Power & Market
Updated: The Vote Failed 55-44
A bipartisan group of senators (Mike Lee, Bernie Sanders, and Chris Murphy) are forcing a vote on the US involvement in the Yemen conflict with a vote expected sometime today. The timing of the vote coincides with a visit by Saudi Crown Prince Mohammad bin Salman, whose country has waged war again Yemen since 2015. The Trump Administration, which has a pricey love affair with Saudi Arabia, is working to kill the effort.
The resolution, if successful, would require the US military to cease all support for militarily not targeting al-Qaeda or “associated forces.” While this qualification likely means the US will not stop intervening in the country, it is an attempt for the Senate to clearly recognize that Yemeni forces are not subject to any of the Authorization for the Use of Military Force (AUMF) vote that Congress have passed since 2001.
While this specific vote is being brought up under the War Powers Act, it is worth mentioning that the necessity of this vote is more an indictment on that legislation than anything else. Without its authorization during the Vietnam War, the ability for the US military to get involved in conflicts like Yemen without first receiving the explicit support of the legislature would be far more limited.
Until the War Powers Resolution, no constitutional or statutory authority could be cited on behalf of such behavior on the part of the president. Now it became fixed law, despite violating the letter and the spirit of the Constitution.
It so happens, moreover, that thanks to a loophole in the resolution, the 60-day clock begins only if and when the president reports to Congress under Section 4(a)(1) of the Resolution. Surprise, surprise: presidents have therefore reported to Congress in a more generic manner rather than expressly under that section. They issue reports "consistent with" rather than "pursuant to" the Resolution.
Even still, in a few cases presidents have acted as if the 60-day limit were in effect, perhaps out of political considerations (even if from a strictly legal point of view it was not). But Bill Clinton’s multi-year military intervention in Bosnia alone, without even so much as a nod in the direction of Congress, made perfectly clear that the resolution, whatever good points may be buried within it, was effectively a dead letter.
The Resolution calls for "consultation" by the President with Congress before committing troops to combat. This consultation, we are told, is to occur "in every possible instance." (Who could possibly find a loophole there?) In practice, presidents have interpreted this provision to mean that they must notify Congress following the initiation of hostilities — not exactly what its drafters probably had in mind.
The Mises Institiute is excited to announce that Dr. Shawn Ritenour is our newest Senior Fellow. Dr. Ritenour is a professor of economics at the historic Grove City College, where he assists with the annual Austrian Student Scholars Conference.
Dr. Joseph Salerno, academic vice president of the Mises Institute, had this to say about the announcement:
We are thrilled to have Shawn Ritenour accept our invitation to become a Senior Fellow. Shawn is a renowned scholar in the Misesian tradition. He is the editor of the Mises Reader, the most important compilation of selections from Mises's works yet published. His own treatise, Foundations of Economics: A Christian View, is much more than a mere economics textbook and can be read with great benefit by anyone wishing to achieve a foundational understanding of modern Austrian economics in the tradition of Mises and Rothbard.
The Hill today reports that the US Supreme Court is refusing to hear a case challenging a California law prescribing a waiting period for gun purchases. In other words, the SCOTUS is allowing the California law to stand:
The Supreme Court on Tuesday refused to hear a challenge to a California law that requires there be a 10-day waiting period after all gun sales, even if the person is already a registered gun owner.
California’s "cooling off period" is the second longest in the country, according to court documents, and was enacted to give state authorities time to run a background check and give individuals who might want the firearm to harm themselves or others an opportunity to calm down.
Only eight other states and the District of Columbia have any kind of waiting period.
Two California residents, Jeff Silvester and Brandon Combs, who already own guns legally, challenged the application of law along with two nonprofits: The Calguns Foundation Inc. and The Second Amendment Foundation Inc.
They argued the waiting period is unconstitutional when it’s applied to "subsequent purchasers" — individuals who already own a firearm according to California’s AFS database or have a valid concealed-carry license and individuals who clear a background check in less than 10 days.
The 9th Circuit Court of Appeals disagreed. It said the 10-day waiting period is a reasonable safety precaution for all purchasers of firearms and need not be suspended once a purchaser has been approved.
