Thursday, December 29, 2005

Social Snowflakes & Human Action

Steven Horwitz:
"When I see that snowflake, it engages my reverence for the beauty of the undesigned order of the natural world. Look at the symmetry and detail of that snowflake, and then consider that is the product of undesigned natural processes. I find it an object of awe that natural processes can produce a thing of such detail, complexity and beauty. It is said that only God can make a snowflake. Well for those who understand the science, or who are atheists, we know that you don't need God to do so. But even to an atheist like myself, the spontaneous order of nature can (and should!) generate the same awe, reverence, and wonder that the contemplation of God generates in those who believe. Unfortunately, whenever my wonder at the beauty of nature is engaged, it is with a tinge of frustration.The frustration I feel is that so many smart and caring people seem unable to see and appreciate the identical processes of undesigned order in the social world. 'Social snowflakes' are all around us, yet precious few seem to be able to understand and appreciate them to the degree we do the snowflakes found in nature. And too many people think that these 'social snowflakes' require a 'Creator.'"

[ . . . ]
"My fervent wish for the 21st century is that more smart and caring people can begin to see and appreciate "social snowflakes." People who are so willing to accept the existence and beauty (and benevolence!) of undesigned order in the natural world should be more willing to open themselves to the possibility that there are processes of undesigned order at work in the social world too. These people know that no one can make a snowflake, but seem blind to the fact that much of the innocent blood that was spilled in the last century was because too many people thought they could intelligently design the social world. Not repeating those mistakes will require a renewed aesthetic appreciation of, and deep desire to understand, the awesome beauty and complexity of the undesigned order of "social snowflakes.""

Most Excellent Rent Seeking

Today's WSJ editorial page includes a discussion of the recent Congressional defeat of the "Byrd Amendment:"
"The repeal of the protectionist Byrd Amendment in Congress's year-end reconciliation bill is more than a rare legislative victory. It's closer to a Christmas miracle.

Named after the West Virginia Senator who snuck it into law without debate in a 2001 appropriations bill, Byrd directs antidumping and countervailing duties into the pockets of U.S. companies that petition for the tariff protection. Byrd was nothing more than a wealth transfer from U.S. consumers and industries that use imports to a small network of savvy protectionists. The miracle is that repeal happened even with all that concentrated 'interest' flowing to politicians who supported Byrd.

Ohio-based ball bearing manufacturer Timken raked in the most Byrd money this year, more than $62 million, while Timken subsidiary MPB Corporation was second with almost $19 million. Ball bearing maker Emerson Power Transmission Corp. finished third with better than $16 million, ahead of candle maker Lancaster Colony Corp. with winnings of $11 million. Total 2005 Byrd distributions were $226 million, 80% of which went to just over 30 companies."
Of course, it is good news to hear that Congress rejected this amendment this time around. But, is this not the epitome of rent seeking? In 2001 Congress passed a law that directed "antidumping and countervailing duties into the pockets of U.S. companies that petition for the tariff protection." It seems Congress had "loaned" it's power to tax to various private companies. Do you suppose this could possibly be consistent with the Constitution?

Wednesday, December 28, 2005

Three Roles of the Market

Frederic Sautet:
"If you were to summarize in three points what the fundamental roles of the market are; what would you say? Austrians have a comparative advantage in this exercise, as they are the only ones with a truly realistic and fully coherent market theory. There is actually too much to say and it is hard to summarize it all in three points – which is also why it is interesting to try.

In my view, the market’s three main roles are:

* A knowledge discovery process via entrepreneurial competition;
* A feedback process via the profit and loss system; and
* The result of the first two leads to an accountability role providing governance."
Notice that there is no mention of "allocate" or "ration" resources. The view of the market presented by these 3 fundamental roles is a view of the market as a dynamic process. Thinking of markets as allocating resources relies on a very static view of the market. These days I thinking it is much more important to think of the market as a dynamic proces.

