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Libertarian Democrat: When New York Produced Giants for Liberty – Article by Lawrence W. Reed

Libertarian Democrat: When New York Produced Giants for Liberty – Article by Lawrence W. Reed

The New Renaissance Hat
Lawrence W. Reed
August 18, 2013
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The idea pervades the bill that severe penalties will secure enforcement; but all experience shows that undue severity of laws defeats their execution … [N]o law can be sustained which goes beyond public feeling and sentiment. All experience shows that temperance, like other virtues, is not produced by lawmakers, but by the influences of education, morality and religion. Men may be persuaded—they cannot be compelled—to adopt habits of temperance.

—Horatio Seymour, 1854

This essay is about a long-forgotten New Yorker who served in his state’s legislature and twice as governor, then nearly became President of the United States. Much respected, even beloved by many in his day, his name was Horatio Seymour. He deserves to be dusted off and appreciated now, almost 130 years since his death. But first, some context.

The Democratic Party in the state of New York these days is about as “liberal” (in the twentieth-century, American sense of the term) as it gets. On economic issues in particular, it is reliably statist, meaning it rarely deviates from the “more government is the answer” mentality, no matter how strongly logic or evidence point elsewhere. But not so long ago, New York’s Democrats were largely of the opposite persuasion. They were often what we now would call “classical liberals,” ardent skeptics of the concentration of power. Classical liberals really believed in liberty; today’s liberals really don’t.

Local and national Democratic Party organizations today host “Jefferson-Jackson Day” dinners in honor of two of the party’s early representatives. If Thomas Jefferson or Andrew Jackson could stop in for a drink, it’s not likely that either one of them would recognize their party after all these years. Arguably, they’d be horrified enough to resign their memberships. My guess is that Jackson would become an Independent while Jefferson would bolt for the Libertarians.

New York City in the 1830s was the birthplace of the Locofocos, the most principled libertarians the Democratic Party ever produced. Their opposition to subsidies, high tariffs, special favors, fiat money, and interventionist government helped keep the state and national party on the right side of liberty until the silver-tongued currency crank William Jennings Bryan came along in 1896.

Martin Van Buren, Jackson’s successor, was a New York Democrat. Economist and historian Jeffrey Rogers Hummel argues that Van Buren may be the most libertarian of all the American presidents.

In the 1840s and 1850s, Democrats fought the Whigs, who stood for a Hamiltonian big government that would dispense privilege and corporate welfare, jack up tariffs, and centralize banking. When the Republicans picked up the mantle of the Whigs in the late 1850s, Democrats opposed them for the same reasons. With the exception of Horace Greeley, the most pro-liberty presidential candidates in the thirty years after the Civil War were the Democratic nominees who didn’t win (Seymour, Tilden, and Hancock). The only Democrat to actually capture the White House between 1865 and 1912—Grover Cleveland, born in New Jersey but a New Yorker most of his life and governor of the state—was arguably one of the very best and most pro-liberty presidents of the 44 we’ve had.

New York was home also to eight-term congressman Bourke Cockran, who emerged in the 1890s as one of the staunchest and most eloquent defenders of Jeffersonian liberty Americans ever sent to Washington from anywhere.

But something happened to the Democratic Party in the years between Cleveland and the next Democratic president, Woodrow Wilson—my personal choice for the worst of all presidents. That sad turn of events is a story for another day. Allow me now to return to my primary subject, Horatio Seymour.

Seymour wrote those words at the top of this essay. They were part of his 1854 veto of one of the earliest alcohol prohibition measures that made it to a governor’s desk. If the wisdom of that veto message had been heeded 65 years later, America would have been spared the imbecility of Prohibition. So, too, it could have saved us from compounding that destructive error with a futile, expensive, and tyrannical War on Drugs in more recent decades. His view on Prohibition was indicative of his general perspective on the role of government in our lives. He was no friend of the meddlesome nanny state.

Seymour was born in 1810 in Onondaga County, New York, early in the presidency of another Jeffersonian Democrat (from Virginia), James Madison. At the age of 23, he went to Albany, where he labored for six years as military secretary to the state’s Democratic governor, William L. Marcy. There, he gained detailed knowledge of the state’s politics. In 1841 he won election to the New York State Assembly and served simultaneously as mayor of Utica from 1842 to 1843. He was elected speaker of the assembly in 1845, then governor of the state in 1852. His veto of the Prohibition bill cost him in his reelection bid, which he lost by a mere 309 votes statewide.

FEE’s senior historian, Dr. Burton Folsom (author of The Myth of the Robber Barons, New Deal or Raw Deal, and other great works) reminds me that Seymour wasn’t as solid on economic issues as New York’s Locofocos: “Seymour was from Utica, and because that town was right on the Erie Canal, he favored state-funded construction of the Erie Canal.  He also favored (though with less enthusiasm) the state funding of the eight branch canals, all of which lost money.” Indeed, Seymour should have seen the logical inconsistency of canal subsidies and small government, but such are the blemishes of politics, which is why when we grade its practitioners, we have to do so “on the curve” or most would flunk. I still see greatness in Seymour on other counts.

