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Investmentocracy: A Challenge to Conventional Democratic Principles and a Framework for a New Free Society (2009) – Treatise by G. Stolyarov II – Second Edition

Investmentocracy: A Challenge to Conventional Democratic Principles and a Framework for a New Free Society (2009) – Treatise by G. Stolyarov II – Second Edition

The New Renaissance Hat
G. Stolyarov II
July 8, 2014
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The Second Edition of my 2009 treatise “Investmentocracy: A Challenge to Conventional Democratic Principles and a Framework for a New Free Society” has been released in PDF format. It can be freely downloaded here.
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Abstract

            The system of investmentocracy, described and defended here, offers a viable alternative to the conventional democratic principles of “one man, one vote” and the illegitimacy of vote transfers and vote pooling among individuals. Investmentocracy, which rewards contributors to the government with a number of votes proportional to their contributions, permits a viable elimination of compulsory taxation. Investmentocracy also entails remedies for voter irrationality and strong protections for all individual rights, including the rights of non-contributors. I use the Freecharter, a constitution of my own design, to provide a specific framework within which investmentocracy can be viably embedded. Here, both protections for individual rights inherent to investmentocracy itself and protections contained in other parts of the Freecharter will be examined.

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Table of Contents

Section Page
Abstract 2
Introduction 2
I. Existing Literature Regarding Investmentocracy and CDPs
    1. Literature Regarding Investmentocracy 3
    2. Literature Critiquing Conventional Democratic Principles 5
II. Problems With Conventional Democratic Principles
    3. Incompatibility of Compulsory Taxation With Individual Rights 9
    4. Ownership Shares in Governmental Entities 10
    5. Lack of Sanctity of the One Man, One Vote Principle 10
III. Mechanics of Investmentocracy and the Transition from CDPs
    6. Investmentocracy and the Elimination of Taxation 11
    7. Transferability of Votes Under Investmentocracy 12
    8. Pooling of Votes Under Investmentocracy 12
    9. Cosmopolitanism, Non-Discrimination, and Investmentocracy 13
  10. Investmentocracy and Incentives for Voter Rationality 14
  11. Defeating the “Social Quacks” Through Investmentocracy 15
  12. The Transition from CDPs to Investmentocracy 16
IV. Resolution of Objections and Concerns Regarding Investmentocracy
  13. The Incentive to Invest 17
  14. The Welfare Loophole Addressed 18
  15. Why Investmentocracy Will Not Create a Hereditary Aristocracy 19
  16. Why the Wealthiest Few Will Not Take Over 21
  17. The Elimination of Forced Carrying and the Mitigation of Free Riding 25
  18. Protecting Rights Under Investmentocracy

18.1.Protections for Individual Rights Inherent to Investmentocracy

18.1a. Desire for Additional Government Funding

18.1b. Fewer Reasons to Oppress Non-Contributors

18.1c. Friedman’s Four Types of Spending Under CDPs and Investmentocracy

18.2.Protections for Individual Rights External to Investmentocracy

18.2a. The Bill of Rights and the Restrictive Clauses

18.2b. The Tricameral Legislature

18.2c. The Nullifier

18.2d. The Opt-In Constitution

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Conclusion 42
Appendix: The Freecharter: A Constitution for a Society of Lasting Liberty 44
Works Cited 69
About Mr. Stolyarov 72

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Find out more about the Freecharter.

Why The 2,776 NSA Violations Are No Big Deal – Article by Ron Paul

Why The 2,776 NSA Violations Are No Big Deal – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 18, 2013
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Thanks to more documents leaked by Edward Snowden, this time to the Washington Post, we learned last week that a secret May 2012 internal audit by the NSA revealed 2,776 incidents of “unauthorized” collection of information on American citizens over the previous 12 months. They are routinely breaking their own rules and covering it up.The Post article quotes an NSA spokesman assuring the paper that the NSA attempts to identify such problems “at the earliest possible moment.” But what happened to all those communications intercepted improperly in the meantime? The answer is, they were logged and stored anyway.

We also learned that the NSA routinely intercepts information from Americans while actually targeting foreigners, and that this is not even considered a violation. These intercepts are not deleted once discovered, even though they violate the US government’s own standards. As the article reports, “once added to its databases, absent other restrictions, the communications of Americans may be searched freely.”

The Post article quotes an NSA official explaining that the thousands of unauthorized communications intercepts yearly are relatively insignificant. “You can look at it as a percentage of our total activity that occurs each day. You look at a number in absolute terms that looks big, and when you look at it in relative terms, it looks a little different.”

So although the numbers of Americans who have had their information intercepted in violation of NSA’s own rules seems large, it is actually miniscule compared to the huge volume of our communications they intercept in total!

Though it made for a sensational headline last week, the fact is these 2,776 “violations” over the course of one year are completely irrelevant. The millions and millions of “authorized” intercepts of our communications are all illegal — except for the very few carried out in pursuit of a validly-issued search warrant in accordance with the Fourth Amendment. That is the real story. Drawing our attention to the violations unfortunately sends the message that the “authorized” spying on us is nothing to be concerned about.