Wednesday, December 21, 2005

Cheney Defends Policy Of Domestic Spying

In the Wall Street Journal today:
"Vice President Dick Cheney on Tuesday vigorously defended the Bush administration's use of secret domestic spying and the expansion of presidential powers, saying, 'it's not an accident that we haven't been hit in four years.'"

Note the assertion in this "news" article of an expansion of presidential powers. Perhaps such assertion in the lead sentence of the news story is more commentary than statement. The best I can figure out at this point is there has been no expansion of Presidential powers. It seems most likely to me that Congress was exceeding its Congressional power with its efforts to make FISA relevant to the activities of the President as Commander in Chief. Of course, that's my sense of the debate at this point. Apparently the Supreme Court has not opined in relevant ways to date. That observation alone seems to me to imply that there has been no expansion of Presidential powers. After all, if no clear statement has been made in the past, then the limits of the President's powers must currently be ambiguous in this area of Constitutional interpretation.


Byron York explains how President Clinton approached FISA:
"In the end, Congress placed the searches under the FISA court, but the Clinton administration did not back down from its contention that the president had the authority to act when necessary."
I decided to take a quick look at FISA. My take is consistent with my earlier discussions of the Constitution. It seems to me that FISA is primarily about the gathering of foreign intelligence as a matter of routine government operation in the name of national security. Further, it seems to me that when Congress explicitly authorizes the President to use military force under the War Powers act, it is the equivalent of Congress declaring war. As such, intelligence activities at a time of war should be thought of as falling under the President's powers as Commander in Chief. I believe this is essentially what President Clinton argued, and what I understand is the position of President Bush.

But, President Clinton went farther by asserting that the Commander in Chief powers were his even if we were not involved in war. It seems the idea is that as Commander in Chief, the President has the power to act in ways that protects the national security of our country, even if the country has not committed military forces to a war against an enemy. This may well be the best definition of the President's power as Commander in Chief.

Of course we people are discussing the law and the Constitution as it has been interpreted. Much of the discussion that I've seen seems to suggest the Judicial branch of government accepts the idea that the Court has no power to constrain the President's power as Commander in Chief. So, it seems to me there are two key questions: (1) Did the President authorize secret monitoring activities as a means of carrying out the war authorized by Congress against our self-avowed enemy? (2) Does the President's Commander in Chief power embody all activities by which the President seeks to protect the national security of our nation? My own answer to the first question is yes (unless there is evidence the President used the pretense of war to spy on Americans he wanted to know about)? My answer to the second question is that at this point I tend to think it is best to include national security in general under the President's power as Commander in Chief.

Wealth of Nations

Ronald Bailey discusses a new study by the World Bank:
"Where is the Wealth of Nations? convincingly shows what countries need to do to create wealth and lift billions of people out of abject poverty. Establish the rule of law and educate people. The big question that the World Bank researchers don't answer is : How can the people of the developing world rid themselves of the kleptocrats who loot their countries and keep them poor? "
Is it possible that Iraq will lead the way?

Toward Freedom In The Arab World

Anthony Bradley:
"Regardless of one’s view of the war in Iraq, we all can agree on the desirability of a dignity-oriented freedom for individuals and families in the Arab world. Economic, political, and religious liberty, however, do not come in a valueless vacuum. Freedom rings when society is ordered so that all people, rich and poor alike, are free to pursue economic and moral goods. The same ordering that led to freedom in the Western world are the same ancient, time-tested truths that will bring liberty to all people everywhere in the world.

The Fraser Institute’s recent report, titled “Freedom In the Arab World,” reminds us that economic freedom will inhabit the Arab world when individuals are free to acquire property without the use of force, fraud, or theft and can freely use their property to do goods things. Additionally, sustained economic freedom in the Arab world will exist when individuals are free to use, exchange, or develop their property in ways that benefit them without violating the identical rights of others.