The country drifted inexorably toward sectional conflict for the rest of the 1850s. Out of office but an influential former governor of the most populous state, Seymour made headlines whenever he spoke. Prominent party leaders promoted him for the presidential nomination in 1856 and 1860 but he declined to run. He opposed slavery but was reluctant to go to war over either it or the question of secession. When war came in 1861, he staked out a definitive position on the Lincoln administration’s suppression of civil liberties and questionable constitutional ventures such as suspension of habeas corpus:  “Government is not strengthened by the exercise of doubtful powers, but by a wise and energetic exertion of those which are incontestable. The former course never fails to produce discord, suspicion and distrust, while the latter inspires respect and confidence.”

As the war groaned on, Seymour chastised Lincoln and the Republicans for imprisoning (without trial) thousands of dissenters who questioned the war or its conduct. He demanded to know why citizens of the North had to be warred upon by their own government. “Liberty is born in war,” he declared. “It does not die in war! I denounce the doctrine that Civil War in the South takes away from the loyal North the benefits of one principle of civil liberty!”

Defending civil liberties in the midst of a major war was a courageous stand in the 1860s. Even among the large and vocal cadre of Lincoln apologists today, it’s not kosher to bring up the seamy side of our 16th President’s policies. But in the day, some very patriotic Americans like Seymour raised serious questions that deserve attention now as they did then.

In 1862, Seymour was again elected governor of New York and was embroiled the very next year in a vigorous battle with the Lincoln administration over the military draft. He strongly opposed it as unconstitutional. He refused to pay the state’s foreign creditors in paper greenbacks, insisting instead on payment in the medium specified in the terms of the debt—gold. Defeated narrowly for reelection in 1864, Seymour resumed his prominent role as a respected elder statesman and spokesman for Democratic principles. He might have taken the presidential nomination away from George McClellan in 1864 but, as in the past, he declined many demands that he be a candidate.

With no strong Democratic contender for the presidential nomination in 1868, Seymour’s name bubbled to the top again. I’ve written elsewhere about Republican James A. Garfield as the most reluctant man ever to be elected President of the United States. Horatio Seymour is easily the most reluctant man ever to be nominated and not get elected, though he came close. Leading up to the Democratic Party convention in 1868, he declared numerous times that he would not be a candidate. He even accepted the role as permanent chairman of the convention because the very position would make it impossible to also be a candidate, but after 21 deadlocked ballots the conventioneers violated party rules and nominated Seymour anyway. He ran against Republican Ulysses S. Grant out of a sense of obligation to his party, not any lust for the job. Democrats made Francis P. Blair of Missouri his vice presidential running mate.

Almost immediately, Republicans waved “the bloody shirt,” accusing Seymour and the Democrats of treason. The Democratic nominee was a “traitor” because he had once supported secession, though he took that position purely (and in the view of this author, correctly) because the Constitution neither addressed nor forbade it. Like it or not, the notion that secession was a right of any state was a widely held perspective in both the North and the South in the first half of the nineteenth century. The Republicans vilified it for reasons of power and politics, but it was not for many decades a “radical” or unsupportable view in America, even among Northern newspaper editors.

In his superb 1938 biography, Horatio Seymour of New York, Stewart Mitchell writes that Seymour was on solid ground in arousing opposition to Republican duplicity, by which I mean claiming to be defenders of the Declaration of Independence and the Constitution while trampling on the rights upheld in both. “The fact was,” according to Stewart (quoting liberally from Seymour himself), “that within ten states of the Union any American citizen who dared to quote that declaration in his own defense ‘would be tried and punished by a military tribunal.’” Moreover, “If a citizen of the state where the ashes of Washington lay buried were to remind his rulers that ‘the military should ever be subordinate to the civil authority,’ he could be ‘dragged to prison’ even from the grave of the man who wrote the declaration.”

The Seymour-Blair platform assailed the party of Lincoln and Grant in certain if not grandiloquent terms, and largely from a pro-liberty perspective. It called for restoration of a sound, metallic currency and lower tariffs. It condemned the Republican Party thusly:

It has nullified there (in the ten states occupied by federal troops) the right of trial by jury; it has abolished habeas corpus, that most sacred writ of liberty; it has overthrown the freedom of speech and of the press; it has substituted arbitrary seizures and arrests, and military trials and secret star-chamber inquisitions, for the constitutional tribunals; it has disregarded in time of peace the right of the people to be free from searches and seizures; it has entered the post and telegraph offices, and even the private rooms of individuals, and seized their private papers and letters without any specific charge or notice of affidavit, as required by the organic law; it has converted the American capitol into a Bastille; it has established a system of spies and official espionage to which no constitutional monarchy of Europe would now dare to resort; it has abolished the right of appeal, on important constitutional questions, to the Supreme Judicial tribunal, and threatens to curtail, or destroy, its original jurisdiction, which is irrevocably vested by the Constitution; while the learned Chief Justice has been subjected to the most atrocious calumnies, merely because he would not prostitute his high office to the support of the false and partisan charges preferred against the President. Its corruption and extravagance have exceeded anything known in history, and by its frauds and monopolies it has nearly doubled the burden of the debt created by the war; it has stripped the President of his constitutional power of appointment, even of his own Cabinet. Under its repeated assaults the pillars of the government are rocking on their base, and should it succeed in November next and inaugurate its President, we will meet, as a subjected and conquered people, amid the ruins of liberty and the scattered fragments of the Constitution.
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Grant easily won the election in the Electoral College, 214 to 80, but the popular vote was a different story. There the margin was less than six points, as Grant bested Seymour 52.7 percent to 47.3 percent. With Grant’s troops occupying most Southern states, controlling many polling stations and actively disenfranchising significant numbers of Southern whites whose votes would likely have gone Democratic, Seymour’s 47.3 percent seems all the more remarkable.

