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The Imperative of Libertarian Rejection of the Two-Party Trap – Stolyarov’s Response to Steele – Part 1 – Article by G. Stolyarov II

The Imperative of Libertarian Rejection of the Two-Party Trap – Stolyarov’s Response to Steele – Part 1 – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
October 21, 2012
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Here I offer the first installment of my response in an ongoing exchange with Dr. Charles Steele regarding the merits (or lack thereof) of various candidates in the 2012 U.S. Presidential Election, as well as the question of whether or not it is justified for a libertarian to prefer Mitt Romney over Barack Obama.

Incidentally, this weekend, I had the opportunity to vote early in Nevada and to cast my vote for Gary Johnson, the Libertarian nominee for President. My hope is that, in this election, Gary Johnson will beat all records in terms of the total votes received by a Libertarian candidate. (See the historical record of votes received by Libertarian candidates here.) This would send a strong signal to the establishment that Americans who love freedom are displeased and outraged at the directions in which both major parties would like to take the country.

For the benefit of my readers, I provide below a list of links to prior installments of this exchange in chronological order.

* “Rand Paul’s Endorsement of Romney Versus Ayn Rand’s and Murray Rothbard’s Historical Grudging Endorsements” – My initial post of September 3, 2012, and a comment by Dr. Steele.

* “Is Mitt Romney Truly a ‘Lesser Evil’?” – My article of September 6, 2012

* “Is It Evil to Vote for a Lesser Evil? Steele’s Response to Stolyarov – Part 1” – Dr. Steele’s article of October 2, 2012

* “Romney v. Obama: Tweedledum and Tweedledee? – Steele’s Response to Stolyarov – Part 2” – Dr. Steele’s article of October 17, 2012

I begin by addressing Dr. Steele’s response in Part 1 to the philosophical argument regarding the impropriety of voting for a lesser evil. In my next installment, I will discuss in greater detail the specific differences between Romney and Obama that Dr. Steele addressed in his Part 2. Dr. Steele stated that most of his questions are not rhetorical, so my purpose here will not be to disagree with any real or perceived implications of such questions – but rather simply to elaborate upon my answers to them and my related views and understandings of the present political situation.

Dr. Steele writes: “When we vote, we vote under conditions of uncertainty about what the candidates will do should they win.  Two reasonable people might differ in their expectations over what opposing candidates might do if elected, even if the candidates are truthful.“

I respond: It is true that people vote under conditions of uncertainty. However, a candidate’s historical record of adherence to his or her promises is a decent indicator of whether this candidate will adhere to his or her promises in the future. Furthermore, a candidate’s record of intellectual consistency can serve as a decent indicator of whether that candidate will flip-flop on issues in the future.

Dr. Steele writes: “And candidates are often less-than-truthful about what they will do if elected; sorting out what is and isn’t true is not necessarily straightforward.  Consider a presidential election between A and B.  If candidate A wins the election and what subsequently transpires is counter to what the voter in good faith expected, what is the voter’s moral responsibility?”

I respond: This is precisely why it is essential not to support candidates with a record of being untruthful, disingenuous, or prone to reversals of their positions. With a candidate like Gary Johnson or Ron Paul, one knows what one is getting, because these men have not materially altered their views or policy recommendations over the course of decades. This is true, also, of certain politicians with whom I have many fewer ideas in common but whom I nonetheless respect for their integrity and consistency – such as Dennis Kucinich, Bernie Sanders, and Ralph Nader. Furthermore, these men have histories of actually trying to put their views into practice. The extent of their success may be outside of their full control (because it is subject to the responses and often the resistance of others), but at least they try honestly, and this is apparent to anyone who studies their records.

Sometimes it may also be acceptable to give an untried candidate (for instance, a young and seemingly intelligent and honest politician with little experience in office) a chance if he or she presents a well-supported impression of competence, knowledge, productivity, and integrity. However, in the long term, the records of those people will also speak for them more clearly than their initial presentations, and they are deserving of continued support only if they show through their deeds that they actually meant what they promised.

 On the other hand, a person such as Mitt Romney has a record of repeatedly changing his rhetoric to directly contradict statements he made in the past. Romney is, in essence, a political “weather vane” – seeking to reflect what he and his political handlers consider to be the predominant attitudinal currents of the particular time and place. Furthermore, Romney has a decidedly un-libertarian policy record as Governor of Massachussetts, a candidate, and a private citizen (in his advocacy of bailouts, Medicare expansion, indefinite detention of Americans, and ever-expanding military interventions abroad). Romney’s problem, furthermore, is not so much that he pursues a non-libertarian set of principles (as some respectable politicians might), but that he does not appear to act on any set of universalizable principles whatsoever. Mitt Romney at time X is quite willing to pursue the opposite set of views and policies from Mitt Romney at time Y. Moreover, RomneyX will deny the existence of RomneyY’s views, and vice versa.  Thus, reasonable observers should not expect him to keep his word, or for his word to be worth much in terms of an indicator of his actual views and planned behavior.

Observation and experience have taught me that honesty and dishonesty are fundamental character traits of individuals. Some people find it extremely difficult morally and even inconvenient practically to lie, as it requires the invention of an entire parallel reality that must continually be kept up in order to prevent others from detecting the lie. Others make lying (in either a blatant form or in the form of half-truths) a way of life. People who achieve a measure of material success by means of lying or presenting false impressions will tend to escalate such behavior until it becomes a pervasive, personality-swallowing, and ultimately self-defeating compulsion.  Occasionally, good people may justifiably lie in order to protect themselves against hostile forces that would use the truth as a tool to unjustly and illegitimately harm the truth-teller. However, such situations are rare in the normal course of events, and good people would lie in such situations as an uncomfortable emergency measure of self-defense whose recurrence it is hoped to avoid.

The mark of a compulsive liar is that he lies even when he does not have to – when telling the truth would be fully consistent with his best interests and even his public image. Mitt Romney and Paul Ryan both have shamelessly distorted facts in their campaign speeches, advertisements, and debate performances. Due to the Internet, these distortions can be readily identified, and the facts can be brought forth to correct them – but Romney, Ryan, and their handlers do not appear to be cognizant of this reality. When their untruths are pointed out to them, they either continue to assert them with a straight face (as in the case of the Romney campaign knowingly using false statements in its advertisements regarding Obama’s non-existent elimination of the work requirement for unemployment-benefits eligibility) or they deny that they made such statements in the first place despite video evidence to the contrary (as in the case of Ryan denying ever expressing praise and admiration for Ayn Rand, or Romney repeatedly asserting that his tax plan either does or does not reduce the tax obligations of the highest income-earners and expressing bewilderment that anyone ever thought that Romney had said the opposite of the assertion du jour). What is astounding is that Romney/Ryan would not have lost an iota of public support by accurately and transparently representing both their own intentions and Obama’s record in office. There are numerous valid criticisms of the Obama administration – enough to occupy any challenger’s time. There is no need to invent facts or engage in distortion in order to address Obama’s genuine blunders in the realms of economic policy, foreign policy, and infringement of civil liberties. Likewise, a full representation of Romney/Ryan’s actual proposed policies would have been far more salutary than a vague set of incoherent and mutually contradictory generic assertions that try to mean everything for everyone.

In short, the problem with Romney and Ryan is not so much what they stand for, but the fact that they can stand for anything and nothing and that integrity and consistency cannot be expected of them based on their campaigning tactics and policy records. More generally, even a halfway-decent judge of character will be able to distinguish between a person of integrity and a habitual liar in politics. All that is needed is a look at the facts – precisely what the habitual liars in politics consider unimportant.

Dr. Steele writes: “Further, we also don’t know and will never know what B would have done.  Does that matter?  Might not a vote for what proved to be A’s bad policies have prevented B’s worse ones? In many cases these issues are small, but not always.  And certainly in times of major institutional transitions, or economic crises, or other important changes, they are likely to loom large.”

I respond: This presupposes that A and B are the only genuine alternatives. In fact, since voting is ultimately the result of an aggregation of individual decisions, the conceivable alternatives are numerous, if only people would see them that way. One might consider two-party politics in the United States to be a sort of collective reverse prisoners’ dilemma – in the sense that the political situation would be much better if people simply did not care about how others plan to vote and would simply vote their conscience – based solely on their independent evaluation of the views and records of the candidates running. It is only because voters try to anticipate one another’s preferences and adjust their own accordingly that the two-party oppression of the status quo has come about.

Over the years, the difference between the “greater” and “lesser” evil has become ever harder to distinguish, either in magnitude or in the identity of the “greater” and “lesser”. This is because the strategists in the two parties know that they do not need to present candidates that differ materially in practice anymore. All they need to do is to put up a show and engage in polarizing but utterly vacuous rhetoric – in order to get the electorate to think that enough of a difference exists to justify voting for one wing of the establishment or for the other. The reality behind the scenes is that we are governed by an elite “bipartisan” consensus where there exist occasional minor policy changes because of the shifting dynamics among the myriad pressure groups comprising the elite. However, the fundamental assumptions of that consensus – including massive corporate welfare, systemic restrictions on upward economic mobility for most, the cartelization of much of the economy, various boondoggles for special interests (including military interventions, “homeland security,” and the War on Drugs), and the need to obtain elite permission to make major innovations that depart from the status quo – remain unchallenged within the two-party establishment. This continuity of policy despite rotations of the parties in power has been strengthening over the years. Thus, it has often and justifiably been remarked that Obama’s first term in office is essentially indistinguishable in practice from a third term for George W. Bush.

At the same time, the gulf between the elite consensus and the possibilities of emerging technologies is becoming ever wider – particularly as the elite is composed predominantly of people who do not understand those technologies and try to operate according to assumptions that only work in a pre-Internet world. The elite reaction to the hyper-empowerment of individuals through personal technology is to crack down ever harder. Hence, we have seen in the past decade and especially in the past several years both an accelerating pace of technological improvement and a flurry of bills (COICA, SOPA, Protect IP, CISPA) and treaties (ACTA and the Trans-Pacific Partnership) attempting to restrict Internet freedom. Ultimately, this interplay of trends can result only in the amazing liberation of individuals or a more totalitarian tyranny than any which came before.

With regard to Dr. Steele’s reference to major institutional transitions and economic crises, we are indeed in such a time period, but the essence of the transition is precisely the manner in which technology tends to yank influence away from the power elites (often without an explicit design to do so) – and the essence of the economic crisis is precisely the power elites’ reaction in attempting to entrench old, failed institutions (through techniques such as bailouts, inflation, subsidies, modern-day guilds, and barriers to competition) and bar the majority of people from prospering due to the unleashing of technology’s full potential. Neither Obama nor Romney stands on the right side of the institutional transition. Especially in this pivotal time, it is imperative to side with those who aspire for individual hyper-empowerment and to reject the two-party elite.  A key part of individual hyper-empowerment is to vote independently of one’s expectations of how others might vote. Setting an example through one’s own decisions (and one’s vocal discussion thereof) can persuade increasing numbers of people to extricate themselves from the trap of pernicious assumptions created by the “bipartisan” consensus.

