Saturday, April 19, 2008

Best Read of the Day

Jim Henley does some guest-blogging at the Art of the Possible with a discussion on the role of libertarians in American politics.

Money 'graph:

So maybe the moral question isn’t, what use can libertarians be to liberals, but what use can libertarians be to anybody? We are not going to bring about either a minarchist or anarcho-capitalist society anytime soon, where “soon” can be translated as ever. Truth be told, I’m not convinced that a purely minarchist society would be all that great to live in. As for anarcho-capitalism, I think even a lot of an-caps agree that it requires a long-term project of learning how to live that way as society. I think libertarians are, rather, the court jesters of politics. I mean that in a good way. We whisper to Caesar that that he is mortal. We caper about, turning ourselves blue if necessary, reminding everyone that government power is inescapably violent and inescapably self-interested. You’re probably not going to care, but we’re going to make you actively decide not to care. And sometimes, maybe you’ll care after all. As a class, we can be stupendously silly people, believing and saying the most absurd things. But our rulers are silly people too, in different and more malignant ways. And as fools, we have the freedom to say so.

(My emphasis.)

Read the whole thing. And for what it's worth, I suspect Henley is basically right about the role of libertarians. And if we're relegated to playing the role of court jester, I'm fine with's a hell of a lot more fun (and more useful, at that) than playing the role of court sycophant.

A Real Dilemma for Libertarians

(H/T: Doug)

I would have to say that even the most militant libertarian would agree that this is appalling and ought not to be allowed:

In 2007, the ‘artist’ Guillermo Vargas Habacuc, took a dog from the street, tied him to a rope in an art gallery, and starved him to death. For several days, the ‘artist’ and the visitors of the exhibition have watched emotionless the shameful ‘masterpiece’ based on the dog’s agony, until eventually he died.
But this is not all… the prestigious Visual Arts Biennial of Central America decided that the ‘installation’ was actually art, so that Guillermo Vargas Habacuc has been invited to repeat his cruel action for the biennial of 2008.

This is a question that comes up from time to time in libertarian circles, and to which I have yet to see a truly satisfactory answer: are animal rights reconcilable with libertarianism in a way which permits humans to act freely? To be sure, in the above instance, all but a handful of libertarians would likely say that the "art" is inhumane and violative of the animal's natural rights such that it should be banned.

But where do we draw the line? There is, to be sure, some controversy about dog-fighting bans in libertarian circles, although I think even most libertarians are accepting of that. But how many libertarians take animal rights so far as to include bans on meat or, more realistically, just bans on "cruel" slaughter techniques? Not many - myself included.

So: where do property rights begin and animal rights end, or vice versa? It is difficult to come to the middle ground conclusion of most libertarians (myself included) using anything identifiable as "pure" libertarian logic. You can, however, come to either of the two more extreme conclusions using libertarian logic, depending on where you draw the line on beings entitled to rights.


***UPDATE***Reading through the comments in Radley Balko's original post, it seems the "death" of the dog was a hoax. But the fact is that the dog was still horribly starved for a substantial period of time in order for the artist to prove a point.
In any event, you will find the comments at Balko's blog (at least the relevant ones) pretty intellectually stimulating, especially the debate involving the Liberty Papers' (and friend of PE) UCrawford.

The Impossibility of Monopoly

Much is frequently written about how horrible so-called "big box" stores are for the American economy. The argument is essentially that these big box stores, with their loss leaders, "unconscionably" low wages and benefits, and huge economies of scale, drive out small businesses and thus reduce competition in the marketplace, effectively creating a monopoly. In the end, the argument goes, consumer choice is eliminated and we are all effectively "slaves" to the big, bad corporations. This in turn, also means lower wages, fewer jobs, and a devastated middle-class (or lower-class).

Ignore for a moment the actual benefits to the economy that result from the lower prices such stores are able to charge. The reality is that as these stores grow larger and larger, and become more dominant, they become less and less able to respond to their local customers' demands. In essence, as Hayek would have been all too happy to point out, they eventually get so large as to run into the same calculation problem as exists in socialism. As a result, markets open up for smaller business to develop again, and the cycle repeats itself.

There was an article on this a few months back in Reason*, available here.

In any event, this morning I saw an example of this phenomenon while shopping for seat cushions for Vienna (Ayn?Constance?)'s rocking chair at Bed Bath and Beyond. This was the first time I had been in BB&B in about a year. If you've been following the market, you'd know that Bed Bath and Beyond now has what is effectively a monopoly in the national bed and bath furnishings/accessories market (the real estate crash essentially destroyed its one national rival, Linens N' Things). Despite this monopoly, its same-store sales have been falling rapidly.

To be sure, Wall Street thinks things will improve for the company in the next year, despite its extremely conservative estimate for 2008 profitability. But what I saw this morning left me convinced that the company has fallen for the socialist fallacy.

Now that the company has an effective monopoly, there are only two ways for it to grow its profits: it can charge a monopoly price (which has its own long-term problems for the company), or it can try to encroach on the business of another, somewhat closely related market. My experience this morning shows that they chose the latter option.

As a result, I found the BB&B chock full of products I never would have found a year or two ago in this particular store: a huge section of personal hygiene products like toothpaste and shampoo, and a huge section of china and glassware for its bridal registry. And, most bizarrely, a pocket version of Guitar Hero.

So what? You ask. After all, aren't they just diversifying their business? Well, yes....except that in this case, that diversification comes at a heavy cost. In order to create the inventory for the china, glassware, and personal hygiene products, they had to remove space for the types of things they're most known for, including, amongst other things: bedding, kitchen gadgets, and, yes, my seat cushions. So, when my wife and I went to look for seat cushions, the only colors available were neutral or extremely dark. Since we were looking for a seat cushion for a baby girl's room that will be a bright green with pink accents, these options were pretty much worthless to us. So we figured we would try to find a simple girlie-colored pillow in the kids' bedding section. Much to our chagrin, though, they no longer had any individual throw pillows available in that section. So, we turned to the adult throw pillow section; again, we struck out, as the only throw pillows were in either neutral or extremely dark colors.