In his 1944 book about losing presidential contenders, They Also Ran, Irving Stone described Seymour as “one of the most intelligent, high-minded and able statesmen produced in America since the creators of the Constitution.” He argued that Seymour’s gentle character likely would have made him an excellent president, “the most logical figure in the country to bind the wounds of the war and wipe out the bitterness.” But alas, he didn’t get the chance.

Seymour never ran for office again after 1868 and turned down a guaranteed seat in the U.S. Senate, two more likely nominations for governor, and even two strong efforts to nominate him for the presidency in both 1876 and 1880. He may hold the record in American history for turning down more opportunities for high office than anyone else. His last political activity was to campaign for Grover Cleveland in 1884. He lived long enough to see Cleveland elected as the first Democrat since James Buchanan. Seymour died in February 1886 at the age of 75 and is buried in Forest Hill Cemetery in Utica, New York.

Horatio Seymour, a significant figure and friend of liberty in his day, is remembered by few and appreciated by even fewer. We should not treat the good men of our past this way.

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The author wishes to thank Mr. John Chodes of New York, a longtime FEE supporter, for his tireless efforts to remind his state and nation of the important contributions of his fellow New Yorker, Horatio Seymour.

Lawrence W. (“Larry”) Reed became president of the Foundation for Economic Education (FEE) in 2008. Prior to that, he was a founder and president for twenty years of the Mackinac Center for Public Policy in Midland, Michigan. He also taught Economics full-time and chaired the Department of Economics at Northwood University in Michigan from 1977 to 1984.

He holds a B.A. degree in Economics from Grove City College (1975) and an M.A. degree in History from Slippery Rock State University (1978), both in Pennsylvania. He holds two honorary doctorates, one from Central Michigan University (Public Administration—1993) and Northwood University (Laws—2008).

This article was originally published by The Foundation for Economic Education.
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.

Bernanke’s Farewell Tour – Article by Ron Paul

Bernanke’s Farewell Tour – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 17, 2013
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In mid-July 2013 Federal Reserve Chairman Ben Bernanke delivered what may well be his last Congressional testimony before leaving the Federal Reserve in 2014. Unfortunately, his farewell performance was full of contradictory comments about the state of the economy and the effects of Fed policies on the market. One thing Bernanke inadvertently made clear was that the needs of Wall Street trump Main Street, the economy, and sound money.

Quantitative easing (QE) and effectively zero interest rates have created paper prosperity, but now the Fed must continuously assure Wall Street that the QE spigot will not be turned off. Otherwise even the illusion of recovery will disappear. So Bernanke made every effort to emphasize that the economy was not doing well enough to end QE, while lauding the success of Fed policies in improving the economy.

Bernanke was also intent on denying that Fed policies directly boost financial markets. However, the money the Fed creates out of nothing in order to buy mortgage-backed securities and government debt for the QE3 program, benefits first and foremost the big banks and the financial class — those people who are invited to the Fed auctions. This new money then fuels stock bubbles, bond bubbles, agricultural land bubbles, and others. The consequences of this are felt by ordinary savers, investors, and retirees whose savings lose value because of the Fed’s zero interest rate policy.

As if Wall Street favoritism and zero returns for savers isn’t bad enough, the Fed wants the rest of America to bear a greater inflation burden. The Fed thinks you should lose two percent of the value of your dollar this year. But Bernanke is not satisfied with having reduced purchasing power by ten percent since the 2008 recession. The inflation picture is actually much worse if we look at the old consumer price index —the one that did not assume that ground beef is a perfect substitute for steak.

Using the old CPI metric, as calculated by John Williams at Shadow Government Statistics, we’ve lost close to 50 percent of the purchasing power of our money in just the last five years. So what you were able to buy with the $20 in your pocket before the financial crisis costs more than $30 today. That might be peanuts to Wall Street, but that’s real money for working Americans. And it’s theft by the Fed. It is a direct consequence of the trillions of new dollars the Fed has “not literally” printed—as Bernanke put it.

Bernanke’s final testimony before Congress confirms that the Fed has blatant disregard for the extra costs and the new bubbles it is creating. The Fed only understands paper prosperity, not how middle-class Americans and the poor suffer the consequences of higher prices, resources misallocations, and distortionary bubbles as well as insidious unemployment.

The only way out of this tailspin of monetary favoritism is to restore sound money, which would end the Fed’s ability to put Wall Street first and to manipulate currency. The Fed has proven over and over again that it has no respect for the real money that preserves the value of people’s labor, their wealth, and their ability to live free and prosperous lives. It is beyond time for the Fed, Wall Street, and the federal government to stop manipulating money and stealing from the American people under the false guise of paper prosperity.

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

This article is reprinted with permission.

Against Monsanto, For GMOs – Video by G. Stolyarov II

Against Monsanto, For GMOs – Video by G. Stolyarov II

The depredations of the multinational agricultural corporation Monsanto are rightly condemned by many. But Mr. Stolyarov points out that arguments against Monsanto’s misbehavior are not valid arguments against genetically modified organisms (GMOs) as a whole.

