Power & Market

Democracy According to The Office

06/01/2021Kollin Fields

It’s been said by democracy’s critics that the system is essentially two wolves and a sheep deciding what’s for dinner. But to its defenders, democracy has been described as an ethical ideal and a way of life—these conceptions nearly implying a metaphysical manifestation. While we have no way of knowing whether or not we’re living up to democracy as an ethical ideal, we do have evidence of its effectiveness as an electoral system, or lack thereof. If the goal is to secure good governance, then democracy generally fails. But democracy not only pertains to presidents and congressmen, but also down to the local town hall, school board, and mayor. Each of these political actors possesses power purportedly on behalf of “the people.” But I wouldn’t be the first to point out that when someone whom I didn’t vote for wields political power over me, they are not doing so with my consent; in this case, their exercise of power is not literally on my behalf. Libertarians are trapped in a by now obvious dilemma: vote as often as we can for the most “proliberty candidate,” or generally abstain from voting on the grounds that there’s no good candidates or that we refuse to give any kind of consent to broad political power. There is an illustrative example of this dilemma in an episode of The Office.

Later in the series (S8, EP19), a woman named Nellie declares she is the new manager after the real manager—Andy—leaves for several weeks. Everyone in the office is confused by her claim to authority, especially since she didn’t earn the position and no one consented to her newfound power. The main character, Jim, tries to convince everyone to just act as though she has no authority. Nellie, however, starts doing performance reviews and giving out raises based on who will accept her as the new boss. Once a few workers in the office begin accepting the idea that she has authority to issue raises, everyone else has a choice: continue to reject her authority, or accept it for the potential benefits it brings them. In addition to giving raises, she actually cuts the pay of a few skeptical workers who won’t consent to her new authority as boss. There are some interesting assumptions at play in this episode: the workers are so conditioned to having a boss that if their options are between an absentee manager and Nellie—the latter of whom is offering raises—there seems to be an obvious incentive to prefer Nellie, even though having no boss extends their personal freedom at work. But other than Jim and a few others, most of the workers in the office never consider rejecting the idea of a boss altogether.

This is how democracy works. Firstly, most assume there has to be a government, which represents the will of the people and enforces the law: this could be a local sheriff, state governor, or even the US president. The cost of trying to convince everyone else that this position or source of power shouldn’t exist is prohibitively high, so the next best option is to choose someone who we think will do the least amount of damage. But—and this is the rub of democracy—in so voting, just as some office workers began accepting Nellie’s raises, we imply a tacit endorsement or acceptance of political power. We have no way of indicating that we’re voting out of self-defense or that, all things considered, we wish something like school board seat 7 or county tax assessor didn’t exist in the first place; power is placed over us with no real alternative.

In this episode of The Office, the aspirational Dwight is likewise in a bind: either he accepts what he otherwise deems to be illegitimate authority, or he remains in the minority. In a democracy, we are all like Dwight: we can either “get a raise” (that is, vote for the candidate whose policies promise to benefit us), or be relegated to powerlessness through our inaction, accepting the dictates of the Nellies of the world. For instance, about a third of eligible voters didn’t vote in 2020, and yet Joe Biden is now their president, just as Trump was everyone’s president before him, including his most impassioned political enemies. Plenty of Americans engaged in hashtag activism to say that Trump was #NotMyPresident, but … he was. In a democracy, we all have little recourse against authority after the election is over. And if we don’t participate at all, we really have no say, since we are not factored into the “will of the people.”

But unlike an office manager, a politician could have control over our very life or death, or at the very least, our livelihoods. The state can send us to fight in wars, raise our taxes, and as covid policies have shown, they can force us to shut down our businesses and our very means of existence. Democracy means that if we never vote, or even if we do vote but our candidate never wins, all of these measures over our lives can be controlled by people to whom we never conceded authority. We are all Dwight in The Office, on the precipice of accepting Nellie’s authority or having it imposed on us regardless. She can give us a raise, but she can also reduce our pay. The American state can reduce our taxes or send out “stimulus checks,” but they can also send us to die in the sands of Afghanistan. The stakes are enormous in our modern democracy.