Dr. Steele writes: “If one votes for a candidate who wins, does one then share responsibility for everything the candidate does?  When we vote for candidate A, we get the ‘entire package.’  We can’t limit ourselves to voting for her/his positions on some issues but not others.  Suppose one agrees with candidate A on fiscal policy, but disagrees on foreign policy, and conversely supports B on foreign policy and opposes his fiscal policy.  In order to decide between candidates, our voter must judge which issue is more likely to be of central importance in the next term, as well as which one is more important for the voter’s overall vision of what should be done.  For that matter, the voter might think that B’s fiscal policy is a more serious flaw than A’s foreign policy, but also believes institutional barriers (e.g. Congress) will largely block B’s fiscal policy while nothing would block A from pursuing the bad foreign policy, and hence reasonably vote B.”

I respond: While it is true that some degree of unpredictability exists with every candidate, there is a major difference between whether that unpredictability is a result of unforeseen contingencies beyond that candidate’s control (e.g., major external events that change the incentives, constraints, and pressures facing a politician) or whether it is a result of the politician simply never intending to form a strong connection between what he says and what he does. Thus, while a person who supports a particular candidate may not be morally responsible for every particular action by that person in office, that person is responsible for helping to elect either a fundamentally honest person or a fundamentally dishonest one. By knowingly electing a fundamentally dishonest person, one essentially writes a blank check for that person to do as he pleases in office, without much connection to any particular intellectually coherent platform or set of ideals.

With regard to weighing the importance of various policy issues, I agree that this assessment may differ based on a voter’s factual expectations as well as his subjective assessment of various areas’ relative significance. However, a fundamentally dishonest politician cannot be expected either to have the same priorities as any given voter, or to fulfill his promise to address particular issues he represents as priorities. In essence, the credibility of a dishonest politician like Romney in communicating particular priorities has already been shattered, and he is therefore an almost unknown quantity in how he would address issues. I say that he is almost an unknown quantity, because whatever Romney does is likely to be strongly biased toward preserving the perverse dynamics inherent in the status quo – i.e., the political trend toward totalitarianism and the further entrenchment of the pressure groups that predominate in today’s “bipartisan” consensus.

Dr. Steele writes: “How much difference does one’s vote make, anyway?  The quote from Mr. Stolyarov suggests that if candidate A wins, a person who voted for him shares some responsibility for what transpires.  But suppose A wins with a very large margin of the vote.  In that case, there’s nothing the voter could have done to stop what transpires.  What is her/his responsibility then?”

I respond: While any given voter’s moral responsibility may be minor in this case with regard to any particular outcome, there is still some moral responsibility in the sense that the voter permitted himself to be one of the masses who supported the winning candidate despite strong initial indications that the candidate is  dishonest, prone to engaging in deleterious policies, or both. The greater moral responsibility is not even so much for casting one’s vote a certain way, but for abrogating the independence of thought and fortitude of character needed to cast a vote based on an assessment that does not take into account what “everyone else” is doing. In other words, the moral responsibility is for allowing the pressures of social conformity to determine one’s decision even though the conformity does not entail an element of physical compulsion and the individual is fully free in theory and practice to make an entirely independent decision based on principles. In the United States, there is unfortunately a widespread entrenched mentality of supporting “the winning team” – irrespective of whether that “team’s” agenda is in one’s best interests. All too many Americans are so frightened of “losing” in any area where they have invested time and effort, that they align themselves with their very destroyers simply to avoid being in the minority.

Dr. Steele writes: “Conversely, suppose instead A loses, so nothing transpires from the vote and presumably no moral responsibility attaches to the voter.  How does anything differ in these two cases, with respect to the voter’s culpability?  I can’t see that the voter has behaved differently in the two cases; shouldn’t moral responsibility be the same?  Perhaps not, but then why not?  And how would the responsibility differ in either case had the voter instead stayed home and not cast a ballot?”

I respond: As a consequentialist, I do not believe that a person can have moral responsibility for hypothetical events; only actual harms count. Therefore, a person who voted for a losing candidate can have no responsibility for the decisions and actions of the winning candidate. However, voting for a losing candidate from one of the two major parties may per se be an imprudent action even if there is no moral fault arising from it – because this action shows that one continues to fall into the two-party trap and to expect a decent outcome from supporting one party or the other, despite a long train of disappointments and broken promises going back for decades.

As an analogy, consider two people who drive at extremely fast speeds on the highway. One person causes an accident, and the other does not. The second person may simply have been lucky in that his reckless behavior did not cause an accident, so I do not think that he should have any criminal or even moral culpability. The first person, on the other hand, is morally culpable because his behavior actually resulted in harm to others. However, it can be said that the second person was greatly imprudent and should improve his behavior and assumptions about the world in order to minimize the risk of causing harm in the future.

That being said, the behavior that a person exhibits while campaigning for or against a particular candidate can result in moral culpability irrespective of the outcome. For instance, the disgraceful, dishonest, and sometimes outright violent ways in which supporters of the Republican establishment have treated supporters of Ron Paul and Gary Johnson render the establishment supporters culpable no matter whether or not Mitt Romney wins the election.

As a general rule, people only have moral responsibility for their active decisions which result in harm to others. Because one part of this two-part test is contingent on external circumstances and events, it is quite possible that the same motivations and even the same physical movements by two different individuals may result in different degrees of culpability (or even culpability in one case and lack thereof in another). Furthermore, inaction, while it may be sub-optimal or even callous at times, does not rise to the level of immorality. A person who does not vote therefore cannot be held morally responsible for the actions of the winning candidate. However, he may also justifiably consider it sub-optimal or imprudent not to vote if he could have had an incremental impact in averting some of the negative consequences of the winning candidate’s victory. For instance, some libertarians believe that they should not vote because they do not want to “legitimize the system” in any way. I do not agree with their view, but adherence to it is not immoral, and libertarians of this persuasion maintain their integrity by behaving in a manner consistent with their view. However, the outcome would have been superior if these libertarians had supported Gary Johnson or Ron Paul – signaling to the establishment that the discontentment with the status quo is more widespread than originally anticipated.

Dr. Steele writes: “Similarly, in every presidential election in which I’ve voted, I voted in Montana.  In none of these was the vote close enough for mine to have mattered, but that’s irrelevant.  Montana’s three electoral votes simply do not matter for the national outcome, so no matter what happened, my vote had no connection at all to what subsequently transpired.  Does this mean that I’m exempt of all moral responsibility when I vote in a presidential election?  Why or why not?”

I respond: Except in extremely unlikely circumstances, no person’s single vote can make the difference in the outcome of a national election. Thus, one’s vote practically matters only to the extent of contributing to the “pool” of votes for a particular candidate. What is more important is the signal that one’s vote sends with regard to whether one is willing to morally sanction an establishment candidate or whether one is willing to voice one’s independent preferences no matter what the social or media pressures might be. Whether one votes in a “swing state” or in a state whose electoral votes are unlikely to make a difference is not so material to this question. Ultimately, one can only control one’s own behavior, and this behavior should be based on adherence to objective principles, rather than the expectation of what others faced with a similar choice are likely to do.

Dr. Steele writes: “It’s clear, then, that Mr. Stolyarov is not committing the Nirvana fallacy.  But I still find his point quite problematic.  It is not always obvious what constitutes ‘incremental good/evil’ on net, or how we identify an overall reduction in liberty.  Let’s simplify this case by assuming there’s only one voter and no uncertainty about what candidates will do if elected, so that there are no disconnects between the vote cast and the political consequences.  Again, the voter faces a choice among presidential candidates, but now her/his vote determines the election and s/he knows exactly what political consequences will transpire. If A’s positions on issues X and Y reduce liberty, and his position on issue Z increases it, how is the voter to weight A’s net effect on liberty?  (Assume for sake of argument there are no other issues.)  Is A automatically disqualified because of his position on X and Y?  Or could his position on Z conceivably be sufficiently beneficial for liberty to outweigh the harm done on the first two?  I would think so, and I suspect Mr. Stolyarov agrees.  (Again, I should note that in some cases any reasonable person should be able to weigh these relative harms and benefits and get the same answer.  But in some real world cases reasonable persons might strongly differ.)”

I respond: I agree that it is difficult sometimes to evaluate the net effect on liberty of an honest candidate who espouses mixed principles. For instance, if someone like Dennis Kucinich had run for President, I would be greatly concerned about most of his stances on economic policy, but I could see tremendous benefits for civil liberties (in particular, with regard to “airport security” and the misguided “War on Terror”) and foreign policy if he were elected. Which are more important? Because I so greatly care about the physical integrity of my person and property while traveling (much more than I care about my monetary holdings), I am more likely to focus significantly on the civil-liberties aspect. However, an extremely wealthy businessman (who, in this example, earned all of his wealth legitimately) might be able to afford to travel in his personal airplanes and might therefore not care as much about airport security as he does about his economic opportunities. He might justifiably weigh the benefits and costs differently than I do.

However, all of these sophisticated and reasonable discussions about how to weigh relative benefits and harms disappear when the candidate running for office is fundamentally dishonest and has a record of continually shifting his positions and violating his promises. In that case, attempting to anticipate relative benefits and harms is akin to using a wooden ruler to measure the spatial position and diameter of a tornado.

Dr. Steele writes: “But also, doesn’t it matter against whom A is running?  If candidate B is worse, much worse, on all three issues, should not the voter choose A over B, regardless of whether the net outcome from A is positive?  (I would think so.) Alternatively suppose instead candidate B drops out of the race to be replaced by C, and C is superior on all three issues.  Shouldn’t that lead our voter to reverse himself and support C?”

I respond: The problem with choosing A over B in a situation where both bring about incremental evils is that this concedes the premise that it is sometimes acceptable for a person to actively participate in an incremental evil, if the alternative is perceived to be even more evil. This is precisely the attitude that, when shared by sufficiently large numbers of people, allows politicians to commit evil in the first place, by creating a false dichotomy in the eyes of the people between a moderate amount of increased evil and a more significant amount of increased evil. My view is that one should compare not two hypothetical futures, but any proposed future and the status quo. If a given proposed future is a marginal improvement over the status quo, then one should support it, despite possible imperfections. However, if the status quo is superior to both of the two “mainstream” proposed futures, then one should refrain from supporting either and seek a third way. The people who vote for third parties are attempting to voice support for such a third way. The people who refuse to vote at all are, implicitly, preferring the status quo over either major candidate’s vision of the future. Either of these non-mainstream approaches is preferable to actively embracing a future that is worse than the status quo.

Dr. Steele writes: “In our one voter example, suppose candidate A will take the nation slowly towards a totalitarian state, and B will take it very rapidly.  Would it not be preferable to choose A over B, to buy time for countervailing processes to act? All of these examples suggest – at least to me – that a voter might reasonably and morally vote for a candidate who will minimize damage to liberty, even if the voter has only reasonable expectation of this.”