As history demonstrates, individuals or families having freedom to determine their own economic destiny liberates them from government dependence and long-term dependence on charity. This reminder is especially apt in developing economies all over the world. Positive changes in national economic growth rates rise only as both rich and poor alike are provided equal structures for pursuing goods."

What's Broken? Congress? The Army?

I agree with Glenn Reynolds:
"MAJOR JOHN TAMMES, an Illinois National Guardsman recently returned from Afghanistan, responds to Rep. Murtha's 'broken army' comments, and he's not happy:

Unmitigated crap. And I don't say this out of defensiveness or service pride - I'll tell you about how far we have had to come in a bit. First, though, a little material for you to mull over. . . .

As anyone who has read this blog knows, The Inner Prop and I served in Operation Enduring Freedom V (Afghanistan, March 2004-March 2005). We stood at the end of the longest sustained supply line in the history of human conflict. We were in war-torn Central Asia. Af-frickin'-ghanistan. We had decent food, e-mail, phone (OK, sometimes they weren't always working, but almost all the time) excellent medical support, good pay, regular (if slow) mail. We had a PXs at most of the larger bases, and coffee places sprang up too. We had so damned much ammunition that we needed to build a bigger ammunition supply point at Bagram, AF. We had so many vehicles that we were constantly squabbling over where to put them all - and we had enough up-armored ones too. Our supply warehouses were stuffed with clothing, boots, body armor and the like. 'Living hand to mouth' is the worst lie of the bunch.

The constant stream of re-enlistments was a revelation to me. When I was the Executive Officer of the garrison at Bagram Airfield (a job I gladly traded away after 5 months) I had to find room to more than double the size of the Retention Office. I personally administered the oath of re-enlistment to an E-5 and an E-7. The E-5 was a mother of two young children and the E-7 was eligible to retire when we got home!

Broken? Hardly. Is it difficult work? Yes."
Read the whole thing.

My own opinion is that Congress is 'broken.' But not, alas, living hand-to-mouth. CONGRESS IS BROKEN.

Tuesday, December 20, 2005


This evening I heard Jonathan Alter of Newsweek discuss the NSA story with Hugh Hewitt on Hewitt's radio show. Just before a commercial break Jonathan and Hugh were both expressing their views over each other, but, I'd guess I heard Mr. Alter say that the President was secretly spying on the American people. I think I've heard or read others make the same kind of statement.

My earlier post on this topic, NSA1, considered the war powers of Congress, the Commander in Chief powers of the President, and the lack of clear powers by the Supreme Court to constrain either Congress or the President with respect to these powers. My thoughts were that if the NSA was told by the President to secretly spy on members of the enemy, then such actions would fall easily within the Commander and Chief powers of the President. The suggestion that the President was secretly spying on the American people leads me to think some people may see the issues differently. Imagine that, eh?

This time I want to start by considering what it would mean for the President to "secretly spy on the American people" through the use of warrantless phone taps. My first guess about what this means is that the wire taps at issue must have involved phone conversations of 2 citizens of the United States. Such phone conversations could easily be characterized as "spying on 2 of the American people," and therefore as "spying on the American people." But, suppose one of the people involved in the secretly monitored phone conversation was not a citizen of the United States. Could we clearly characterize this secret monitoring as "spying on the American people." In general, I don't think we clearly can. One possible reason for secretly monitoring the phone conversation might be that the government thought that one of the people involved in the conversation was not a citizen and was an enemy of the United States. Another possible reason for secretly monitoring the phone conversation might be to keep track of the American citizen who was on the phone. If this was the case, then that would indeed look like spying on a member of the "American people." I think in that case it is clear that such secret "spying" would be unconstitutional unless it were authorized by court order.

With this I am led to the Fourth Amendment:
"The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized."