References

– “Against Monsanto, For GMOs” – Essay by G. Stolyarov II
– “Monsanto – Legal actions and controversies” – Wikipedia
– “Copyright Term Extension Act” – Wikipedia
– “Electronic Arts discontinues Online Pass, a controversial form of video game DRM” – Sean Hollister – The Verge – May 15, 2013
– “Extinction” – Wikipedia

A House Divided Over NSA Spying on Americans – Article by Ron Paul

A House Divided Over NSA Spying on Americans – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 10, 2013
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In late July 2013, the House debate on the Defense Appropriations bill for 2014 produced a bit more drama than usual. After hearing that House leadership would do away with the traditional “open rule” allowing for debate on any funding limitation amendment, it was surprising to see that Rep. Justin Amash’s (R-MI) amendment was allowed on the Floor. In the wake of National Security Agency (NSA) whistleblower Edward Snowden’s revelations about the extent of US government spying on American citizens, Amash’s amendment sought to remove funding in the bill for some of the NSA programs.

Had Amash’s amendment passed, it would have been a significant symbolic victory over the administration’s massive violations of our Fourth Amendment protections. But we should be careful about believing that even if it had somehow miraculously survived the Senate vote and the President’s veto, it would have resulted in any significant change in how the Intelligence Community would behave toward Americans. The US government has built the largest and most sophisticated spying apparatus in the history of the world.

The NSA has been massively increasing the size its facilities, both at its Maryland headquarters and in its newly built (and way over-budget) enormous data center in Utah. Taken together, these two facilities will be seven times larger than the Pentagon! And we know now that much of the NSA’s capacity to intercept information has been turned inward, to spy on us.

As NSA expert James Bamford wrote earlier this year about the new Utah facility:

“The heavily fortified $2 billion center should be up and running in September 2013. Flowing through its servers and routers and stored in near-bottomless databases will be all forms of communication, including the complete contents of private emails, cell phone calls, and Google searches, as well as all sorts of personal data trails—parking receipts, travel itineraries, bookstore purchases, and other digital “pocket litter.” It is, in some measure, the realization of the “total information awareness” program created during the first term of the Bush administration—an effort that was killed by Congress in 2003 after it caused an outcry over its potential for invading Americans’ privacy.”

But it happened anyway.

In late July we have seen two significant prison-breaks, one in Iraq, where some 500 al-Qaeda members broke out of the infamous Abu Ghraib prison, which the US built, and another 1,000 escaped in a huge break in Benghazi, Libya – the city where the US Ambassador was killed by the rebels that the US government helped put in power. Did the US intelligence community, focused on listening to our phone calls, not see this real threat coming?

Rep. Amash’s amendment was an important move to at least bring attention to what the US intelligence community has become: an incredibly powerful conglomeration of secret government agencies that seem to view Americans as the real threat. It is interesting that the votes on Amash’s amendment divided the House not on party lines. Instead, we saw the votes divided between those who follow their oath to the Constitution, versus those who seem to believe that any violation of the Constitution is justified in the name of the elusive “security” of the police state at the expense of liberty. The leadership – not to my surprise — of both parties in the House voted for the police state.

It is encouraging to see the large number of votes crossing party lines in favor of the Amash amendment. Let us hope that this will be a growing trend in the House – perhaps the promise that Congress may once again begin to take its duties and obligations seriously. We should not forget, however, that in the meantime another Defense Appropriations bill passing really means another “military spending” bill. The Administration is planning for a US invasion of Syria, more military assistance to the military dictatorship in Egypt, and more drones and interventionism. We have much work yet to do.

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

This article is reprinted with permission.

Why Won’t They Tell Us the Truth About NSA Spying? – Article by Ron Paul

Why Won’t They Tell Us the Truth About NSA Spying? – Article by Ron Paul

The New Renaissance Hat
Ron Paul
August 10, 2013
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In 2001, the Patriot Act opened the door to US government monitoring of Americans without a warrant. It was unconstitutional, but most in Congress over my strong objection were so determined to do something after the attacks of 9/11 that they did not seem to give it too much thought. Civil liberties groups were concerned, and some of us in Congress warned about giving up our liberties even in the post-9/11 panic. But at the time most Americans did not seem too worried about the intrusion.
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This complacency has suddenly shifted given recent revelations of the extent of government spying on Americans. Federal politicians and bureaucrats are faced with serious backlash from Americans outraged that their most personal communications are intercepted and stored. They had been told that only the terrorists would be monitored. In response to this anger, defenders of the program have time and again resorted to spreading lies and distortions. But these untruths are now being exposed very quickly.

In a Senate hearing this March, Director of National Intelligence James Clapper told Senator Ron Wyden that the NSA did not collect phone records of millions of Americans. This was just three months before the revelations of an NSA leaker made it clear that Clapper was not telling the truth. Pressed on his false testimony before Congress, Clapper apologized for giving an “erroneous” answer but claimed it was just because he “simply didn’t think of Section 215 of the Patriot Act.” Wow.