I respond: I do have some sympathy with this argument, as – especially in a time of rapid technological advancement – enabling innovation to occur more freely for even a few years can make a tremendous difference to how free people are in practice. However, in practice, I do not see the two parties as taking us to totalitarianism at different rates. Rather, I see them as taking us toward marginally different flavors of totalitarianism at the same galloping pace. The Republican totalitarianism is more theocratic, militaristic for purposes of “national glory,” and focused on corporate cronyism toward “traditional” industries (including large financial firms). The Democratic totalitarianism is more politically correct, militaristic for purposes of “humanitarian” intervention, and focused on corporate cronyism toward “alternative” or “emerging” industries (as well as large financial firms). Both forms of totalitarianism entail extreme violations of civil liberties, though the Republican form is likely to be more targeted toward minority groups of whom many among the Republican base disapprove, while the Democratic form is likely to attempt to inconvenience and burden everybody in an egalitarian manner. Both forms of totalitarianism are fundamentally hostile to meritocracy, the enrichment of young people through economic opportunity, and small-scale technologically based institutions rising in a competitive market to replace the politically connected “legacy” institutions. Most significantly with regard to the opportunity for countervailing forces to emerge, the elites of both the Republican and Democratic parties are hostile to Internet freedom and willing to side with totalitarian guilds, such as the Recording Industry Association of America (RIAA) and Motion Picture Association of America (MPAA), to support draconian infringements on indivduals’ use of the Internet. They only subside or backtrack in their support when confronted with massive public outrage.

In this unfortunate situation of competing totalitarianisms, a valid defense of a divided government might be made. If enough friction can be introduced between the two wings of the elite, then neither wing may be able to fulfill its totalitarian vision. In some respects, this is a reason why the march to totalitarianism was slowed somewhat after the election of a Republican House of Representatives in 2010, creating a disconnect with the Democratic Senate and the Obama administration. It has certainly been more difficult for federal legislation of any sort (including the destructive sort) to be enacted in 2011-2012 than in 2009-2010.

Dr. Steele writes [regarding my strategic argument of sending a credible signal of refusing to play along with the establishment]: “Maybe so.  I certainly hope so.  But note that this is a strategic argument and quite different from the argument about a voter’s moral responsibility.  I find the moral argument to be unhelpful in this discussion.”

I respond: I see the two arguments as at least somewhat interrelated, in that a voter’s perception of his moral responsibility may constrain and shape his practical choices in terms of strategy. For instance, if a person is held captive by a totalitarian regime – does he choose to appease his captors or to escape? If he believes that he has a moral responsibility not to give into his captors, then he will be more likely to plan an escape and to succeed. In the same way, it is more likely for Americans to escape the two-party trap if they believe that they have a moral responsibility to do so and set up their strategies for doing so accordingly. While the moral and strategic arguments are technically separate, embracing one may aid in the efficacy of implementing the other.

Romney v. Obama: Tweedledum and Tweedledee? – Steele’s Response to Stolyarov – Part 2 – Article by Charles N. Steele

Romney v. Obama: Tweedledum and Tweedledee? – Steele’s Response to Stolyarov – Part 2 – Article by Charles N. Steele

The New Renaissance Hat
Charles N. Steele
October 17, 2012
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In his article “Is Mitt Romney Truly a ‘Lesser Evil’?”, Gennady Stolyarov took issue with my contention that a Mitt Romney victory is preferable to another term for Barack Obama from a classical liberal standpoint.  In Part 1 I responded to Mr. Stolyarov’s arguments concerning the moral responsibility one might bear in supporting a bad candidate over a much worse candidate, a “lesser evil.”  Here I make a case that Romney and Obama certainly are not Tweedledum and Tweedledee: Mitt Romney is indeed a lesser evil compared with Barack Obama from a libertarian/classical liberal perspective.

I must emphasize at the outset that I am not arguing one should vote for Mr. Romney.  I am making a case that Romney is the lesser of the two major party evils, not that one must support him.  If in one’s judgment an abstention or perhaps a vote for another candidate, such as Gary Johnson, does more for liberty, then one should act accordingly.

However, I also think that our current political situation is quite precarious; if we confine our vision to the federal government and its policies, America is in an unusually dangerous position today, quite unlike anything I ever expected to see in my lifetime.  If current trends continue, I think there’s some not insignificant chance that the First and Second Amendments could soon have “dead letter” status – formally in effect but no longer valid nor enforced – and that the probability of this is much higher with a continuation of the Obama presidency.  I also think that America is on track for a fiscal and economic disaster unprecedented in modern history, and that the Romney-Ryan ticket is at least marginally superior to Obama-Biden in this regard.

I’ll address four areas in which I believe there are fundamental differences between Romney and Obama: 1. general vision, 2. health-care reform, 3. appointments to the Supreme Court, and 4. economic and fiscal issues.  I’ll close with a few qualifications that temper my argument.

1. General Vision:  This presidential election is not so much a choice between Mr. Romney and Mr. Obama as it is between two competing visions of the role of government.  Romney and Obama are both very poor standard bearers for this conflict of visions currently underway, but one would have to be oblivious to American politics of the past twelve years to miss the significance of this election.  There is, for a change, a real ideological difference.  On the one hand, there’s the progressive view that supposes the state is the fount from which all good things and all social advance flow (“You didn’t build that.”), and on the other, there’s the view that government is limited by the rights of the individual, and that most of civilization is built by free people acting in the market.

The progressive vision sees government intervention as the solution to every imaginable problem.  This was perhaps best stated recently in a Washington Post op-ed by E.J. Dionne.  There is no question that Obama and the Democratic Party represent the progressive-left view.  If they are sometimes loathe to admit it, it is simply because it is currently bad politics to do so – the Tea Party backlash was more than they’d bargained for.

Pitted against progressivism is the view that government must be restricted to certain limited functions.  American conservatives, for all their many and various flaws, do tend to understand this.  American voters outside the progressive/left camp certainly do, as the Tea Party arose out of anger over big government: government bailouts, exploding government debt, the general expansion of government in health care.  It was Ronald Reagan who observed that the “heart and soul of conservatism is libertarianism.”  Whether one agrees or not, it is certainly true that conservatives are far more skeptical of government than are progressives.  Currently the Republican Party is the party of skepticism about government.

It would be a simple thing to expose the many cases of Republican hypocrisy on these issues – I often do so myself.  But let me ask this question – which party – Democrat or Republican – is more likely to propose legislation containing more and more interventions, programs, entitlements, and social engineering?  If the reader is genuinely uncertain (I doubt most are), read the respective platforms of the parties (here for Democrat  and here for Republican). The first platform contains proposal upon proposal for expanding the role of government; the latter refers repeatedly to specifics about restricting overweening government.  No one is bound by a platform, but the platforms do give the vision, and these visions are fundamentally different.

Does this matter?  For an example, consider how the two parties have responded to the Citizens United decision.  Republicans have applauded it on free speech grounds.  Conversely, Nancy Pelosi and other Democratic legislators have introduced in Congress a constitutional amendment, the “People’s Rights Amendment,” that would effectively eliminate the First Amendment protections of freedom of speech and press.  As George Will put it in Washington Post, “By proposing his amendment, McGovern helpfully illuminates the lengths to which some liberals want to go. So when next you hear histrionic warnings about tea party or other conservative ‘extremism,’ try to think of anything on the right comparable to McGovern’s proposed vandalism of the Bill of Rights.”  (Or, I might add, try to find anything in the Democrats’ platform even mentioning any threat to free speech from our government.  It certainly contains nothing even vaguely rivaling the Republican denunciation of speech codes, Fairness Doctrine, McCain-Feingold, and other restrictions of free speech.)

As another example, consider the right of the individual to keep and bear arms, and the protection of it by Second Amendment.  Republicans are supportive of this, while Democrats generally oppose it.  The Republican platform specifically defends the inherent individual right to keep and bear arms, applauds Heller, and explicitly opposes new gun controls, including the “Assault Weapons Ban.”  The Democrats relegate the right to “an American tradition” and imply it is created by the Second Amendment.  They then call for new gun controls and further restrictions on ownership.  If the Democrats should, at some point, manage to gain control of both houses of Congress and pass a new, more draconian “Assault Weapons Ban” or legislation to “close the gun show loophole” [i] as they promise, who is more likely to veto it – Romney or Obama?  For that matter, we already know that Obama has sought gun controls under the table by supporting U.N. negotiations for a treaty that would regulate and restrict private firearm ownership.  President Obama is more hostile to our rights to arms ownership and to self defense than any other president in history.  Romney’s record in Massachusetts was poor; he signed a state version of the AWB.  But unlike Obama, he has not argued in favor of banning all private ownership of handguns, all private ownership of semi-automatic weapons, civilian concealed carry permits, and outlawing self-defense.  As his base is generally very strongly opposed to an AWB, it is hard to believe he would betray them on this hot-button issue.

Again, it’s not that the Republicans are libertarian – they are far from it.  It is rather that the Democratic Party has gone so far to the left that they are the greater threat to liberty.  They would willingly destroy both the First and Second Amendments.  They’ve sponsored legislation to do it.  Without these two amendments it’s hard to see what checks at all we’d have on government.  It is the Democrats’ progressive vision that is the greater threat to liberty currently.  Romney might be a weak reed, but he’s at least on the side that opposes this progressive vision, and a President Romney would be beholden to his more conservative, anti-big government constituency.

2. Health-Care Reform:  Here’s a good application of my above argument.  The PPACA (a.k.a. Obamacare) is a terribly flawed approach to health-care reform.  It reduces, rather than increases, consumer choice.  It increases, rather than reduces, government interference in the health-care sector.  It will prove to be fiscally irresponsible and is likely to reduce the quality of health care.  If the Republicans manage to hold both houses of Congress, they will almost certainly repeal it.  (The Senate can do so even with a bare majority if Republicans are willing to end the filibuster, something legal scholars across the political spectrum have suggested is reasonable.)  A President Obama would surely veto a repeal.  A President Romney would sign it.

This would likely be the only chance we will have to get rid of this bad legislation, for the longer it stays in place, the more firmly it will be entrenched, with more special interests defending it.  On the other hand, if Republicans fail to repeal the bill, Romney would be far more likely to temper and slow the implementation of PPACA than Obama would.

Mr. Stolyarov has suggested Mitt Romney would veto a repeal because of similarities between the PPACA and the Massachusetts reform, but this makes little sense for two reasons.  First, the PPACA is much hated by the Republican base (for that matter the majority of Americans dislike it).  A repeal would be extremely popular.  It’s simply incredible to think that a President Romney would defy his party and practically 100% of his supporters in order to save Barack Obama’s hallmark program.  I can’t imagine anything else he could do that would make him more likely to lose the GOP nomination in 2016.