If the subject of investigation in monitored phone calls is a citizen of the United States, then the Fourth Amendment seems relevant to me. This Amendment in our Bill of Rights is the reason I suggested just above that secretly monitoring a U.S. citizen without a warrant would be unconstitutional. Of course, the NSA story itself is about circumstances in which the subject of investigation in the monitored phone calls is not a citizen of the United States. Further, the subject of "investigation" is thought to be a member of enemy forces. I don't believe the right spoken of in the Fourth Amendment is a right held against our government when the person involved is not a citizen of the United States. And, certainly, I don't think the Constitution grants such a right "against unreasonable searches and seizures" to a member of an enemy we are at war against. Further, I hope relatively few of my fellow Americans would want the Constitution to extend such rights to members of enemy forces, and particularly when the enemy has already successfully killed fellow Americans within the borders of our country.

Now, perhaps there is still a concern regarding conversations between a member of the enemy and an American citizen. I can't imagine the concern is defined with respect to the enemy. So, there may be a concern that the American citizen should not be secretly monitored in such conversations without a warrant. If so, then I'm not sure that makes much sense to me. The subject of investigation is not the citizen, but the enemy. It seems coincidental that the monitored conversation of a member of the enemy turns out not to be another member of the enemy, but an American citizen. I suppose some might assert that in such cases we should say the secret monitoring of the American's conversation is an unreasonable search, unless the monitoring was authorized by Court order, which would also require some probable cause to believe the citizen should be monitored. I cannot agree with such an assertion because, a coincidence seems neither reasonable nor unreasonable in general. Coincidences happen. Further, when the very purpose of the secret spying on people involves a member of enemy forces, I think it is quite reasonable to listen in on any conversations by that enemy that we can. If such a conversation happens to include a fellow American, I cannot conclude that government has unreasonably searched that fellow American.

The NSA story seems only to involve "spying on a member of the enemy" without a warrant. Such a warrant seems to me not to be needed in general because the President has the power of Commander in Chief to carry out a war against the enemy. For some reason the President's critics seem more concerned with politics than with fighting a war against an enemy that has killed fellow Americans right here at home. Certainly if the President has authorized warrantless "spying" on the phone conversations of Americans, and such conversations did not involve the belief that at least one party to the conversation was a member of the enemy, then such actions by the President would clearly be unconstitutional. At this point, all I've heard in the story is that the President authorized monitoring phone conversations of the enemy without a Court's prior approval. When the issue involves waging war against the enemy, I don't think the Constitution gives the Judicial branch of government the power to constrain the means by which the President uses his power as Commander in Chief.


I've been listening and reading many offer analysis of the NSA wiretaps. I hear some calling for impeachment. Others profess profound shock and concern that our President would authorize secret actions in the name of war and in the name of protecting us from an enemy that declared war on our system of political economy years ago. Many of the lawyer and law professor blogs are ablaze with analysis. And, yes, I understand that the wiretaps being discussed involved one participant to a phone call that was a citizen of the United States. I would like to make an informed judgment about this controversy, but I'm afraid the public conversation is likely to be so filled with inaccuracies and even outright lies, that I'm not optimisitc that an informed judgment on my part is possible. But, I'm going to start by taking out my copy of the Constitution.

Article 2, Section 2:

"The President shall be Commander in Chief of the Army and Navy of the United States, and of the Militia of the several States, when called into the actual service of the United States. . . ."
So, what do we suppose the words mean? My first thought is that the President has power which has been granted from We The People to be Commander in Chief. Second, this granted power would be called, I think, a "plenary power." That means that neither Congress, nor the Judiciary, shares any of the power of the President as Commander in Chief. It is a power that, in terms of this part of the Constitution, has no constraints on it that are written down. This is unlike the power of Congress to regulate interstate commerce because this Congressional power is constrained by the Necessary and Proper Clause of Article 1, Section 8.

I look next at Article 1, Section 8 to consider the powers of Congress, and I find:

"The Congress shall have Power . . . .To declare War. . ."