Like many workers in The Office, most people are too conditioned to think we need a boss, and that Nellie, or Joe Biden, is as good as any other. But if the fictitious world of Dunder Mifflin tells us anything, the workers’ most productive period was later in the series when their manager (played by Will Ferrell) was hospitalized after trying to dunk a basketball. After weeks without a boss, Jim says, “So as it turns out, unless you're a young child or a prison inmate, you don't need anyone supervising you. People just come in and do their work on their schedule. Imagine that. People like us allowed to sell paper. Unsupervised. And yet, somehow it works.”

We too might consider a world without arbitrary political power. Imagine that.

Image source:
TheMuuj via Flickr
When commenting, please post a concise, civil, and informative comment. Full comment policy here

Denying Reality Leads to Tyranny and Societal Failure

05/14/2021Patrick Barron

The common thread that connects failed societies, from Weimar Germany to the Soviet Union, is an almost pathological insistence on denying reality. Weimar Germany denied that masses of printed money would destroy civilized society. The Soviet Union insisted that Soviet Man would emerge spontaneously from the ashes of capitalist society. Weimar Germany spawned Nazi Germany. Nazi Germany was completely destroyed, both physically and politically, by the World War II Allies. Mercifully, the Soviet Union simply collapsed after seventy years of consuming capital to achieve the phantom of the classless society. Today both Nazi Germany and the Soviet Union are synonymous with tyranny and failure. Both nations murdered millions. Both nations no longer exist. True, Germany exists as does Russia, but I contend that both are new nations. Neither is perfect, but neither claims a political heritage to the nation that preceded it.

Pathological policy errors flowed inexorably from a skewed view of reality in both Nazi Germany and the Soviet Union. Once this view of reality was deemed to be above criticism, its champions adopted increasingly tyrannical policies. Nazi Germany's Aryan Supremacy racial theories seemingly justified the murder of the handicapped, Gypsies, those of alternative sexual orientation, Jews, and Slavs. In the name of birthing a new Soviet Man, the Soviet Union murdered anyone who stood in the way of its program to confiscate all businesses, including small farms. When businesses and farms failed, there was no soul searching as to root causes that might lie in Marxism itself. No, the problem had to be saboteurs within society. Reality, you see, was what the Soviet Union's Politburo said it was. As the vanguard of the proletariat, the Politburo stood outside society and saw its flaws. Those who disagreed were blind to this insight and had to be eliminated.

Chasing the Phantoms of Alternative Reality

Today the West especially is adopting policies that flow from alternative realities that, frankly, do not exist. Here I list just a few:

  1. Catastrophic global warming/climate change is caused by man and must be stopped. I prefer to qualify the term "global warming/climate change" by the adjective "catastrophic". Is the world warming? Who knows? Is the climate changing? Probably. But neither global warming nor climate change is "catastrophic". Yet it has become almost an article of faith that the earth is on the precipice of an environmental catastrophe, requiring ever more radical handicaps on our freedoms and the economy.
  1. White privilege in the US is responsible for crimes against minorities and disparities in wealth. This critical race theory has spawned witch hunts for secret and shadowy white supremacist groups especially in the military, which has empowered investigators to find evidence of these groups and root them out. It will be imperative that these investigators actually uncover such groups, whether they exist or not. Critical race theory is the old Marxist class struggle theory in new clothes. The Marxist class struggle theory postulated that we all are born into a class and cannot escape its prejudices. But notice that the Marxist and now the Race theorists consider that they themselves are not susceptible to the prejudices in which all the rest of us are trapped. Very convenient, eh?
  1. Covid-19 is an existential threat to human life on earth. Constitutionally guaranteed human rights may be violated with impunity. Who gets to decide all this? Why, elected officials and government bureaucrats, of course.
  1. Modern Monetary Theory (MMT) explains that government need not moderate its spending. Government can always manufacture more money in order to fund new programs and pay its debts . More government spending can always prevent a drop in aggregate demand. Government debt is irrelevant, because "we owe it to ourselves". MMT gave government elected officials exactly what they always wanted--carte blanche to spend, spend, and spend some more and not worry about justifying or prioritizing spending. As Keynes actually said, pay people to dig holes in the ground and pay others to fill them back up. What could possibly go wrong?