As the story broke in June of the extent of warrantless NSA spying against Americans, House Intelligence Committee Chairman Mike Rogers assured us that the project was a strictly limited and not invasive. He described it as a “lockbox with only phone numbers, no names, no addresses in it, we’ve used it sparingly, it is absolutely overseen by the legislature, the judicial branch and the executive branch, has lots of protections built in…”

But we soon discovered that also was not true either. We learned in another Guardian newspaper article last week that the top secret “X-Keyscore” program allows even low-level analysts to “search with no prior authorization through vast databases containing emails, online chats and the browsing histories of millions of individuals.”

The keys to Rogers’ “lockbox” seem to have been handed out to everyone but the janitors! As Chairman of the Committee that is supposed to be most in the loop on these matters, it seems either the Intelligence Community misled him about their programs or he misled the rest of us. It sure would be nice to know which one it is.

Likewise, Rep. Rogers and many other defenders of the NSA spying program promised us that this dragnet scooping up the personal electronic communications of millions of Americans had already stopped “dozens” of terrorist plots against the United States. In June, NSA director General Keith Alexander claimed that the just-disclosed bulk collection of Americans’ phone and other electronic records had “foiled 50 terror plots.”

Opponents of the program were to be charged with being unconcerned with our security.

But none of it was true.

On August 3, 2013, the Senate Judiciary Committee heard dramatic testimony from NSA deputy director John C. Inglis. According to the Guardian:

“The NSA has previously claimed that 54 terrorist plots had been disrupted ‘over the lifetime’ of the bulk phone records collection and the separate program collecting the internet habits and communications of people believed to be non-Americans. On Wednesday, Inglis said that at most one plot might have been disrupted by the bulk phone records collection alone.”

From dozens to “at most one”?

Supporters of these programs are now on the defensive, with several competing pieces of legislation in the House and Senate seeking to rein in an administration and intelligence apparatus that is clearly out of control. This is to be commended. What is even more important, though, is for more and more and more Americans to educate themselves about our precious liberties and to demand that their government abide by the Constitution. We do not have to accept being lied to – or spied on — by our government.

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

This article is reprinted with permission.

Hacking Law and Governance with Startup Cities: How Innovation Can Fix Our Social Tech – Article by Zachary Caceres

Hacking Law and Governance with Startup Cities: How Innovation Can Fix Our Social Tech – Article by Zachary Caceres

The New Renaissance Hat
Zachary Caceres
July 16, 2013
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Outside of Stockholm, vandals and vines have taken over Eastman Kodak’s massive factories. The buildings are cold metal husks, slowly falling down and surrendering to nature.  The walls are covered in colorful (and sometimes vulgar) spray paint. In the words of one graffiti artist: It’s “a Kodak moment.”

After its founding in 1888, Eastman Kodak became the uncontested champion of photography for almost a century. But in early 2012, the once $30-billion company with over 140,000 employees filed for bankruptcy.

Kodak was the victim of innovation—a process that economist Joseph Schumpeter called “the gales of creative destruction.” Kodak could dominate the market only so long as a better, stable alternative to its services didn’t exist. Once that alternative—digital photography—had been created, Kodak’s fate was sealed. The camera giant slowly lost market share to upstarts like Sony and Nikon until suddenly “everyone” needed a digital camera and Kodaks were headed to antique shows.

How does this happen? Christian Sandström, a technologist from the Ratio Institute in Sweden, argues that most major innovation follows a common path.

From Fringe Markets to the Mainstream

Disruptive technologies start in “fringe markets,” and they’re usually worse in almost every way. Early digital cameras were bulky, expensive, heavy, and made low-quality pictures. But an innovation has some advantage over the dominant technology: for digital cameras it was the convenience of avoiding film. This advantage allows the innovation to serve a niche market. A tiny group of early adopters is mostly ignored by an established firm like Kodak because the dominant technology controls the mass market.

But the new technology doesn’t remain on the fringe forever. Eventually its performance improves and suddenly it rivals the leading technology. Digital cameras already dispensed with the need to hassle with film; in time, they became capable of higher resolution than film cameras, easier to use, and cheaper. Kodak pivoted and tried to enter the digital market, but it was too late. The innovation sweeps through the market and the dominant firm drowns beneath the waves of technological change.

Disruptive innovation makes the world better by challenging monopolies like Kodak. It churns through nearly every market except for one: law and governance.

Social Technology

British Common law, parliamentary democracy, the gold standard: It may seem strange to call these “technologies.” But W. Brian Arthur, a Santa Fe Institute economist and author of The Nature of Technology, suggests that they are. “Business organizations, legal systems, monetary systems, and contracts…” he writes, “… all share the properties of technology.”

Technologies harness some phenomenon toward a purpose. Although we may feel that technologies should harness something physical, like electrons or radio waves, law and governance systems harness behavioral and social phenomena instead. So one might call British common law or Parliamentary democracy “social technologies.”

Innovation in “social tech” might still seem like a stretch. But people also once took Kodak’s near-total control of photography for granted (in some countries, the word for “camera” is “Kodak”). But after disruptive innovation occurs, it seems obvious that Kodak was inferior and that the change was good. Our legal and political systems, as technologies, are just as open to disruptive innovation. It’s easy to take our social techs for granted because the market for law and governance is so rarely disrupted by innovations.

To understand how we might create disruptive innovation in law and governance, we first need to find, like Nikon did to Kodak, an area where the dominant technologies can be improved.