Now, I am not supporter of laws such as these. On the other hand, I also am opposed to the federal government stepping in to overturn state laws.
State autonomy in this matter is important from a decentralist and pro-federalism position. But it is also important from a legal position, because as Brion McClanahan has made clear in his work on the Constitution and the Bill of Rights, the Second Amendment does not apply to the states.
Many gun-ownership advocates wrongly claim that the Second Amendment applies to the states, but this is not the case. In other words, they accept the legal doctrine of "incorporation" invented in the late 19th century which applies the Bill of Rights to state governments.
McClanahan notes, however, that not only is "incorporation" a faulty legal doctrine, but it was never applied to the Second Amendment until very recently.
In this podcast [beginning around12:00] with McClanahon, he examines the historical realities surrounding the adoption of the Bill of Rights, and it is clear that the provisions of the Bill of Rights were intended as "restricting clauses on the general government" and that "these amendments were to apply only to the general government."
There is a reason, after all, that nerly all state constitutions contain some provisions guaranteeing a right to bear arms. This was seen as the domain of the state governments.
Federalism, properly understood, puts gun regulation in the hands of the state government. And while I am generally laissez faire on this issue, I agree with McClanahan that the federal government ought not to be the agency to which gun advocates appeal for protections of gun-ownership rights.
More: Decentralize the Gun Laws by Ryan McMaken
Nicolai Foss and I have written a paper criticizing currently fashionable "stakeholder" approaches to the firm and the idea that managers should pursue "corporate social responsibility." BlackRock CEO Larry Fink, who manages $6 trillion in corporate assets, made a splash last month by insisting that corporate executives focus not on shareholders, but on a broader segment of society: "Companies must ask themselves: What role do we play in the community? How are we managing our impact on the environment? Are we working to create a diverse workforce? Are we adapting to technological change? Are we providing the retraining and opportunities that our employees and our business will need to adjust to an increasingly automated world? Are we using behavioral finance and other tools to prepare workers for retirement, so that they invest in a way that that will help them achieve their goals?"
Foss and I argue that this view ignores the basic function of ownership, which is to exercise responsibility for productive resources. Building on Mises's judgment-based view of entrepreneurship, we argue that corporations should be run in the interests of owners -- and that not everyone affected by a company's actions, let alone society at large, is an owner. Here is the abstract:
We argue that the stakeholder and CSR literatures can benefit from more systematic thinking about ownership. We discuss general notions of ownership in economics and law and the entrepreneurial notion of ownership we have developed in prior work. On this basis, we argue that stakeholder theory needs to deal more systematically with ownership as an economic function that can be exercised with greater or lesser ability, may be complementary to other economic functions, and works better when assigned to homogeneous groups. Some stakeholder groups are likely to lack what we call “ownership competence,” even if they have made relationship-specific investments, in part because of diverse interests. We also discuss CSR from the perspective of ownership and support Friedman’s original position, but with a twist. The point of Fried-man’s paper is not that firms “should” maximize profits, but that managerial pursuit of “socially responsible” activities in a discretionary way imposes costs on owners. We suggest this problem is exacerbated with entrepreneurial managers who can devise new ways to disguise self-interested actions as CSR initiatives.
The paper is titled "Stakeholders and Corporate Social Responsibility: An Ownership Perspective" and is forthcoming in Advances in Strategic Management. A manuscript copy can be downloaded at SSRN.
One of the topics discussed is the debate over dehomogenizing the work of Hayek and his mentor Ludwig von Mises on the impracticality of socialism. Since this is the 30th anniversary of this debate, we will have a panel dedicated to it at this year's AERC.
Swiss news site The Local reports that new laws taking effect this month will make it even more difficult for immigrants to obtain citizenship.
It has apparently been established law for some time that immigrants collecting social benefits are barred from naturalization. The new law, however, now also prohibits naturalization if an applicant has accepted social benefits at any time during the previous three years.
An exception is made if the benefits "are paid back in full."