Now it seems to me the language we find in the Constitution says that Congress, not the President, has the power to declare war. This power seems to me to be much like the President's power as Commander in Chief in that there are no written constraints or limits on this power. And, neither the President, nor the Supreme Court, can declare war.

If we put both these clauses together, Congress declares war, or in the more modern language of today, Congress authorizes the President to use military force. The President, on his own power, cannot authorize the use of military force, and the President cannot declare war. Likewise, Congress has no power to implement the use of military force that has been authorized, nor does Congress have the power to check or constrain the choices of the President as Commander in Chief. Further, since the Supreme Court is not mentioned in either of the Constitutional clauses, it would seem that the Supreme Court has no power to constrain Congress in the ways it authorizes the use of the country's military, nor does it have the power to constrain the President in the ways in which the Commander in Chief power is carried out.

Of course, I haven't studied Supreme Court opinions on these aspects of the Constitution. But, perhaps that isn't too relevant, since it is my belief that any of us should be able to read the words written in the Constitution and have a darn good chance of knowing what the Constitution means.

What could all of this mean for Presidential authorization of wiretaps by the National Security Agency? It seems to me that we should see the National Security Agency as falling within the realm of Commander in Chief power, especially if the National Security Agency is acting against an enemy for which Congress has authorized the use of the country's military power. Wiretaps to monitor phone calls by such an enemy, even if those phone calls include another person located within the United States (whether this person is a citizen or not), would seem to me to involve the President's use of the Commander in Chief power to wage an authorized war against the enemy. As such, it would seem that we should not think either Congress or the Supreme Court have the Constitutionally granted power to constrain the President's choices to secretly monitor the phone calls of the enemy.

Now I understand that people are talking about various statutes and various Judicial opinions as being relevant. The talk seems to be asserting that this President broke the law. But, if the relevant law attempts to constrain the President's waging war against an enemy for which force has been authorized by Congress, then it would seem to me such a law was not a law because it would be unconstitutional.

In other words, I'm thinking that my reading of the Constitution suggests that the real issue with respect to secret NSA wiretaps is whether or not: (1) the President has been authorized to wage war against an enemy, and (2) do the wiretaps involve secretly monitoring individuals who the President believes are among the members of this enemy. If the President authorized secret monitoring of the enemy, I can't imagine that such an action is inconsistent with these clauses in the Constitution. Nor, can I imagine that a large percentage of my fellow Americans would not want the President to secretly monitoring our enemy.

Do I misread the words of our Constitution? Do I misread the nature of the secret wiretaps?

Monday, December 19, 2005

Media Bias Economics

From UCLA News:
"While the editorial page of The Wall Street Journal is conservative, the newspaper's news pages are liberal, even more liberal than The New York Times. The Drudge Report may have a right-wing reputation, but it leans left. Coverage by public television and radio is conservative compared to the rest of the mainstream media. Meanwhile, almost all major media outlets tilt to the left.

These are just a few of the surprising findings from a UCLA-led study, which is believed to be the first successful attempt at objectively quantifying bias in a range of media outlets and ranking them accordingly.

'I suspected that many media outlets would tilt to the left because surveys have shown that reporters tend to vote more Democrat than Republican,' said Tim Groseclose, a UCLA political scientist and the study's lead author. 'But I was surprised at just how pronounced the distinctions are.'

'Overall, the major media outlets are quite moderate compared to members of Congress, but even so, there is a quantifiable and significant bias in that nearly all of them lean to the left,' said co‑author Jeffrey Milyo, University of Missouri economist and public policy scholar.

The results appear in the latest issue of the Quarterly Journal of Economics, which will become available in mid-December."
Hmmm. If it's published in QJE, it has to be right, eh?