Where Today’s Social Techs Fail

Around the world, law and governance systems fail to provide their markets with countless services. In many developing countries, most of the population lives outside the law.

Their businesses cannot be registered. Their contracts can’t be taken to court. They cannot get permission to build a house. Many live in constant fear and danger since their governance systems cannot even provide basic security. The ability to start a legal business, to build a home, to go school, to live in safe community—all of these “functions” of social technologies are missing for billions of people.

These failures of social technology create widespread poverty and violence. Businesses that succeed do so because they’re run by cronies of the powerful and are protected from competition by the legal system. The networks of cooperation necessary for economic growth cannot form in such restrictive environments. The poor cannot become entrepreneurs without legal tools. Innovations never reach the market. Dominant firms and technologies go unchallenged by upstarts.

Here’s our niche market.

If we could find a better way to provide one or some of these services (even if we couldn’t provide everything better than the dominant political system), we might find ourselves in the position of Nikon before Kodak’s collapse. We could leverage our niche market into something much bigger.

Hacking Law and Governance with Startup Cities

A growing movement around the world to build new communities offers ways to hack our current social tech. A host nation creates multiple, small jurisdictions with new, independent law and governance. Citizens are free to immigrate to any jurisdiction of their choosing. Like any new technology, these startup cities compete to provide new and better functions—in this case, to provide citizens with services they want and need.

One new zone hosting a startup city might pioneer different environmental law or tax policy. Another may offer a custom-tailored regulatory environment for finance or universities. Still another may try a new model for funding social services.

Startup cities are a powerful alternative to risky, difficult, and politically improbable national reform. Startup cities are like low-cost prototypes for new social techs. Good social techs pioneered by startup cities can be brought into the national system.

But if bad social techs lead a zone to fail, we don’t gamble the entire nation’s livelihood. People can easily exit a startup city—effectively putting the project “out of business.” If a nation chooses to use private capital for infrastructure or other services, taxpayers can be protected from getting stuck with the bill for someone’s bad idea. Startup cities also enhance the democratic voice of citizens by giving them the power of exit.

Looking at our niche market, a startup city in a developing nation could offer streamlined incorporation laws and credible courts for poor citizens who want to become entrepreneurs. Another project could focus on building safe places for commerce and homes by piloting police and security reform. In reality, many of these functions could (and should) be combined into a single startup city project.

Like any good tech startup, startup cities would be small and agile at first. They will not be able to rival many things that dominant law and governance systems provide. But as long as people are free to enter and exit, startup cities will grow and improve over time. What began as a small, unimpressive idea to serve a niche market can blossom into a paradigm shift in social technologies.

Several countries have already begun developing startup city projects, and many others are considering them. The early stages of this movement will almost certainly be as unimpressive as the bulky, toy-like early digital cameras. Farsighted nations will invest wisely in developing their own disruptive social techs, pioneered in startup cities. Other nations—probably rich and established ones—will ignore these “niche market reforms” around the developing world. And they just might end up like Kodak—outcompeted by new social techs developed in poor and desperate nations.

The hacker finds vulnerabilities in dominant technology and uses them to create something new. In a sense, all disruptive innovation is hacking, since it relies on a niche—a crack in the armor—of the reigning tech. Our law and governance systems are no different. Startup cities are disruptive innovation in social tech. Their future is just beginning, but one need only remember the fate of Kodak—that monolithic, unstoppable monopolist—to see a world of possibility.

Those interested in learning more about the growing startup cities movement should visit startupcities.org or contact startupcities@ufm.edu.

Zachary Caceres is CIO of Startup Cities Institute and editor of Radical Social Entrepreneurs.

This article was originally published by The Foundation for Economic Education.

Internet Fascism and the Surveillance State – Article by Ben O’Neill

Internet Fascism and the Surveillance State – Article by Ben O’Neill

The New Renaissance Hat
Ben O’Neill
July 16, 2013
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What is the purpose of telecommunication and internet surveillance?

The NSA presents its surveillance operations as being directed toward security issues, claiming that the programs are needed to counter terrorist attacks. Bald assertions of plots foiled are intended to bolster this claim.[1] However, secret NSA documents reveal that their surveillance is used to gather intelligence to achieve political goals for the US government. Agency documents show extensive surveillance of communications from allied governments, including the targeting of embassies and missions.[2] Reports from an NSA whistleblower also allege that the agency has targeted and intercepted communications from a range of high-level political and judicial officials, anti-war groups, US banking firms and other major companies and non-government organizations.[3] This suggests that the goal of surveillance is the further political empowerment of the NSA and the US government.

Ostensibly, the goal of the NSA surveillance is to prevent terrorist acts that would harm or kill people in the United States. But in reality, the primary goal is to enable greater control of that population (and others) by the US government. When questioned about this issue, NSA whistleblower Thomas Drake was unequivocal about the goal of the NSA: “to own the internet and find out what everybody is doing.”[4]

“To own the internet” — Public-private partnerships in mass surveillance

The internet is, by its very nature, a decentralized arrangement, created by the interaction of many private and government servers operating on telecommunications networks throughout the world. This has always been a major bugbear of advocates for government control, who have denigrated this decentralized arrangement as being “lawless.” Since it began to expand as a tool of mass communication for ordinary people, advocates for greater government power have fought a long battle to bring the internet “under control” — i.e., under their control.

