But filmmakers, whose bank accounts were directly and immediately affected by what they deemed artistic infringement, were quicker to the punch.
Since they could not yet copyright films, Thomas Edison and others began to register each and every frame as separate, copyrighted photographs, a medium already recognized by law as rightful property. In this sense of the word, the first copyrighted film technically appeared in the 1890s. Other tactics pursued by filmmakers included the placement of signature markers (e.g., roosters) within the mise-en-scène in order to designate which studio produced it. These makeshift strategies allowed audiences to become familiar with specific companies’ creations, but they didn’t do much to deter piracy. And then there was the trouble of infringers who stole, as it were, other people’s original ideas and reproduced them without permission.
In 1907, director Sidney Olcott released Ben Hur. The silent film was based upon a novel published about 30 years earlier, a fact to which Olcott happily admitted. However, the filmmakers never received permission from the book’s author to do so. The author’s publisher responded with a lawsuit, insisting that moving pictures based upon copyrighted fiction should be treated under the law as a “stage representation,” thus necessitating the author’s permission for use. The lawsuit was the first of its kind and attempted to clarify at last the industry’s obscure property conflict. The U.S. Circuit Court of Appeals issued its first ruling two years later: it agreed with the book publisher.
Olcott strongly contested this ruling and made it clear that film was a unique medium on which he spent significant time, money, and energy producing the work regardless of its inspiration. He claimed that his film was “only an ‘exhibition of pictures,’ and not a dramatic performance within the meaning of the copyright law.”“Legislation and Legal Notes,” The Nickelodeon, May 1909 (p. 124). Alas, he didn’t convince the court. Many people were disappointed in the ruling’s ambiguity, though, which permitted Olcott’s production of the film but not his presentation of it. In other words, “The court draws a decided distinction between moving pictures on the film and moving pictures projected on screen. It seems that a moving picture film is a photograph” — which could not infringe on a book — “while a projection of the same film may be a dramatization.”“Ben Hur Case,” The Nickelodeon, September 1909 (p. 72).
Uncertainty drove the Ben Hur case to the Supreme Court, to which we’ll return shortly.
The international sphere took similar steps toward a more concrete understanding of copyright in the meantime. French dramatist Georges Courteline sued a film company in 1910 for allegedly using scenes from his play Boubouroche in its moving picture show. Before this case, there was no explicit law or court ruling that required cinematograph operators to receive permission from playwrights before producing adaptations. Courteline may not have personally benefited from the court’s ruling — he lost on grounds that the adaptation was too dissimilar from his play to constitute infringement — but it certainly changed the French government’s interpretation of copyright law. The ruling explained that the play’s “plot and its situation belong to [Courteline] as well as the dialogue,” which one film critic boiled down in optimistic terms: “Although losing his own case in this instance, the dramatist has succeeded in gaining a victory for his profession.”“Author’s Copyright Protected in Paris,” The Nickelodeon, August 1910 (p. 98).
Things were heating up in the United States one year later. Aside from a few related incidences and court rulings, copyright enforcement in the film industry essentially ranged from a verbal warning to an uncomfortable slap on the wrist. The Copyright Act of 1909 extended time limits for ownership but had not yet been invoked in order to protect moving pictures. In 1911, though, the State of New York seized 20,000 feet of film from the Columbia Film Company, claiming it had infringed upon the Monopol Film Company’s copyright.
This action, rightly deemed “the first of the kind that has been issued under the copyright law of 1909,” was a landmark for three reasons.“Seize Moving Picture Films,” Motography, August 1911 (p. 64). First, it acknowledged the law’s inclusion of film, which had been merely implicit to that point. Second, it recognized that these copyright privileges could be transferred internationally through leases, as the Monopol Film Company had done with the Milano Film Company in Italy. And, third, it confirmed that filmmakers could register their adaptations of public domain works — in this case, Dante Alighieri’s The Inferno — as original creations. The law under which these actions were taken was not superseded for about 70 years.
Only a few months later, the Supreme Court issued its ruling on the Ben Hur case and affirmed the lower court: director Sidney Olcott was guilty of infringing upon the copyright of the publishing company whose book inspired his film. Justice Oliver Wendell Holmes wrote, “Authors have the exclusive right to dramatize any of their works [and we] are of the opinion that Ben Hur was dramatized by what was done.”“Some Legal Decisions of 1911,” Motography, January 1912 (p. 5). The judicial branch had decided once and for all that exhibitors, if their films were based on a previously copyrighted work of fiction, could no longer project them for an audience without the original author’s permission. At that point, the future of intellectual property as it pertained to artistic creations fell into place more rapidly than ever before in history.
Congressman Edward W. Townsend introduced a bill in the House of Representatives shortly thereafter. Its statutes stipulated that the federal government increase the penalties laid against copyright infringers whose actions harmed the film industry, including criminal fees of up to $200, $1,000, and $5,000 for newspapers, exhibitors, and distributors, respectively.“Picture Copyright Bill in House,” Motography, April 1912 (p. 161). The bill spent less than four months in the chambers prior to passage. One reporter called its seamless transition into law “a proper extension of [copyright] which includes the motion picture.”“Copyrighting Moving Pictures,” Motography, August 1912 (p. 102).
