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Ayn Rand and Friedrich A. Hayek: A Side-by-Side Comparison – Article by Edward W. Younkins

Ayn Rand and Friedrich A. Hayek: A Side-by-Side Comparison – Article by Edward W. Younkins

The New Renaissance HatEdward W. Younkins
August 1, 2015
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Ayn Rand and Friedrich A. Hayek did more than any other writers in the Twentieth Century to turn intellectual opinion away from statism and toward a free society. Although they are opposed on many philosophical and social issues, they generally agree on the superiority of a free market. Rand’s defense of capitalism differs dramatically from Hayek’s explanation of the extended order. In addition, Hayek approves of state activity that violates Rand’s ideas of rights and freedom. The purpose of this brief essay is to describe, explain, and compare the ideas of these two influential thinkers. To do this, I present and explain an exhibit that provides a side-by-side summary of the differences between Rand and Hayek on a number of issues.

In their early years of writing, both Hayek and Rand were dismissed by intellectuals, but they were heralded by businessmen. Hayek began to gain some respect from intellectuals when he published The Road to Serfdom in 1944. He wrote a number of scholarly books, attained formal academic positions, and earned the Nobel Prize for economics in 1974. Rand never did write scholarly works or hold a formal academic position. Her philosophy must be extracted from her essays and her fiction.

Hayek was read in college classes sooner, and to a much greater extent, than was Rand. He was viewed by intellectuals as a responsible and respected scholar, and Rand was not. His vision of anti-statism was more acceptable to intellectuals because he called for some exceptions to laissez-faire capitalism. In his writings he permitted concessions for some state interventions. In his immense and varied body of work, he touched upon a great many fields, including anthropology, evolutionary biology, cognitive science, philosophy, economics, linguistics, political science, and intellectual history. During the last 25 years or so, Rand’s works have been increasingly studied by scholars. There is now an Ayn Rand Society affiliated with the American Philosophical Association and a scholarly publication devoted to the study of her ideas—The Journal of Ayn Rand Studies. In addition, her writings are now being covered in college classes.

A Summary Comparison

Exhibit I provides a summary comparison of Rand and Hayek based on a variety of factors and dimensions. With respect to metaphysics and epistemology, Rand holds that “A is A” and that reality is knowable. Contrariwise, Hayek argues that reality is unknowable and that what men see are distorted representations or reproductions of objects existing in the world. The skeptic Hayek goes so far as to state that the notion of things in themselves (i.e., the noumenal world) can be dismissed. Whereas Rand’s foundation is reality, the best that Hayek can offer as a foundation is words and language.

Hayek supports the view that the human mind must have a priori categories that are prior to, and responsible for the ability to perceive and interpret the external world. He adds to this Kantian view by making the case that each individual mind’s categories are restructured according to the distinct experiences of each particular person.   Each person’s neural connections can therefore be seen as semi-permanent and affected by his or her environment and experiences. The mind’s categories evolve as each specific person experiences the world. According to Hayek, there is pre-sensory knowledge embedded in the structure of the mind and the nervous system’s synaptic connections which can be further created and modified over time. For the neo-Kantian Hayek, knowledge always has a subjective quality.

Reason for Rand is active, volitional, and efficacious. It follows that she sees rationality as man’s primary virtue. She sees progress through science and technology as the result of the human ability to think conceptually and to analyze logically through induction and deduction. Rand also contends that people can develop objective concepts that correspond with reality.

In his philosophy, Hayek relegates reason to a minor role. He argues for a modest perspective of people’s reasoning capabilities. He contends that reason is passive and that it is a social product. Hayek’s message of intellectual humility is primarily aimed at constructivist rationalism rather than critical rationalism. As an “anti-rationalist,” he explained that the world is too complex for any government planner to intentionally design and construct society’s institutions. However, he is a proponent of the limited potential of critical rationalism through which individuals use local and tacit knowledge in their everyday decisions. Hayek views progress as a product of an ongoing dynamic evolutionary process. He said that we cannot know reality but we can analyze evolving words and language. Linguistic analysis and some limited empirical verification provide Hayek with somewhat of an analytical foundation. His coherence theory of concepts is based on agreement among minds. For Hayek, concepts happen to the mind. Of course, his overall theory of knowledge is that individuals know much more than can be expressed in words.