When information about the massive NSA domestic spying program began leaking earlier in the summer, Deputy Attorney General James Cole assured us of the many levels of safeguards to prevent the unauthorized collection, storage, and distribution of our communications. He promised to explain the NSA’s record “in as transparent a way as we possibly can.”

Yet two months later we only discover from more leaked documents the thousands of times communications were intercepted in violation of their own standards! It is hardly reassuring, therefore, when they promise us they will be more forthcoming in the future. No one believes them because they have lied and covered up continuously. The only time any light at all is shone on these criminal acts by the US federal government is when a whistleblower comes forth with new and ever more disturbing information.

Americans are increasingly concerned over these violations of their privacy. Calls for reform grow. However, whenever Washington finds itself in a scandal, the federal government responds by naming a federal-government panel made up of current and former federal employees to investigate any mistakes the federal government might have made. The recommendations invariably are that even more federal government employees must be hired to provide an additional layer or two of oversight. That is supposed to reassure us that reforms have been made, while in fact it is just insiders covering up for those who have hired them to investigate.

Let us hope the American people will decide that such trickery is no longer acceptable. It is time to take a very serious look at the activities of the US intelligence community. The first step would be a dramatic reduction in appropriations to force a focus on those real, not imagined, threats to our national security. We should not be considered the enemy.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission.

George Zimmerman’s Acquittal – Thoughts and Implications – Video by G. Stolyarov II

George Zimmerman’s Acquittal – Thoughts and Implications – Video by G. Stolyarov II

Now that George Zimmerman has been acquitted in a court of law of the charges of murdering Trayvon Martin, Mr. Stolyarov offers his reflections on the Trayvon Martin case in light of the information that emerged during the trial. These thoughts include a re-evaluation of the comments made in Mr. Stolyarov’s earlier (March 2012) video, “The Travesty of Trayvon Martin’s Murder“.

Reference
– “Shooting of Trayvon Martin” – Wikipedia

Futile Temporary Totalitarianism in Boston – Video by G. Stolyarov II

Futile Temporary Totalitarianism in Boston – Video by G. Stolyarov II

The aftermath of the Boston Marathon bombings of April 15, 2013, showed all too clearly that totalitarianism does not need decades of incremental legislation and regimentation to come to this country. All it needs is the now-pervasive fear of “terrorism” – a fear which can give one man the power to shut down the economic life of an entire city for a day.

This video is based on Mr. Stolyarov’s recent essay, “Futile Temporary Totalitarianism in Boston“.

References

-“U.S. Cities With Bigger Economies Than Entire Countries” – Wall Street Journal – July 20, 2012
– “Adding up the financial costs of the Boston bombings” – Bill Dedman and John Schoen, NBC News – April 30, 2013
– “United Airlines Flight 93” – Wikipedia
– “Richard Reid” – Wikipedia
– “Umar Farouk Abdulmutallab” – Wikipedia
– “Homicides decrease in Boston for third straight year” – Matt Carroll, The Boston Globe – January 1, 2013
– “List of motor vehicle deaths in U.S. by year” – Wikipedia
– “How Scared of Terrorism Should You Be?” – Ronald Bailey, Reason Magazine – September 6, 2011
– “Terrorism Risk Insurance Act” – Wikipedia
– “Business Frets at Terrorism Tag of Marathon Attack” – Associated Press – May 13, 2013
– “TIME/CNN Poll Shows Increasing Number Of Americans Won’t Give Up Civil Liberties To Fight Terrorism” – Tim Cushing, TechDirt – May 6, 2013

Illiberal Belief #17: Democracy is a Cure-All – Article by Bradley Doucet

Illiberal Belief #17: Democracy is a Cure-All – Article by Bradley Doucet

The New Renaissance Hat
Bradley Doucet
May 14, 2013
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I know it is sacrilege, but that is all the more reason to say it, and say it loud: Democracy is not the be-all, end-all, Holy Grail of politics that many imagine it to be. It is one, but only one, of the ingredients that make for good societies, and it is far from the most important one. Why point this out? If democracy is a good thing, why stir controversy by questioning just how good? Because the widespread, quasi-religious devotion to democracy in evidence today has some very nasty consequences. Democracy means “rule by the people.” The people usually rule by electing representatives, a process which is called, simply enough, representative democracy. Sometimes, as in the case of a referendum on a specific question, the people rule more directly, and this is known as direct democracy. Actually, though, “rule by the people” is a bit misleading, since “the people” are never unanimous on any given question, and neither are their chosen representatives. In practice, democracy is rule by majority (i.e., 50% + 1), or even mere plurality (i.e., more than any one other candidate but less than half) when three or more candidates compete.
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Long before any nation had experienced anything even approaching universal suffrage, people concerned with human liberty—thinkers like Alexis de Tocqueville and John Stuart Mill—expressed concerns that the fading tyranny of kings might merely be replaced by a “tyranny of the majority.” They worried that majorities might vote away minorities’ hard-won rights to property, freedom of religion, freedom of expression, and freedom of movement. Majorities with a hate on for certain minorities might even vote away their very right to life.