Simply put: in order to expand their market, they were forced to get rid of a lot of their niche products upon which they had built their company, keeping only the most popular of those niche products. This, of course, leaves a huge hole in the marketplace for smaller businesses to fill. Meanwhile, with the introduction of (especially) the personal hygiene products and (less so) the fine china, Bed Bath & Beyond is taking on pharmacies (and grocery stores), as well as high end department stores, respectively. While Bed, Bath & Beyond might be able to compete successfully with department store in the fine china market, it most certainly will not be able to compete with pharmacies and grocery stores in the personal hygiene market. (Not to mention video game stores in the Guitar Hero market).

This means that Bed Bath & Beyond has opened the door for competition in its core market (ie, bedding, kitchen gadgets, seat cushions, etc.) while at the same time jumping into a market where it is highly unlikely to have much success (ie, personal hygiene and, uh, video games).

At least in the US market, Bed Bath & Beyond had essentially reached its maximum profit; in an attempt to increase or maintain that profit, it is taking an unnecessary risk that most marketing majors could tell you is outright idiotic. Within the next five years, I am predicting either a resurgence in small local (but high end) bedding businesses or the emergence of niche bedding internet businesses.

Had Bed Bath & Beyond chosen the other route for maximizing profits (ie, charging monopoly prices), it would have created a host of other problems for itself. By charging a monopoly price, the market would become open for challenges by lower-priced competitors (Target and Wal-Mart, for instance, not to mention entrepreneurs willing to accept a lower profit margin to fill a much-needed niche in the market).

Anyone who has been involved in running a business, especially one that requires maintaining an inventory, understands that you can't make something out of nothing. You can't grow a business without spending something, whether it be effort or money. Unfortunately, there are a lot of times when spending more effort or money is counterproductive. Often this is because the business owner made a bad decision. But the more a business grows, the number of available growth-enhancing decisions decreases, eventually reaching zero. This is why we should not fear the big-box store.

*Totally off-topic, but this month was the first issue of Reason with Matt Welch at the helm of the print edition. I'll admit that I liked the magazine under Nick Gillespie, but this month's issue was easily the best in the last year or so. As always, Radley Balko's article is fantastic, but the article on the Iraq War funding process was relevant in a way that Reason often fails to be. The article on bottom-up power generation by Brian Doherty was both uniquely informative and filled with the free-wheeling joy that I love so much about most forms of libertarianism.

***UPDATE*** I apparently erred in saying that same-store sales for BB&B are dramatically down. The numbers upon which that statement was based were actually overall sales rather than same-store sales (which are slightly down I might add). This does not affect my overall argument, though, which is simply that BB&B's need to continue growing as a business must inherently create openings for smaller niche competitors. In other words: the idea that big box stores will kill small business and create a whole host of other permanent problems ignores economic realities.

Thursday, April 17, 2008

Another Way the Extended Campaign Hurts the Dems- and Maybe the Country

(Via memeorandum)

Much has been written about how the continuing attacks of the two Democrat candidates are only serving to weaken the eventual winner (Obama...cough....cough) for the general election. As a result, the longer a certain candidate remains in the race, the more she is hurting her party.

There is, however, another sense in which the overly long race will hurt Obama's chances in the general election. That sense is the manner in which the drawn-out race has forced each of the two candidates to focus more and more on economic populism. Prior to Super Tuesday, free trade was at most a minor issue in the campaign. As the campaign drew on longer despite the rapidly decreasing odds of Sen. Clinton coming back, the two candidates were drawn into more and more states where economic populism is the order of the day for local Democrats.

In order to win votes in these areas, Obama and Clinton have both drifted increasingly far away from free trade, to the point that it seems as if Obama must be ignoring his otherwise excellent economic policy advisor Austan Goolsbee. To be sure, some of that has had to do with the need to distance himself from Goolsbee after the Canadian embassy silliness. But we would do well to remember that what caused that silliness in the first place was Obama's increasingly populist rhetoric on trade. While Sen. Clinton has likewise drifted further into economic populism, this has been less problematic since she has long had the ability to talk out of both sides of her mouth.

This continuing drift to the left will hurt Obama in the general election, as it gives McCain all sorts of sound bites to use against Obama to pigeon hole him as a far left radical. For me, at least, Obama's anti-trade rhetoric has already caused me to re-evaluate my tentative support of him. To be sure, I still think he's the least bad of the three from a libertarian point of view, but it is now exceedingly unlikely that I will vote for him in the general election. I suspect many of Obama's Republican defectors have had similar thoughts in the last few weeks and months. With McCain's well-established reputation as a moderate, Obama's best chance at winning was to fight McCain for the middle, hold on to the left, and maybe steal a few votes from the right as well. Now, however, he probably won't be able to steal many votes from the right, and his appeal to the middle will have to largely come out of his opposition to the war. His legendary unity rhetoric has lost a lot of its appeal in Obama's populism, which is an ideology that is rarely associated with unity.

Worse, from my perspective, is that the continuing push to the left will make it increasingly difficult for a President Obama to return to more of a centrist position on trade.

All of which is to say that I think the never-ending campaign that is the Democrat nomination process is hurting not only Obama's chances at winning, but is also hurting the country by limiting the policy options a President Obama could pursue (not only that, but from a libertarian perspective, the remaining policy options would be a huge step backwards).

This is not to say that I think Obama will lose the general election, necessarily - the fundamentals right now are just too heavily in favor of the Democrats. But it is to say that the likelihood of him beating McCain is dropping by the day.

Happiness and "Economic Self-Interest"

I've been following the ongoing discussion between publius at Obsidian Wings and Megan McArdle (and their respective commenters) with some interest. The question at issue is why working class whites not only vote Republican in heavy numbers but also passionately support Republican economic policies even though those economic policies would seem to be against their self-interest. As Megan points out, this question also runs in the other direction: why do so many wealthy Democrats so passionately support Democrat economic policies.

For publius, the answer is that the resentment and anger stirred up in the culture wars boils over into economic policies such that the response becomes almost reflexive. In other words: if liberals like it, it must be bad and evil. (I note that publius does not believe this works both ways; he believes, perhaps correctly, that wealthy Democrats would have too little to gain on the margins to have an incentive to support Republican economic policies). By contrast, Megan believes that the apparently irrational support of Republican economic policies may not be irrational at all, but instead arises from the importance of property rights in small communities.