Rand makes a positive case for freedom based on the nature of man and the world. She explains that man’s distinctive nature is exhibited in his rational thinking and free will. Each person has the ability to think his own thoughts and control his own energies in his efforts to act according to those thoughts. People are rational beings with free wills who have the ability to fulfill their own life purposes, aims, and intentions. Rand holds that each individual person has moral significance. He or she exists, perceives, experiences, thinks and acts in and through his or her own body and therefore from unique points in time and space. It follows that the distinct individual person is the subject of value and the unit of social analysis. Each individual is responsible for thinking for himself, for acting on his own thoughts, and for achieving his own happiness.

Hayek denies the existence of free will. However, he explains that people act as if they have free will because they are never able to know how they are determined to act by various biological, cultural, and environmental factors. His negative case for freedom is based on the idea that no one person or government agency is able to master the complex multiplicity of elements needed to do so. Such relevant knowledge is never totally possessed by any one individual. There are too many circumstances and variables affecting a situation to take them all into account. His solution to this major problem is to permit people the “freedom” to pursue and employ the information they judge to be the most relevant to their chosen goals. For Hayek, freedom is good because it best promotes the growth of knowledge in society. Hayek explains that in ordering society we should depend as much as possible on spontaneous forces such as market prices and as little as possible on force. Acknowledging man’s socially-constructed nature, he does not view individuals as independent agents but rather as creatures of society.

According to Rand, the principle of man’s rights can be logically derived from man’s nature and needs. Rights are a moral concept. For Rand, the one fundamental right is a person’s right to his own life. She explains that rights are objective conceptual identifications of the factual requirements of a person’s life in a social context. A right is a moral principle that defines and sanctions one’s freedom of action in a social context. Discussion of individual rights are largely absent from Hayek’s writings. At most he says that rights are created by society through the mechanism of law.

Whereas Rand speaks of Objective Law, Hayek speaks of the Rule of Law. Objective laws must be clearly expressed in terms of essential principles. They must be objectively justifiable, impartial, consistent, and intelligible. Rand explains that objective law is derived from the rational principle of individual rights. Objective Law deals with the specific requirements of a man’s life. Individuals must know in advance what the law forbids them from doing, what constitutes a violation, and what penalty would be incurred if they break the law. Hayek says that the Rule of Law is the opposite of arbitrary government. The Rule of Law holds that government coercion must be limited by known, general, and abstract rules. According to Hayek certain abstract rules of conduct came into being because groups who adopted them became better able to survive and prosper. These rules are universally applicable to everyone and maintain a sphere of responsibility.

Rand espouses a rational objective morality based on reason and egoism. In her biocentric ethics, moral behavior is judged in relation to achieving specific ends with the final end being an individual’s life, flourishing, and happiness. For Hayek, ethics is based on evolution and emotions. Ethics for Hayek are functions of biology and socialization. They are formed through habits and imitation.

Rand advocates a social system of laissez-faire capitalism in which the sole function of the state is the protection of individual rights. Hayek, or the other hand, allows for certain exceptions and interventions to make things work. He holds that it is acceptable for the government to supply public goods and a safety net.

For Rand, the consciousness of the individual human person is the highest level of mental functioning. For Hayek, it is a supra-conscious framework of neural connections through which conscious mental activity gains meaning. He states that this meta-conscious mechanism is taken for granted by human beings. The set of a person’s physiological impulses forms what Hayek calls the sensory order. Perception and pattern recognition follow one’s sensory order which is altered by a person’s own perception and history of experiences

Aristotle is Rand’s only acknowledged philosophical influence. They both contend that to make life fully human (i.e., to flourish), an individual must acquire virtues and make use of his reason as fully as he is capable. Hayek was influenced by Kant and Popper in epistemology, Ferguson and Smith in evolutionary theory, Hume in ethics, and Wittgenstein in linguistics.

Although Rand and Hayek are opposed on many philosophical questions, they generally agree on the desirability of a free market and are among the most well-known defenders of capitalism in the twentieth century. The works of both of these intellectual giants are highly recommended for any student of liberty.