Second, it’s not clear that Romneycare and Obamacare really are the same thing, despite a similar basic framework.  The Massachusetts bill signed by Romney was different from that which was implemented.  Romney used his line item veto on a number of the more draconian parts of the bill.  The Democratic legislature overrode these vetoes, and the bill was implemented by a Democratic governor who further altered it.  Furthermore, at the time Romney signed the bill, the situation in Massachusetts insurance markets was far worse than perhaps anywhere else in the United States.  In this context, Romneycare – at least Romney’s version of it – was arguably an improvement over the status quo in Massachusetts.  Thus when Romney argues that the reform might have been right for Massachusetts but not for America in general, he’s not necessarily being disingenuous.  In short, it’s hard to believe that Romney is not key to any chance of repealing the PPACA and not superior to Obama on health-care reform.

3. Supreme Court Appointments: The next president will likely make as many as three appointments to the Supreme Court.  Whoever is president in the next four years will very likely have the chance to change fundamentally the makeup of the Supreme Court.  This might be the single most important reason for preferring Romney to Obama.

Obama and his party are closely associated with the new “democratic constitutionalism” movement in legal theory.  This movement seeks to “take back” the Constitution from “conservatives” and make it once again a “living” document, i.e. one without fixed meaning, permitting progressive politicians and judges to interpret it however they wish to favor their political agendas.  One common doctrine in this thinking is that the distinction between negative rights and “positive” rights is essentially meaningless, and one person’s “right” (to health care, housing, and whatnot) creates a similar obligation on others to provide it.  It’s unclear to me what sort of society would result from consistent application of this doctrine that replaces genuine rights with entitlements, but it would not be a free society, nor would it have a functioning economy.

Conversely, there’s also been a new interest in federalism in legal thought (it’s to this that the democratic constitutionalists are reacting) which favors strict Constitutional interpretation, separation of powers, strict limits on governmental powers, and the idea that individual rights are imprescriptable, rather than gifts from the state.  The movement has both conservative and libertarian aspects, and is in many respects libertarian.  Needless to say, Republicans are more closely associated with this movement than are Democrats.

If Obama selects nominees for the Supreme Court, it is likely that we’ll have justices who are in line with “democratic constitutionalism,” and with the notion that our Constititutional rights should not be considered “absolute” sense, but rather subject to international norms.  Romney is unlikely to draw from this crowd, and far more likely to draw from judges with at least some sympathy for the new federalism.

Ilya Somin of Volokh Conspiracy is worth quoting at length on this issue: “Republican judges are far from uniformly good on libertarian issues. But the Democratic ones are overwhelmingly bad. Moreover, cases such as Kelo and the individual mandate decision have sensitized conservatives to the importance of appointing judges committed to federalism and property rights. That reduces the chance that future GOP nominees will waffle on these issues, as some past ones have.”

“[Also] the younger generation of conservative jurists and legal scholars have been significantly influenced by libertarian thought on many issues. This is far less true of their liberal equivalents. Whether you choose to blame liberals for this situation or libertarians, it’s a crucial point. Other things equal, a party’s judicial nominees tend to reflect the dominant schools of thought among its legal elites.”

On this issue, it’s simply absurd to imagine that Obama and Romney are equal from a libertarian standpoint.  They are not.  Obama is far, far worse.

4. Economic and Fiscal Issues: On economic issues, neither Romney nor Obama is very good from a free market perspective.  But they are not equally bad.  Obama has a much stronger preference for activist regulation, including environmental regulations, health care regulations, labor regulations, and financial regulation.  Obama also is more likely to favor targeted subsidies to special interests – green energy for example.  Conversely, Romney is more likely to rein in regulatory agencies such as EPA, and less likely to favor extensive regulation.  Mr. Stolyarov suggests that Romney is anti-entrepreneur in practice, but it is small entrepreneurs who are most hurt by regulation.  Large established firms have teams of lawyers and accountants and frequently can benefit from gaming the rules; in practice, Obama is a greater threat to entrepreneurship.

On fiscal issues, I think Romney is at least marginally better than Obama.  Neither has any real plan to actually reduce spending.  But Romney and Ryan have been willing to put forward the idea that entitlement programs as they exist are unsustainable and must be radically restructured.  Obama assures us this won’t happen.  Yet it will.  Our entitlement programs are unsustainable and will be cut – it is simply a matter of whether we plan to make these cuts now, rationally, in such a way as to minimize economic disruption, or whether we wait until economic crisis forces the cuts, resulting in economic shock and great disruption.  On this matter I give a slight edge to Romney… although if Obama is reelected and then begins following a more “Republicanlike” path, it would not shock me – the unsustainability of entitlements is not in dispute, except in campaign rhetoric.

On taxation, the fiscal crisis will almost certainly lead anyone in office to seek more revenues.  Obama has stated a clear preference for increases in marginal rates on higher income earners, higher corporate taxes, and an increasing number of tax breaks, this last for purposes of social engineering (a.k.a. buying votes).  Romney has endorsed a reduction in marginal rates and a broadening on the base by eliminating deductions and exemptions.  The latter approach reduces the economic distortions of taxation and also returns it to the purpose of collecting revenue, rather than shaping citizens’ behavior to match politicians’ goals.  Again, Romney is preferable to Obama on this issue.  I fear it might already be too late for the United States to avert a sovereign debt crisis, and the record of politicians from both parties of fiscal responsibility is dismal.  But the approach Romney has laid out it preferable to Obama’s.

So there it is.  I am not a fan of Romney, nor of the Republican Party in general.  But after looking at these four areas, I think it’s clear that Romney is certainly the lesser of two evils compared to another four years of Barack Obama.  It should also be clear why I think the current political situation is dangerous.  Eight years of Bush ’43 followed by four years of Obama have empowered the federal government and put us well on the road to an authoritarian “soft despotism.”  If current political trends are not checked by some countering force, the near and medium future look rather bleak.  If a Romney victory would simply slow the trend and thus buy time for countering forces to take effect, that would make Romney the lesser of two evils.  With either candidate, the immediate political future will be a mess at best, but the mess will be much worse with Obama.

I’ll close with three caveats.  First, unless one votes in a swing district in a swing state, none of this matters anyway since one’s vote does not matter.  Second, it’s been observed that sometimes a politician from political party A finds it easier to pursue party B’s platform than politicians from party B do, because he faces little opposition from within his own party when he does.  Perhaps a second-term Obama will do the opposite of what I suggest above.  I have little reason to believe he would, but cannot rule it out.  The same might occur with Romney, although I suspect his interest in a second term precludes this.  Finally, Mr. Stolyarov notes that a vote for Gary Johnson “could be seen as a social statement, rather than a purely electoral one,” and signal increasing support for libertarian ideas.  In Part 1 I suggested that perhaps there is some merit in Mr. Stolyarov’s “strategic argument,” that voting for a third-party candidate who proves to be a spoiler might send a message to political parties; his “social statement” argument further strengthens this case.  (It is not clear, by the way, whose voters Gary Johnson “steals;” I know one erstwhile Obama supporter who is voting for Johnson as the only anti-war candidate.  I understand some polls suggest this phenomenon may cost Obama Nevada.)  Particularly given the shameful way the GOP treated Gary Johnson, Ron Paul, and its more libertarian members, it certainly deserves a comeuppance.  However, this seems to me an issue separate from whether Mitt Romney is the lesser evil.

I could say more, but this is sufficient.  I thank Mr. Stolyarov for the opportunity to make my case, and look forward to his responses.


[i] In fact, there is no such thing as a “gun show loophole.”  Firearms sales at gun shows are covered by the identical laws that cover sales elsewhere, including background checks for dealer sales.  “Closing the loophole” is progressive-speak for making it illegal for citizens to buy, sell, or otherwise trade firearms with each other; only federally licensed gun dealers would have this right.

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.

Dr. Steele also maintains a blog, Unforeseen Contingencies.

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.

Rejecting the Purveyors of Pull: The Lessons of “Atlas Shrugged: Part II” – Article by G. Stolyarov II

Rejecting the Purveyors of Pull: The Lessons of “Atlas Shrugged: Part II” – Article by G. Stolyarov II

The New Renaissance Hat
G. Stolyarov II
October 13, 2012
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Atlas Shrugged: Part II is a worthy successor to last year’s Part I, and I am hopeful for its commercial success so that John Aglialoro and Harmon Kaslow will be able to release a full trilogy and achieve the decades-long dream of bringing the entire story of Ayn Rand’s Atlas Shrugged to the movie screen. The film is enjoyable and well-paced, and it highlights important lessons for the discerning viewer. The film’s release in the month preceding the US Presidential elections, however, may give some the wrong impression: that either of the two major parties can offer anything close to a Randian alternative to the status quo. Those viewers who are also thinkers, however, will see that the film’s logical implication is that both of these false “alternatives” – Barack Obama and Mitt Romney – should be rejected decisively.

While the cast has been replaced entirely, I find the acting to have been an improvement over Part I, with the actors portraying their respective characters with more believability and emotional engagement. Samantha Mathis, in the role of Dagny Taggart, showed clearly the distress of a competent woman who is ultimately unable to keep the world from falling apart. Esai Morales aptly portrayed Francisco d’Anconia’s passion for ideas and his charisma. Jason Beghe also performed well as Hank Rearden – the embattled man of integrity struggling to hold on to his business and creations to the last.

The film emphasizes strongly the distinction between earned success – success through merit and creation – and “success” gained by means of pull. The scene in which two trains collide in the Taggart Tunnel is particularly illustrative in this respect. Kip Chalmers, the politician on his way to a pro-nationalization stump speech, attempts to get the train moving through angry phone calls to “the right people,” thinking that all will be well if he just pulls the proper strings. But the laws of reality – of physics, chemistry, and economics – are unyielding to the mere say-so of the powerful, and the mystique of pull collapses on top of the passengers.

As the world falls apart, the film depicts protesters demanding their “fair share,” holding up signs reminiscent of the “Occupy” movement of 2011 – “We are the 99.98%” is a clear allusion. Yet once the draconian Directive 10-289 is implemented, the protests turn in the other direction, away from the freedom-stifling, creativity-crushing regimentation. Perhaps the protesters are not the same people as those who called for their “fair share”  – but the film suggests that the people should be careful about the policies they ask for at the ballot box, lest they be sorely disappointed upon getting them. This caution should apply especially to those who think that Barack Obama’s administration parallels the falling-apart of the world in Atlas Shrugged – and that Mitt Romney’s election would somehow “save” America. Nothing could be further from the truth.