Henceforth, the tone newspapers used in reference to copyright became less aggressive and less antagonistic. These publications, reassured by a series of court cases and legislative acts that seemed to demonstrate the government was taking their industry seriously, approached the topic in a friendlier manner. Editorials transformed from scathing critiques of inconsistent copyright enforcement to peaceful instructions on how filmmakers could go about registering their works more easily, even offering financial tips for independent artists who needed to navigate the expensive process.“Film Copyrights,” Motography, September 1912 (p. 192).
The amiable environment continued after 1912, not without exception but without the perpetual fear of infringement on every filmmaker’s lips. The official standardization of intellectual ownership quelled much dismay about an industry run amok and, in my opinion, allowed filmmakers to focus on the innovation, rather than on policy, that energized the United States as an industry superpower during and after World War I.
David Gordon discusses the judicialization of international relations, and how it serves as impetus for war. Gordon is Editor of The Mises Review.
The American Bar Association’s (ABA) Texas Capital Punishment Assessment Team recently reviewed the Texas death penalty system to find what surprises no one — it’s an expensive program that is run poorly and makes mistakes. The analysis, led by legal experts and former elected officials across the ideological spectrum, found that Texas relies on outdated, unscientific, and unreliable methods to prove guilt. Many changes were suggested to attempt to prevent wrongful convictions and provide fair due process.
This same Texas system of capital punishment that Governor Perry and some of his predecessors are so proud of has led to disastrous consequences. It is responsible for at least 12 men being wrongfully convicted and then released from death row and perhaps others were even wrongfully executed. Carlos DeLuna was executed using no forensic evidence, sloppy crime scene investigation, and essentially one eyewitness account who later said he was 50 percent sure DeLuna was the perpetrator. Claude Jones was put to death in 2000 based, in part, on the analysis of a hair found at the crime scene. This hair analysis has since been shown not to be scientific, and recently, DNA evidence revealed that it was not Jones’s hair after all. Cameron Todd Willingham was executed in 2004 primarily after local investigators testified that arson was the cause of the fire that killed his three young daughters. This “evidence” has since been debunked by nine fire experts who have examined the case and determined that it was a tragic accident, not arson.
Texans continue to be subjected to paying taxes for this program that grants so much power to the state and often fails miserably. The average cost for a death penalty case in 1992 in Texas was $2.3 million as opposed to $750,000 for a case involving a life sentence. Jasper County, Texas was forced to raise property taxes by nearly 7 percent just to pay for one death penalty trial. A single capital punishment case, in part, led Gray County, Texas to withhold county employees’ raises and to increase county taxes. The cost on the local, state, and federal levels are a heavy burden on the taxpayers while the death penalty fails to deter crime.D. Nagin and J. Pepper, “Deterrence and the Death Penalty,” Committee on Law and Justice at the National Research Council, April 2012.
The high cost, frequent mistakes, and overwhelming power that capital punishment gives the state is not limited to Texas. Nationally, more than 140 people have been wrongfully convicted and released from death rows since 1976 while many others were most likely wrongfully executed. This program comes at a cost that greatly exceeds life-without-parole. Too often this increased cost is passed down to citizens in the form of additional taxation or public debt.
Ever since the death penalty was reinstated in 1976 by the United States Supreme Court, countless legislative and judicial fixes have been attempted. These actions have further limited the use of capital punishment. Judicial decisions and legislation have lengthened the appeals process, tried to limit the arbitrariness of the death penalty, and even created an additional sentencing trial only available in capital cases. As is the case with any process, additional government regulation and involvement does not cause perfection. In fact, systemic failures persist and are abundant, which has prompted 18 states to repeal the death penalty.
The framework that governs the death penalty guarantees dysfunction. Elected prosecutors are given broad discretion to decide to seek a death sentence or not — regardless of the wishes of the victim or victim’s family members. Political, rather than moral or legal, considerations sometimes drive elected officials to pursue a death sentence. Even the juries are designed to support the death penalty. If a prosecutor seeks capital punishment, then a person who opposes the death penalty is generally not permitted to serve on that jury. If that alone isn’t problematic enough, the appeals process that is currently in place is there not to introduce new evidence but to ensure the convicted was given a fair initial trial. It remains incredibly difficult to introduce new evidence. This framework favors the death penalty and the will of the government over protecting the rights of the people.
The current system not only has permitted junk science to be used as evidence, but the government’s willingness to accept, use, and defend unscientific evidence and unreliable expert testimony is appalling. This has contributed to major failures and produced wrongful convictions. Even when it is known that much of the “forensic science” is more of an art than a science, juries have not been informed of the subjective nature.
The authority to put US citizens to death is an immense power enjoyed by American governments, and great power opens the door to great abuse. In an effort to prevent further failures and abuse, the government has implemented changes to the death penalty process, which make it exorbitantly expensive, to attempt to limit future catastrophes. Even with these changes, it is still a failure.
The death penalty’s inception may not be based on nefarious schemes and likely comes out of a desire to ensure justice and safety. However, the government’s monopoly on criminal justice proceedings and its insulation from responsibility when the system fails, are at the root of the system’s failures. If we wish to limit the power of the state, the state’s death penalty may be a good place to start.
Jury duty garners complaints from those who have been drafted into service, but it seldom gets media attention. Other than when there is a celebrity involved (e.g., when Oprah Winfrey was chosen for a murder trial), juries seem to enter public discourse only when there is a sensational case, such as the upcoming trial for Aurora theater shooting suspect James Holmes.