 Exhibit I

A Summary Comparison

 

Rand

 

Hayek

Foundation Reality Words and Language
Knowledge Reality is knowable. Skepticism – The idea of things in themselves can be dismissed.
Reason Reason is active, volitional, and efficacious. Reason is passive and a social product.
Progress Based on power of human reason and conscious thought Evolution and social selection
Analytic Method Logical analysis, including induction and deduction Linguistic analysis and empiricism
Theory of Concepts Objective concepts that correspond with reality Coherence or agreement among minds
Freedom Positive case for freedom Negative case for “freedom”
Free Will Man has free will. Man is determined but acts as if he has free will.
Subject of value and unit of social analysis Individual happiness Perpetuation of society (i.e., the group)
The Individual Independent Dependent—man is socially constituted
Rights Based on the nature of the human person Created by society through law
Law Objective Law Rule of Law
Ethics and Morality Rational objective morality based on reason and egoism Evolutionary and emotive ethics based on altruism which is noble but cannot be implemented because of ignorance. Established through habits and imitation
Desired Social System Laissez-faire capitalism Minimal welfare state that supplies public goods and safety net
Highest level of understanding and mental functioning Consciousness of the Individual Meta-conscious framework—neural connections
Philosophical influences Aristotle Ferguson, Smith, Kant, Hume, Popper, Wittgenstein
Handcuffed and Helpless – Article by T.K. Coleman

Handcuffed and Helpless – Article by T.K. Coleman

The New Renaissance HatT.K. Coleman
July 28, 2015

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There’s a naive idea floating around that an innocent person should never be afraid of cops.

 

Editors’ Note from the Foundation for Economic Education: FEE faculty T.K. Coleman is consistently one of our students’ favorite speakers and teachers. His insight and magnetism would be impossible to replace. We not only consider him a friend, but a member of the FEE family.

Recently T.K. related the story of his experience with police abuse. We cannot independently verify the account he gives here, but we offer his story based on our belief in T.K. Coleman as a human being and as a friend to our organization.

We believe it is important to cover the problem of police abuse from the perspective of one who has experienced it.

What you are about to read is not a philosophical argument. It’s a personal testimony. The aim of telling this story is neither to make a political statement, nor to score points for a particular ideology. For almost three years, I’ve mostly held it in. But it’s become clear to me that it’s time to give a more detailed account to a broader audience.

*             *             *

One Friday night, my wife and I were driving through a small town on the way to a comedy club in Manhattan Beach, California. We were going to hang out and share a few laughs. On the way, we were pulled over by the police.

Two officers approached our car. One of them came to my window. The other one came to her window.

Without asking to see my license or registration, the officer on my side told me to get out of the car. I immediately and respectfully complied without raising a single question or objection. And in case you’re wondering, I wasn’t dressed in gang colors, nor was I wearing a hoodie.

When I exited the car, he turned me around, handcuffed me, threw me against the side of my car, and did a complete body search on me. As he groped me, he said, “This is how we do it in LA.”

I remember seeing a woman walking across the street holding hands with her little girl. We made eye-contact. She picked her little girl up and jogged in the other direction. Who could blame her? If I saw one of society’s most trusted authority figures manhandling a guy, I’d also assume this was a potentially dangerous situation.

The officer then removed the wallet from my pocket and pulled out the cash.

“Why do you have so much cash on you?”

“Sir, I honestly didn’t feel like a $100 was a lot of cash to have on me. I’m going out with my wife tonight and just wanted to have a little cash on me.”

“We’ll see.”

Next, he asked me where I lived. I told him my address. He laughed and said, “This n****r knows his address.” Then he walked me to the police car and literally threw me in the back seat and shut the door. From the back seat of a police car, I watched the officer join his partner who was already busy questioning my wife. They also made her get out of the car. They both got in her face and started questioning her.

Imagine what goes on inside of a man’s head when he’s handcuffed and helpless as he watches two men with guns get in his wife’s face. Imagine the complex blend of confusion, fear, irrational optimism, and rage that festers inside one’s soul as he watches one cop take his wife’s purse and pour all the contents out, while the other officer literally crawls around inside our car for several minutes.

They spent about 10 more minutes aggressively questioning my wife.

One of the officers returned to the car with my wallet and proceeded to look up my info in the system.

“You got any baby momma drama?” he asked me.

“I don’t have any children, sir.”

“You sure you ain’t got no baby momma drama?”

“I am certain I have no children, sir. There are no women out there who are even under the impression that I am the father of their child.”

“Are you clean? Are you clean? You ain’t got no drugs? You ain’t got nothing on you? No baby momma drama?” he says.