To a large extent, I think publius is on the right track. His explanation fits well with the concept of "pu-pu platter partisanship" that I've argued has come to characterize so much of our politics. Under this concept, American politics have gotten so polarized as to effectively reduce the number of factions capable of winning any given debate from nearly infinite to only two: Democrats and Republicans. True independents (who remain divided into a nearly infinite number of factions) are too few in number and too divided to have any real say in final outcomes. Moreover, research has shown that partisans actually derive pleasure from rationalizing inconsistencies in their belief systems; as long as working class Republican partisans maintain social issues as their top priority, psychology suggests that they will actually derive pleasure from reconciling their belief systems with apparently inconsistent Republican economic policy.

That said, there are two important things both publius and Megan seem to have missed. Although a comment that Megan picked up on starts to get at the more important of them. The first problem is that publius begins with the assumption that Democrat economic policy is necessarily better for working class whites than Republican economic policy; this assumption may or may not be true, but it's not an answer that should just be assumed.

However, even accepting for sake of argument that Democrat economic policy in fact creates more financial wealth for middle class whites, publius misses something critically important. He (and it would seem, Megan as well) assumes that economic self-interest is synonymous with financial wealth. But if we've learned anything from economics, and especially from Tyler Cowen and books like Freakanomics, it's that money is not everything to everybody - or even most people. People often rationally value things far above or far below their actual monetary value.

For instance, if you were offered $100 dollars for piece of jewelry worth $50 that happens to be a family heirloom, would it be irrational to refuse the offer? Of course not - there is a sentimental or moral value to the heirloom that far exceeds the $50 windfall you would otherwise receive for the heirloom. But if you looked purely at the financial aspect of the equation, it would appear to be an extremely irrational decision to refuse to sell the heirloom.

Turning back to politics, economic policy does not occur in a vacuum. Whatever else it is, it cannot be separated from the individual voter's personal values. The individual voter may, for instance, be a hardcore libertarian type who would find any government assistance to him to be morally repugnant. The extra few hundred dollars a year in income will be quite insufficient to overcome those moral values and suddenly support the Democrat economic policy.

Similarly, it is important to note that there has always been a sense of rugged individualism in much of the United States, even if that has not necessarily translated into support for libertarianism. That sense of individualism creates an attitude in a good number of people that unwanted help from the government will in fact inhibit their sense of self-worth and accomplishment.

It's important to realize that for many Americans (myself included to a large extent- or so I like to think), their economic self-interest and financial self-interest align only insofar as they are financially secure enough to have a roof over their head and food in their belly. After that, their economic self-interest places far more value on things like family, religion, leisure (e.g., hunting) or whatever else makes them truly happy and satisfied. For many people, knowing that everything you have is something you have actually achieved on your own is priceless in and of itself*; suddenly having the government artificially bump up your wage or give you an extra tax credit will actually cheapen that pride far more than it could ever repay.

In the end, perhaps the most frequently made false assumption we see in politics is that people value money over all else.

*To all the libertarian-haters out there, this sentence comes pretty close to defining what Ayn Rand defined as "selfishness" and why she thought selfishness was thus a virtue.

Wednesday, April 16, 2008

Glad I Missed That One...

I've been pointedly trying to stay away from the horse race the last few weeks, and except for a particularly pertinent story this afternoon, have largely succeeded in doing so. But it's clear that the Dem primary has become nothing but a descent into pointless minutiae that lack anything resembling substance.

Given that, I figured tonight's debate would just be more of the same and thus I was better off watching the American Idol results show (which I hate watching, by the way). From the initial reaction in the blogosphere, it seems my decision is vindicated. Except for Taylor Marsh, who long ago descended into self-parody. I'm guessing she wrote the positive comment Sully mentions here.


Jay McDonough has a follow-up post to the discussion yesterday at his site, Newshoggers, and here about McCain's economic plan.

Money quote:

"Senator McCain is, clearly, trying to "out-Bush" President Bush. Incurring additional debt at a time when our debt interest payment is the sixth largest expenditure of the federal government is reckless and irresponsible."

Of course, he could solve this by proposing to end the Iraq War....but that's just crazy talk.

Political Research Survey

I've been asked to post a link to this survey pertaining to the 2008 primaries. The survey is for a study being conducted by NYU.

I encourage all my readers to participate if they have about 10-20 minutes.
In order to not prejudice the survey results, I have closed comments to this post.


Have you ever gotten the feeling that the real divide in America isn't between left, right, and libertarian, but is instead between those who have a degree of humility about their opinions and those who prefer to reside in the fever swamps? In other words: between those who treat their political opponents like mature and responsible adults, and those who infantilize and demonize their political opponents?

To me, this is the same distinction as I discussed a few weeks ago between those who know they don't understand other people, and those who think they understand other people.

Regardless, I always find debate with the former type of person to be physically invigorating, even if I wind up having to concede defeat. Debate with the latter, however, is physically draining from start to finish, and in no case does either side actually "win." (Although the resident of the fever swamp usually will declare victory despite having demonstrated nothing beyond an ability to attack a caricature of the other person). Just a thought.

Then again, this study I found discussed at Dr. X's Free Associations would seem to answer my question in the affirmative. At a minimum it would explain why the fever swamp residents so often declare victory in their debates.


I'll be starting a new job tomorrow, which will likely result in me posting less often. I will try to continue posting at least once a day, though.

More Dishonest Hillary

I really don't want to return to the horribly overblown minutiae of the Democratic primary campaign. But since today's publicized gaffe hits particularly close to home, I figure it's worth a quick comment.

For those who are unaware, Hillary Clinton has been running ads attacking Obama for his allegedly elitist remarks about small-town Pennsylvanians. One ad offers several testimonials from Pennsylvanians purportedly offended by the remarks (although the controversy appears to have had little effect).

Today the Chicago Tribune reports that one of the "Pennsylvanians" in the ad is actually registered to vote here in New Jersey, where he has lived just about his entire life (though he was born in Allentown, PA). The man purportedly moved to Bethlehem, PA sometime since February. Prior to that, the man had lived his entire life in Somerville, NJ, which is smack in the middle of New Jersey.