History has given these worries ample justification. Democracy by itself is no guarantee of peace and freedom. Adolf Hitler’s victory in democratic 1930s Germany is only the most glaring example of popular support for an illiberal, anti-human regime. The people of Latin America have a long and hallowed tradition of rallying behind populist strongmen who repay their fealty by grinding them (or sometimes their neighbours) beneath their boot heels, all the while running their economies into the ground. Their counterparts in post-colonial Africa and certain parts of Asia have shown similarly stellar political acumen.

As writers like Fareed Zakaria (The Future of Freedom: Illiberal Democracy at Home and Abroad) point out, in those parts of the world that have successfully achieved a respectable degree of freedom and prosperity (basically Europe, the Anglosphere, and Japan and the Asian Tigers), sheer democracy has been supplemented—and preceded—by institutions like the rule of law, including an independent judiciary; secure property rights; the separation of church and state; freedom of the press; and an educated middle class. Indeed, instead of supplementing democracy, it is more accurate to say that these institutions limit the things over which the people can rule. It is enshrined in law and tradition that neither the people nor their representatives shall be above the law, violate the lives or property of others, impose their religious beliefs on others, or censor the freedom of the press. These checks on the power of the people have created, in the most successful parts of the world, not just democracies but liberal democracies.

According to Zakaria, societies that democratize before having built up these liberal institutions and the prosperity they engender are practically doomed to see their situations deteriorate instead of improve, often to the detriment of neighbouring countries, too. Liberty is simply more important than democracy, and must come first. We who are fortunate enough to live in liberal democracies would do well to remember this when judging other nations, like China, and urging them to democratize faster.

We would do well to remember it when thinking about our own societies, too. Thinkers like economist Bryan Caplan, author of The Myth of the Rational Voter: Why Democracies Choose Bad Policies, argue that even in the most liberal countries, democracy often works against liberty. Economists have been saying for a few decades now that political ignorance is an intractable problem that undermines the beneficial effects of democracy. The argument is that since a single vote has practically no chance of affecting the outcome of an election (or a referendum), the average voter has no incentive to become informed. Defenders of democracy have replied that ignorance doesn’t matter, since the ignorant essentially vote randomly, and random ignorant votes in one direction will be cancelled out by random ignorant votes in the opposite direction, leaving the well-informed in the driver’s seat.

Caplan agrees that if average voters were merely ignorant, their votes would cancel each other out, and the well-informed would be in charge and make good decisions. His central insight, though, is that voters are not merely ignorant, but irrational to boot. Voters have systematically biased beliefs, to which they are deeply attached, and those biases do not cancel each other out. Specifically, the average voter underestimates how well markets work; underestimates the benefits of dealing with foreigners; focuses on the short-term pain of job losses instead of the long-term gain of productivity increases; and tends at any given time to be overly pessimistic about the economy. These biases lead voters to support candidates and policies that undermine their own best interests.

The alternative to democracy, Caplan emphasizes, is not dictatorship, but markets. The market is not perfect, but it works a lot better than politics, because in my daily life as a producer and a consumer, I have an obvious incentive to be rational: my pocketbook. This incentive is lacking when it comes time to go to the polls, because of the aforementioned near-impossibility that my vote will determine the outcome. Given this asymmetry, we should favour markets over politics whenever possible. For those things that must be decided collectively, democracy may be the best we can do, but we should strive to decide as many things as possible privately, resorting to politics only when no other option is feasible. In other words, we should recapture the wisdom of the American Founding Fathers, rediscover the genius of constitutionally limited democracy, and reclaim some of the liberty previous generations fought so valiantly to secure. If we don’t, it might not be too much longer, in the grand scheme of things, before the Western world ceases to be a model worth emulating.

Bradley Doucet is Le Quebecois Libré‘s English Editor. A writer living in Montreal, he has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness.
“Occupy” Protesters Have Rights, Too – Article by G. Stolyarov II

“Occupy” Protesters Have Rights, Too – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
November 4, 2012
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I am generally skeptical of the “Occupy” movement and have expressed my ambivalence and criticisms here, here, and here in the past. However, for all of my disagreements and reservations, I will defend the rights of fellow human beings when they are infringed. And, without question, “Occupy” protesters have rights, too – rights that have been shamelessly violated in the brutal crackdowns on “Occupy” protests which occurred last year.

In response to my passing mention of the pepper-spraying incident at University of California Davis in November 2011 (for which the University has now offered to generously compensate the victims), Dr. Charles Steele wrote, “Mr. Stolyarov responds that he’s concerned about ‘Occupy’ protesters being pepper-sprayed at UC Davis.  I’m uncertain what this event has to do with the Romney v. Obama choice, but he and I have very different definitions of ‘peaceful.’  My definition of peaceful does not include forcibly blocking public thoroughfares and occupying public spaces so that others cannot exercise their legitimate rights to use them.  It’s shameful that taxpayer money is now going to these ‘victims.’

First, the facts of the situation do not bear out the allegation that anyone’s ability to use the UC Davis facilities was substantially impeded. The protesters blocked a sidewalk; that is all. Surely, anyone who wished to get from one facility to another could have walked around.