Even when juries get noticed, it is not the inefficiencies and the waste of juror time that get the attention, yet the large number of jurors to be called for sensational cases (6,000 for the Holmes trial) often makes those problems more obvious than usual.
Serious inquiry highlights the single most effective reform available: ensuring a sufficient number of qualified jurors by paying them what their time is really worth. Because jury system problems primarily arise from treating jurors as if their time has little or no value, paying jurors instead of drafting them would produce real advantages over our current system, not just in lower costs to society, but in better dispensing dependable justice.
The greatest inefficiency of current jury service is its huge waste of juror time (e.g., 165,000 of 6 million Californians who performed jury duty actually served on a case last year). But with juror services essentially costless to judges and lawyers, they have little reason to reduce the waste. If jurors were paid something that reflected the true value of their time, they would be utilized far more effectively.
Another problem is uncomfortable and unpleasant jury facilities. With drafted jurors, there is little incentive to accommodate their preferences. If they had to be recruited voluntarily, like other employees, they would be willing to work for less under more pleasant conditions, and courts would provide for more juror comfort and convenience to cut the cost of wages.
No-shows are another major problem which increases both costs and administrative difficulties. Courts have to guess how many draftees will actually appear, wasting many jurors’ time on many days, and wasting court resources when there are too few jurors. Jurors paid a market rate for their time would show up like other employees whose jobs depend on it, reducing such waste.
Underpriced jurors cause other problems. Facing below-market costs for juror time, some courts limit jurors’ ability to take written notes, leading to delays, mistakes and avoidable jury room disputes over what was actually said. Similarly, jurors are often restricted in submitting questions to clarify their understanding, or to discuss the trial during breaks, causing confusion and wasted juror and court time. If jurors had to be paid a competitive wage, such time-wasting practices would be trimmed.
If jurors were paid, attorneys would be pushed to use plain language rather than legalese to facilitate more efficient communication. Tighter time constraints would be imposed to force attorneys to make their points more quickly and clearly, and to avoid repetitive questions (a pet peeve of jurors). Paid jurors would also spur other efficiencies, such as speeding up jury selection (e.g., by limiting peremptory challenges).
Paying jurors would also induce jurors to become more educated on the law, evidence, and procedure, reducing the chance of mistrials and the resources now devoted to ensuring jurors understand and follow the rules.
Offering sufficient inducement to attract “professional” jurors would also make justice more reliable as professional jurors would seek to cultivate a reputation as reliable and unbiased.
Currently, the primary incentive of many drafted jurors is to finish their involuntary servitude faster. That offers little assurance of attentive jurors or evenhanded rulings (not to mention creating big payoffs to jury consultants for finding “leaners” who can change the outcome in their direction). In contrast, paid jurors’ incentives would be more like those of current mediators, which litigants increasingly find preferable to court trials.
Mediators must be thorough and evenhanded if they want to continue in that role, because they must remain acceptable to both sides involved. Obvious bias or sloppiness would end their careers. Those wanting to continue to serve as paid jurors would similarly want to be fair and balanced, to preserve that possibility. Since, as according to California’s courts assert, “the duties of a juror are as important as the duties of a judge,” these incentives are crucial.
Jurors are the only resource our justice system treats as essentially costless, though, as with a military draft, the very real costs are really “paid” by the draftees. Our current system is made slower, more wasteful and more inequitable because the costs imposed on jurors, which all too often are a serious financial and personal hardship for many, are essentially ignored.
Americans’ right to a jury trial does not imply that drafting jurors is the best way to provide that right. A paid volunteer juror system would be an important positive reform, bringing us closer to providing the “liberty and justice for all” that is the goal.
Judge Andrew P. Napolitano joined the Mises Institute in August as the Institute’s Distinguished Scholar in Law and Jurisprudence. During Mises University in July, Judge Napolitano taught what David Gordon described as a “conference within the conference” and “a masterful survey of how the Supreme Court has interpreted the commerce clause, from Gibbons v. Ogden (1824) to the present.” This summer, the Mises Institute spoke briefly with Judge Napolitano about the Constitution and the American political system.
Mises Institute: Why is understanding constitutional law and its history important? The text of the document is pretty short, so can’t we just read it for ourselves and know what it says?
Judge Andrew P. Napolitano: The Constitution proclaims itself to be the Supreme Law of the Land. It was written to create, define, and restrain the federal government. If history is prologue, it is important for all concerned about the overreach of the government today to understand how we got to where we are today; and the history of that is essentially a study of the history of the debates over the implementation of the powers set forth in the Constitution.
As for reading the Constitution in order to understand it, that is no doubt what its authors intended. However, as is well known, the big government impulses of those in government have rendered most of the plain language in the Constitution meaningless. Thus, it is nearly impossible to comprehend the meaning of the Constitution without understanding about 200 Supreme Court cases interpreting it.
MI: When it comes to Supreme Court cases, what do you think were some of the most damaging to the cause of liberty?
APN: Without sounding cynical, my answer is: Almost all of them. Here is a short list of the most constitutionally offensive cases: Marbury v. Madison, which establishes the federal government as the final judge of its own power; McCullough v. Maryland, which establishes the primacy of the federal government over the states and establishes the concept of implied federal power; Dred Scott v. Sanford, which establishes the principle that a class of human beings can be defined as non-persons because of an immutable characteristic of birth; Wickard v. Filburn, which permits the Congress to regulate personal, private, and even trivial behavior; Korematsu v. United States, which permits the attribution of guilt and the infliction of punishment based on an immutable characteristic of birth; Roe v. Wade, which permits murder based on the age of the victim; and National Federation of Independent Business v. Sebelius, which permits the Congress to tax any event or non-event it wishes.