“I am clean,” I said.

For the entire time we were talking, my eyes were deadlocked on that other officer and my wife. After what felt like an eternity, the officer let me out of the car and took off the handcuffs.

“You’re good,” he told me.

As I slowly walked back to our car, I said to one of the officers, “Sir, I’m not trying to be antagonistic or disrespectful, but is there a reason for why I was pulled over?”

“We just had to check you out.”

I wanted to say, “What does that even mean?” But more importantly, I wanted to get us out of that situation safely. Given the way he man-handled me earlier, it was obvious to me that I was dealing with guys who weren’t above breaking protocol. So I just walked back to the car, took a deep breath, asked my wife if she was alright, and did my best Denzel Washington from Glory impersonation as I tried to keep it together.

Our comedy show started at 8 P.M. We were pulled over at about 7:30. When they let us go, it was about 10 minutes after the hour. We decided we couldn’t go home, or it would feel as if we let them win. So we drove to a local cinema, watched a movie, came back home, had some coffee, and just stayed up talking with each other about it.

*             *             *

I’m grateful that we didn’t get killed. I’m grateful that my wife didn’t get assaulted. I’m grateful that they didn’t plant drugs on me or put me in the hospital.

But my gratitude doesn’t change the fact that these men abused their power, disrespected my wife, laid their hands on my body in an inappropriate way, scared the hell out of us both, made us miss our show, and treated us like criminals simply because they felt entitled to do so.

They will not ruin my life, nor will they determine my destiny, but I want to put this story on the record because this was neither the first nor the second time something like this happened to me, and I sincerely believe that things like this happen all over the country.

There’s this naive idea floating around that people should never be afraid of cops as long as they’re innocent and compliant. For a lot of people in this country, that’s simply not true. This isn’t about playing some mythical race-card, nor is it about me promoting the idea that all cops are evil. I’m sure there are lots of cops who are nice to their kids and fun to hang out with when they’re having beer with their buddies. (I’m also sure that’s true of a lot of so-called thugs.)

But if we want to have intelligent discussions about authority in this country, we have to stop using a logic that tells us that people in authority always have a fair reason for doing what they do. We do a lot of talking about what people can do to avoid being abused by cops. We don’t talk as much as we should about the abuse that happens to people who follow all those instructions. If we can’t question authority, we are doomed.

*             *             *

Here’s a habit I picked up early on: When I see police officers, I shift into my A-game.

If I feel an itch on my forehead, I’ll notify the cops first before scratching the itch because I want them to feel safe and secure about the movement of my hand. This is a technique I refer to as “not getting shot.”

I learned techniques like this from the first day I received my driver’s license. Growing up in the suburbs, I was always afraid to drive my dad’s Lincoln Town Car.

I was too afraid to tell him, but I would cringe when he’d ask me to drive his car because I knew I would be pulled over and harassed by cops whose worldview wasn’t big enough to imagine me in a nice car (even though it was normal to see young people driving nice cars in the neighborhood where I grew up).

I remember driving my dad’s car once, and he left his toolbox in the back seat. A cop pulled me over and asked why I had a toolbox. Fair enough. I told him my dad was in real estate and construction, and that I was working with him at one of his buildings. The cop had me step out of the car, handcuffed me, and searched the toolbox while I sat on the curb in handcuffs.

“Are there any other weapons in this car besides this hammer here?”

My overly diplomatic reply was this: “With all due respect, sir, the hammer is not a weapon, but rather one of many tools in that toolbox we use for work. However, I understand where you’re coming from and I can see how you might be inclined to see it as a weapon, but those tools are only used for work.”

He let me go. I can only imagine what my fate would have been if I hadn’t learned about the loaded question fallacy. Two points for philosophy. Hurray.

By the way, the officer gave me no warnings, citations, or explanations. Like the guys from my earlier story, he just wanted to “check me out.”

Unfortunately, my techniques don’t make me feel all that secure, nor does the fact that today I drive a car that’s a lot more modest than my dad’s. At every stage of my adulthood, I’ve been pulled over by cops, dragged out of my car, handcuffed, spoken to like I was a stupid little boy, humiliated in public, called racial slurs, and manhandled by multiple guys with badges multiples times (without being arrested or charged with anything), in spite of the fact that I’ve never been armed, and I’ve always complied with their every request.

