Power & Market

The Sixth Amendment to the US Constitution says that all criminal defendants “shall enjoy the right to a speedy and public trial.” Many state constitutions also guarantee speedy trials, as do many state statutes.

Specifically, the Sixth Amendment states:

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury…and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the Assistance of Counsel for his defence.

In recent decades, this right has slowly grown more tenuous as the court system has grown increasingly overloaded in many areas by an ever increasing load of state and federal laws that bring grave penalties for the convicted. Defendants must wait long periods in some cases to get a court date.

As often happens with government mandates for permits, permissions, and hearings, court requirements that defendants stand trial are not met by the government with a willingness to actually provide the services necessary to allow compliance. That is, governments force us to submit to certain government procedures, but the government is unwilling to provide those procedures in a way that's timely or accessible.

But now that the wheels of "justice" are grinding to a complete halt, thanks to COVID-19 related shutdowns, the accused may now be waiting for trial indefinitely. Some US immigration courts, for instance, have declared that they won't be doing anything for a year:

The 9th Circuit Court of Appeals in San Francisco extended an earlier one-month emergency declaration for federal courts in San Diego and Imperial counties by a year to April 17, 2021, according to an order posted on the circuit’s website Friday. The court’s judicial council cited public-health concerns and governments declaring states of emergency.

The order suspends the federal Speedy Trial Act, which means anyone facing criminal charges will have to wait longer to exercise their constitutional right to a jury trial—including defendants already in custody. In San Diego and Imperial counties, a significant share of those federal cases involves immigration, drugs and U.S. Customs offenses, the council said.

The state of Kansas is denying speedy-trial rights at the whims of a single judge:

Less than two weeks ago, cases in Douglas County District Court were being set for trials, and other hearings delayed because some trials were already scheduled. But as state and local officials have gradually restricted further how many people can be in one place at one time in efforts to slow the spread of COVID-19, the courts can’t function normally.

Gov. Laura Kelly on Thursday signed into law a bill that expands the authority of the chief justice of the state Supreme Court to issue orders “to extend or suspend any deadlines or time limitations established by statute when the chief justice determines such action is necessary to secure the health and safety of court users, staff and judicial officers.”

North Carolina courts are closed.

In Colorado, a legislator demands the legislature close the speedy-trial "loophole." By "loophole" he means the law that insists that the government respect a defendant's rights or set him free.

But, as with the natural rights protected by other articles of the Bill or Rights—and similar texts found in state constitutions—there is no clause at the end which says "null and void in case of virus."

Naturally for defendants who are in jail awaiting trial—people who are still presumed innocent, mind you—long delays can destroy them both personally and financially. Delays can ruin careers and ruin marriages. They alienate children from parents. They impact the defendant's health.

There is a reason, of course, that the right to a speedy trial—which goes back to clauses 39 and 40 of the Magna Carta—exists. Delaying justice is a common tactic of governments that really can't be bothered with respecting the rights of the accused. But as with so many liberties, this one is apparently to be ignored when some governors decide it to be so.

In the race to develop a cure and treat COVID-19, many consider the state and its subsidiaries as the only institutions capable of adapting our current system to suit the epidemic. On the other hand, phrases such as “the private sector has no interest in humanitarian goals! It only seeks profit!” are uttered as justification for more state action.

To illustrate that the private sector can work for the common good, here are some initiatives that "greedy" capitalists have created to help with the fight against the novel coronavirus (and if they profit along the way, who can blame them?).

[RELATED: "The FDA Continues to Actively Undermine America’s Response," by Tho Bishop]

Turning Whiskey Into Hand Sanitizer

An item which has been highly demanded is hand sanitizer, and due to panic purchasing its price has risen a great deal or it has disappeared from shelves altogether in places where laws prevent vendors from raising prices.

However, in those places where prices have increased, this has pushed makers to increase production and supply the market with more of the product. Moreover, it has encouraged others to shift their production toward alcohol and hand sanitizer.

This is the case with distilleries. Instead of crafting bourbon and vodka, many are changing their schedules to produce hand sanitizer. They are giving it away for free to the local communities or selling it at a lower price, which helps them hold the fort during these difficult times. Even Bacardi, a famous rum producer, is allocating alcohol to the production of more than 1.7 million ten-ounce units of hand sanitizer.

Companies that make perfume are also entering the business. LVMH (LVMH Moët Hennessy – Louis Vuitton SE​) announced that it is going to convert its cosmetic factories to hand sanitizer production and distribute the product to thirty-nine hospitals in France.

Free Services

Special efforts are being made to guarantee that businesses and schools can continue their activities—at least in part. Google has made available features of Google Hangouts that were previously paid, such as video meetings of up to 250 participants and the ability to record calls and save them to Google Drive.