The goal of government “ownership of the internet” entails accessing the facilities that route traffic through the network. This is gradually being done through government control of the network infrastructure and the gradual domination of the primary telecommunications and internet companies that provide the facilities for routing traffic through the network. Indeed, one noteworthy aspect of the mass surveillance system of the NSA is that it has allegedly involved extensive cooperation with many “private” firms operating under US law. This has allegedly included major security, telecommunications and internet companies, as well as producers of network software and hardware.

Examples of such “public-private partnerships” are set out in leaked documents of the NSA. An unnamed US telecommunications company is reported to provide the NSA with mass surveillance data on the communications of non-US people under its FAIRVIEW program.[5] Several major computing and internet companies have also been explicitly named in top secret internal NSA material as being current providers for the agency under its PRISM program.[6] Several of these companies have issued denials disavowing any participation in, or prior knowledge of the program, but this has been met with some scepticism.[7] (Indeed, given that the NSA did not anticipate public release of its own internal training material, it is unlikely that the agency would have any cause to lie about the companies they work with in this material. This suggests that the material may be accurate.)

Many of these companies have supplied the NSA with data from their own customers, or created systems which allow the agency access to the information flowing through telecommunications networks. They have done so without disclosure to their own customers of the surveillance that has occurred, by using the blanket advisement that they “comply with lawful requests for information.” By virtue of being subject to the jurisdiction of US statutes, all of these companies have been legally prohibited from discussing any of their dealings with the NSA and they have been well placed for retaliatory action by the many regulatory agencies of the US government if they do not cooperate. In any case, it appears from present reports that many companies have been active partners of the agency, assisting the NSA with illegal surveillance activities by supplying data under programs with no legitimate legal basis.

This has been a common historical pattern in the rise of totalitarian States, which have often sought to incorporate large business concerns into their network of power. Indeed, the very notion of “public-private partnerships” in this sector readily brings to mind the worst aspects of fascist economic systems that have historically existed. The actions of US companies that have cooperated in the NSA’s mass surveillance operations calls into question the “private” status of these companies. In many ways these companies have acted as an extension of the US government, providing information illegally, in exchange for privileges and intelligence. According to media reports, “Such cooperation is an extremely delicate issue for the companies involved. Many have promised their customers data confidentiality in their terms and conditions. Furthermore, they are obliged to follow the laws of the countries in which they do business. As such, their cooperation deals with the NSA are top secret. Even in internal NSA documents, they are only referred to by the use of code names.”[8]

We began this discussion by asking the purpose of telecommunication and internet surveillance. The answer lies in the uses to which those surveillance powers are being put, and will inevitably be put, as the capacity of the NSA expands. The true purpose of the NSA is not to keep us safe. Its goal is to own the internet, to own our communications, to own our private thoughts — to own us.

Ben O’Neill is a lecturer in statistics at the University of New South Wales (ADFA) in Canberra, Australia. He has formerly practiced as a lawyer and as a political adviser in Canberra. He is a Templeton Fellow at the Independent Institute, where he won first prize in the 2009 Sir John Templeton Fellowship essay contest. Send him mail. See Ben O’Neill’s article archives.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Notes

[1] Mathes, M. (2013) At least 50 spy programs foiled by terror plots: NSA . The Sydney Morning Herald, 19 June 2013.

[2] MacAskill, E. (2013) New NSA leaks show how US is bugging its European allies . The Guardian, 1 June 2013.

[3] Burghardt, T. (2013) NSA spying and intelligence collection: a giant blackmail machine and “warrantless wiretapping program.” Global Research , 24 June 2013. Reports are from NSA whistleblower Russ Tice, who is a former intelligence analyst at the NSA.

[4] Wolverton, J. (2012) Classified drips and leaks. The New American, 6 August 2012. Emphasis added. Capitalization of “Internet” removed.

[5] Greenwald, G. (2013) The NSA’s mass and indiscriminate spying on Brazilians . The Guardian, 7 July 2013.

[6] Gelman, B. and Poitras, L. (2013) US, British intelligence mining data from nine US internet companies in broad secret program . The Washington Post, 7 June 2013. See also NSA slides explain the PRISM data-collecting program . The Washington Post, 6 June 2013.

[7] McGarry, C. (2013) Page and Zuckerberg say NSA surveillance program is news to them . TechHive, 7 June 2013.

[8] Ibid Poitras, p. 3.

Let Market Forces Solve Organ-Transplant Crisis – Article by Ron Paul

Let Market Forces Solve Organ-Transplant Crisis – Article by Ron Paul

The New Renaissance Hat
Ron Paul
July 16, 2013
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Ten-year-old cystic fibrosis patient Sarah Murnaghan captured the nation’s attention when federal bureaucrats imposed a de facto death sentence on her by refusing to modify the rules governing organ transplants. The rules in question forbid children under 12 from receiving transplants of adult organs. Even though Sarah’s own physician said she was an excellent candidate to receive an adult organ transplant, federal government officials refused to even consider modifying their rules.

Fortunately, a federal judge intervened so Sarah received the lung transplant. But the welcome decision in this case does not change the need to end government control of organ donations and repeal the federal ban on compensating organ donors.