When I spent two years without having a car, it was one of the most peaceful, cop-free times in my life. I would still get harassed at times, but it was so much harder for them to come up with excuses for stopping me. I have never been physically or psychologically abused by drug-dealing “thugs,” but I have definitely been abused by police who thought it was okay to push me around because I fit their stereotype of a thug.

Some people automatically feel safer when cops are around, but that’s not a universal experience. It’s certainly not mine. I’m not angry at every cop, but I am deeply concerned about the frighteningly popular belief that you must have done something wrong if you were abused by one.

*             *             *

When I first wrote about this on my Facebook page, I only had my family and friends in mind. Prior to that, I’d never shared the full details with anyone except for a small group of people.

But more and more, I’d been involved in conversations about police brutality. It seems to be on everyone’s mind. And while I acknowledge that these issues are more complex than many people make them out to be, there was one recurring element in many of these conversations that really irked me: The idea that a police officer would never mistreat someone if they conducted themselves in the right way. I know from personal experience that this assumption is false.

Indeed, I know many people who have been mistreated by authorities who abuse their power and they’re simply afraid to talk about it. Since I shared a version of this account on Facebook, over 1500 hundred people have shared my Facebook post. I’ve received tons of messages from people who have been victims of various kinds of abuse, not just from cops, but abuse in general. Many of them thanked me for inspiring them to tell their own story. I’ve even had police officers apologize to me on behalf of other police officers.

But why are people so often silent in the face of abuse? They don’t want to risk their careers; they don’t want to make enemies at their church; they don’t want to be associated with the wrong political party; they don’t want to be seen as liars; they don’t want anyone targeting them.

And I get it. Just since I shared this on social media, people have called me a liar, a bullshitter, a slanderer, a cop hater and an attention seeker. Honestly, I can relate with those people who would rather just stay silent than suffer the indignity of the aftermath — which so often just adds insult to injury.

But then there are the people who find inspiration, perhaps to tell their own story. I wrote this for them. Some have asked why I would write something like this if I have no chance of bringing the cops to justice. My answer is that I wrote this primarily in hopes that some people’s minds will be opened and others’ hearts will be healed due to what I went through. Most importantly, I wrote this so that people who stay silent — for whatever reason — will know they aren’t alone.

I wish I had footage of what happened. I wish I had had the opportunity to obtain badge numbers, names, or license plate numbers without fear. Instead all I could think was “Please God let me out of this situation alive.” “Please don’t let them hurt my wife.” “What in the world is happening to me?” When they finally let me go, I was mostly just relieved that we were going to get out safe.

Believe it or not, there was a point when it did occur to me to try to get some information on these police officers. When I asked the one cop why we had been stopped, I thought about getting a look at their license plate number right then. But it occurred to me that things could escalate again if they perceived me as antagonizing them. I was scared of what they might do next if they noticed me looking at their car as if I were trying to obtain their information.

*             *             *

After my wife and I left, we calmed down. I started to reflect on things. I wished I could have gotten something — a badge number, a license tag, anything. Still, I decided to report it. The next day, I called the police department in the town where we were pulled over. I spoke with an officer who was appalled by my story, but who said it couldn’t be his department. He asked me if I was sure it wasn’t the state police. I honestly didn’t know. He believed my story, though, and he told me that if those were his guys, he would deal with them harshly. He apologized on behalf of police officers. We talked for almost an hour and he promised to have a meeting with his department about my story.

I also called state police as well as the departments for a couple surrounding towns but with the same results. My lack of evidence made things difficult. I tried hard to channel my anger in the direction of holding those officers accountable, but ultimately fell short. So, all I have is my story and the hope that some good can come from telling it.

All I ask of you, dear reader, is that you consider it an invitation to rethink the way some of these police encounters are framed and construed by all parties. If you’re skeptical of my version of events, that’s fine. I encourage you to keep on doubting.

But please don’t be selective in your skepticism. Question me. Question others. Question the police. Question authority. Most importantly, question your own assumptions. The truth will come will eventually come from people willing to search for it.