MI: Are there any easy fixes? Could we just tweak the text of the Constitution in certain places to greatly improve things? If so, what would you change? If not, why not?
APN: Because the Constitution is only as effective as an instrument to guarantee liberty as is the fidelity of those in whose hands it has been reposed for safekeeping to its underlying principles, the short answer is: Have a majority of Supreme Court justices committed to the plain language and original intent of the document, and the preservation of the natural law? However, if I were free to do so, I’d change “We the People ...” to “We the States ...” I’d define the regulation of interstate commerce as “keeping the movement of goods between merchants across interstate borders regular,” I’d add “explicitly” to the Tenth Amendment, and I’d repeal the 16th and the 17th amendments.
MI: In recent months, the issue of nullification has become important, and it has been actually happening. Colorado, for example, has nullified federal laws about marijuana. Moreover, there have been efforts surrounding provisions of the National Defense Authorization Act, and historically, numerous states essentially nullified the federal law behind the national ID card. Are these efforts on firm constitutional ground?
APN: They are on firm historical ground, and firm constitutional ground as the Constitution was understood by those who wrote it.
MI: We’ve been talking about the 1787 Constitution of course, but there was one that came before it, written in 1776, and known as the Articles of Confederation. Many libertarians point to the newer constitution, say it was not an improvement, and that it replaced the more de-centralist Articles. In light of this, should we still be defenders of the current constitution, and if so, why?
APN: I have spent my entire professional career defending the Constitution; and that can be likened to playing catch with jell-o or shoveling against the tide. The Articles of Confederation permitted the states to become tyrants, and the Constitution — as interpreted over the centuries — has permitted the federal government to become tyrannical. The resolution of this dilemma will require the entry into all three branches of the government of persons committed to natural law principles. That means they’d believe in the primacy of the individual over the state and the intrinsic inability of government to do anything beyond enforcing the natural law.
Interviewed by Ken McClenton on "The Exceptional Conservative Show," Mark Thornton discusses the characteristics of a just society and how American can become one.
One of the core principles of good governance in society is the idea that the authority of law ought to prevail over the brute power of people — i.e., that society should operate under the rule of law, not the rule of men. Aristotle wrote that “[t]he law ought to be supreme over all ...” and argued that ... where the laws are not supreme, there demagogues spring up.” The principle has many important ramifications for society, but the most important is the view that government agents and agencies must be bound by the same law as their subjects.
This principle is of great relevance in the present NSA scandals, especially in light of recent NSA admissions of “compliance problems” with the legal constraints that are supposed to operate on the agency. For ordinary citizens, “compliance problems” with the law are better known as “crimes” (or possibly civil wrongs) and these lead to judgment debts, fines, and possibly even jail time, depending on the severity of the lack-of-compliance. But for government officials such notions are irrelevant — legal compliance problems are just something you file a report about, and send to another bureaucrat higher up in the government chain, so that he can bury it on his desk.
Unfortunately, this is not a new phenomenon. The notion of the rule of law is the wellspring of an endless stream of hypocrisy in the modern social-democratic welfare-warfare state. It is difficult to find anyone who does not speak highly of the principle when it is presented in abstract form, yet it is simultaneously rare to find people who really take the idea seriously when applied to concrete situations involving government wrongdoing. In the case of the NSA, the principle of rule of law has been jettisoned entirely, and the agency operates without any effective legal constraints.
Data collection, storage and access by the NSAPresent limitations on the surveillance activities of the NSA are almost entirely technological or logistical. The agency focuses mostly on gathering “metadata” from phone and internet communications, but its capacity to record the content of these communications is also increasing rapidly. According to media reports, the agency has collected over one-trillion metadata records, and has new technology that will allow it to record the voice content of one-billion mobile phone conversations per day. Internet data is continuously collected and recorded by the agency, and the volume of content recorded is so large that it can presently only be stored for only a few days, while internet metadata is stored for thirty days. This allows the NSA to obtain access to the internet activities of a user, including his or her browsing history, as well as the contents of emails and online chats and posts. Data of interest to the agency is stored in a separate database that holds records for up to five years.
Throughout the NSA scandal, the US Government has sought to convince the public that its surveillance activities are targeted exclusively at suspected terrorists and their associates, and that data collection is used exclusively for the purposes of combating terrorism, with strict legal constraints and oversight operating to prevent mass surveillance. However, despite initial protests to the contrary, it is now evident that the NSA does indeed indiscriminately collect and store metadata and communication content under its surveillance programs.
The collection of metadata and communication content occurs without any probable cause to believe that that the people targeted are a threat to anyone. It also occurs in violation of the U.S. Constitution and the already very broad requirements of the Patriot Act, which requires applications for access to records to have “a statement of facts showing that there are reasonable grounds to believe that the [records] sought are relevant to an authorized investigation.” In a recently declassified (but still heavily redacted) opinion from the Foreign Intelligence Surveillance Court, Judge James Bates wrote that “[t]his court is troubled that the government’s revelations regarding NSA’s acquisition of Internet transactions mark the third instance in less than three years in which the government has disclosed a substantial misrepresentation regarding the scope of a major collection program.” In an earlier ruling the court had found that legal requirements for data queries had been “frequently and systematically violated.”