Likewise Coursera has made its program Coursera for Campus available at no cost for universities whose activities were affected by COVID-19. It can be used to enroll students in more than 3,800 online courses from prestigious colleges and universities.

But not every worker can work from home. This is the case for those who work in a variety of services and specific types of shops. "Social distancing" places an enormous economic burden on such enterprises.

To help with this problem, Facebook has started a fund of $100 million to aid small businesses affected by the epidemic. Up to thirty thousand businesses in over thirty countries are eligible to receive help with rent costs, operational costs, and maintaining their workforces. Surely this will be a relief for many entrepreneurs.

The Private Sector Works for Both Private Gain and the Common Good

So far, we have only noted some cases of capitalists around the globe helping their communities and other nations with resources to fight the epidemic. However, we have set aside all the theoretical discussion involving the question of whether we should have a totally private healthcare system or a socialized one.

A case can be made—implicit in some parts of this article—that the state disturbs the workings of the healthcare industry. Government regulations have limited the supply of critical goods such as hand sanitizer, masks, and even food. Government-funded services do not scramble to supply goods and services the way that market firms do. After all, speed and service are the lifeblood of a private firm. This is why even if we abandoned the healthcare sector to the pursuit of profit the whole population would benefit. For any profit to be made, businessmen have to provide a valuable service to their customers. This even drives firms to lower prices while embracing innovation and research with an enthusiasm that government agencies lack.

Unfortunately, the role of private markets is becoming harder to see as government expands into more and more sectors. Everywhere, for example, states dominate the healthcare sector. Even in the US, considered by many the embodiment of capitalism, healthcare has ceased to be primarily a market endeavor. Yet even as government attempts to further crowd out the private sector, the social benefits of markets remain.

As grappling with COVID-19 has required rapid and difficult decisions by world leaders to protect the public, it has been easy to overlook some of the lessons basic economics can teach us about prices. I taught economics for several years, and this topic that we covered in the first few sessions of each semester comes to mind as I watch today’s events unfold.

Prices serve a far more important role than simply telling us how much cash we need to part with in order to receive a good or service. They form the backbone of the entire market system. Individual market actors deliver critical products around the world more effectively than any third party–directed effort ever could. And they can do that only because of prices.

Prices act as signals to entrepreneurs of what value society is placing on particular resources at any given time. So, if society wants more iPhones, then the prices of the inputs to make iPhones will increase, thereby allowing the raw materials required to be directed to that purpose. Industries creating products with less value to society can’t pay as much for those raw materials, and thus they don’t get them. In times of crisis, our focus shifts from studying how prices direct resources to iPhone production to the more critical function of rationing—who does and doesn’t get food, fuel, and medical supplies.

The political consensus is that prices should be prevented from fluctuating in times of crisis. Although these policies are often well intentioned, they remove the critical signals needed by those on both the supply side and the demand side to make decisions in the best interest of society.

Consider hand sanitizer, the price of which has been increasingly scrutinized during this crisis. People around the world have been hoarding it, making it difficult or impossible to find in some areas. Nervous citizens quite naturally understand the importance of this product and want to make sure they have plenty of it. With prices forced to remain low, those who can get to the stores fastest have little economic incentive to not stock up. Those who aren’t as swift (who coincidentally make up a large portion of those who would be most at risk should they contract COVID-19) are left with empty store shelves. Once hand sanitizer is out of stock, those who really need it can’t purchase it—at any price. Even if a desperate person deems fifty dollars per bottle a lower cost than the cost of contracting the virus, they have no options. Our well-intentioned anti-price-gouging policies have left them with nothing.

And because producers who might currently be supplying ethyl alcohol for other, less needed uses (such as alcoholic beverages) aren’t able to be compensated for the expense of converting their plants or abandoning their existing customers, many of them aren’t able to shift gears—even if they might like to in the name of helping society in a critical time.

The inevitable outcome is the emergence of a black market as desperate buyers and sellers attempt to skirt the rules and transact anyway. A basic supply and demand graph shows us that black market prices are higher than those the market would have arrived at. Our attorney generals then run around making criminals out of people who were attempting to serve the needs of the community, and no one wins.

If, however, we allow the price to fluctuate freely, two good things happen. Those who are able bodied and make it to the stores first will have some challenging decisions to make. When faced with hand sanitizer at twenty dollars per bottle that was previously only two dollars, they will be a lot less likely to clean the shelves out. They will be much more likely to grab only the amount their families need, thereby leaving additional supply for those who come behind them.