T.K. Coleman is a philosopher, writer, lecturer, entrepreneur, and life coach living in Los Angeles, California. He is the co-founder and Education Director for Praxis, a 10-month apprenticeship program that combines a traditional liberal arts education with practical skills training, professional development, and real-world business experience.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Living the Easy Life – Article by Doug Bandow

Living the Easy Life – Article by Doug Bandow

The New Renaissance Hat
Doug Bandow
November 24, 2014
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CAIRO — “I could be arrested when I leave here,” said a journalist I met at the tony Marriott near Cairo’s Tahir Square. A student activist acting as an interpreter observed that he, too, could be detained at any time. A veteran human rights activist calmly stated, “Some of our groups will be closed. Some of us will be imprisoned. It is inevitable.”

Most foreigners travel to Egypt to play tourist. I visited with a human rights delegation. As a result, I came away with a very different picture than do most foreigners of this fascinating nation.

I was also reminded how lucky Americans — and, indeed, most Westerners — are. Forget American exceptionalism or manifest destiny.

Most important are the basic characteristics of a free society. The rule of law. Civil liberties. Criminal procedures. Legal safeguards. Democratic processes. Obviously, even nations that purport to have all of these often fall short. However, few Americans, Europeans, or citizens of democratic Asian nations live in constant fear of arrest, imprisonment, and torture. Those in rule-oriented societies rarely see every authority figure as a threat.

In Egypt, the uncertainty began when I arrived. On both of my trips the government knew about me because my host organization had requested meetings on my delegation’s behalf. Both times I was pulled aside. The first time an entry guard took my passport and I waited for an hour before being waved on. The second time the delay was far shorter, with security officials formally welcoming me — after asking for my phone number and hotel destination.

Of course, the United States occasionally stops people from entering, but not typically because the visitors want to assess America’s human rights record. Most often, foreigners get blocked from visiting if officials believe they want to stay.

Even after leaving the arrivals area on my first trip, I had to wait again while the videographer joining us unsuccessfully tried to persuade officials to let him bring his camera into the country. The Egyptians said no. (He went on to rent a smaller one.) While there are places in the United States where you can’t film, no one’s going to stop you from having a camera of any sort.

Both visits were filled with interviews relating all sorts of harrowing stories. Most every society has injustice, and errors are sadly common in US jurisprudence. However, most Americans don’t expect a visit to a friend to turn into a stint in prison.

In Egypt, for reasons of political repression and personal revenge, people face arbitrary arrest, perpetual detention, fraudulent trials, and horrific imprisonment. No doubt, some of the accounts we heard could be exaggerated or even false, but reports from people in many walks of life and across the political spectrum were consistent and demonstrated that the slightest resistance to state authority risks freedom and even life. Indeed, being in the wrong place at the wrong time can be equivalent to a death sentence.

Moreover, those with whom we met were vulnerable to arrest. Students told us about classmates arrested at demonstrations. Journalists discussed colleagues detained after criticizing the regime. Attorneys reported on lawyers detained while representing defendants. Family members described the arrest of husbands and wives, brothers and sisters, fathers and mothers. No one is exempt from persecution.

Nor is there any effective oversight or appeal to limit official abuse. If you were tortured or suffered from inhumane prison conditions, you can complain only to the public prosecutor. But that government office seems strangely uninterested in following up on allegations against government officials. Accountability obviously is less than perfect in the United States, but here, at least, there are alternative channels of protest: private lawsuits, media coverage, public demonstrations. That’s one of the advantages of pluralistic societies. Authoritarian regimes rarely view themselves as bound by any rules.

While members of my delegation, largely Americans and Europeans, felt relatively secure, we knew other foreigners had been arrested for various offenses. At least in the United States no meeting other than one involving a criminal conspiracy could land a listener in jail.

In fact, on my second trip we found ourselves attacked by a pro-coup television talk show host (government critics long ago were driven off the air) and the head of a “human rights” council (sponsored by the regime) who cheerfully mixed fact and fantasy. No harm was done since I don’t plan on running for office in Egypt, but the regime obviously has tools short of prison for use against foreign critics.

Evidence of extreme force is everywhere. Tanks next to prisons; armored personnel carriers in city squares and on city streets; concrete blast barriers, barbed wire, and armed sentries around sensitive government installations; portable fences piled high near potential protest points; and a ubiquitous mix of uniformed and plain clothes security personnel.

It is unsettling enough to be stopped by a policeman in the United States. After hearing stories of dubious arrests followed by months of detention, no one wants to end up anywhere near an Egyptian cop. After clearing passport control to leave on my second trip, I waited with a friend for a couple of other members of our group to emerge. While we were talking, a border agent came over and asked us for our passports. I assume we were targeted since we were conveniently nearby. He gave our passports back after barely glancing at them. But I felt uneasy the entire time.