The NSA has taken a two-pronged approach to its legal defense of its surveillance activities. It has claimed that it may collect any and all information it wishes without any warrant or restriction, and that this does not constitute real “collection” of data unless the database is later queried. In other words, collection of data is not really collection of data, so long as the data sits idle and is not accessed. It has then claimed that querying of its databases is only ever done under warrant and only under circumstances where there are specific facts to yield a reasonable suspicion of terrorist activity. This is clearly false in view of the broad searches and indiscriminate data mapping that shows up in NSA documentation.
NSA operations and their “compliance problems”After a long period of fervent denials, the NSA has now acknowledged that its analysts have often exceeded their legal limits even under the widest interpretations of the Patriot Act by the NSA itself. An internal audit of the agency found that in a single year there were 2,776 “incidents” of unauthorised collection, storage, access or distribution of communications of US citizens, with many individual incidents covering large numbers of communications. This included violation of court orders from the Foreign Intelligence Surveillance Court.
Rather than referring to these as instances of lawbreaking as what they are, the Director of National Intelligence has instead referred to these legal violations as “compliance problems” with the programs. He has made a point to stress that these kinds of problems are monitored and assessed regularly by the agency and are to be expected in such a complex program. One consequence of this view is that there is no actual sanction for unlawful activity by the NSA. If “compliance problems” are just an expected part of government operations then there is no sense in having any sanction for these legal breaches. The agency then operates above the law, in the sense that its agents are pre-emptively acquitted of lawbreaking, on the grounds that some degree of non-compliance with the law is expected.
Even for the Foreign Intelligence Surveillance Court, tasked with supposed judicial oversight of the agency, attempting to hold the NSA to the rule of law has been a farce. Chief Judge Reggie Walton explained to the press that, “[t]he FISC is forced to rely upon the accuracy of the information that is provided to the Court. ... The FISC does not have the capacity to investigate issues of noncompliance, and in that respect the FISC is in the same position as any other court when it comes to enforcing [government] compliance with its orders.”
The NSA has “compliance problems” in its surveillance programs in the same way that a serial killer has “compliance problems” with the law against murder — neither of them are willing to follow the rules. In a society which respects the rule of law this matters. And as the demagogues spring up to defend the actions of the agency, it is useful to bear in mind what these “compliance problems” really mean for the rule of law.
In this 1997 speech by Hans-Hermann Hoppe, now available as an ebook from the Mises Institute under the title What Must Be Done, Hoppe presents a plan of action for anarcho-capitalists against the modern state.
Hoppe begins by examining the nature of the state as “a monopolist of defense and the provision and enforcement of law and order.” Like all state-mandated monopolies, the monopoly of law enforcement also leads to higher prices and lower quality of services. Why is this state of affairs tolerated? The modern democratic states, much more than the monarchies and princely estates of old, are seen as moral and necessary despite ample evidence to the contrary.
In this initial analysis, we find much of what Hoppe eventually expanded into his 2001 book Democracy: The God that Failed, which systematically dismantled modern arguments in favor of the democratic state.
In the final portion of his speech, Hoppe turns to discussing how a modern partisan of liberty might act to counter the march of centralization and the destruction of property, culture, learning, and natural social hierarchies.
A Bottom-Up RevolutionAt last to the detailed explanation of the meaning of this bottom-up revolutionary strategy. For this, let me turn to my earlier remarks about the defensive use of democracy, that is, the use of democratic means for nondemocratic, libertarian pro-private property ends. Two preliminary insights I have already reached here.
First, from the impossibility of a top-down strategy, it follows that one should expend little or no energy, time, and money on nationwide political contests, such as presidential elections. And also not on contests for central government, in particular, less effort on senatorial races than on house races, for instance.
Second, from the insight into the role of intellectuals, in the preservation of the current system, the current protection racket, it follows that one should likewise expend little or no energy, time, or money trying to reform education and academia from the inside. By endowing free enterprise or private property chairs within the established university system, for instance, one only helps to lend legitimacy to the very idea that one wishes to oppose. The official education and research institutions must be systematically defunded and dried up. And to do so all support of intellectual work, as an essential task of this overall task in front of us, should of course be given to institutions and centers determined to do precisely this.
The reasons for both of these pieces of advice are straightforward: Neither the population as a whole nor all educators and intellectuals in particular are ideologically completely homogeneous. And even if it is impossible to win a majority for a decidedly antidemocratic platform on a nationwide scale, there appears to be no insurmountable difficulty in winning such a majority in sufficiently small districts, and for local or regional functions within the overall democratic government structure. In fact, there seems to be nothing unrealistic in assuming that such majorities exist at thousands of locations. That is, locations dispersed all over the country but not evenly dispersed …
But what then? Everything else falls almost automatically from the ultimate goal, which must be kept permanently in mind, in all of one’s activities: the restoration from the bottom-up of private property and the right to property protection; the right to self-defense, to exclude or include, and to freedom of contract. And the answer can be broken down into two parts.