If there is any character in Atlas Shrugged who most resembles Mitt Romney, it is not John Galt. Rather, it is James Taggart – the businessman of pull – the sleek charlatan who will take any position, support any policy, speak any lines in order to advance his influence and power. Patrick Fabian conveyed the essence of James Taggart well – a man who succeeds based on image and not on substance, a man who has a certain polished charisma and an ability to pull the strings of politics – for a while. James Taggart is the essence of the corporatist businessman, a creature who thrives on special political privileges and barriers to entry placed in front of more capable competitors. He can buy elections and political offices – and he can, for a while, delude people by creating a magic pseudo-reality with his words. But words cannot suspend the laws of logic or economics. Ultimately the forces of intellectual and moral decay unleashed by corporatist maneuvering inexorably push the world into a condition that even the purveyors of pull would have preferred to avoid. As Ludwig von Mises pointed out, the consequences of economic interventionism are often undesirable even from the standpoint of those who advocated the interventions in the first place. James Taggart is ultimately pushed into accepting Directive 10-289, though his initial plans were much more modest – mostly, a desire to hang onto leadership in the railroad business despite his obvious lack of qualifications for the position. Mitt Romney, by advocating James Taggart’s exact sort of crony corporatism, may well usher in a similar overarching totalitarianism – not because he supports it now (in the sense that Mitt Romney can be said to support anything), but because totalitarianism will be the logical outcome of his policies.

Because, in some respects, Ayn Rand wrote during a gentler time with respect to civil liberties, and the film endeavors to consistently reflect Rand’s emphasis on economic regimentation, there is little focus on the kinds of draconian civil-liberties violations that Americans face today. The real-world version of Directive 10-289 is not a single innovation-stopping decree, but an agglomeration of routine humiliations and outright exercises of violence. The groping and virtual strip-searching by the Transportation Security Administration, the War on Drugs and its accompanying no-knock raids, the paranoid surveillance apparatus of large-scale wiretaps and data interception, and the looming threat of controls over the Internet and indefinite detention without charge – these perils are as damaging as an overarching economic central plan, and they are with us today. While not even the most socialistic or fascistic politicians today would issue a ban on all new technology or a comprehensive freeze of prices and wages, they certainly can and will try to humiliate and physically threaten millions of completely peaceful, innocent Americans who try to innovate and earn an honest living. Obama’s administration has engaged in this sort of mass demoralization ever since the foiled “underwear” bomb plot during Christmas 2009 – but Romney would do more of the same, and perhaps worse. Unlike Obama, who must contend with the pro-civil-liberties wing of his constituency, Romney’s attempts to violate personal freedoms will only be cheered on by the militaristic, jingoistic, security-obsessed faction that is increasingly coming to control the discourse of the Republican Party. There can be no hope for freedom, or for the dignity of an ordinary traveler, employee, or thinker, if Romney is elected.

I encourage the viewers of the film to seriously consider the question, “Who is John Galt?” He is not a Republican. If any man comes close, it is Gary Johnson, a principled libertarian who has shown in practice (not just in rhetoric) his ability and willingness to cut wasteful interventions, balance budgets, and protect civil liberties during two terms as Governor of New Mexico. He staunchly champions personal freedoms, tax reduction, foreign-policy non-interventionism, and a sound currency free of the Federal Reserve system. Gary Johnson was, in fact, a businessman of the Randian ethos – who started as a door-to-door handyman and grew from scratch an enterprise with revenues of $38 million.  And, on top of it all, he is a triathlete and ultramarathon runner who climbed Mount Everest in 2003 – clearly demonstrating a degree of ambition, drive, and pride in achievement worthy of a hero of Atlas Shrugged.

Ayn Rand never meant the strike in Atlas Shrugged to be an actual recommendation for how to address the world’s problems. Rather, the strike was an illustration of what would happen if the world was deprived of its best and brightest – the creators and innovators who, despite all obstacles, pursue the path of merit and achievement rather than pull and artificial privilege. Today, it is necessary for each of us to work to keep the motor of the world going by not allowing the purveyors of pull to gain any additional ground. Voting for Mitt Romney will do just the opposite – as Atlas Shrugged: Part II artfully suggests to the discerning viewer.

Ending the War on Kidneys – Article by Sanford Ikeda

Ending the War on Kidneys – Article by Sanford Ikeda

The New Renaissance Hat
Sanford Ikeda
October 13, 2012
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The war on drugs can be dated to 1914, although the phrase “war on drugs” was coined in 1972 during the presidency of Richard Nixon.  The war on kidneys began in 1984.

It’s an oft told tale how drug prohibition has led to the promotion of organized crime, skyrocketing violence here and abroad, and a simultaneous increase in potency and decrease in safety.  (See here and here for examples.)  The solution to these perhaps unintended but predictable negative consequences is legalization.  So it is, too, with the sale of organs–kidneys in particular.

Meanwhile in Iran…

Since 1984, under the leadership of Senator Al Gore, the United States government has made it illegal to buy or sell kidneys and in so doing has effectively launched a “war on kidneys.”  Again, the consequences, unintended but predictable, are mostly if not wholly bad.

According to the Human Resources and Services Administration there are currently over 93,000 persons in the United States on the waiting list for a donated kidney.  Another source estimates that the list grows by 3,000 to 4,000 candidates a year.  Between 1988 and 2008 yet another source reports that the number of kidney transplants performed in the United States has ranged from 8,873 (in 1988) to a high of 17,091 (in 2006) for an average of about 13,847 per year.  While that may indicate a dwindling list of candidates, the reality is that the number who die each year still runs into the thousands.

The United States Department of Health and Human Services, for instance, claims that 18 people die each day waiting for a kidney donor.  That’s 6,570 deaths a year, and though their figure for the waiting list is considerably higher than the HRSA’s, they are in the same ballpark.

Kidney sales are legal in Iran, which offers a mix of private and government financing for kidney transplants.  Not surprisingly, waiting lists there are practically nonexistent (because of a larger supply), and so is the number of people dying while waiting for one.

Moreover, the incidence of black markets and of “medical tourism”—in which relatively wealthy foreigners travel to relatively poor countries to buy local kidneys or have other procedures performed at lower cost than in the United States—would probably fall, much as legalization of alcohol after Prohibition saw the downfall of speakeasies and bathtub booze.

What’s the Downside?

And although some estimate that the cost of a kidney may be as high as $100,000—which would make the total cost of the transplant procedure around $350,000—keep in mind that in addition to the value of the lives saved, the savings from unnecessary kidney dialysis is about $70,000 per person per year.  (See also this article from The Economist.)

Some argue that only the rich would get organs and only the poor would die giving them up.  Existing black markets and medical tourism already reinforce any such tendency by keeping prices high.  Would a free market in organs mean that the relatively poor would supply the relatively rich?  Perhaps.  More generally, would abuses occur?  Yes, they would, just as they do in other aspects of organ transplantation—such as in shabby hospitals or lousy medical care. Nobody suggests banning hospitals or doctors because some hospitals and some doctors occasionally screw up.  The cure lies largely in greater competition, the prerequisite of which is making organ sales legal.

Some are put off by the very idea of a market in kidneys, and many who aren’t might have some reservations about extending the list to other parts of our bodies.  Some of this can be attributed to a socio-ethical resistance to “commoditizing the human body.”  Perhaps this is a valid concern.  Interestingly, there is a legal market for cadavers, so it seems to be OK to pay for bodies but not for organs.

What about other organs or body parts?  The thing about kidneys—or eyes, ears, hands, and feet—is that removing them from our bodies does not entail death or, in the case of kidneys, any significant decline in the quality of life to the donor.  But what about selling something vital such as a heart, which would spell certain death?  That’s a difficult question that we may not have to settle just yet.  Let’s start with kidneys.

The Moral Alternative

I confess to being uncomfortable with the thought of selling off body parts. In the same way, I would never recommend to anyone, including myself, taking cocaine for fun.  But I would stop short of banning cocaine, and my qualms about selling body parts doesn’t keep me from staunchly supporting legalization, especially when a strong case can be made (as in this video by Professor James Stacey Taylor) that banning it would itself be immoral.  Selling body parts for money should be no more illegal than letting people make a living fishing for crabs on the high seas or give up their lives for a cause they believe in.  I may disapprove of a practice that harms the practitioner, but that by itself doesn’t give me the right to stop it, especially if it harms no one else.

Finally, today it’s considered perfectly legal and moral to allow husband A to give up his kidney to his wife B without compensation.  Or, if A’s kidney is not a match for B, it’s okay for A to donate to C, whose husband D could then donate to B.  That is like trading a goat to Jack to get a pile of bricks to trade to Jill for a sack of grain, which is what you wanted for your goat in the first place.  While the Internet and creative websites have made organ bartering of this kind easier than in the past, humans long ago developed another institution that gets the job done much more easily:  buying and selling for money.

Crimalizing activities—whether  drugs, prostitution, or organ sales—typically generates consequences that are usually unintended but, with the aid of some basic economic knowledge, mostly predictable.  After decades and over a trillion dollars spent and countless lives ruined, a summit of Latin-American politicians earlier this year declared that “the war on drugs has failed,” a sentiment echoed around the world.

It’s time that our government ended the war on kidneys, too.

Sanford Ikeda is an associate professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Illiberal Belief #5: Charity Must Be Enforced – Article by Bradley Doucet

Illiberal Belief #5: Charity Must Be Enforced – Article by Bradley Doucet

The New Renaissance Hat
Bradley Doucet
October 13, 2012
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Some people feel that charity must be enforced and administered through government welfare programs because private charity would not suffice to meet the needs of the destitute and desperate. If people are not forced to give up half of their salaries to ensure a caring society, then they won’t do it and we will be left with a dog-eat-dog world in which the needy are left to suffer and die in the streets.It is undoubtedly true that very few people would give up anywhere in the neighbourhood of half of their earnings if they were not forced to do so. What is not true is that society as we know it would crumble as a result. Instead, it would flourish. Allowing people to keep more (dare we dream: all?) of their earnings would be a great incentive for people to work harder, because the extra effort would be fully rewarded. On the flipside, knowing that they will not be automatically taken care of is a great incentive for the unemployed who are able but unwilling to work to get off their butts already. As for those recipients of welfare programs who are truly unable to care for themselves, they would be able to rely on the voluntary charity of a society that will be even wealthier than the one we have right now and whose productive members will not feel that they “already gave at the office” to the tune of half of their earnings. There is simply no grounds for believing that the bulk of humanity is so uncaring as to let the truly needy suffer and die when helping them is readily within their reach.

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. He also writes for The New Individualist, an Objectivist magazine published by The Atlas Society, and sings.
How Government Sort of Created the Internet – Article by Steve Fritzinger

How Government Sort of Created the Internet – Article by Steve Fritzinger

The New Renaissance Hat
Steve Fritzinger
October 6, 2012
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Editor’s Note: Vinton Cerf, one of the individuals whose work was pivotal in the development of the Internet, has responded to this article in the comments below. Read his response here.

In his now-famous “You didn’t build that” speech, President Obama said, “The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

Obama’s claim is in line with the standard history of the Internet. That story goes something like this: In the 1960s the Department of Defense was worried about being able to communicate after a nuclear attack. So it directed the Advanced Research Projects Agency (ARPA) to design a network that would operate even if part of it was destroyed by an atomic blast. ARPA’s research led to the creation of the ARPANET in 1969. With federal funding and direction the ARPANET matured into today’s Internet.