Let's just say that I have a little more than a passing familiarity with Somerville. For starters, it is in fact a small, working class town. If that was all you knew about the place, you would think it would be exactly the type of place that would have been offended by Obama's remarks.

The trouble is that's where the similarities end. Somerville is far from the type of place where voters' biggest issues are "God, guns, and gays." It is a town that is probably almost 50% African-American and Latino, maybe more. The immigration issue is not something that will go very far with most of the town. Although it is a working-class town, it also sits smack in the middle of one of the wealthiest counties in the country. Moreover, it has been undergoing something of an economic revival for about the last 6 or 7 years after a decade or two of decline. The downtown area is now filled with excellent, moderately priced restaurants where 10 years ago there were vacant or run-down storefronts.

The point is this: while Somerville might be a small, working-class town, it is hardly the type of place where people would have been offended by Obama's remarks. That the Clinton campaign would use someone from such a place - which isn't even in Pennsylvania - in one of her ads is just more proof that this is a campaign built almost entirely on lies and deceit.

(More at memeorandum)

Bush Denounces, Redefines Freedom

File this one under War Is Peace.

In Bush's welcoming remarks to Pope Benedict today, he said the following:

"We need your message to reject this dictatorship of relativism and embrace a culture of justice and truth," Bush said in brief remarks welcoming Benedict to
the White House. "In a world where some see freedom as simply the right to do as they wish, we need your message that true liberty requires us to live our freedom not just for ourselves, but in a spirit of mutual support."

This concept that freedom is limited by something other than a respect for others' freedoms is one of the most evil examples of Orwellian redefinitions that exists today. To be sure, Bush is hardly the first to suggest that "freedom" is something less than an absolute. The controversy over the Mohammed cartoons showed us those who would define "free speech" as being limited to inoffensive speech. Rick Santorum has talked of how he defines liberty as including an obligation to the "common good." It is this definition to which Bush today pledged his allegience. Of course, any definition that centers on striving for the "common good" begs the question of who decides the "common good."

But the idea that liberty "requires" us to act in a certain way is nothing short of a recipe for totalitarianism and authoritarianism. Far too many thinkers, including both Orwell and Hayek, have warned that authoritarianism will come under a false concept of freedom. Now that Bush has clearly expressed his redefinition of freedom and liberty, it is quite clear why his administration has been responsible for so much evil.

We can never forget that freedom does, in fact, mean the ability to do as you wish (provided you allow others to do as they wish). Any other definition makes the word "freedom" utterly devoid of meaning.


Ahh, the Tyranny of the Majority

Coyote Blog has a brief discussion about the fact that 60% of people think the amount of taxes they pay is "fair."
At first blush, this would seem to be a pretty strong argument that Americans don't think they are overtaxed.
Except that Coyote Blog points out another little thing: 60% of Americans also receive more in government benefits than they pay in taxes. In other words: 60% of Americans believe that it is fair to take from the remaining 40%. This is the problem when you implement "majority rules" governance over taxation. It's awfully easy to advocate for more government programs when you don't actually have to pay into those government programs.

Tuesday, April 15, 2008

McCain and Budget Deficits

I'm going to do something interesting in this post which will piss off some of my fellow libertarians. So please hear me out.

The always-outstanding Cernig at the always-phenomenal Newshoggers site has a post that attack John McCain's economic proposal, which amounts to a plan to implement additional tax cuts and cut government spending. However, Cernig points out that McCain's spending cuts would only reduce pork barrel spending along with Medicaid and Social Security spending.

Like Cernig, I have no idea how he could cut Medicaid and Social Security, which are both non-discretionary spending. Meanwhile, despite all the (justifiable) outrage over earmarks, they make up only a minuscule fraction of the federal budget. Of course, if McCain was really serious about cutting spending, he would dramatically reduce spending on the oversold War on Terror (especially the Iraq War). As Cernig points out, we spent more on supplemental spending alone for the War on Terror last year - to little demonstrable effect - than we did on education (which is amazing in the NCLB era). The size of our defense spending is made even clearer by this graph at TaxProf Blog.

But I noticed something else in both Cernig's post and TaxProf Blog's post: one of the government's largest annual expenses is interest on the national debt. Depending on whose statistics you use, interest on the national debt is either 9% or 13.4% of federal spending. That means that about 10% of the federal budget is spent on literally nothing before another penny is spent on any program (no matter how ineffectual). Sigh. I remember the days when Republicans were deficit hawks and it was the Democrats who said that "deficits don't matter."

The thing is: that 10% of the federal budget amounts to an annual tax of its own on the American people - no one in this country gets anything out of those interest payments. Worse, of course, is the fact that it contributes to inflation, making it effectively a double tax.

My point is this: unless you believe we are currently on the left side of the Laffer Curve (which even I think is extremely doubtful), cutting taxes without unconscionable cuts in nondiscretionary spending will likely only increase our deficit. This is particularly true as we head into a clear recession.

I would argue that the best thing our next President could do to help us have lower taxes in the future is to pay down the national debt. I do not think that warrants a tax increase, by the way. It just means that we need to cut back significantly on defense spending and keep taxes at current levels. But currently, our national debt is more than our annual budget. That is not a good thing.

***UPDATE***Jay McDonough (who was the original source for a lot of these numbers) points out that the national debt is actually triple the annual budget. That is staggering on any number of levels. What makes it worse is its juxtaposition against this article from the current issue of Reason, which shows how the Bush Administration has managed to massively increase defense spending through the shady supplemental appropriations process. This process guarantees a lack of fiscal discipline while at the same time permitting the Bushies to semi-accurately make the claim that they are reducing spending (even though they're not).

Libertarianism in One Sentence: A Collection

In light of the continuing lack of understanding of libertarianism as a philosophy, I decided to make this post. I've said before that I believe libertarianism can be boiled down to one essential sentence which can be expressed in an unbelievable amount of ways. To be sure, there will be exceptions to any such statement where a given libertarian may reach a different result. But any such exceptions amount to acknowledged deviations from "pure" libertarianism. Importantly, libertarianism to me works as well or better as a personal philosophy about life as it does as a philosophy about government. Generally speaking, I think simply living life with relatively libertarian values in your day to day affairs is a valuable way of being a happy, calm, and decent human being.