Second, the protesters were students who were paying customers of the university. Even though the right to use public property is a somewhat nebulous area (since it is funded through the payments of large numbers of people with competing preferences), it is clearly the case that a paying user of property – especially one who pays the immensely generous sums that often constitute tuition these days – should have a considerable degree of prerogative, as long as the property is not damaged and remains usable to others. This whole incident is a glaring demonstration of the power asymmetry between universities and their students. What other institution (especially a privately owned and funded institution) would treat its customers in this way? Would any private country club be able to get away with pepper-spraying its donors who happened to be sitting on the sidewalk approaching a golf course (without being in the way of the game)?

It is clear that the protest was not intended to obstruct the everyday goings-on at the university. Rather, like the many special events that regularly occur at every university, it was intended to attract attention to an issue important to students – in this case, the protesters’ grievances, justified or not. There is no evidence that the protesters befouled the grass and sidewalk they occupied, or that they prevented other students and faculty from passing through on unrelated business.

Third, even if the protesters violated a formal rule of the university (which is itself unclear), proportionality was not followed in the response. To physically damage a person for breaking a prohibition whose violation physically hurt no one is clearly not a proportionate punishment. Nor was the attempt to evict the protesters through any kind of force justified with respect to this kind of petty violation (if it was one). Even if it could justifiably be said that the protesters were clearly, unambiguously in the wrong in occupying the sidewalk, they should not have been interfered with forcibly during their occupation. An appropriate remedy would have been to inform them of the nature of their violation and to present them with a subsequent punishment that did not involve bodily harm. Preferably, the punishment should have been related to any alleged harms. Examples could include sidewalk-cleaning duty, or fines that reflect the estimated “economic cost” of the obstruction (if there indeed was one).

But, even more importantly, I fail to see how a clear criterion can be established to delineate which “occupations” of the sidewalk would constitute violations of other people’s rights. With regard to genuine public thoroughfares (e.g., roads and railroads), the delineation can be clearly made with regard to whether the flow of vehicle traffic is obstructed. But, on a mere sidewalk, how long would one need to dally in order to be considered a violator? Would sitting for a mere minute suffice? What about standing for a minute? What about standing for five seconds? What about walking really slowly so that others have to walk around? What about walking really slowly because one has a disability? What about walking at a moderate pace when the culture of the university encourages most people to be ultra-rushed and adopt a rapid pace at all times? What if a person occupies the sidewalk for a much longer time period, but no one else is around to use it? Ultimately, no such arbitrary delineation can be made – and if none can be made, then we must err on the side of permissiveness. The ability for people to peacefully express themselves is too precious for anything less to be done in the attempt to preserve it.

The Vital Importance of Property in Land: Part 2 – An Analysis of the Georgist Land-Value Tax – Article by G. Stolyarov II

The Vital Importance of Property in Land: Part 2 – An Analysis of the Georgist Land-Value Tax – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
October 16, 2012
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In this second installment of my short series on land and property rights (see my first installment here), I begin to respond to “We Can Have It All: The Beauty of Value Capture” by Edward Miller. In particular, I focus on the idea of the single tax on the value of land, as originated by Henry George. Mr. Miller, a contemporary representative of the Georgist position, states that “We can eliminate taxes and debt, poverty and special privilege. Contrary to the dour pronouncements from the curators of the dismal science, we can have it all.” Mr. Miller advocates doing this by advocating the elimination of “no-strings-attached sovereignty” over land and replacing it with what he calls “Value Capture” and which many others would call a land-value tax. Mr. Miller states that this “is a tax only in the sense that Pigovian ‘Taxes’ are. It is not a tax on production, and thus there is nothing objectionable about it from the perspective of classical liberalism. Indeed, I’d argue that without it, classical liberalism is a cruel joke. Value capture is simply a reconceptualization of who owns the value of the access rights over the Earth.” In this installment, I will focus on the Pigovian/Georgist land-value tax idea in particular. In subsequent installments, I will address what I consider to be a more desirable approach to land in a free-market, classically liberal manner that seeks to facilitate economic growth and the continual improvement of living standards.

I am not a supporter of a land-value tax (however it may be termed) or of Pigovian taxation in general. The idea of a Pigovian tax (however called) seems to me rather contrived, in that it assumes a perfect knowledge on the part of the taxing authority of not just which activities create negative externalities, but also the precise extent to which a particular instance of such activities creates those externalities – and, correspondingly, the precise extent of taxation needed to take the “social cost” of these activities into account. The economic distortions of taxation, relative to a tax-free free-market situation, cannot be avoided in practice, no matter what form the tax takes – though, admittedly, it can be said that some types of taxes produce greater distortions or different kinds of distortions than others. Furthermore, the idea of a Pigovian tax is unworkable in practice, because political incentives and the influence of special-interest pressure groups would surely distort the incidence of the tax to benefit those with lobbying clout. In other words, even if the exact “social cost” of every activity could be calculated, the influence of lobbyists on elected officials would result in the incidence of the tax departing from a proper reflection of that “social cost.”