Like any good creation myth, this story contains some truth. But it also conceals a story that is much more complicated and interesting. Government involvement has both promoted and retarded the Internet’s development, often at the same time. And, despite Obama’s claims, the government did not create the Internet “so all the companies could make money off” it.

The idea of internetworking was first proposed in the early 1960s by computer scientist J. C. R. Licklider at Bolt, Beranek and Newman (BBN). BBN was a private company that originally specialized in acoustic engineering. After achieving some success in that field—for example, designing the acoustics of the United Nations Assembly Hall—BBN branched out into general R&D consulting. Licklider, who held a Ph.D. in psychoacoustics, had become interested in computers in the 1950s. As a vice president at BBN he led the firm’s growing information science practice.

In a 1962 paper Licklider described a “network of networks,” which he called the “Intergalactic Computer Network.” This paper contained many of the ideas that would eventually lead to the Internet. Its most important innovation was “packet switching,” a technique that allows many computers to join a network without requiring expensive direct links between each pair of machines.

Licklider took the idea of internetworking with him when he joined ARPA in 1962. There he met computer science legends Ivan Sutherland and Bob Taylor. Sutherland and Taylor continued developing Licklider’s ideas. Their goal was to create a network that would allow more effective use of computers scattered around university and government laboratories.

In 1968 ARPA funded the first four-node packet-switched network. This network was not part of a Department of Defense (DOD) plan for post-apocalyptic survival. It was created so Taylor wouldn’t have to switch chairs so often. Taylor routinely worked on three different computers and was tired of switching between terminals. Networking would allow researchers like Taylor to access computers located around the country without having dedicated terminals for each machine.

The first test of this network was in October 1969, when Charley Kline, a student at UCLA, attempted to transmit the command “login” to a machine at the Stanford Research Institute. The test was unsuccessful. The network crashed and the first message ever transmitted over what would eventually become the Internet was simply “lo.”

With a bit more debugging the four-node network went live in December 1969, and the ARPANET was born. Over the next two decades the ARPANET would serve as a test bed for internetworking. It would grow, spawn other networks, and be transferred between DOD agencies. For civilian agencies and universities, NSFNET, operated by the National Science Foundation, replaced ARPANET in 1985. ARPANET was finally shut down in February 1990. NSFNET continued to operate until 1995, during which time it grew into an important backbone for the emerging Internet.

For its entire existence the ARPANET and most of its descendants were restricted to government agencies, universities, and companies that did business with those entities. Commercial use of these networks was illegal. Because of its DOD origins ARPANET was never opened to more than a handful of organizations. In authorizing funds for NSFNET, Congress specified that it was to be used only for activities that were “primarily for research and education in the sciences and engineering.”

During this time the vast majority of people were banned from the budding networks. None of the services, applications, or companies that define today’s Internet could exist in this environment. Facebook may have been founded by college students, but it was not “primarily for research and education in the sciences and engineering.”

This restrictive environment finally began to change in the mid-1980s with the arrival of the first dial-up bulletin boards and online services providers. Companies like Compuserve, Prodigy, and AOL took advantage of the home computer to offer network services over POTS (Plain Old Telephone Service) lines. With just a PC and a modem, a subscriber could access email, news, and other services, though at the expense of tying up the house’s single phone line for hours.

In the early 1990s these commercial services began to experiment with connections between themselves and systems hosted on NSFNET. Being able to access services hosted on a different network made a network more valuable, so service providers had to interoperate in order to survive.

ARPANET researchers led by Vint Cerf and Robert Kahn had already created many of the standards that the Internet service providers (ISPs) needed to interconnect. The most important standard was the Transmission Control Protocol/Internet Protocol (TCP/IP). In the 1970s computers used proprietary technologies to create local networks. TCP/IP was the “lingua franca” that allowed these networks to communicate regardless of who operated them or what types of computers were used on them. Today most of these proprietary technologies are obsolete and TCP/IP is the native tongue of networking. Because of TCP/IP’s success Cerf and Kahn are known as “the fathers of the Internet.”

Forced to interoperate, service providers rapidly adopted TCP/IP to share traffic between their networks and with NSFNET. The modern ISP was born. Though those links were still technically illegal, NSFNET’s commercial use restrictions were increasingly ignored.

The early 1990s saw the arrival of the World Wide Web. Tim Berners-Lee, working at the European high energy physics lab CERN, created the Uniform Resource Locator (URL), Hyper-Text Transfer Protocol (HTTP), and Hyper-Text Markup Language (HTML). These three technologies made it easier to publish, locate, and consume information online. The web rapidly grew into the most popular use of the Internet.

Berners-Lee donated these technologies to the Internet community and was knighted for his work in 2004.

In 1993 Mosaic, the first widely adopted web browser, was released by the National Center for Supercomputing Applications (NCSA). Mosaic was the first Internet application to take full advantage of Berners-Lee’s work and opened the Internet to a new type of user. For the first time the Internet became “so easy my mother can use it.”

The NCSA played a significant role in presidential politics. It had been created by the High Performance Computing & Communications Act of 1991 (aka “The Gore Bill”). In 1999 presidential candidate Al Gore cited this act in an interview about his legislative accomplishments,saying, “I took the initiative in creating the Internet.” This comment was shortened to: “I created the Internet” and quickly became a punchline for late-night comedians. This one line arguably cost Gore the presidency in 2000.

The 1992 Scientific and Advanced Technology Act, another Gore initiative, lifted some of the commercial restrictions on Internet usage. By mid-decade all the pieces for the modern Internet were in place.

In 1995, 26 years after its humble beginnings as ARPANET, the Internet was finally freed of government control. NSFNET was shut down. Operation of the Internet passed to mostly private companies, and all prohibitions on commercial use were lifted.

Anarchy, Property, and Innovation

Today the Internet can be viewed as three layers, each with its own stakeholders, business models, and regulatory structure. There are the standards, like TCP/IP, that control how information flows between networks, the physical infrastructure that actually comprises the networks, and the devices and applications that most people see as “the Internet.”

Since the Internet is really a collection of separate networks that have voluntarily joined together, there is no single central authority that owns or controls it. Instead, the Internet is governed by a loose collection of organizations that develop technologies and ensure interoperability. These organizations, like the Internet Engineering Task Force (IETF), may be the most successful anarchy ever.

Anarchy, in the classical sense, means without ruler, not without laws. The IETF demonstrates how well a true anarchy can work. The IETF has little formal structure. It is staffed by volunteers. Meetings are run by randomly chosen attendees. The closest thing there is to being an IETF member is being on the mailing list for a project and doing the work. Anyone can contribute to any project simply by attending the meetings and voicing an opinion. Something close to meritocracy controls whose ideas become part of the standards.

At the physical layer the Internet is actually a collection of servers, switches, and fiber-optic cables. At least in the United States this infrastructure is mostly privately owned and operated by for-profit companies like AT&T and Cox. The connections between these large national and international networks put the “inter” in Internet.

As for-profit companies ISPs compete for customers. They invest in faster networks, wider geographic coverage, and cooler devices to attract more monthly subscription fees. But ISPs are also heavily regulated companies. In addition to pleasing customers, they must also please regulators. This makes lobbying an important part of their business. According to the Center for Responsive Politics’s OpenSecrets website, ISPs and the telecommunications industry in general spend between $55 million and $65 million per year trying to influence legislation and regulation.

When most people think of the Internet they don’t think of a set of standards sitting on a shelf or equipment in a data center. They think of their smart phones and tablets and applications like Twitter and Spotify. It is here that Internet innovation has been most explosive. This is also where government has had the least influence.

For its first 20 years the Internet and its precursors were mostly text-based. The most popular applications, like email, Gopher (“Go for”), and Usenet news groups, had text interfaces. In the 20 years that commercial innovation has been allowed on the Internet, text has become almost a relic. Today, during peak hours, almost half of North American traffic comes from streaming movies and music. Other multimedia services, like video chat and photo sharing, consume much of people’s Internet time.

None of this innovation could have happened if the Internet were still under government control. These services were created by entrepreneurial trial and error. While some visionaries explored the possibilities of a graphically interconnected world as early as the 1960s, no central planning board knew that old-timey-looking photographs taken on ultramodern smart phones would be an important Internet application.

I, Internet

When Obama said the government created the Internet so companies could make money off it, he was half right. The government directly funded the original research into many core networking technologies and employed key people like Licklider, Taylor, Cerf, and Kahn. But after creating the idea the government sat on it for a quarter century and denied access to all but a handful of people. Its great commercial potential was locked away.

For proponents of government-directed research policies, the Internet proves the value of their programs. But government funding might not have been needed to create the Internet. The idea for internetwork came from BBN, a private company. The rise of ISPs in the 1980s showed that other companies were willing to invest in this space. Once the home PC and dial-up services became available, people joined commercial networks by the millions. The economic incentives to connect those early networks probably would have resulted in something very much like today’s Internet even if the ARPANET had never existed.

In the end the Internet rose from no single source. Like Leonard Read’s humble writing instrument, the pencil, no one organization could create the Internet. It took the efforts of thousands of engineers from the government and private sectors. Those engineers followed no central plan. Instead they explored. They competed. They made mistakes. They played.

Eventually they created a system that links a third of humanity. Now entrepreneurs all over the world are looking for the most beneficial ways to use that network.

Imagine where we’d be today if that search could have started five to ten years earlier.

Steve Fritzinger is a freelance writer from Fairfax,Virginia. He is the regular economics commentator on the BBC World Service program Business Daily.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

The Golden Age of Freedom Is Still Ahead – Article by Anthony Gregory

The Golden Age of Freedom Is Still Ahead – Article by Anthony Gregory

The New Renaissance Hat
Anthony Gregory
October 6, 2012
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Free enterprise is often associated with the past. This perception puts the market’s champions, seen as hopeless reactionaries, on the defensive.

A typical narrative follows: America had an insufficiently active government under the Articles of Confederation. The Constitution expanded the central government to meet society’s needs. In this climate, where property rights continued to trump the common good, the central government could not maintain national cohesion and ensure racial equality. During the Civil War, the federal government grew to preserve the Union, enable commerce through expansion of infrastructure, and abolish the ancient evil of slavery. During the late nineteenth century, laissez faire reigned supreme. Unchecked, robber barons exploited their customers and workers.

American society, so continues the narrative, overcame its laissez-faire history and embraced active government in the Progressive Era. Commerce, banking, monopolies, food and drugs, and labor conditions finally became regulated. The market was still too free, however, causing the stock market crash and the Great Depression, which the New Deal’s reforms finally addressed. Anachronistic free marketers resisted this progress.

A generation later the free market proved inadequate on race relations, education, poverty, social insurance, workers’ conditions, and the environment. New regulations, taxes, and programs arose in the 1960s and 1970s to address these deficiencies. Ronald Reagan’s election marked a conservative counterrevolution toward the free market, causing the savings-and-loan crisis, rising income disparities, and, ultimately, the 2008 financial collapse. After four consecutive reactionary presidents—Bill Clinton being a practitioner of neoliberal austerity—deregulation and market fundamentalism have again revealed themselves as outdated approaches to America’s modern problems.