Anyhow, below is my list, which is comprised of sentences I've come up with as well as many sentences from truly noteworthy individuals. I should also add that some of these are normative statements about the way one should act, some are positive statements about human nature, and some are a mixture of both. Feel free to add your own in the comments section or to let me know of any with which you disagree. There are sure to be plenty I leave out. I'm sure this will come off as pretentious to some people. If that is the case, I apologize, and feel free to skip this post.

"I shall not live for the sake of any (hu)man, nor shall I ask any (hu)man to live for my sake." -Ayn Rand (the italicized part is forgotten far too often by people seeking to pigeonhole's also forgotten by libertarians who reside in the fever swamps).

"Do unto others as you would have others do unto you." - The Golden Rule.

Everything is permissible except for the use of force or fraud (or coercion). - General libertarian maxim

"Whoso would be a man must be a nonconformist." - Ralph Waldo Emerson (this quote having the most meaning in my life for a long time)

"No human has greater natural rights than any other human, nor should any human have greater legal rights than any other human." -Me

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." - Thomas Jefferson, Declaration of Independence

All relationships ought to be consensual. - General libertarian maxim.

"To believe that humans are perfectable is to believe there is a limit to what humans can achieve." -Me (I like this one because it has a lot of applicability in day-to-day life. It amounts to saying that intolerance limits individual and human growth).

"Utopia is neither achievable nor desirable." -Me (this is similar to the above quote but is my way of saying that Orwell (Utopia is not achievable) and Huxley (Utopia is not desirable) were right).

"Give me liberty or give me death." -Patrick Henry

Nothing is ever right just because someone else says so. - My way of summing up Socrates' Euthyphro argument.

The (Alleged) Costs of Illegal Immigration

A week or so ago, I tried to rebuke the notion that immigrants, and particularly illegal immigrants, take jobs away from Americans.

Another common argument against illegal immigration in particular is that illegal immigrants are a burden on taxpayers. According to this argument, illegal immigrants receive far more benefits from our government coffers than they put in since we don't collect taxes from them.

I've always had a problem with this argument on a couple of grounds:
1. It's a red herring. If the problem is that illegal immigrants don't pay taxes, the solution is to make them legal. Not only that, but we also need to dramatically increase the amount of legal immigration we permit to make sure that immigrants pay taxes.
2. I'm not sure how many government services illegal immigrants actually use. To be sure, they benefit from use of the roads, but that benefit is de minimis in the sense that few illegals own cars and the ones who do typically drive around with like 8 people in the car. Some illegals also certainly use our hospitals free of charge, but again I doubt the cost of this is particularly overwhelming. On the other hand, it is difficult to see how an illegal immigrant would qualify for welfare or Medicaid, for instance.
3. Illegal immigrants create wealth in this country by filling jobs that would not otherwise be filled. Moreover, they spend some of these earned wages here in the US on things like rent, food, and clothes. Rent is, of course, indirectly taxed through property taxes, which means that illegals are in fact contributing to public education. And this says nothing about sales taxes paid by illegals on other goods. Finally and most importantly, taxes on wages in most jobs in this country are withheld from paychecks. It doesn't matter if the employee is legal or illegal, the taxes are still withheld.

Today I came across an article that confirms that illegal immigrants are a net benefit to the government coffers. It is clear that because of paycheck withholding, these illegal immigrants are paying billions in income, Social Security, and Medicare taxes. According to the article, the Social Security taxes alone may amount to as much as $9 billion a year. These Social Security taxes will never be collected by the immigrants when they reach retirement age. Which means that they are helping to prop up our otherwise troubled Social Security system.

The response we hear to this confirmation is a related argument: that illegal immigrants come to the US to take advantage of our welfare system. As a result, they are an even bigger burden on our social services than they pay taxes. This argument is nothing short of preposterous: our welfare system is nothing compared to that of other countries. Moreover, an illegal immigrant would be idiotic to risk exposing themself by applying for welfare. The fact is that illegal immigrants come to the US because they can make a higher wage and can send some of their earnings back home. I've actually known people who were CPAs in their home country who were working for a temp agency here in the US doing warehouse work on a visa because they could make so much more money doing that.

Although the blanket assertion is often made that illegal immigrants take huge sums from our social services, I have never seen any evidence to back this claim up. Again, it is extremely difficult to imagine an illegal immigrant being able to take advantage of our welfare system. Attempting to do so would have a tremendous risk of the immigrant's illegal status being discovered. If that were to happen, deportation would possibly follow soon thereafter. Besides, the goal of most illegal immigrants is to make enough money that they can save some to send back to their homes. If they simply collect welfare benefits, they will be unable to send any money home at all since things like food stamps have no value in foreign countries (although they do admittedly have a reduced resale value here in the US on the black market). With all the benefits an illegal could potentially receive from the government, they are still going to be better off working a regular job 12 hours a day at minimum wage (or even a little less if the employer is particularly insidious).

There's also the fact that in order to get welfare benefits, an illegal will need a fake social security number. But if they can get a fake social security number (as many, perhaps most, can), then they will be able to guarantee they make a half-decent wage that far surpasses any social services benefits.

As I said in my post a few weeks ago, immigrants go where the jobs are. Specifically, they go where there are jobs that few Americans are willing to do. These are jobs for which demand is higher than supply and therefore the wages are often higher than minimum wage. In such an instance, government welfare is a far less lucrative option than just working your tail off.

In the end, the solution to our immigration problems is very simple: get the existing illegal immigrants out of the shadows and dramatically increase the number of unskilled immigrants we allow in legally.

H/T: Sully

PSA: Free the Jefferson 1 Video Now Online

I wrote the other day about the rather disturbing arrest at the Jefferson Memorial for silly dancing. The video is now online, and it's pretty clear that there was no basis for the arrest other than a fear of nonconformity. It's also pretty clear from the video (as well as the dedicated website, Free the Jefferson 1) that Julian Sanchez's admonition that hijinks will ensue is pretty much dead-on accurate.

Megan McArdle also points out that there is officially a plan to recreate the 10-minute Jefferson dance-a-thon beginning this Saturday night as a form of protest. If it weren't for the fact that I could become a father any day now, I'd gladly make the trip down to DC to join in. If you're in that vicinity this weekend, I highly recommend paying your homage to liberty.

