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The Dawn of the Surveillance State – Article by Gary McGath

The Dawn of the Surveillance State – Article by Gary McGath

The New Renaissance Hat
Gary McGath
September 18, 2014
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We think of mass surveillance as a product of modern technology—applying computing power to scoop up communications and metadata in bulk. But large-scale spying on Americans got its real start in 1917, when the United States entered World War I. The government wanted to build up an apparatus to crush all criticism.

In his 1917 Flag Day speech, President Wilson claimed that Germany had “filled our unsuspecting communities with vicious spies and conspirators and sought to corrupt the opinion of our people in their own behalf.” He warned, “Woe be to the man or group of men that seeks to stand in our way in this day of high resolution.” The next day, Congress gave teeth to his warning with the Espionage Act, which criminalized opposition to the war. In 1918, the Sedition Act made prohibitions on dissent even broader.

The apparatus for searching out people with supposedly disloyal tendencies was already in place. The Council of National Defense, created in 1916, had begun urging the states to create their own Councils of Defense. Some of them paid close attention to everything people were saying and promoted persecution of anything sounding disloyal or foreign. In Iowa, elderly women were jailed for speaking German over the telephone, and a pastor was imprisoned for giving part of a funeral service in Swedish.

In Oklahoma, Governor Robert L. Williams formed an extralegal state Council of Defense, which in turn created an Oklahoma Loyalty Bureau, employing secret service agents to find sedition in communities. The Tulsa County Council of Defense formed a secret organization to look for dissidents.

The Bureau of Investigation (later called the FBI) got into the act, creating the American Protective League (APL)—a private, quasi-official espionage organization. The APL boasted that it was “organized with approval and operating under the direction of the United States Department of Justice, Bureau of Investigation.” Because it was nominally private, the government didn’t have to take responsibility for its actions. Its 1,200 branches put local public schools under surveillance, checked on people who didn’t buy war bonds, and investigated Lutheran clergymen who didn’t express public support for the war. APL members detained over 40,000 people, opened mail, and raided factories, union halls, and private homes.

The federal government did its own share of outrageous searches and seizures. A 1918 pamphlet, “War-time Prosecutions and Mob Violence,” by the National Civil Liberties Bureau, cites numerous raids, with vast amounts of printed materials confiscated, from September 1917 onward. The International Workers of the World (IWW) and the International Bible Students’ Association—a branch of what’s now known as the Jehovah’s Witnesses—were targeted repeatedly.

The Feds also took control of all radio stations when the United States joined the war. Amateur radio was shut down, along with many commercial stations. In 1918 the federal government nationalized telephone and telegraph service, an act that Postmaster General Burleson declared necessary “to prevent communication by spies and other public enemies.”

Most of the surveillance apparatus was dismantled after the war was over, and communications returned to private hands. However, the Sedition Act, which made it all possible, still remains on the books, though in a more limited form. In 1971, it was used to indict Daniel Ellsberg for leaking the Pentagon Papers, which showed that the government had been systematically misleading the public about the Vietnam War. In 2013, it was the basis for bringing charges against Edward Snowden.

And even if most of the organizations created during this wave of hysteria are now defunct, as historian Lon Strauss has written, we can “see the foundation that influenced subsequent decisions…. There’s a direct connection with the type of surveillance state that produced the NSA; that foundation was created in the First World War.”

Mass surveillance might be grabbing headlines, but unfortunately, it’s nothing new.

Gary McGath is a freelance writer and a former editor of the Thomas Paine Review.

This article was originally published by The Foundation for Economic Education.
Oklahoma: The Economic Storm – Article by David J. Hebert

Oklahoma: The Economic Storm – Article by David J. Hebert

The New Renaissance Hat
David J. Hebert
May 25, 2013
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A tornado ravaged Oklahoma last week, destroying hundreds of homes, killing dozens, and injuring hundreds more. Unfortunately, it looks like the citizens of Oklahoma are about to be ravaged by another storm brought on by the Oklahoma Attorney General, Scott Pruitt.

According to ABC News, Mr. Pruitt and his staff began “aggressively combing the region for fraud just hours after the tornado … and immediately [found] businesses violating the law. ”

What laws were the businesses accused of violating?  Anti-price-gouging laws. Using powers granted by the Emergency Price Stabilization Act, Mr. Pruitt is hoping to help the people of Oklahoma by preventing businesses from profiting off of the suffering of the townspeople, many of whom just lost their homes. He goes so far as to say, “[the townspeople] never anticipate or expect that someone would take advantage of them right now, but this situation is what criminals prey upon. ”

While Mr. Pruitt no doubt intends to help the local citizens, his misunderstanding of the workings of the price mechanism will lead only to folly and the prolonged suffering of the very people that he is trying to help. What he is effectively arguing for is a price ceiling on basic commodities, such as water (which is reportedly being sold for $40 per case today as opposed to only $3-$4 just a few weeks ago).

This has very predictable results: a shortage.

When prices are held below their market value, the effect is that there will be a large number of people who are willing to purchase water at that price but very few sellers willing to sell the water at that price. This means that people will compete on non-price margins to acquire water, that is, they will queue, sometimes for hours on end. The time that they spend waiting in line, however, is a deadweight cost as it is value that is forgone but is not captured by anyone. So now, instead of contributing towards the reconstruction of the town, the people are stuck waiting in line for water.

The beauty of the price mechanism is what it accomplishes in situations like this, assuming, of course, officials allow it to function properly. In this situation, demand in Oklahoma rises and producers, seeing an opportunity to profit, reroute trucks/planes to Oklahoma, thus increasing the quantity of water supplied in the area that needs it most.

Absent the rise in price, we would have to rely on the benevolence of these companies to help the people in need (and assume that they knew what the people of Oklahoma wanted to begin with).

This isn’t in and of itself terrible. Obviously companies DO send extra water to places that experience disasters, and the Red Cross DOES send volunteers and such. But notice that nothing in the preceding analysis precludes this benevolence. Why rely merely on benevolence when we can also rely on self-interest? If the goal is to help people get clean drinking water, it stands to reason that we ought to incentivize producers as many ways as possible, be they other-regarding, self-regarding or both.

David Hebert is a Ph.D. Fellow at the Mercatus Center at George Mason University.

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