Supporters of the current system claim that organ donation is too important to be left to the marketplace. But this is nonsensical: if we trust the market to deliver food, shelter, and all other necessities, why should we not trust it to deliver healthcare—including organs?

It is also argued that it is “uncompassionate” or “immoral” to allow patients or insurance companies to provide compensation to donors. But one of the reasons the waiting lists for transplants is so long, with many Americans dying before receiving a transplant, is because of a shortage of organs. If organ donors, or their heirs, where compensated for donating, more people would have an incentive to become organ donors.

Those who oppose allowing patients to purchase organs should ask themselves how compassionate is it to allow those people to die on the transplant waiting list who might otherwise have lived if they were able to obtain organs though private contracts.

Some are concerned that if organ donations were supplied via the market instead of through government regulation, those with lower incomes would be effectively denied access to donated organs. This ignores our current two-tier system for allocating organs, as the wealthy can travel overseas for transplants if they cannot receive a transplant in America. Allowing the free market to alleviate the shortage of organs and reduce the costs of medial procedures like transplants would benefit the middle class and the poor, not the wealthy.

The costs of obtaining organs would likely be covered by most health insurance plans, thus reducing the costs directly borne by individual patients. Furthermore, if current federal laws distorting the health care market are repealed, procedures such as transplants would be much more affordable. Expanded access to health savings accounts and flexible savings accounts, combined with generous individual tax deductions and credits, would also make it easier for people to afford health care procedures such as transplants.

There is also some hypocrisy in the argument against allowing market forces in organ transplants. Everyone else involved in organ transplantation procedures, including doctors, nurses, and even the hospital janitor, receives compensation. Not even the most extreme proponent of government-provided health care advocates forcing medical professionals to provide care without compensation. Hospitals and other private intuitions provide compensation for blood and plasma donations, and men and women are compensated for donations to fertility clinics, so why not allow compensation for organ donation?

Sarah Murnaghan’s case shows the fallacy in thinking that a free-market system for organ donations is less moral or less effective than a government-controlled system. It is only the bureaucrats who put adherence to arbitrary rules ahead of the life of a ten-year old child. It is time for Congress to wake up and see that markets work better in all aspects of health care, including organ donation, just as they work better in providing all other goods and services.

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

This article is reprinted with permission.

New Egyptian War: Americans Lose, Again – Article by Ron Paul

New Egyptian War: Americans Lose, Again – Article by Ron Paul

The New Renaissance Hat
Ron Paul
July 14, 2013
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Looking at the banners in the massive Egyptian protests last week, we saw many anti-American slogans. Likewise, the Muslim Brotherhood-led government that was deposed by the military last week was very critical of what it saw as US support for the coup. Why is it that all sides in this Egyptian civil war seem so angry with the United States? Because the United States has at one point or another supported each side, which means also that at some point the US has also opposed each side. It is the constant meddling in Egyptian affairs that has turned Egyptians against us, as we would resent foreign intervention in our own affairs.

For more than 30 years, since the US-brokered Camp David Accord between Israel and Egypt, the US supported Egyptian dictator Hosni Mubarak. Over that period the US sent more than $60 billion to prop up Mubarak and, importantly, to train and seek control over the Egyptian military. Those who opposed Mubarak’s unelected reign became more and more resentful of the US, which they rightly saw as aiding and abetting a dictator and denying them their political aspirations.

Then the US began providing assistance to groups seeking to overthrow Mubarak, which they did in 2011. The US continued funding the Egyptian military at that time, arguing that US aid was more critical than ever if we are to maintain influence. The US Administration demanded an election in Egypt after Mubarak’s overthrow and an election was held. Mohamed Morsi of the Muslim Brotherhood won a narrow victory. The US supported Morsi but kept funding the Egyptian military.

After a year of Morsi’s rule, Egyptians who did not approve of his government took to the streets to demand his removal from power. The US signaled to the Egyptian military that it would not oppose the removal of Morsi from power, and he was removed on July 3rd. With the overthrow of the Muslim Brotherhood-led government came the arrest of many politicians and the closure of many media outlets sympathetic to them. Then the US government warned the same Egyptian military that undermined democracy that it needed to restore democracy! Is it any wonder why Egyptians from all walks of life are united in their irritation with the United States?

Despite the Egyptian government being overthrown by a military coup, the Obama Administration will not utter the word “coup” because acknowledging reality would mean an end to US assistance to the Egyptian government and military. That cannot be allowed.

Instead, we see the same Obama administration that is on a worldwide manhunt for pro-transparency whistle-blower Edward Snowden demand that the Egyptian military exercise “political transparency” in its dealings with the ousted Muslim Brotherhood-led government.

So, successive US administrations over the decades have supported all sides in Egypt, from dictator to demonstrator to military. There is only one side that the US government has never supported: our side. The American side. It has never supported the side of the US taxpayers who resent being forced to fund a foreign dictatorship, a foreign military, and foreign protestors. It has never supported the side of the majority of Americans who do not wish to get involved in the confusing internal affairs of countries thousands of miles away. It has never supported the side of those of us concerned about blowback, which is the real threat to our national security. Unfortunately, US administrations continue to follow the same old failed policies, and Obama is no different: more intervention, more foreign aid, more bullying, more empire.

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

This article is reprinted with permission.