In addition, producers of alcoholic beverages will quickly notice that prices of hand sanitizer are rising. They will find it more profitable to supply hand sanitizer than beverages and rapidly convert their production. This increase in production will not only increase the amount of hand sanitizer available in the world, but also mitigate the rise in prices. Even enterprising suppliers who might appear to be exploiting the situation at the consumer’s expense are sending vital signals to other suppliers that they need to start ramping up production.

The phenomenon has been proven time and again over many generations, and no product or service to date has been exempt—no matter how urgent the crisis. The invisible hand is still at work. Markets provide more products than any other delivery method and the most just form of determining who gets them. In a time of crisis, instead of abandoning their most beneficial feature, perhaps we should lean on them more.

On October 17, 2019, civil protest erupted in Lebanon. The reason for the eruption was a proposed tax on the popular WhatsApp app.1 The tax served as only a spark to ignite the uprising. Over the years the economy of Lebanon has been steadily worsening. Of course, the usual suspect is the state, and the preferred method is interventionism.

Economic Conditions

Although there is no reliable data to track the unemployment rate in Lebanon, at a certain point in 2018 the president himself stated that the unemployment rate was about 46 percent. He attributed this high number to the grave economic situation and to Syrian refugees.2 According to the IMF, the debt-to-GDP ratio is projected to grow to about 185 percent in 2024.3 The official conversion rate of the US dollar to the Lebanese pound is about USD 1 dollar for LBP 1512.5, but in reality as of March the rate at which people are exchanging is USD 1 for LBP 2700.

During the first days of the civil protests, banks shut down and blocked depositors' access to their funds. They then moved to set some severe withdrawal limits on dollar accounts. Some banks have set a limit of USD 600 a month. Although there have been no severe limitations on accounts in Lebanese pounds, as of March 1 I am no longer allowed to spend more than fifteen dollars per month for international transactions using my debit card. Yes, you read that correctly! Fifteen dollars per month. And to top it all, the first sovereign default in Lebanon’s history took place on March 9. Much can be said regarding the current Lebanese economic conditions. But It is self-evident that Lebanon is currently undergoing the worst financial crisis since its independence. Not even during the civil war (1975–90) did people witness such a financial crisis. It could be that during the civil war the state was much more powerless than now and wasn’t able to intervene in the economy as much as it is now.

Public Debt

Between 1993 and 2018, Lebanon’s public debt increased from $4.2 billion to $85 billion4—a debt that has been forced on the Lebanese people, and the burden of which Lebanese citizens have been dealing with for years. To put things into perspective—and this is from the IMF report:

Because of the large public debt, interest payments exceeded 9 percent of GDP. Tax revenues in 2018 were lower than forecast, with all tax revenue categories disappointing in the slow economy except taxes on income and profits.5

Consequences of the State’s Actions

I could go on discussing the awful policies and actions of the Lebanese state. I could give a very accurate description of its anatomy, which is an abomination. But what I would like to shed light on is the forgotten youth of Lebanon. How long is it going to be before the economy recovers? Is it still possible for a young Lebanese to build a better future for himself? Can all the young Lebanese who emigrated ever hope to come back? Existential crises, as bad as they already are for young individuals, have been made worse by the Lebanese government. Future Lebanese generations will inherit a debt that cannot be repaid. The state has robbed us of our prosperity.

Hope Remains

Despite everything that has happened, there’s still some hope for the youth of Lebanon. Lebanese have learned a lot from the past few months. It has become self-evident that the government of Lebanon holds too much power and is too centralized. Traditional political parties in charge of the government have had their popularity diminish dramatically. And the best thing is that some Lebanese have been resorting to cryptocurrency as a way to bypass the bank and transfer money. Above all, I truly hope that in the future Lebanese people will aim to reduce the concentration of power that the state holds.

• 1. "Lebanon: WhatsApp tax sparks mass protests," Deutsche Welle, Oct. 10, 2019, https://www.dw.com/en/lebanon-whatsapp-tax-sparks-mass-protests/a-50880357.
• 2. "Lebanon's president says unemployment is at 46 percent. Is it true?," StepFeed, Apr. 4, 2018, https://stepfeed.com/lebanon-s-president-says-unemployment-is-at-46-percent-is-it-true-7375.
• 3. H. Plecher, "Lebanon: National debt in relation to gross domestic product (GDP) from 2014 to 2024," Statista, Nov. 13, 2019, https://www.statista.com/statistics/455257/national-debt-of-lebanon-in-relation-to-gross-domestic-product-gdp/.
• 4. Rouba Chbeir and Marwan Mikhael, "A Historical Analysis of Lebanon’s Public Debt" (Blominvest Bank, 2019), p. 2.
• 5. 2019 ARTICLE IV CONSULTATION—PRESS RELEASE, p. 5