Egypt is a fascinating country with hospitable people. Although there was much to frustrate typical Westerners — for instance, we joked about being on “Egypt time” — the chaotic streets were a source of energy. The economic and social challenges facing Egypt would be enormous in the best of cases, but, tragically, the nation suffers under an unashamed military dictatorship. Consequently liberty is limited and frequently at risk.

Despite all of the problems faced by those in the West, even imperfectly free societies offer extraordinary advantages we should never forget and should work to protect. Walking the streets of Cairo, I thought: there but for the grace of God go I. With my US passport I can leave and return to a society that, despite enormous problems, generally respects people’s lives, liberty, and dignity.

Doug Bandow is a senior fellow at the Cato Institute and the author of a number of books on economics and politics. He writes regularly on military non-interventionism.

This article was originally published by The Foundation for Economic Education.
A Republic, Not a Democracy – Article by Ron Paul

A Republic, Not a Democracy – Article by Ron Paul

The New Renaissance Hat
Ron Paul
September 23, 2012
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Early September 2012 marked the conclusion of the grand taxpayer-funded spectacles known as the national party conventions.  It is perhaps very telling that while $18 million in tax dollars was granted to each party for these lavish ordeals, an additional $50 million each was needed for security in anticipation of the inevitable protests at each event.  This amounts to a total of $136 million in taxpayer funds for strictly partisan activities – a drop in the bucket relative to our disastrous fiscal situation, but disgraceful nonetheless.  Parties should fund their own parties, not the taxpayer.

At these conventions, leaders determined, or pretended to determine, who they wished to govern the nation for the next four years amidst inevitable, endless exaltations of democracy.  Yet we are not a democracy.  In fact, the founding fathers found the concept of democracy very dangerous.

Democracy is majority rule at the expense of the minority.  Our system has certain democratic elements, but the founders never mentioned democracy in the Constitution, the Bill of Rights, or the Declaration of Independence.  In fact, our most important protections are decidedly undemocratic.  For example, the First Amendment protects free speech.  It doesn’t – or shouldn’t – matter if that speech is abhorrent to 51% or even 99% of the people.  Speech is not subject to majority approval.  Under our republican form of government, the individual, the smallest of minorities, is protected from the mob.

Sadly, the constitution and its protections are respected less and less as we have quietly allowed our constitutional republic to devolve into a militarist, corporatist social democracy.  Laws are broken, quietly changed and ignored when inconvenient to those in power, while others in positions to check and balance do nothing.  The protections the founders put in place are more and more just an illusion.

This is why increasing importance is placed on the beliefs and views of the president.  The very narrow limitations on government power are clearly laid out in Article, 1 Section 8, of the Constitution.  Nowhere is there any reference to being able to force Americans to buy health insurance or face a tax/penalty, for example.  Yet this power has been claimed by the executive and astonishingly affirmed by Congress and the Supreme Court.  Because we are a constitutional republic, the mere popularity of a policy should not matter.  If it is in clear violation of the limits of government and the people still want it, a Constitutional amendment is the only appropriate way to proceed.  However, rather than going through this arduous process, the Constitution was in effect, ignored and the insurance mandate was allowed anyway.

This demonstrates how there is now a great deal of unhindered flexibility in the Oval Office to impose personal views and preferences on the country, so long as 51% of the people can be convinced to vote a certain way.  The other 49% on the other hand have much to be angry about and protest under this system.

We should not tolerate the fact that we have become a nation ruled by men, their whims and the mood of the day, and not laws.  It cannot be emphasized enough that we are a republic, not a democracy and, as such, we should insist that the framework of the Constitution be respected and boundaries set by law are not crossed by our leaders.  These legal limitations on government assure that other men do not impose their will over the individual, rather, the individual is able to govern himself.   When government is restrained, liberty thrives.