Wednesday, December 14, 2005

Constitutional Radicalism

Noah Graubart writes:
"Thomas' radicalism on this front is perhaps best demonstrated by his 2004 dissent in Elk Grove Unified School District v. Newdow, the infamous Pledge of Allegiance case. The majority of the Court held that Michael Newdow -- the father who sued over his daughter's school's practice of reciting the pledge in class -- lacked standing to challenge the pledge because his ex-wife, not he, was the child's custodial parent entitled to bring such actions. Thomas disagreed with that assessment. He also went one giant step further, arguing that the First Amendment's Establishment Clause does not even apply to the states. That this is a radical conclusion in itself is probably obvious (most scholars would also probably call it dubious, at best). What is more striking, though, is that Thomas felt it appropriate to make the argument at all. The majority did not even reach the merits of the case. The portion of Thomas' dissent discussing the First Amendment, therefore, was entirely gratuitous -- a fact that is indicative of his unwillingness to let sleeping dogs lie when it comes to precedent. Furthermore, Thomas' approach undercuts decades of precedent presuming that states are limited in their ability to establish religion. The school district did not even take this radical position, although the amicus brief of Phyllis Schlafly's Eagle Forum did (always a good indicator of the reasonableness of a position). As troubling as the idea of the Baptist State of Kentucky may be, it is equally troubling to know that Justice Thomas is so cavalier about introducing such an interpretation."

I'm bothered by the suggestion here that Justice Thomas has a radical view of the Constitution. I think it is certainly the case that Constitutional jurisprudence at this stage has said the First Amendment's Establishment Clause applies to the states. Justice Thomas apparently thinks this clause in the Bill of Rights does not apply to the states, and Mr. Graubart says such a conclusion is "radical" and suggests that other scholars would "probably call it dubious at best."

I'm concerned by this because it seems clear to me that such a position was the original meaning of the Constitution. After all, at the time the Bill of Rights was ratified there was at least one state (Mass. I think) that had an official government religion, and if my memory serves me, there were perhaps two other states with official government established religions. Ratification of the Bill of Rights did not make those state religions unconstitutional. And, this seems sensible to me since these are the words actually written as the First Amendment: "Congress shall make no law respecting an establishment of religion. . . " Surely, different language, e.g. "Congress, as well the states, shall make no law respecting an establishment of religion", could have been written that would have made the establishment clause applicable to state governments. But there are no such words written in my copy of the Constitution.

Further, as I understand the history of Constitutional jurisprudence, the Supreme Court's opinions for many years were precisely this -- the Bill of Rights does not apply to state governments. The reason the establishment clause is now thought to apply to state governments is that the 14th Amendment was ratified. The Supreme Court, over time, has come to the position that the 14th Amendment changed the Constitution to say, among other things, that the Bill of Rights no longer constrains just Congress, but it constrains state governments as well. Unfortunately, the 14th Amendment does not itself, include words that directly say something like: "The Constitution is now amended to include the constraints found in the Bill of Rights to state governments as well as to Congress." If you read the 14th Amendment, perhaps you will wonder whether ratification of the 14th Amendment really did change the Constitution so that state governments were to be constrained by the Bill of Rights.

Can an interpretation of the Constitution really be said to be radical if such a view was once, and for quite a long time, the clear view on which the Supreme Court reached opinions? Can it really be dubious to assert that the establishment clause does not apply to the states when the actual language in the Constitution mentions only Congress and not state governments? Perhaps we could more easily argue that when there are no specific words and clauses in the Constitution that say the establishment clause constrains state governments, that the present state of Constitutional jurisprudence in this area is "dubious at best?"

Perhaps when the Constitution is changed in ways that are not the result of the formal ratification process it is only to be expected that people will argue interpretations and even assert some interpretations (by others of course) are radical and dubious. But, it does seem difficult to me to assert that a view of the Constitution is radical and dubious when I have my own copy and the words I read sound very much like what is asserted to be radical and dubious.

Monday, December 12, 2005

Schumer's Checks & Balances

From the WSJ today:
"'Sen. Frist has thrown down the gauntlet at a time when the country least needs it,' said New York Sen. Chuck Schumer, a Democratic member of the Judiciary Committee. 'The American people know that checks and balances are an integral part of our government.'"