The elimination of all other possible taxes would be a definite advantage of the Georgist system, though – in practice – attempts to introduce a new type of tax have seldom supplanted existing taxes but have merely resulted in yet another kind of tax alongside all others. In fact, in the United States today, we might consider the current system of property taxation to be a partially Georgist system – but the property taxes are paid alongside income, sales, excise, gift, estate, fuel, and numerous other taxes – not to mention a myriad of fees to fund specific government services.

However, let us assume that it is politically feasible to enact a single land-value tax that supplants all other taxes. Perhaps an added advantage of this simplified approach would be the reduction in the overall cost of administering tax determination and collection – which the most benevolent conceivable government would entirely pass on to the people in the form of a lower tax rate. Even in this ideal situation, why might a land-value tax still be less favorable than other possible taxes?

Consider that certain kinds of taxes can be avoided by a property-owning individual entirely. He only needs to pay an income tax if he earns taxable income. He only needs to pay a sales tax if he purchases taxable goods. He can avoid gift taxes by not giving gifts (beyond the tax-exempt amounts). If he has enough money saved up to live on, grows/produces all of his own goods, and keeps his property largely to himself, he can avoid all such taxes in theory (even though, in practice, he would admittedly be part of a small minority of the population). The similarity among these taxes (no matter their other flaws, of which there are many) is that they do not reduce current wealth kept for personal use. Property taxes are different in that they are able to actually diminish a person’s stock of wealth without that person undertaking any positive action. As long as a person owns a house, or a commercial building, or even a stretch of land for recreational use, he cannot avoid the diminution of his wealth through taxation solely due to the passage of time. An income tax only reduces one’s potential earning opportunities. A sales tax only reduces one’s potential purchasing power if one chooses to make purchases. A property tax, however, reduces one’s existing stock of wealth, no matter what one chooses to do. Thus, with all other things (including the total tax collected) being equal, a property tax is more adverse to an individual because it compels him to engage in positive actions in order to maintain his present wealth, rather than merely discouraging the individual from undertaking certain additional activities that might be taxed to a greater extent than he might prefer.

A Georgist land-value tax is different from the current American property tax in that it taxes the land only and not the manmade improvements on that land. In this respect, the land-value tax is superior. It would probably encourage significant vertical building by landowners/occupants in order to increase the amount of improvements per unit of land. However, it would also probably result in large stretches of land being unoccupied and unused, because there would be a sub-optimal level of interest in developing that land, as the owners/occupants would be responsible for paying tax. This may make the unfortunate phenomenon of urban congestion common even in less populated areas.

Furthermore, one can conceive of a supremely sub-optimal outcome of the single land-value tax, which would be the result of a perverse incentive indeed. This is the scenario where most individuals decide that it is not worth the trouble to own land (or partially own it or “rent” it from the community – however this might be described legally). Instead, large landholding corporations would emerge and purchase most or all of the land. Their owners (probably a lot of dispersed shareholders beholden to an entrenched management and thereby subject to numerous principal-agent problems) would be willing to absorb the costs of the land-value tax in exchange for collecting rents from everyone else who lives and works on that land. Many ordinary people might think that they are getting a good deal by avoiding all legal incidence of taxation – but in reality, the amount of rent they would pay to the landholding corporations would be higher to reflect the taxes those corporations have to pay. In other words, the cost of the land-value tax would be at least partially passed on to the renters/majority of people in the community by the landholding corporations. Economically, this is identical to the scenario that the Georgist proposal seeks to avoid – the situation where (whether or not this is indeed the case) it is alleged that most of people are beholden to a minority of landowners or lienholders by means of payment of rent or repayment of expensive mortgages.

One significant downside of this scenario, relative to the status quo, is that the possibility of “free and clear” ownership of property would be more definitively off-limits to everybody – even in theory. Another even greater concern is that the landholding corporations would essentially behave like supercharged homeowners’ associations – with even more power to micromanage people’s lives and impose arbitrary restraints on the use of personal property and the improvement of land. They would be able to conduct this abuse with impunity, because there would be fewer of them in any given geographical area, compared to today’s homeowners’ associations. This would give the landholding corporations the oligopoly (and sometimes monopoly) power that enables many similar entities to disregard consumer preferences and extract large amounts of unearned money.

The reality is that the market always seeks to correct for economic distortions that are the result of confiscatory or redistributive policies. The correction is always imperfect, because real wealth is in fact appropriated through taxation. However, changing the tax structure cannot, by itself, solve the whole distortion – without addressing how much wealth is kept by private citizens and what they are legally able to do with that wealth. There may, however, be a valid argument for changing a tax structure if this inherently results in a lower total proportion of tax collected, relative to the wealth that exists among the general population. This, of course, depends on the real rates of tax selected for each alternative under consideration. For instance, I would wholeheartedly support (as an unambiguous directional improvement relative to the status quo) a single land-value tax whose entire collections would be a mere 0.5% of the Gross Domestic Product. Irrespective of any concerns about the incentive effects of the tax, those would be dwarfed by the sheer amount of wealth that individuals would be able to keep compared to today’s tax regime. In this situation, though, I would still strongly prefer that the legal concept of full ownership of land be retained and that the land-value tax be administered similarly to today’s property taxes – as opposed to treating the occupant of the land as a “tenant” who owes a “rent” to “the community.”