Food Riots and Why Krugman Is Right

The still-increasing price of food throughout the world is continuing to cause massive problems, with tragic consequences. Food riots are spreading in much of the Third World, and mass starvation looms on the near horizon. This is a tragedy of potentially unspeakable proportions.

In response to the latest news, there is a tendency on the Left to blame free market economics for the crisis. This is a terrible mistake that is not only unproductive but will also only make the problems worse if it is followed by anti-market policy action. The laws of supply and demand are not optional - you can either accept them and try to learn why demand has outstripped supply so horribly or you can ignore them at your own peril. But blaming supply and demand for the food crisis is like blaming gravity for the collapse of a poorly maintained bridge.

Indeed, Paul Krugman (no conservative or libertarian) last week wrote an outstanding column that described the causes of this crisis and what to do about them. Though he is far from a believer in the unrestricted free market, he placed the bulk of the food crisis squarely at the feet of anti-trade economic policies. Specifically, he blamed the subsidization of biofuels, and especially "demon ethanol."

On this, his instincts are most certainly correct. Indeed, the sad fact is that we had forewarning of this crisis. Back in September, I wrote about the effects that biofuel subsidies were having on world food prices. At the time, I pointed out that within 20 years, we could face an additional 600 million starving people in the world due solely to biofuel subsidies. I also pointed out that because of our subsidization of maize ethanol, world maize prices had more than doubled in a little more than a year. Maize is considered the world's most important staple crop. And although I wrote about this in September, I was several months behind the curve, as the articles I relied upon mostly came out in the first half of 2007. And this was all before this winter's massive energy bill with its billions upon billions in new biofuel subsidies.

To the extent that biofuel subsidies are to blame for this crisis - and they are by far the biggest factor - you cannot blame the free market. This is because subsidies represent the worst possible government interference with the market. So blaming the market and thus implementing more anti-market policies (like price controls, for instance) will only make problems worse. Like it or not, you cannot escape the laws of supply and demand. The best thing that could be done, as Krugman correctly points out, is to eliminate - immediately - all subsidies for biofuels, which do virtually nothing to help the environment anyhow.

Of course, there are other factors involved in the ongoing food crisis. Certainly high oil prices play a major role; however, the war in Iraq has had only a marginal effect in this regard since Iraq was unable to export most of its oil before our invasion. To be sure, a stable Iraq would be able to reduce oil prices somewhat, but this effect would be marginal because the biggest factor in the high oil prices has been the massive increase in demand for oil, primarily fueled by China. And I say this despite my firm opposition to the Iraq war.

It is also possible that global warming has played a factor by causing a massive drought in Australia. However, it's worth pointing out that world temperatures have not risen for 10 years. So it's highly questionable whether the current crisis can be blamed on global warming (this is not to say that global warming is fictional, just that you can't blame the current crisis on it).

As Krugman says, there is also the fact that many countries have been holding less food in reserve for quite some time. While this is not a problem about which we can do anything in the short term, it is a problem that results from lack of foresight in planned economies.

One other factor that Krugman does not mention is the refusal of many countries to accept genetically modified foods despite a lack of any evidence to suggest such foods are dangerous. This myth has largely been propagated by EU countries seeking to protect their own agricultural markets. Removing these barriers would do much to reduce food prices and increase supply, particularly since it would allow more farmers to grow genetically modified crops, which have a much higher yield.

In the end, most of the current crisis can be blamed squarely on the protectionism and government interference that characterizes the world agriculture market in a way unmatched in almost any other industry. There is nothing that receives more subsidies or that is subject to more tariffs worldwide than agriculture. As a result, the world food market is increasingly at the mercy of government planners looking to score cheap political points with native farmers. The solution is not more interference with the market - it is to get rid of the massive price supports on non-staple crops like coffee, sugar, (in France, for instance) tobacco, and most importantly biofuels. It is also to eliminate tariffs on these products and especially on staple crops. Tariffs increase domestic prices while at the same time discouraging foreign farmers from maximizing their yields.

But I beg Progressives- if you want to solve this crisis, please do not try to blame the free market and solve it by planning. Doing so will result only in starvation as has not existed before on this planet. Instead, fight to eliminate subsidies and tariffs. And, while you're at it, donate to the World Food Programme or to some other charity that provides food to Third World countries.

More at memeorandum.

***UPDATE*** The EU is now receiving heat for its biofuels subsidies, which a UN representative is calling "a crime against humanity." I'm not usually one to agree with the UN, but it is difficult to conceive of an action that is more a crime against humanity than biofuel subsidies. Except, perhaps, for other agricultural subsidies that prevent foreign farmers from being able to emerge above subsistence farming. For which that same UN representative also took the EU to task.

Have I mentioned that I'm really getting sick of people blaming free markets for problems that occur in markets with massive government interference? Because it is really getting on my nerves.

Monday, April 14, 2008

This Is What Makes Me Laugh

A comment I just received to my post extolling the libertarian virtues of Switzerland:

I would love to see an entire country where every one of you libertarian freeloaders can live out your selfish greedy existence. It would be fun to watch a divided population of individuals bow to the corporate largess you so admire. The sad reality: It would be a short live utopia. You'll either die from the unregulated food that you consume, or contaminated ground water that you'll drink down stream from a coal fired plant.

I absolutely love crap like this, which shows a complete lack of willingness to engage in rational argumentation. Of course, for starters it shows exactly zero understanding of libertarian philosophy (not surprising), reducing the philosophy of thinkers like Ralph Waldo Emerson, FA Hayek, Ludwig von Mises, Ayn Rand, Milton Friedman, and Thomas Jefferson (amongst many, many others) to "selfish greed[]" based on a "divided population of individuals" who admire "corporate largess" and like to "freeload."

Of course, except for (arguably) Rand*, libertarianism quite bluntly rejects "selfish greed" as a moral virtue. Instead, libertarianism argues only that most people act in what they believe to be in their rational self-interest. (I have further argued that when people act in what they believe to be the rational self-interest of others, they wind up harming both themselves and the other person). On the contrary: libertarianism is centered entirely on the premise of "do no harm" to others. We just think that the government should be held to the same standard.