Interesting. I suppose Senator Schumer is referring to his role as Senator in checking and balancing the power of the President to put a person on the Supreme Court. And, of course, such a "check and balance" is of value. But, in reading Senator Schumer's comment, I was reminded of something he said during the process of Senate consenting to Justice Roberts. Senator Schumer was concerned that Justice Roberts seemed to think the Congressional power to regulate interstate commerce was a limited power, whereas Senator Schumer seemed to think the power to regulate interstate commerce meant that he and has colleagues in Congress could regulate any aspect of economic activity. This suggests to me that the power of the President isn't the only relevant issue regarding "checks and balances" in question with respect to new members of the Supreme Court. Specifically, Senators will be voting to consent or not to the appointment of a new Supreme Court justice who will later make decisions about the Constitution that will either serve to check the power of Congress (and Senator Schumer) or that will not check the power of Congress.

Saturday, December 10, 2005

Consensual Capitalist Acts

Don Boudreaux:
"Proponents of immigration restrictions, and especially of the so-called “Minutemen” who police against “illegal” immigrants, often make the following argument:

Whether current levels of immigration are good or not, the fact is that many immigrants are in the United States illegally – that is, without the permission of the government. Breaking laws is wrong. Therefore, anyone in the U.S. illegally is a wrongdoer and should return to his own country. If he then applies for and receives permission to enter the U.S. legally, then he’ll be welcome.

Minutemen help government enforce laws on the books; therefore, they should be applauded.
(The wording above is mine, but if you survey much of the anti-immigration, pro-'Minuteman' literature -- including some of the comments on this blog-post -- you'll find it, I believe, to be a fair rendition of a much-used argument.)

This argument is weak.

First, it fails to appreciate the fact that unjust laws deserve to be broken, or at least don’t deserve to be obeyed. Wasn’t it noble to violate the fugitive-slave laws and Jim Crow legislation? (I understand, of course, that there’s some danger in a decentralized system for deciding which laws are worthy of respect and which laws aren’t. But there’s also danger in a centralized system for declaring which laws should be obeyed.) My moral sense is that politicians, bureaucrats, and “Minutemen” have no business telling me which peaceful persons I can befriend or make love to in my own home or hire in my own factory. My moral sense tells me also that foreigners are not morally obliged to obey American politicians who would keep them from engaging in consensual capitalist acts on these shores."
Would you say this is a sound position based on the normative perspective of liberty? Or would liberty suggest that the citizens of the United States have agreed to a "social contract", while illegal immigrants have not?

"More Freedom Than Any Other People"

Alex Kozinski:
"Dr. Buchanan advances a vision of government—especially the federal government—that I find attractive. There is, alas, a lingering nostalgia for the vision of the minimalist state as a purer form of government, one that advances everyone’s economic well-being while maximizing personal freedom. While I have a romantic attachment to this vision, I’m far from convinced that it would achieve the goals set for it—that we’d be living in a better world today if only we repudiated the New Deal, or had never adopted it in the first place. Whenever I try to imagine what such a world would look like, I look at the world we do live in and recognize that we don’t have it so bad at all. We have the world’s strongest economy by far; we are the only superpower, having managed to bury the Evil Empire; and we have more freedom than any other people anytime in history. We must be doing something right."

Could it be true that "we have more freedom than any other people anytime in history"? The Index of Economic Freedom does not rank our system of political economy at the top of the heap today, and it seems to show economic freedom on the decline in our system of late. Could it really be true that the people of the United States prior to the Democrat Supreme Court's of FDR and Truman had less economic freedom than we do today? Could it really be true that the people of the United States had less economic freedom during the "economic due process era" of Supreme Court constitutional jurisprudence than we do today? Can it really be true that we have greater freedom today when government can take a person's house to become the private property of another, than the people of the United States had when the Supreme Court said this could not be done?