First, what to do within these very small districts, where a pro-private property candidate and anti-majoritarian personality can win. And second, how to deal with the higher levels of government, and especially with the central federal government. First, as an initial step, and I’m referring now to what should be done on the local level, the first central plank of one’s platform should be: one must attempt to restrict the right to vote on local taxes, in particular on property taxes and regulations, to property and real estate owners. Only property owners must be permitted to vote, and their vote is not equal, but in accordance with the value of the equity owned, and the amount of taxes paid.
Further, all public employees — teachers, judges, policemen — and all welfare recipients, must be excluded from voting on local taxes and local regulation matters. These people are being paid out of taxes and should have no say whatsoever how high these taxes are. With this platform one cannot of course win everywhere; you cannot win in Washington, D.C. with a platform like this. But I dare say that in many locations this can be easily done. The locations have to be small enough and have to have a good number of decent people.
Consequently, local taxes and rates as well as local tax revenue will inevitably decrease. Property values and most local incomes would increase whereas the number and payment of public employees would fall. Now, and this is the most decisive step, the following thing must be done, and always keep in mind that I am talking about very small territorial districts, villages.
In this government funding crisis which breaks out once the right to vote has been taken away from the mob, as a way out of this crisis, all local government assets must be privatized. An inventory of all public buildings, and on the local level that is not that much — schools, fire, police station, courthouses, roads, and so forth — and then property shares or stock should be distributed to the local private property owners in accordance with the total lifetime amount of taxes — property taxes —that these people have paid. After all, it is theirs, they paid for these things …
Without local enforcement, by compliant local authorities, the will of the central government is not much more than hot air. Yet this local support and cooperation is precisely what needs to be missing. To be sure, so long as the number of liberated communities is still small, matters seem to be somewhat dangerous. However, even during this initial phase in the liberation struggle, one can be quite confident.
It would appear to be prudent during this phase to avoid a direct confrontation with the central government and not openly denounce its authority or even abjure the realm. Rather, it seems advisable to engage in a policy of passive resistance and noncooperation. One simply stops to help in the enforcement in each and every federal law. One assumes the following attitude: "Such are your rules, and you enforce them. I cannot hinder you, but I will not help you either, as my only obligation is to my local constituents …”
[This is the second of a two-part analysis of ethical and legal questions pertaining to whistleblowers who expose government wrongdoing. The first part, “The Ethics of Whistleblowing” is available here. This second part goes beyond contractual considerations to look at government ownership of information and government oversight mechanisms.]
Government secrets and the “ownership” of secret government documentsThe foregoing principles discussed in Part I of our analysis vitiate any allegation of criminal conduct by Edward Snowden resting on his alleged contractual duties to the NSA. His disclosures of NSA documents were certainly “unauthorized disclosures” as has been charged, but there is no reason that any government authorization should be required. Indeed, it is quite absurd to suggest that government permission should be required to disclose evidence of government criminality. But what of the remaining property-based claim that Snowden’s actions involve the “theft” of government property?
This question can be dealt with in a similar manner, by consideration of the ordinary rules pertaining to the use of property in criminal dealings. When a private firm commits a crime using its own property as an instrument of wrongdoing it loses the right to claim ownership as a safeguard against investigation. If an investigator confiscates digging equipment and barrels of toxic waste from a private firm accused of dumping these on the property of others it is no bar to this action if the firm presents a receipt showing that the equipment belongs to them. (Indeed, this would be taken as further evidence linking them to the alleged crime.) The same applies to documentary evidence of a crime — it may legitimately be taken by an investigator as a means of proving criminal wrongdoing, notwithstanding the normal ownership claim that would apply to the item.Of course, if the crime is not proven then the property must be returned. It may also be the case that the firm would then have a legitimate legal action against the investigator for having confiscated their property without good cause. In such a case the legitimacy of the original confiscation rests on whether or not the firm really is engaged in criminal action.
Government claims to ownership have no special status in this regard, and do not override these ordinary principles of property rights. In fact, the situation for government claims of ownership is even weaker than for a private enterprise, since the latter will generally have acquired the tools of its criminal dealings with its own money. If a private firm unlawfully dumps toxic waste on the property of others, it is likely that it has at least legitimately purchased its own barrels and digging equipment without having also stolen these. On the contrary, government agencies are built on a system of coercion, where the resources for their operations are extracted through forcible payment from the public, i.e., through taxation. Unlike in a private firm, this gives rise to a situation in which the “shareholders” of government are forced to contribute the instruments of further criminal activity, whether they wish to participate or not. Government claims to ownership of the property in its possession are extremely dubious, and this is made more so when the claim to ownership is made in order to shield knowledge of its own operations from those very shareholders. When the claim to ownership is made to prevent the disclosure of documents detailing further criminal actions by the government, the appeal to property rights is thrice-damned!
In the case of private crimes it would be unusual that the accused wrongdoer would present a claim to ownership of documents linking himself to a serious crime. Most would want to do everything possible to avoid corroborating ownership of items proving their criminal guilt, and even if this were to be a fruitless endeavor, it would be regarded as the height of chutzpah to claim the protection of property rights to evidence of criminal wrongdoing! But government is altogether unashamed of such absurdities. Faced with clear publicized documentary evidence of extensive lawbreaking by its own agencies, the government screams across the news media “Those are our secret documents! How dare they be stolen from us!”