On the other hand, applicants for citizenship now must only have resided in Switzerland for ten years instead of 12, as was the case before the new law took effect.
It's important to make a distinction here. The change in law is not saying the recipients on social welfare will be deported. It is merely closing them off from citizenship until they can demonstrate they do not require social assistance.
There is a difference here between residency and naturalization, and the two ought not to be confused. The state is quite flexible with legal residency. The rules for extending citizenship, though, are far more rigorous.
Indeed, Switzerland has a large number of foreign born residents, and its economy includes many immigrant workers.
Unlike many other nations, though, the Swiss recognize that the political system is distinct from the economic system, and admitting a migrant to the Swiss economic sphere does not necessarily mean the state must also grant access to the political sphere.
Moreover, in nearly all cases, immigrants residing in Switzerland have citizenship. They're simply citizens somewhere else. (Swiss law specifically protects immigrant residents from deportation in case of statelessness.)
This is true everywhere, of course. Non-resident immigrants residing in the US, for example, are already citizens. They're simply citizens somewhere else. This fact is confused by the usage of phrases like "illegal alien" or "undocumented worker" which ignore the actual citizenship status of these workers. In most cases, the term "foreign national" — which highlights the fact these people are not stateless — is really more useful than "illegal immigrant."
After all, the "illegality" of an immigrant is a totally arbitrary status made up by government bureaucrats, and is no more morally legitimate than the term "illegal drugs." In both cases, the only difference between legal and illegal is some government paperwork.
On the other hand, there is no clear reason why foreign nationals residing anywhere ought to be given an easy path to citizenship, especially in cases where those residents rely on taxpayer funded services.
This position, by the way, need not violate the property rights of immigrant residents. After all, property rights exist everywhere, regardless of location, and a respect for property rights suggests that persons ought to be allowed to freely contract with others for employment, housing, and other goods — regardless of an arbitrary government decree of illegality.
In a 2017 column titled "Don't Confuse Immigration with Naturalization," I explore this topic further.
Preferably, access to the economic system is open to anyone with whom persons are willing to contract, whether they be employers, landlords, shopkeepers, and potential customers for new immigrant-owned businesses. Given that people tend to be quite open to economic ties with others, accessing the economic sphere has long been quite easy for immigrants to the United States. This is precisely because the economic sphere is relatively free and open in the US.
Granting access to the political sphere, however, opens up a variety of other problems, such as extending access to the ballot box, and encouraging the use of political power to enrich one's self or one's own group. This problem is hardly unique to immigrants, as I've explained here, but as the Swiss understand, restricting access to the political system in this case is often quite prudent. Thus, is makes sense to be open to migration, while being less open with the extension of citizenship privileges.
The ideal, of course, is to shrink the political sphere in such a way that citizenship ceases to be important. In a laissez faire economy where the state has only a tiny role in the regulation and ownership of property, then it would not be terribly important if one enjoys citizenship or not. The free exercise of one's property rights would be assured regardless.
According to multiple sources, Attorney General Jeff Sessions is going to revoke the Obama-era Cole Memo, which directed federal law enforcement to respect states' marijuana legalization laws. Once revoked, federal prosecutors in states where marijuana has been legalized will independently decide how to enforce federal marijuana policy in their states. This could create chaos in the fast-growing cannabis business which has been creating large numbers of jobs and burgeoning tax revenues for state and local governments.
It is unclear how Mr. Sessions thinks that such a move would benefit Sessions or help him carry out his job, other than repealing an Obama-era rule might get him back into the graces of President Trump.
The only other option is that Session is supposed to help address the Opioid Crisis. He thinks that cannabis has somehow contributed to the crisis ala the Gateway Theory of drugs, which assumes that cannabis smokers will turn into heroin addicts. The Gateway Theory has long been debunked for many reasons. In fact, cannabis and cannabis legalization has actually reduced the crisis somewhat. Cannabis is now being successfully used to treat opioid addiction. In states that have legalized cannabis, the number of opioid overdose deaths have actually decreased.
In any case, it will be interesting to see how people react to a new crackdown on cannabis in states that have successfully repealed federal law and enjoy very positive results.