This repeated recognition that the free market no longer suits society’s needs is a common theme of modern liberalism. Through experience the inadequacy of the unhampered market has forced enlightened observers to accept the need for more government.

One obvious problem with this narrative is the steadily changing definition of “free market.” The free market is said to have caused problems addressed in the Progressive Era, yet once again the market economy was blamed for the Depression.The New Deal is said finally to have abolished laissez faire, yet laissez faire has been the culprit in every crisis since. Thoughtful proponents of this narrative explain that the 1980s, for example, were somehow substantially more laissez-faire than the 1970s, yet they rarely present more than a handful of superficial examples of deregulation amid an overall trend of regulatory expansion.

A major problem market proponents have in confronting this narrative, whatever its shortcomings, arises because they themselves sometimes accept it implicitly, often complaining about the liberties lost over the years. The significant kernel of truth is that the national government has unmistakably grown well beyond anything imagined in 1789 or even the nineteenth century. And surely, for every argument statists have defending this growth, compelling historical and economic counterarguments are available.

Yet we must be careful before conceding this premise that the past was laissez-faire. By celebrating the political economy of yesteryear, we risk associating our ideals with the past’s many injustices. We can and should avoid this baggage entirely.

Slavery: The Opposite of Free Enterprise

No libertarian defends the horrid institution of slavery. The problem comes in how free marketers sometimes describe slavery as a mere exception to the rule of early American freedom. In fact this exception virtually swallowed the principle whole.

Progressives love contrasting the pro-liberty, anti-tax rhetoric of the founding generation with the slavery that they tolerated or championed. Robin Einhorn’s American Taxation, American Slavery is a sophisticated contribution to the argument that those loudly protesting taxes were often the very people who clung to human bondage. This argument indicts the rhetoric of property rights, which is foundational to free enterprise and, in a warped form, the “right” of one person to own another. Infamously, the Supreme Court found in Dred Scott v. Sanford (1857) that the Fifth Amendment protected a white man’s right not to be deprived of his slave without due process. Given this association between America’s slave-owning generations and the rhetoric of liberty, it is crucial that free marketers explain, emphatically and intelligently, how slavery was the very negation of the free-market system.

The subjugation of slaves would undermine early America’s status as a free country even if slaves were a tiny minority. They were not. Slaves amounted to 18 percent of the population at the time of the Constitution’s ratification and 12.6 percent on the eve of the Civil War, at which point there were nearly four million.

Libertarians should study the brutality of this system. Historians estimate that hundreds of thousands of slaves were forced to migrate in antebellum America’s internal slave trade. Children were frequently ripped from their families. Beatings and rape were ubiquitous, and torture as punishment was hardly unusual.

Even slaves with relatively humane masters lacked the freedoms that most of today’s Americans, living under the modern leviathan, take for granted.

Peter Kolchin, in his seminal American Slavery: 1619–1877, sums up the reality:

Slaves could hardly turn around without being told what to do.They lived by rules, sometimes carefully constructed and formally spelled out and sometimes haphazardly conceived and erratically imposed. Rules told them when to rise in the morning, when to go to the fields, when to break for meals, how long and how much to work, and when to go to bed; rules also dictated a broad range of activities that were forbidden without special permission, from leaving home to getting married; and rules allowed or did not allow a host of privileges, including the right to raise vegetables on garden plots, trade for small luxuries, hunt, and visit neighbors. Of course, all societies impose rules on their inhabitants in the form of laws, but the rules that bound slaves were unusually detailed, covered matters normally untouched by law, and were arbitrarily imposed and enforced, not by an abstract entity that (at least in theory) represented their interests, but by their owners. Slaves lived with their government.

I thank God I don’t live with my government! For many years the pro-market tradition saw slavery as a grave violation of its principles. Kolchin writes:

Early political economists—including Adam Smith, whose book The Wealth of Nations (1776) remained for decades the most influential justification for the principles underlying capitalism—believed that slavery, by preventing the free buying and selling of labor power and by eliminating the possibility of self-improvement that was the main incentive to productive labor, violated central economic laws.

Although critics blame market exchange for the rise of slavery, this criticism is grossly unfair. The slave trade was indeed a market of sorts—unfree, unjust, and regulated—but the most fundamental relationship in slavery was not a market at all. Kolchin explains:

Slave owners engaged in extensive commercial relations, selling cotton (and other agricultural products), buying items both for personal consumption and for use in their farming operations, borrowing money, and speculating in land and slaves, but the market was conspicuously absent in regulating relations between the masters and their slaves. In other words, relations of exchange were market-dominated, but relations of production were not.

The slave power dominated political life in the South and enjoyed federal support through the Fugitive Slave Clause. Slavery was a major government program, its enforcement costs socialized through law. “The chief way that the South’s slaveholding elite externalized the costs of the peculiar institution was slave patrols,” writes Jeffrey Rogers Hummel in Emancipating Slaves, Enslaving Free Men. These slave patrols were “established in every slave state” to enforce black codes, inflict punishment, and suppress insurrections and were “compulsory for most able bodied white males.” Slave patrols, necessary to slavery’s maintenance, were a flagrant violation of the free economy.

The destruction of the Indians, the restrictions on women owning property, and many other antebellum policies also illustrate that the United States hardly had a free market before the Civil War. Slavery best makes the point. The conflation of a slave society with free enterprise is an obscenity.

Protectionism, Nationalism, and Corporatism

Outside of slavery nineteenth-century America often fell far short of the free-market ideal. Protectionism was a perennial problem, from the nationalist Tariff of 1816 to the sectionally biased Tariff of 1824 and the infamous Tariff of Abominations in 1828, from President Andrew Jackson’s threat to invade South Carolina to enforce the Tariff of 1832 to the Morrill Tariff of 1861. In 1870 the average tariff rate hit 44.6 percent. High tariffs financed the corporatist arrangement of federal subsidies for waterways, canals, and railroads during the Civil War, a war that defied market principles dramatically through its taxation, conscription, militarization of society, massive inflation, and inauguration of new government bureaus.

After slavery’s abolition and before the twentieth century, American economic liberty in some senses achieved a peak, but not without many qualifications. Immediately after the Civil War, state-level black codes kept nominally free blacks in a form of extended slavery, indenturing them to employers and criminalizing “vagrancy.” The U.S.  government began enforcing Reconstruction in the conquered South through military rule. Reconstruction counteracted State-imposed rights violations but also fostered a rise in government education and infrastructure projects financed through federal subsidies and considerable hikes on state-level property taxes. Government schooling became much more prevalent in the South, and by the end of the century 75 percent of the states had compulsory attendance laws.

The banking system—fundamental to any modern economy—was regulated by the federal government for most of the nineteenth century. There was a National Bank from 1791 to 1811 and again from 1816 to 1832.The Civil War birthed a new federal banking system that quickly grew, eventually culminating in the creation of the Federal Reserve in 1913.

In the late nineteenth century Benjamin Tucker identified four federally created monopoly powers that robbed Americans of their liberty—the land monopoly, money monopoly, patent monopoly, and tariff monopoly. These mostly involved federal privileges, but the heavy hand of government was also felt locally. Nineteenth-century state governments, at times working with federal authorities, displaced and killed American Indians; regulated various professions, labor relations, consumption goods, and businesses; and implemented social programs.

All in all, the U.S. regulatory state, explains Roderick Long, was not a twentieth-century innovation, but rather was “deeply involved from the start, particularly in the banking and currency industries and in the assignment of property titles to land. (Even such land as was not stolen from the natives was seldom appropriated in accordance with any sort of Lockean homesteading principle; instead, vast tracts of unimproved land were simply declared property by barbed wire or legislative fiat.)”

In substantial ways the economy of the late nineteenth century was freer than today, although some groups were heavily controlled, not least of all the southern blacks persecuted by Jim Crow laws, to say nothing of whites restricted by segregation from freely associating with these blacks.

Even nationally the twilight of the nineteenth century was a mixed bag. Veto-happy Grover Cleveland was probably the most laissez-faire president in half a century and ever since. Yet Cleveland’s terms had nontrivial blemishes: He used U.S. Marshals to quell the Pullman strike and enforce the Sherman Antitrust Act, supported the Dawes Act’s aggrandizement of presidential authority over Indian affairs, strengthened the Chinese Exclusion Act, begrudgingly acquiesced to an income tax to offset reduced tariff revenue, created the Interstate Commerce Commission, and despite a largely anti-imperialist record, threatened and used military force to assert dominance in Latin America against European influence and in favor of U.S. banking interests.

Shifting Definition

The market’s defenders often mimic its opponents in moving the benchmarks to describe historical periods as “laissez-faire.” This dangerous game does not stop with the nineteenth century.

American life before the New Deal was certainly freer in important respects, but we must be cautious in defending the 1920s. Putting aside the bloated bureaucracies lingering from World War I, the Fordney McCumber Tariff of 1922, the Immigration Control Act of 1924, and the calamity of alcohol prohibition, it was 1920s credit expansion that Austrian economists credibly blame for the boom and 1929 crash. We lose credibility in carelessly praising the pre–New Deal Era while blaming the Depression on policies enacted in that time.

Less ambitious free marketers idealize the 1950s—the decade of top marginal tax rates exceeding 90 percent (and, for the poorest Americans, 20 percent); the FCC’s puritanical regulation of the airwaves and maintenance of the telephone monopoly; the booming military-industrial complex; and the growing regimentation of industry, farming, and higher education. The transformative Great Society was in many ways an expansion on Eisenhower-era precedents more than a qualitative break from the past.

Even more desperate acts of nostalgia glorify the Reagan years. Although some government impositions were curtailed on the margins, Ronald Reagan oversaw growth of the New Deal–Great Society regime, as deficit spending exploded, Social Security and protectionism expanded, and foreign aid and bureaucracies ballooned.

None of this sober reflection backward should prompt us to see our history as an inexorable march toward liberty. There have been major advances in modern times—abolition of the draft, strengthened free-speech rights, and greater legal tolerance for minorities—but even in areas like racial oppression and personal freedom, many matters have worsened. Over two million Americans are behind bars. The drug war has devastated African-American communities. Last year the national government deported more immigrants than ever before. The war on terror has shredded basic rights. Washington’s run-of-the-mill economic interventions—in the name of health, equality, environmentalism, and fighting poverty—have escalated.The national debt and entitlement state have seen an unprecedented boom.

Neither today’s dismal state of affairs nor past oppression should make us nihilistic. History can teach us a lot about liberty. Certain areas of American life were freer in the nineteenth century than today and others were not, and the social blessings arising from relative conditions of liberty are worth identifying and understanding. Economics shows that free markets serve the masses by elevating workers’ productivity and smashing the old order of privilege and oppression. Both experience and economic science demonstrate the superiority of liberty to statism.