Then there is the claim that libertarians are "freeloaders." This is perhaps the most ignorant statement one can make, as libertarians alone believe that no person is entitled to the work of another person. Indeed, that premise is one of libertarianism's most basic tenets. Libertarians despise corporate welfare every bit as much, more even, than we despise regular welfare.

Libertarians likewise do not necessarily admire corporate largesse. To be sure, we admire anyone who can produce a high quality product for an efficient price. However, this does not mean that we all admire all large corporations. For starters, many large corporations have become so through their willingness to suckle at the teat of government largesse. Those corporations we do not admire. We also do not admire when corporations get bailed out of tough situations by legal changes and backroom lobbying. We particularly despise corporate fraud (when it really is fraud, at least), as fraud is a form of coercion and coercion is the one activity that is most despised by libertarianism. Finally, we do not admire corporations who provide a product or service that we do not like; when this happens, though, we do not go crying to the government to fix our problems. Instead, we simply stop using that corporation's products and services and find a better alternative.

As for our desire for a "divided population of individuals," that is something that no libertarians view as desirable. Instead, we simply believe that all relationships should be consensual. This has the effect of minimizing conflict and maximizing cooperation. To be sure, there will be those tiny number of people who prefer no contact with the outside world. Libertarians have no beef with them - they are doing no one any harm and are living their lives as they see fit. But their lifestyle is not exactly the preferred lifestyle of most libertarians.

As for the evil effects of unregulated economies causing massive pollution and poisonous toxins: well, that's pretty freaking silly. Last I checked, the most libertarianish countries in the world all enjoyed extremely high standards of living, while the countries with the most regulated economies in the world like, I don't know, Zimbabwe, had as low a standard of living as you can imagine. Put another way: those countries that have remained truest to Enlightenment ideals are the countries that have the highest standards of living, while those countries that have most abandoned the enlightenment enjoy the lowest standards of living, or at least rapidly deteriorating standards of living. After all, it doesn't make much sense for a business to allow so much poison in its products that its customers can't live, since that would mean they wouldn't have any more customers (and not just because they all died off - people won't buy a product they know will kill them).

Meanwhile, if you look at the world's most polluted cities, you'll notice a common theme: they're all in highly regulated or recently highly regulated locations (by high regulations, I mean outright Communism or something close to it).

But hey, if you really think air travel was safer in the early 70s than it was just before Congressman Oberstar's ego-trip last week, well then I have a beautiful bridge to sell you in Venezuela.

*I read Rand in a somewhat different fashion from most, in that I believe her definition of "selfish" is very, very different from what we typically understand as "selfish." Of course that might change once I read "The Virtue of Selfishness" in the next few days.

Iraq: A Madisonian Analysis and Proposal

(Via memeorandum)

Ed Morrissey has a typically thoughtful post making the argument for staying in Iraq as a a duty we owe to the people of Iraq and to our allies in the region. As usual, Morissey avoids the demagoguery that all-too-often infects debate over the war - on both sides. In his argument, Morrissey points to anecdotal evidence that the Iraqi people want us to stay and that the biggest hurdle to obtaining their full-fledged support is a fear that we will abandon them as we did in 1991.

He further argues that our presence in Iraq allows us to fight al-Qaeda in open battle against our military strength rather than in terrorist attacks in the US against civilians. Finally, he suggests that if we pull back and Iraq becomes a terrorist haven, the Iraqi people will not welcome us back a third time. He finishes his post with an assertion that the terrorists are on the run and that Iraq is on the verge of being a successful democracy.

Not surprisingly, I largely disagree with Morrissey's arguments. However, it is most certainly essential that we consider the sentiment of the Iraqi people in deciding what to do come January 2009.

One problem I have with Morrissey's argument is that it is based on the anecdotal evidence of a handful of soldiers who have served in Iraq (Morrissey does not specify the time period for their service, so I will assume they only recently returned). There a few problems with this reliance: first, it is anecdotal, from one source. While I do not doubt that his source is truthful, it is difficult to extrapolate from one source to the entire population of Iraq. This is particularly the case when you consider that Iraq is a country that is essentially comprised of portions of three nations (an important fact that I will return to), within which there are dramatic differences in security and outlook based on geography. I've also seen polls and other anecdotal evidence which would seem to contradict Morrissey on this. The reality, as usual, is likely to lie somewhere in between. At a minimum, I suspect that the Kurds and most Sunnis (at this point) want us to stay. I also suspect that a not-insubstantial number of Shiites want us to remain as well; however, Sadr's continued popularity suggests that a majority or at least a plurality of Shiites want us out.

But for the sake of argument, let's assume that the Iraqi people want us to stay. If that is the case, I think we are still left in an extremely difficult position, and the issue of what to do next remains complicated.

Although it is intuitively true that we are better off fighting Al Qaeda with our military than having to worry about terrorist attacks at home, this is only true to the extent that we are actually able to defeat Al Qaeda. The problem we have is that our presence in Iraq is extremely inflammatory in the rest of the Muslim world and is almost inarguably Al Qaeda's best recruiting tool. As a result, to a large extent we are just playing Whack-a-Mole in Iraq with respect to Al Qaeda and Islamic terrorism more generally. To make matters more difficult, though, our continued presence in Iraq also inflames passions amongst people who are not terrorists; as a result, our ability to obtain the cooperation of local populations in the rest of the Muslim world is significantly reduced.

But mostly, we face a much bigger problem than our generals can handle with respect to Iraq. The fact is that the solution in Iraq is not just military. Gen. Petraeus is as fine a man and as competent a general as exists on this planet, and SecDef Gates is likewise an all-too-rare honorable public servant. The problem that we have, however, is that the military is really only good at two things, as a famous general once said (MacArthur?): killing people and blowing stuff up. This is why Republicans in the late 90s were (rightly) so up in arms about Clinton's nation-building policies.

Gen. Petraeus is particularly good at getting the military to do its intended job. But that only means that our troops can improve the security situation in Iraq (which they have, to a large extent, done since Petraeus took command). However, he cannot force a political solution to Iraq's remaining problems.

Worse, our insistence on certain "benchmarks" (which largely have not been met) will at best result in an artificial solution to Iraq's political problems. Meeting such benchmarks only creates top-down agreement. It does not, however, create trust between neighbors or between the constituent groups of each of the three Iraqi "nations."