There may also be a valid argument for changing a tax structure if doing so results in more wealth-generating behavior and increased productivity. However, I cannot find a system that allows for the diminution of current wealth through taxation to be more encouraging of productivity than a system that merely takes a share of future active production or consumption. If one cannot be guaranteed the peaceful and total enjoyment of the wealth one has already earned, then earning more seems less attractive from a psychological (in addition to a purely economic) perspective. Productivity is simply not as enjoyable if one views it as a chore to be done in order to remain in one’s present situation and prevent a decline – rather than an ambitious endeavor of self-improvement and possible enrichment.

Next, I will address how land might properly be approached from a libertarian/classical liberal standpoint, with beneficial practical consequences to most and the avoidance of effects that might stifle economic growth or decrease individual opportunities.

The Vital Importance of Property in Land: Part 1 – Arguments for Land as Property – Article by G. Stolyarov II

The Vital Importance of Property in Land: Part 1 – Arguments for Land as Property – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
October 14, 2012
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In this small series on land and private property, I hope to counter the claims of Henry George and his contemporary followers, who generally support a libertarian view with respect to all property except land – which they do not consider to be legitimate property. I, on the contrary, see the ability to own property in land (based on a true Lockean understanding of “mixing one’s labor” with rightfully owned land, or legitimately acquiring it from those who did) as indispensable to the existence of other property rights – as well as, more generally, to the expression of human individuality and the improvement of the human condition.

Why is property in land essential for the exercise of all other property rights? In this first installment, I provide six arguments.

Argument 1: Use of Personal Property: If there is no property in land, one cannot be guaranteed the ability to set one’s personal property in any location for its use and enjoyment. This means, ultimately, the use and enjoyment of one’s personal property is always at the discretion – and with the permission – of whichever governing authority or collective decision-making would supplant the right of private property in land. This is not liberty; the best that it can be is a kind of benign neglect from the persons or committees who have the power to dispose of the land and what is on it.

Argument 2: Complete Ownership: If there is no property in land, then there is never an ability – even in theory – to enjoy the use of land “free and clear” – without paying some sort of rent or “usage fee” to someone. Ignoring property taxes (whose absence is wholly conceivable and would be tremendously beneficial – even if other types of taxes are kept in place), it is possible today for people to pay off any mortgages and liens on their property and to enjoy it outright, without fear of losing the property if they do not pay a continuous stream of money to a third party.  The greatest value of private property comes about precisely when the ownership of that property is absolute – not contingent upon future services or payments rendered to other people.

Argument 3: Opportunity to Choose Leisure or Work: If there is no property in land, and one must continuously and inescapably pay a stream of money to a third party in order to avoid losing the property, then this means that one must continuously earn a sizable income to support that stream of payments. The ability to lead a life of leisure (after having made adequate provision for one’s other needs) is forever closed off to most people (unless they are beneficiaries of trust funds or a fortuitous investment strategy). Whatever the relative merits of work versus leisure might be in any particular situation, a libertarian would hold that the choice to pursue either (or any combination of each) should be up to the individual. Restrictive institutions should not permanently foreclose individuals (in multiple senses of that word) from pursuing one of these alternatives or the other. My own ambition, for instance, is to pay off the mortgage on my house while I am still relatively young. I would continue to engage in paid employment (and hopefully earn decent money) for many decades thereafter, but a lot of the economic pressure would be removed by getting rid of the largest recurring expense, and the same amount of earnings could achieve a much higher standard of living in other respects.

 Argument 4: Incentives for Improvement: If there is no property in land, then there is little incentive (other than sheer benevolence) for the occupant to improve the land by the addition of permanent fixtures, for someone else (or “the community at large”) would capture the values of the improvements, while the occupant would spend his personal resources on the improvements. This is the classic case of a “positive externality” not being realized – or, alternatively, a “tragedy of the commons” situation arising from the community laying claim to a resource that becomes over-exploited and insufficiently maintained. If one wishes for private residential lots to begin to resemble the public roads of a large city in appearance, then doing away with land ownership is an excellent means to that dubious goal.

Argument 5: Individuality: Only through the exercise of the right of private property can a person truly actualize his individual aspirations and distinctive esthetic. True private property enables an individual to act within his own realm as he pleases, as long as he does not infringe on the identical prerogatives of all others with their property. Only private property in land can give an individual the unfettered ability to paint a house with the colors and patterns of one’s choice, to determine the surrounding landscaping, to select the appliances and amenities therein, and to decorate it (which is a right that should not be undervalued, lest we lose it in the age of draconian busybody “homeowners’ associations”). An individual who owns land can truly turn the land and the improvements on it into reflections of himself, rather than just another barren, drab, or cookie-cutter plot (though any of those are within his prerogative as well, if he wishes to be unimaginative). True innovators are always in the minority and always unconventional. If they do not have a sphere where they can act unfettered, then many of their creations may never come to be.