The golden era of freedom and free markets is not now and it’s not behind us. It is still ahead of us. This is reason to rejoice. We can happily envision a much better future.

Anthony Gregory is a Research Fellow at the Independent Institute.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Government Gifts from Heaven: The Illusions of Redistributive Taxation – Article by Kyrel Zantonavitch

Government Gifts from Heaven: The Illusions of Redistributive Taxation – Article by Kyrel Zantonavitch

The New Renaissance Hat
Kyrel Zantonavitch
October 3, 2012
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Everybody wants something for nothing. But the problem is you can never actually get it. And virtually everyone quietly understands this.

Nothing is ever free, and there’s always a price to pay – even if you only pay it eventually, indirectly, or secretly. And usually the price for this “free” stuff is quite high. You’re almost always far better off paying for it directly and honestly rather than engaging in any type of amoral, unprincipled, dispiriting, and anxiety-ridden beggary or theft.

But when it comes to government, many people today really do pretty much think you can get something for nothing. Many people nowadays really do believe that the government can magically generate things out of thin air, and then give them to “the people” for free. They even commonly think that this is the people’s “right.”

And the more coercive the government, the better, some people think. The more tyrannical the state is, the more it has the power to repeal the laws of economics, physics, and reality. Then it can give “the people” all sorts of free goods and services!

And yet, in an odd way, this view is actually right, because it’s always the more authoritarian states that pretend to offer the most goodies and booty to their greedy citizenry. They’re the ones that always claim to feature the most “economic rights” or welfare-state give-aways.

Many people in the 21st century really do want – and even righteously demand – “free” schools and medical care. They want mandatory “free” paid vacations, sick days, and personal days. They want paid mandatory “free” maternity leave along with no-charge day care for the kids. And, of course, they fully expect “free” public roads, parks, libraries, fire departments, water supplies, etc.

But the problem with all this “free” stuff – as has already been stated – is you truly do pay for it. This happens via taxes. And no, you can’t steal from the rich, and make them pay your share. If you attempt it, they’ll probably just make you pay double. If a government is tyrannical, the rich and powerful can work its machinery far better than you.

Still, too many people try. They hope and dream – and then are easily deluded and duped.

The result of all this attempted robbery of the wealthy, and of the general public, is that while some people do get some “freebies” of a generally ugly and repellant type, the rest of the citizenry quietly raises the costs of everyone’s taxes thru the roof. And almost all the merchandise redistributed via taxation is invariably low in quality and high in cost. Now, maybe many don’t notice this. Defenders of Big Brother go to considerable trouble to disguise this reality from you. But it’s the truth.

Had you directly and honestly paid for all this apparent government windfall – utilizing your individual judgment, prudence, experience, and intelligence – you and your society would be far richer overall. The massive taxes you and the others end up paying are not at all worth it.

Ultimately, whether you know it or not, welfare-state redistribution of wealth results in its very advocates getting utterly conned and totally ripped off.

Kyrel Zantonavitch is the founder of The Liberal Institute  (http://www.liberalinstitute.com/) and a writer for Rebirth of Reason (http://www.rebirthofreason.com). He can be contacted at zantonavitch@gmail.com.

Is it Evil to Vote for a Lesser Evil? Steele’s Response to Stolyarov – Part 1 – Article by Charles N. Steele

Is it Evil to Vote for a Lesser Evil? Steele’s Response to Stolyarov – Part 1 – Article by Charles N. Steele

The New Renaissance Hat
Charles N. Steele
October 2, 2012
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Mr. Stolyarov gives a thoughtful reply to my contention that given a choice between Barack Obama and Mitt Romney, Romney is the lesser of two evils.  I respond, but find I must do so in two parts.  Mr. Stolyarov makes two kinds of arguments in his reply to me; one is a philosophical one on the ethical nature of voting and the second an empirical one about Romney and Ryan.  In this note I address Mr. Stolyarov’s philosophical argument.   I ask many questions here – please note carefully that most of them are not rhetorical.

Mr. Stolyarov’s philosophical argument concerns the moral responsibility one bears in voting: “[E]ven a true incrementally lesser evil is still evil and does not warrant one’s support. One key consideration in casting one’s vote is one’s share of moral responsibility in what would transpire if one’s candidate of choice (even half-hearted choice) gets elected.”

At first glance this seems a reasonable argument – after all, wouldn’t we think that, for example, German citizens who supported Hitler’s regime bore a good share of responsibility for its crimes?  And in general, if people vote for candidate A over candidate B, it’s reasonable to think they bear some responsibility for empowering A’s platform over B’s.  But the more I contemplate it, the less I understand the nature of  this “moral responsibility” voting, for three reasons.

1. When we vote, we vote under conditions of uncertainty about what the candidates will do should they win.  Two reasonable people might differ in their expectations over what opposing candidates might do if elected, even if the candidates are truthful.  And candidates are often less-than-truthful about what they will do if elected; sorting out what is and isn’t true is not necessarily straightforward.  Consider a presidential election between A and B.  If candidate A wins the election and what subsequently transpires is counter to what the voter in good faith expected, what is the voter’s moral responsibility?  Further, we also don’t know and will never know what B would have done.  Does that matter?  Might not a vote for what proved to be A’s bad policies have prevented B’s worse ones?

In many cases these issues are small, but not always.  And certainly in times of major institutional transitions, or economic crises, or other important changes, they are likely to loom large.

2. If one votes for a candidate who wins, does one then share responsibility for everything the candidate does?  When we vote for candidate A, we get the “entire package.”  We can’t limit ourselves to voting for her/his positions on some issues but not others.  Suppose one agrees with candidate A on fiscal policy, but disagrees on foreign policy, and conversely supports B on foreign policy and opposes his fiscal policy.  In order to decide between candidates, our voter must judge which issue is more likely to be of central importance in the next term, as well as which one is more important for the voter’s overall vision of what should be done.  For that matter, the voter might think that B’s fiscal policy is a more serious flaw than A’s foreign policy, but also believes institutional barriers (e.g. Congress) will largely block B’s fiscal policy while nothing would block A from pursuing the bad foreign policy, and hence reasonably vote B.

3. How much difference does one’s vote make, anyway?  The quote from Mr. Stolyarov suggests that if candidate A wins, a person who voted for him shares some responsibility for what transpires.  But suppose A wins with a very large margin of the vote.  In that case, there’s nothing the voter could have done to stop what transpires.  What is her/his responsibility then?  Conversely, suppose instead A loses, so nothing transpires from the vote and presumably no moral responsibility attaches to the voter.  How does anything differ in these two cases, with respect to the voter’s culpability?  I can’t see that the voter has behaved differently in the two cases; shouldn’t moral responsibility be the same?  Perhaps not, but the why not?  And how would the responsibility differ in either case had the voter instead stayed home and not cast a ballot?

Similarly, in every presidential election in which I’ve voted, I voted in Montana.  In none of these was the vote close enough for mine to have mattered, but that’s irrelevant.  Montana’s three electoral votes simply do not matter for the national outcome, so no matter what happened, my vote had no connection at all to what subsequently transpired.  Does this mean that I’m exempt of all moral responsibility when I vote in a presidential election?  Why or why not?

These three points involve “disconnects” betweens one’s vote, the outcome of an election, and what subsequently transpires.  It strikes me that these disconnects weaken the moral responsibility a voter holds.

Mr. Stolyarov does address some of my concerns (particularly those of point 2) when he observes “It may therefore be justified to vote for an imperfect candidate who could do some incremental good, but not for a candidate who would commit incremental evil – in the sense of reducing liberty compared to the situation that existed prior to his election.”

It’s clear, then, that Mr. Stolyarov is not committing the Nirvana fallacy.  But I still find his point quite problematic.  It is not always obvious what constitutes “incremental good/evil” on net, or how we identify an overall reduction in liberty.  Let’s simplify this case by assuming there’s only one voter and no uncertainty about what candidates will do if elected, so that there are no disconnects between the vote cast and the political consequences.  Again, the voter faces a choice among presidential candidates, but now her/his vote determines the election and s/he knows exactly what political consequences will transpire.

If A’s positions on issues X and Y reduce liberty, and his position on issue Z increases it, how is the voter to weight A’s net effect on liberty?  (Assume for sake of argument there are no other issues.)  Is A automatically disqualified because of his position on X and Y?  Or could his position on Z conceivably be sufficiently beneficial for liberty to outweigh the harm done on the first two?  I would think so, and I suspect Mr. Stolyarov agrees.  (Again, I should note that in some cases any reasonable person should be able to weigh these relative harms and benefits and get the same answer.  But in some real world cases reasonable persons might strongly differ.)

But also, doesn’t it matter against whom A is running?  If candidate B is worse, much worse, on all three issues, should not the voter choose A over B, regardless of whether the net outcome from A is positive?  (I would think so.) Alternatively suppose instead candidate B drops out of the race to be replaced by C, and C is superior on all three issues.  Shouldn’t that lead our voter to reverse himself and support C?

This seems quite sensible to me, but Mr. Stolyarov seemed to rule it out:  “There is no doubt in my mind that Mitt Romney would commit numerous incremental evils – and there is no justification for supporting him in any way, even if his transgressions could be predicted with certainty to be less severe than Obama’s.”  It should by now be clear why I find this position problematic.

On this point, Mr. Stolyarov agrees with my earlier assertion “real progress in expanding liberty will come from economic, technological and social processes, NOT from electoral processes. If elections and political processes do anything in this regard, it will be simply to respond to and formalize advances made by civil society.”  But he then concludes: “But if this is the case, then there is no point supporting anything other than the very best available option in any election.”

I can’t see how that follows.  In our one voter example, suppose candidate A will take the nation slowly towards a totalitarian state, and B will take it very rapidly.  Would it not be preferable to choose A over B, to buy time for countervailing processes to act?

All of these examples suggest – at least to me – that a voter might reasonably and morally vote for a candidate who will minimize damage to liberty, even if the voter has only reasonable expectation of this.

Mr. Stolyarov does have another point worth noting in this matter.  He suggests we vote for the best candidate, even a third party candidate who has no chance of winning: “[A] single person can send a message by refusing to play along with the two-party system. If enough of us begin to think this way, then the libertarian voters will become a force to reckon with, a credible threat to the two main parties that unsatisfactory candidates will be disfavored no matter what. As an added bonus, if enough people in general begin to vote based purely on their conscience, then the whole ‘lesser of two evils’ trap would disappear, the two major parties would need to rapidly evolve or would disintegrate, and government could become truly representative.”

Maybe so.  I certainly hope so.  But note that this is a strategic argument and quite different from the argument about a voter’s moral responsibility.  I find the moral argument to be unhelpful in this discussion.

In part 2 of my response I will try to make the case that Mitt Romney is indeed the lesser of two evils when compared to Barack Obama.

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.

Dr. Steele also maintains a blog, Unforeseen Contingencies.