The necessity to operate outside the institution of governmentNotwithstanding the legitimacy of Snowden’s disclosures of classified NSA material, one objection that has been raised against his actions is the fact that he went outside the official government-sanctioned channels for oversight of its agencies. According to this view, the reporting of government misconduct and criminality must be reported within the rules calculated by that same institution, by reporting to government oversight agencies or Congressional committees. If agencies of the US government engage in secret acts of despotism, an aspiring whistleblower must meekly turn to other agents of the government and ask, “Please Sir, tell me which forms to fill out. How might I go about filing a complaint that suits your requirements?”
Writing in the New Yorker, Jeffrey Toobin naïvely argues that “... our system offers legal options to disgruntled government employees and contractors. They can take advantage of federal whistle-blower laws; they can bring their complaints to Congress; they can try to protest within the institutions where they work. But Snowden did none of this. Instead, in an act that speaks more to his ego than his conscience, he threw the secrets he knew up in the air — and trusted, somehow, that good would come of it.”
Ah yes. All of those wonderful “legal options” offered to whistleblowers against the NSA. Let’s ask some former NSA whistleblowers about those wonderful options. In 2000 mathematician William Binney and senior NSA analyst J. Kirk Weibe raised concerns about the illegality and waste involved in a surveillance program at the NSA. After repeatedly raising internal concerns within the NSA they reported their concerns to a Congressional committee. As a result of this action both men were accused of having betrayed the agency by the Director of the NSA, General Michael Hayden. Hayden sent an internal memo to staff at the NSA saying that “Actions contrary to our decisions will have a serious adverse effect on our efforts to transform NSA and I cannot tolerate them.”See NSA whistleblowers William (Bill) Binney and J Kirk Wiebe at the Government Accountability Project. Both men suffered retaliatory action in their careers as part of their efforts to report wrongdoing, and both ultimately left the agency.
Binney left the NSA in 2001 after voicing complaints that the agency was “purposefully violating the constitution.”Binney later made a sworn declaration to the court in the case of Jewel v. NSA. At the time of publication of this article, the case is still ongoing. In 2005 he was investigated by the FBI over suspicions of providing information to the New York Times. Despite being cleared of any wrongdoing the FBI later raided his home and confiscated his personal and business records, keeping a gun on him while he stood naked, towelling off from a shower. As a result of his whistleblowing he lost his security clearance and had to close his business. As Binney put it, “After a raid like that, you’re always sitting here wondering if they’re coming back. This did not feel like the America we grew up in.”E. Bronner, C. Savage, and S. Shane (2013) Leak inquiries show how wide a net US cast. The New York Times, 25 May 2013.
Thomas Drake, another NSA whistleblower, raised internal complaints within the NSA about illegality and waste of public money in a data project known as “Trailblazer.” After approximately five years of efforts to draw attention to the problem through government-mandated channels Drake finally went to the media to report NSA wrongdoing. According to media reports on his actions, “He first tried the sanctioned methods — going to his superiors, inspectors general, Congress. Finally, in frustration, he turned to the ‘nuclear option’: leaking to the media.”E. Nakashima (2010) Former NSA executive Thomas A. Drake may pay high price for media leak. . The Washington Post, 14 July 2010. Notwithstanding any federal whistle-blower laws, Drake was prosecuted on a large number of charges relating to “unauthorized retention” of NSA data, and these charges were used as leverage to try to extort his assistance with the prosecution of other whistleblowers. He held out against this and eventually the government prosecution collapsed. As Drake put it, “I will never plea-bargain with the truth.”Ibid.
If one expects government oversight mechanisms to exist for the purposes of actual oversight, then this all seems perverse. But if one understands the actual purpose of these mechanisms, it all makes perfect sense. The actual purpose of Congressional oversight committees and other government bodies of this kind is to create a channel to divert would-be whistleblowers, so as to trap them in a system designed to identify them for retaliation and neutralize their dissent. Moreover, in a case in which the agency under scrutiny operates an extensive surveillance network, there is a pervasive danger that this very system can be used as a weapon against its alleged overseers. Indeed, previous allegations from NSA whistleblowers suggest that the agency has surveilled the very people that sit on oversight committees and courts prescribed with overseeing its operations. Some of the most vocal and zealous defenders of the surveillance system are the same people who have been alleged to have been previously surveilled by the NSA, leading to concerns that they now defend the agency under the threat of blackmail.For example, Tice alleges that the NSA has previously targeted Senator Dianne Feinstein, the head of the Senate Intelligence Committee, and Senator John McCain, former presidential candidate. Feinstein and McCain are now two of the most important defenders of the program, giving respective support to the program from both major political parties in the US; see, e.g., E. Heil. (2013) Feinstein, NSA’s top Congressional defender, has built respect over decades of service. The Washington Post, 26 June 2013; G. J. Cosker (2013) John McCain defends the National Security Agency’s surveillance programs. Examiner.com, 10 June 2013. In both cases there have been concerns expressed by some commentators as to whether the defense of the NSA has been motivated by blackmail pertaining to past intelligence gathered on these public figures.
In light of these considerations, it is perverse to imagine that reporting of government crimes must be done through a system mandated by the very same government that commits these crimes. It never occurs to critics of government whistleblowers that the institution of government is itself coercive and corrupting in nature, and its agents do not have the requisite incentives to offer an effective mechanism for the public exposure of its own wrongdoing. This is why Snowden must flee the United States in fear of his freedom, and perhaps even his life, while the head of the NSA can lie blatantly to the Congress, and then go straight back to collecting his government paycheck.