Argument 6: Owned Land versus Land in the State of Nature: While I do not support arbitrary claims of ownership to undeveloped land, I do hold to the Lockean view that a person comes to own land by mixing his labor with it as the first occupant – and only to the extent that he does so. Locke himself argued that a person’s legitimate claim to land extends only to whatever land this person (or others acting on his behalf, through the voluntary exchange or offering of their services) was able to transform with his labor and put to use. Any other (undeveloped) land remains in the state of nature, free for others to claim. This is why Locke opposed arbitrary claims of the King of England to all of the prime forests of that country as the King’s “hunting grounds”. Likewise, one might question whether a Lockean view of property rights would allow national governments today to lay claim to vast undeveloped territories and to preclude development thereon (or sell “development rights” or “resource rights” to those territories). A fully libertarian system of property law would recognize the right of the first occupant and user of a property to be its owner, but only with respect to the land which is truly inextricably involved with such occupancy or use – i.e., land that has been improved and transformed. This is a consistent and universalizable standard for legitimate ownership, and it is a standard that follows directly from the desire to use and transform objects in nature for the improvement of human well-being. Such improvement and transformation are precisely what differentiates owned land from land in the state of nature. Owned land is much more usable and often dedicated to specific purposes, whereas land in the state of nature remains to be adapted to human needs. In practice, the two would look quite different and would enable natural demarcations of private land holdings.

The Law of the Jungle is Taking Over: Professor Eric Posner Calls for Censorship – Article by Charles N. Steele

The Law of the Jungle is Taking Over: Professor Eric Posner Calls for Censorship – Article by Charles N. Steele

The New Renaissance Hat
Charles N. Steele
September 30, 2012
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Another highly placed America legal scholar is endorsing gutting the First Amendment in favor of anti-blasphemy laws and censorship.  It’s the most anti-First Amendment op-ed I’ve seen yet.

It turns out “we overvalue free speech” (foreigners’ values are the right ones, so we must abandon ours) and “often free speech must yield to other values and the need for order.”

So says University of Chicago law professor Eric Posner, who also argues “We have to remember that our First Amendment values are not universal; they emerged contingently from our own political history, a set of cobbled-together compromises among political and ideological factions responding to localized events…”

This is not true.  The case for free speech is a profoundly philosophical one, with a very long history — and it is not only a Western idea, either.  Posner is highly educated legal scholar — I suspect he knows this already (umm, is it to be prohibited to suggest that some public figure is, umm, lying?)

“As often happens, what starts out as a grudging political settlement has become, when challenged from abroad, a dogmatic principle to be imposed universally. Suddenly, the disparagement of other people and their beliefs is not an unfortunate fact but a positive good. It contributes to the ‘marketplace of ideas…'”

Yes, in fact the freedom to examine and criticize people and beliefs is a positive good, and how else will we ever be able to separate good ideas from bad ones?  There is no other way other than freedom of discussion.  And one can’t specify in advance which ideas or criticisms are and aren’t permitted — that would assume we already knew and agreed on Truth.

“…as though we would seriously admit that Nazis or terrorist fanatics might turn out to be right after all. Salman Rushdie recently claimed that bad ideas, ‘like vampires … die in the sunlight’ rather than persist in a glamorized underground existence. But bad ideas never die: They are zombies, not vampires. Bad ideas like fascism, Communism, and white supremacy have roamed the countryside of many an open society.”

They also don’t die if we suppress them, and in fact do fester and grow.  Rushdie is right.

“So symbolic attachment to uneasy, historically contingent compromises, and a half-century of judicial decisions addressing domestic political dissent and countercultural pressures, prevent the U.S. government from restricting the distribution of a video that causes violence abroad and damages America’s reputation.”

No, it doesn’t cause violence.  Religious fanatics and psychopaths choose to engage in violence.  If they did not, we would not be having this debate.  The video would simply be a case study in bad filmmaking for a few reviewers.

“And this is a video that, by the admission of all sides, has no value whatsoever.”

No!  The filmmakers disagree.  For that matter, I disagree!  I think the first parts, which illustrate the attacks of Salafi muslims on Coptic Christians, and Egyptian state complicity, have merit. Our values have zero weight?  Why?

Let’s take this farther.  If I find Posner’s op-ed blasphemous and utterly without merit, is that sufficient for me to call for its suppression and his prosecution?  If not, how many of us does it take?  How big a mob must I organize and how violent must we become?

Professor Posner, you’re a professor of law, so explain for us the legal criteria your argument implies.  I want to know now, in advance, what the boundaries are.  What speech will be prohibited?  Is it really only that which ex post “causes” others to engage in violence?

I’m quite certain that Michael Totten has it right, that these kinds of arguments are equivalent to giving terrorists veto power over our thought, speech, and actions.  Conversely, Posner tries to claim that this is just about having a reasonable debate over “whether a government should be able to curtail speech in order to safeguard its relations with foreign countries.”  Never mind Posner’s confusion of religious rioters with foreign states, this point is simply disingenuous.  The purpose of our government is to protect our rights from attack by foreigners, not restrict them when foreigners are 1) offended and 2) engage in criminal behavior.  What the hell can Posner be thinking?