Tuesday, December 06, 2005


Have you heard there are people arguing over Wal-Mart? A commentary at puts the issues in perspective. Consider:
"But even if you buy into the myths, there's no getting around the fact that somewhere out there, millions of people are spending billions of dollars on what Wal-Mart puts on its shelves. No one is making them do it. To the extent that mom-and-pop stores are threatened by Wal-Mart, it's because the same people who supposedly so value their Main Street hardware store find that Wal-Mart's selection, or prices, or parking lot--something about it--is preferable. Wal-Mart can't make mom and pop shut down the shop any more than it can make customers walk through the doors or pull out their wallets. You don't sell $300 billion a year worth of anything without doing something right.

What about the workers? In response to long-running criticisms about its pay and benefits, Wal-Mart's CEO, Lee Scott, recently called on the government to raise the minimum wage. But as this page noted at the time, Wal-Mart's average starting wage is already nearly double the national minimum of $5.15 an hour.

So raising it would have little effect on Wal-Mart, but calling for it to be raised anyway must have struck someone in the company as a good way to appease its political critics. (Bad call: Senator Ted Kennedy quickly pocketed the concession and kept denouncing the company.) The fact is that the company's starting hourly wages not only aren't as bad as portrayed, but for many workers those wages are only a start. Some 70% of Wal-Mart's executives have worked their way up from the company's front lines."
Note first, the attention to Wal-Mart isn't forcing anybody to buy its products. Nor is it forcing people to stop buying at the "Mom-and-Pop" stores. Nor is it forcing people to become employees.

Second, note Wal-Mart's average starting wage, and the observation that 70% of Wal-Mart's executives worked their way up in the organization.

Third, consider the following:
". . . the vanguard of the Wal-Mart haters is composed of unions that have for decades kept retail wages and prices artificially high, especially in the supermarket business. Those unions have had next to no success organizing Wal-Mart employees and see Wal-Mart's push into groceries as a direct threat to their market position. And on that one score, they may be right.

But seen in that light, it becomes clear that much of the criticism is simply a form of special-interest lobbying in socially conscious drag. And why an outside observer should favor the interests of unionized supermarket employees over those of Wal-Mart shoppers and employees is far from clear (unless you're a politician who gets union contributions)."
So, the criticism of Wal-Mart is in support of the interests of unions, and unions, by their nature are, coercive. Further, note that government has historically, with legislation, thrown it's coercive power behind the unions. Thus the arguments over Wal-Mart seem to involve those on one side who point to the voluntary actions of buyers, employees, and Wal-Mart, versus those on the other side who want to use force and coercion to interrupt those voluntary actions.

Friday, December 02, 2005

Everything Changes

Jason Potts:
"I ended the last post with the notion that, in an evolving economy, everything changes, and that that is the reason government cannot do anything useful with respect to innovation policy. So let me say that I am not down on the role of government. I see absolute certainty in its role in providing law & order, defence, property rights, and that is all."

[. . . .]

"Economic evolution (as driven by innovation) is an ever ongoing process. There is no end. There never can be an end. Economic evolution (and economic development and growth) is an ongoing process. The point is that in an economic system, everything eventually changes because everything is eventually subject to competitive challenge. No economic activity is an island. No policy can ever hope to be specific."
It seems to me that this is correct. Unfortunately, the static models of economics cannot capture this aspect of economic activity. The idea of economic efficiency, since it evaluates consequences or results, fits very well the static models of economic activity. But, it does not fit at all well with the truly dynamic and evolutionary nature of the economy. The static models combined with the idea of economic efficiency encourage us to think government can find policies that will get efficient results from economic activity. Instead, I think recognizing that "no economic activity is an island" should lead us to emphasize process rather than consequence when we examine public policy and government. Paying attention to process leads us to emphasize individual liberty, not economic efficiency as pareto optimality.