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

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

Eliminating Most Foreclosures: An Innovative and Just Approach to Mortgage Delinquencies

Eliminating Most Foreclosures: An Innovative and Just Approach to Mortgage Delinquencies

The New Renaissance Hat
G. Stolyarov II
March 25, 2012
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The economic and personal consequences of foreclosure are devastating. Foreclosures leave behind not only blighted neighborhoods, but ruined lives. Furthermore, during the past three years, immense abuses of the foreclosure process have come to light – with numerous banks being found to have improperly foreclosed on thousands of homeowners. The banks have either been unable to produce documentation that demonstrated their right to foreclose – or, worse, have foreclosed on individuals who were never even delinquent or did not have mortgages in the first place (see, for instance, here, here, and here). The violations of due process, private-property rights, and the rule of law have been astounding.

At this point, any solution that can reduce the number of foreclosures will be a welcome benefit to individual liberty, the US economy, and millions of Americans. Indeed, the concept of foreclosure – the expropriation of one’s home – resulting from a few late payments has always struck me as draconian. It disregards one fundamental fact: the homeowner has equity in his or home, even if he or she fails to make a few scheduled payments. So, suppose that a homeowner has a $150,000 outstanding mortgage loan on a home whose market value is $200,000. This means that the homeowner’s equity in the home is $50,000 – or one quarter of the home’s value. If the homeowner fails to make a $1000 hypothetical monthly payment on time, why is the bank entitled to appropriate the entire home and thereby deprive the homeowner of the entire $50,000 in equity? Suppose, as is often the case these days, that the foreclosure proceedings drag on for a year. A 5000% annual rate of interest for that one delinquent payment is quite steep indeed!

While delinquencies ought to be penalized, wholesale expropriation of a home is an unnecessary and disproportionate response in most cases. It would not have been possible on a truly free market, where roughly equal negotiating power would exist between lenders and borrowers. In today’s politicized financial environment, however, the large banks receive all of the privileges: bailouts, loan guarantees, access to “free money” from the Federal Reserve, barriers to entry for smaller competitors, the ability to “securitize” personal loans through means of dubious accountability, the ability to flout laws such as those pertaining to mortgage modifications, and a swiftly operating “revolving door” between bankers and politicians. Thus, homeowners are often left to acquiesce to terms that are far harsher than what they could have gotten for themselves in a truly free market.

A more equitable solution, that recognizes that the real value of the homeowner’s equity, is not to foreclose, but rather to reduce the homeowner’s equity for each delinquent payment. If the homeowner fails to make a scheduled payment, then the bank should be able to recoup its resulting losses – by seizing the portion of the homeowner’s equity corresponding to the amount of the delinquency, perhaps also incorporating an interest charge at the prevailing market rate. Only when all of the homeowner’s equity has been exhausted in this way should the bank have the right to foreclose. In today’s housing market, where many homes are “underwater” (i.e., the mortgage balance exceeds the market price, which has declined precipitously since the days of the housing bubble), this solution would still mean that some foreclosures would occur. But the number of foreclosures would be greatly reduced, and the majority of currently planned foreclosures would never occur. Furthermore, the “underwater” homeowners could still be helped by downward principal modifications that recognize the illusory and unsustainable nature of the inflated market prices that existed during the housing bubble and that were fueled by the expansionary monetary policy of the Federal Reserve. Homeowners should not be made to suffer for the Federal Reserve’s blunders.

Under my proposed approach, the mere involuntary loss of one’s job, or a catastrophic illness, would not put one’s place of shelter in immediate jeopardy. Rather, in the time that it takes for the homeowner’s equity to be exhausted, the homeowner would have the opportunity to attempt to regain his or her employment or health. Furthermore, with fewer foreclosures, the unsightly, wasteful, and dangerous effects of neighborhood blight would be greatly scaled back. A homeowner will still largely maintain his or her residence, even if he or she cannot make a regular mortgage payment. But once a home enters foreclosure, it suffers from deterioration and decrepitude at best – and outright vandalism and destruction at worst.

In rolling back the political privileges of the large banks, it is essential to compensate ordinary, law-abiding, innocent homeowners for the damage that these special privileges have wrought. The benefits of years of hard work and consistent mortgage payments should not be nullified overnight by a single delinquency. Over a year ago, in “Wrongful Foreclosures and the Free Market”, I advocated breaking up the bailed-out banks and declaring a temporary moratorium on foreclosures. Rewriting foreclosure law to require the exhaustion of the homeowner’s equity before a foreclosure can be initiated can be another step to wipe out most foreclosures at the stroke of a pen – while restoring an outcome more compatible with individual liberty, true market freedom, and natural justice.