Posner thinks we need to understand “that often free speech must yield to other values and the need for order.”  In Pakistan, “yielding” to “other values” has lead to what one Muslim cleric calls “the law of the jungle…”  If a mob is sufficiently violent, the police arrest the “offender” and courts convict, all in the name of defending the mobs’ values and maintaining a pretense of civil order.  Note that it is Pakistani Muslims who are recognizing that Islamic anti-blasphemy laws are empowering the worst people in their country.

“Law of the jungle” is an apt description.

Not all academics have gone mad, of course. Professor of Sociology Mahfooz Kanwar — a Muslim — warns that “[t]he blasphemy law is clearly a very blunt and effective tool used to destroy the lives of one’s enemies…” and that “[t]he entire Muslim world, not just Pakistan, is agitating for the United Nations to pass an anti blasphemy law. The rest of the civilized world must oppose this at every turn.”

Why isn’t this obvious to Posner, and everyone else tripping over themselves to abandon the First Amendment?  There can be no law but the law of the jungle under Posner’s standards.  Go ahead and “yield to other values” and you’ll see what kind of order that gets us.

This article originally appeared on the Unforeseen Contingencies blog.

Dr. Charles N. Steele is the Herman and Suzanne Dettwiler Chair in Economics and Associate Professor at Hillsdale College in Hillsdale, Michigan. His research interests include economics of transition and institutional change, economics of uncertainty, and health economics.  He received his Ph.D. from New York University in 1997, and has subsequently taught economics at the graduate and undergraduate levels in China, the Russian Federation, Ukraine, and the United States.  He has also worked as a private consultant in insurance design and review.

On Indefinite Detention: The Tyranny Continues – Article by Ron Paul

On Indefinite Detention: The Tyranny Continues – Article by Ron Paul

The New Renaissance Hat
Ron Paul
May 28, 2012
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The bad news from the recent passage of the 2013 National Defense Authorization Act is that Americans can still be arrested on US soil and detained indefinitely without trial. Some of my colleagues would like us to believe that they fixed last year’s infamous Sections 1021 and 1022 of the NDAA, which codified into law the unconstitutional notion that some Americans are not subject to the protections of the Constitution. However, nothing in this year’s bill or amendments to the bill restored those constitutional rights.

Supporters of the one amendment that passed on this matter were hoping no one would notice that it did absolutely nothing. The amendment essentially stated that those entitled to habeas corpus protections are hereby granted habeas corpus protections. Thanks for nothing!

As Steve Vladeck, of American University’s law school, wrote of this amendment:

“[T]he Gohmert Amendment does nothing whatsoever to address the central objections…. [I]t merely provides by statute a remedy that is already available to individuals detained within the United States; and says nothing about the circumstances in which individuals might actually be subject to military detention when arrested within the territory of United States…. Anyone within the United States who was subject to military detention before the FY2013 NDAA would be subject to it afterwards, as well…”

Actually, the amendment in question makes matters worse, as it states that anyone detained on US soil has the right to file a writ of habeas corpus “within 30 days” of arrest. In fact, persons detained on US soil already have the right to file a habeas petition immediately upon arrest!

I co-sponsored an amendment offered by Reps. Adam Smith and  Justin Amash that would have repealed the unconstitutional provisions of last year’s NDAA by eliminating Section 1022 on mandatory military detention and modifying Section 1021 to make it absolutely clear that no one can be apprehended on US soil and held indefinitely without trial or be held subject to a military tribunal. Our language was clear: “No person detained, captured, or arrested in the United States, or a territory or possession of the United States, may be transferred to the custody of the Armed Forces for detention under the Authorization for Use of Military Force, this Act, or the National Defense Authorization Act for Fiscal Year 2013.”

The term “person” is key in our amendment, as our Founders did not make a distinction between citizens and non-citizens when determining who was entitled to Constitutional protections. As the father of the Constitution James Madison wrote, “[I]t does not follow, because aliens are not parties to the Constitution, as citizens are parties to it, that whilst they actually conform to it, they have no right to its protection.”

We should not forget that our Article III court system is a strength not a weakness. The right to face our accuser, the protections against hearsay evidence, the right to a jury trial – these are designed to protect the innocent and to determine and then punish guilt. And they have been quite successful thus far. Currently there are more than 300 individuals who have been tried and convicted of terrorism-related charges serving lengthy terms in US federal prisons. Each of the six individuals tried in US civilian courts for the 1993 bombing of the World Trade Center are serving hundreds of years in prison, for example.

Last week was discouraging and disappointing to those of us who value our Constitution. That the US government asserts the legal authority to pick up Americans within the United States and hold them indefinitely and secretly without a trial should be incredibly disturbing to all of us. Americans should check how their representative voted. Politicians should not be allowed to get away with undermining our liberties in this manner.

Representative Ron Paul (R – TX), MD, is a Republican candidate for U. S. President. See his Congressional webpage and his official campaign website

This article has been released by Dr. Paul into the public domain and may be republished by anyone in any manner.