Snowden is the fifth major whistleblower to give information about the surveillance operations of the NSA. Unlike his predecessors he did not use the government-mandated channels of “oversight” to make complaints. Instead he systematically gathered documentary evidence of the NSA surveillance system and leaked this directly to the media, so as to give information to the public. This is precisely the reason that he has succeeded where previous whistleblowers failed. The claims of Russ Tice are still uncorroborated, but the claims from Binney, Weibe, and Drake have now clearly been vindicated by documentary evidence leaked by Snowden. Despite the previous alerts to the public, it has only been the release of clear documentary evidence from Snowden that has allowed the public to confirm the details of the NSA’s surveillance activities through its own documentation. All three of these previous whistleblowers have been interviewed about the Snowden leaks and all agree that he was correct to take his information directly to the public — that he had succeeded where they had failed.P. Eisler and S. Page. (2013) 3 NSA veterans speak out on whistle-blower: we told you so. USA Today, 16 June 2013.
Investigating the crimes of government: is this a crime?We have already noted that the doctrine of unlawful agreements operates to give a philosophical basis for the legal protection of whistleblowers. Similar considerations apply with respect to property claims over documents and other items that incriminate a person in criminal wrongdoing. In fact, the general principles of unlawful agreements also operates beyond this, to a range of activities pertaining to the investigation of unlawful activities. The same philosophical principle is at work when government agents investigate the actions of private criminal organizations, such as when an undercover police officer infiltrates an unlawful criminal syndicate. In such cases, it is perfectly sensible that the investigator would give assurances of secrecy to his target, and it is entirely sensible that this also be viewed as legally and ethically non-binding.
When FBI agent Joseph Pistone (a.k.a. Donnie Brasco) infiltrated the Bonnano crime family in New York, he spent six years as a low-level associate to members of the mafia, no doubt giving various assurances of secrecy under the mafia code-of-silence.S. Lovgren. (2005) FBI agent “Donnie Brasco” recalls life in the mafia. National Geographic News, 10 June 2005. Obviously this was no bar to the legitimacy of his revelations about the actions of this criminal organization — any assurance of secrecy he had made to his mafia associates was legally and ethically non-binding.
So here we have a rather hypocritical situation. The US government claims the prerogative to have its agents infiltrate any private criminal syndicate and make phony assurances of confidentiality to their members, in order to gather evidence of criminal wrongdoing. They rightly regard the code-of-silence of the mafia as being legally unenforceable, even when their own undercover agents give assurances of silence. But faced with the same action being taken against its own agencies the US government asserts that the person gathering evidence of wrongdoing is the criminal! Here it is the code-of-silence of the US government that must prevail, in the face of documented confirmation of its own wrongdoing.
If one takes a principled approach to questions of law, as opposed to slavish adherence to the commands of government legislation, it is appropriate to regard all such instances of confidentiality as being non-binding. Whistleblowers like Snowden operate in essentially the same way as other criminal investigators, using subterfuge to gather evidence of wrongdoing and exposing this to the scrutiny of the public eye. If this freedom of speech is a problem for the operations of the NSA, and makes it difficult for the agency to operate in the way it would like, then perhaps it is the operations of the NSA that are the real problem. Here it is worth reminding ourselves of the rationale for judicial non-enforcement of unlawful agreements:
To refuse to grant either party to an illegal contract judicial aid ... tends strongly towards reducing the number of such transactions to a minimum. The more plainly parties understand that when they enter into contracts of this nature they place themselves outside the protection of the law, so far as that protection consists in aiding them to enforce such contracts, the less inclined will they be to enter into them. In that way the public secures the benefit of a rigid adherence to the law.McMullen v. Hoffman (1899) 174 US 639, per Peckham J at 670.
Concluding remarksI hasten to remind the reader that the legal principles we have been discussing are of the normative jurisprudential variety, and so you should not expect to see such an argument run in any US court on the present matter. These institutions have long since abandoned any pretense of holding the US government to the rule of law. Nevertheless, for those who remain interested in speaking about “theft” and other similar concepts in respect to what is actually validly owned, the correct principles of contract and property will be of interest.
For Snowden, the matter is still up in the air. He has exposed the wrongdoing of men and agencies that are not subject to the rule of law, and are adept at monitoring and destroying the lives of those that displease them. While Snowden is on the run from the agencies of the US government, men like NSA Director James Clapper will remain in the circles of power, collecting their government paychecks and having their hands on the levers of the most massive apparatus of surveillance and coercion in human history.
In the face of revelations of the present magnitude it is important to keep focus on the actions of government, and not to become too consumed with contemplation of the actions of a solitary whistleblower. But there is good reason why the fate of the latter is important. If Snowden survives the onslaught of smears and legal action against him it will serve as a message to other would-be whistleblowers that could serve the public. If he is imprisoned and destroyed it will also serve as a message. This is a matter that is important to anyone who wishes to hold government to account:
In a democratic free enterprise system, a commitment to whistleblowing represents a fundamental confidence in the ability of individuals to make a difference. Society can never eradicate wrongdoing, but it can shield from retaliation those citizens who, urged on by their integrity and social responsibility, speak out to protect its well-being.Winters v. Houston Chronicle Publishing Co. (1990) 795 S.W.2d 723, per Doggett J at 730.