One of our many mistakes in going into Iraq in the first place was our failure to realize that Iraq the country arose purely as a result of arbitrary line drawing 100 years ago by the British Empire. These three groups were never given the opportunity to create inter-group trust prior to being forced into the same country. This meant that the only way to keep order between them was through either an extreme form of authoritarianism (ie, Saddam) that ensured rapid punishment for inter-group strife or through an extremely decentralized government similar to the American Constitution (as it was originally intended, rather than as it has become interpreted). By decentralizing - essentially allowing near-absolute autonomy for each region - the three nations of Iraq would have been able to build trust between themselves over time.

But Iraq wound up going the extreme authoritarian route. As a result, no trust was built up between the three nations and - worse - there was no civil society to speak of within Iraq to allow separate, non-tribal factions to form. Our failure to recognize the lack of diverse factions in Iraq was one of our biggest mistakes in the leadup to invasion. (Historically, the existence of a robust civil society has been a prerequisite for the establishment of a successful democracy).

Since the invasion, there has been little opportunity for inter-group bonds to form, and thus Iraq remains a land of three primary factions. As Madison recognized, a lack of diversity of factions is fatal to democracy. So long as tribal loyalty remains paramount to most Iraqis, it will be impossible to form anything resembling an Iraqi "nation," and strife will continue ad infinitum. This is perhaps the most significant reason why Africa remains a land of so much civil war and violence- few African countries are composed entirely of one nation and civil society has had little opportunity to flourish between different nations.

The need for diversity of factions implies that inter-group harmony can only be created from the bottom-up. Simply making peace between the leaders of each faction is unlikely to have much long-term effect unless each leader rules his group with an iron fist. Unfortunately, there is also little that the American military can do to create this diversity of factions that cuts across tribal lines. To the extent the American military can do anything, it is already doing so. Indeed, the improved security situation has allowed inter-tribal neighborhood patrols to form. But this is not nearly enough, as only a relatively small portion of Iraqi society is involved.

What this all means is that our continued military presence in Iraq - as currently formulated - is unlikely to result in anything resembling a peaceful Iraq, at least not without the rise of another dictator (which we obviously do not want). At worst, we are simply delaying intertribal genocide and full-scale civil war. At best, our presence will have to continue for decades, with the security situation never improving much beyond its current status, as the different tribes (especially the Sunnis and Shi'a) fight violently for control of the reins of power.

If we withdraw now, the likelihood is that Iraq will descend into something resembling full-scale civil war. However, I do not believe that al Qaeda will play a particularly important role in such a war, as there will be little motivation for foreign Muslims to enter the fray on one side or the other. To be sure, Jordanian Sunnis will not exactly be in love with Iraqi Shi'a, but neither will Jordanian Sunnis have the motivation of a jihad to get them into the fray. In other words, while withdrawal would undoubtedly have horrible short-term effects, it would not result in a caliphate for Osama bin Laden. As such, I do not buy the argument that withdrawal amounts to surrender - we would not be "surrendering" to anyone; at best al Qaeda would get an extremely short-lived PR victory, but would still lose much of its future ability to recruit and take advantage of local populations.

In this respect, and especially factoring the costs of the war to the US in blood and treasure, withdrawal is likely more palatable than the current course of operations. In addition, we would be able to move more troops into the Afghanistan front, where they could almost certainly do more good in actually fighting terrorism on the battlefield.

There is, however, one other option that I think would be more palatable still, although retaining some severe drawbacks. That option is the outright partition of Iraq, with a rewritten Constitution to go along. In this option, we could prevent outright civil war from occuring, primarily by enforcing territorial borders. Within each territory the local government would have almost complete autonomy, including with respect to security matters. In Kurdistan, of course, this setup would require virtually no changes; in the rest of Iraq, substantial changes. Free trade between territories would have to be required in the rewritten constitution, as would free migration between territories (provided the migrants go through checkpoints along the way, of course). Over time, this could help to build trust between the tribes, and more importantly would establish intertribal interests. As these new interests eventually became predominant over tribal interests, we would be able to gradually reduce our presence in Iraq. Eventually, one would hope, the need for inter-territory checkpoints would be eliminated.

Of course, as I said, there are drawbacks to this approach. For starters, there would initially be strife over the sharing of oil revenues, and there would also likely be mass migrations between territories (although much of this migration has already occured). In addition, we would not be able to supplement our forces in Afghanistan. Most importantly, we would have to commit troops to Iraq for an extended period of time (though far less than we would if our current strategy is to succeed), perhaps 10 years.

If this course of action is successful, we would then remove our troops from Iraq and return them home. We should not have a permanent base in Iraq along the lines of Korea unless: 1. Iran remains a clear and present danger to Iraqi stability or to world peace; 2. Both the Iraqi people and the Iraqi federal government so desire; and 3. there is Congressional approval for such a plan. Even with all three of those conditions met, I am suspicious of any permanent base, but at a minimum those conditions must be met.

Sunday, April 13, 2008

America, 2008

I've always been particularly proud to share a birthday with Thomas Jefferson. So I was a bit disturbed to have my morning blogosphere birthday present be this. To sum up: about 20 DC area libertarians got together at the Jefferson Memorial to celebrate the birthday of our nation's most anti-authoritarian Founding Father. In celebration of this, they were all wearing their iPods, dancing silently. For about 10 minutes. At midnight. When virtually no one was around.

Several minutes into this brief celebration, the Park Police showed up and ordered them to disperse. When one asked "why?" she was arrested. Welcome to life in the Bush Administration, when you can do something that disturbs absolutely no one at a memorial to a symbol of anti-authoritarianism and get arrested. The charge? "Interfering with an agency function," according to Radley Balko, who was actually there for some of it. In other words: if you dare to question an illegal order from the police, they can arrest you. Which means that the police are, quite literally, above the law.

Reading some of the comments to Megan McArdle's story on this, it's suddenly very easy to see how our President has managed to destroy the Constitution with very little objection from the American people. I do believe that T-Jeff himself is weeping a bit today at the blind obedience to authority that has overtaken much of the nation he helped found.

More reactions to this outrage at memeorandum.