Champions of the above denials of reality refuse to discuss whether their view of reality is accurate. All are articles of faith and cannot be questioned. In fact, to question them is considered to be an admission of ignorance, guilt, or perfidy. One wants to destroy Mother Earth, enslave minorities, kill innocent people, and prevent all in society from enjoying unlimited prosperity. It's the old straw man fallacy on steroids. Furthermore, resources will be expended to pursue these phantoms, and more resources will be expended to protect oneself from being caught in a witch hunt. Society will live in fear--fear of global warming, fear of being branded a racist, fear of contracting a dread disease. Unfortunately, what society does not fear is that our lifetime's savings will be wiped out by inflation made possible by MMT.

The Basics of Reality

Contrast these phantoms with the pragmatic basics of sound economics: namely, that in order to prosper man must face the reality of human existence—primarily scarcity and uncertainty. People's preferences must be accepted at face value. Man acts. This is an irrefutable axiom in that to deny it is to confirm its validity. His action is rational in the sense that he believes that his action will improve his condition. He understands cause and effect. He performs one act at a time. He performs the most important act first; in other words, he ranks his actions in order of importance. Performing an act means that he must sacrifice the execution of others until later; in other words, acting means giving up some other preference, at least until some later time. Man's ordinal ranking of preferences means that the cost of an action is determined by what he eschews until later. No two men have the identical ordinal ranking of preferences; plus, the preferences cannot be assigned a cardinal value in order to compare one man's preferences with another. Man discovers the concept of comparative advantage and adopts the division of labor in order to accomplish more. Through the market process, man adopts a universal medium of exchange (money) in order to break the tyranny of direct barter. Now man can indirectly exchange his specialized production for a universal medium of exchange in order to obtain his real wants. Man invents government as a specialized service in order to protect his person and his property at a lower cost. He invents law in order to adjudicate inevitable disputes.

All this is reality. Peaceful exchange requires social cooperation, which brings about peace and prosperity among men everywhere. As advice columnist Ann Landers used to say, Wake up and smell the coffee!

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Does an "Inflationary Problem" Exist?

05/12/2021Robert Aro

How does one respond when a friend, colleague, professor, or one of the most decorated economists on the planet, claim they don’t foresee and inflationary problem? Janet Yellen, US Treasury Secretary claims, as reported by Reuters:

I don't think there's going to be an inflationary problem. But if there is the Fed will be counted on to address them.

Henry Hazlitt dedicated an entire book on inflation, opening with the sentence:

No subject is so much discussed today — or so little understood — as inflation.

That was nearly 60 years ago! Going back to Mises, it was addressed, yet ignored for over a century!

The problem starts with trying to gauge your interlocutor's understanding of “inflation.” There’s the commonly accepted idea of inflation being a general “increase in prices,” but inflation originally signified the act of increasing the supply of money and credit, then during the last century this became less widely used. Now, the act of increasing the money supply by even several trillions of dollars a year is considered routine policy; what was once dubbed inflation is now called stimulus.

Should they remain fixated on the idea that inflation means price increases measured by the CPI, steer them in the direction of illustrating various problems with inflation calculations. These problems have been cited for several generations and even in my recent article Inflation: The Art of Moving Goal Posts. By understanding how inflation data is compiled, what’s omitted, what’s included, and the immeasurability of the idea itself helps cast doubt on the mainstream narrative.

But if inflation calculations are inherently flawed, are there other ways to convey that society already has an “inflationary problem” at hand?

Looking at median sales prices of homes in America, we see prices have steadily risen, save for the previous recession where prices declined. Interesting how housing prices have sharply increased during this recession; we can only speculate as to how much this is caused through central bank intervention.

aro

You can also point to continual all-time highs in the stock market, the rise of crypto currencies, and the burgeoning NFT market, all occurring when our future has never looked so uncertain, in the face of the money supply, national debt, and stimulus reaching unheard of levels.

Unfortunately, the unaffordability of life through increase in asset prices and associated debt level don’t matter much to inflationists. It’s the general price increase in necessities such as gasoline and toilet paper which matters most.

Should all else fail, and the inflationary problem remains unnoticed, try pointing to a country like Venezuela, noting how their money supply has risen on an upward trajectory. It’s unlikely anyone could deny that “maybe,” the cause of their hyperinflation and currency collapse was a result of a dramatic explosion to their money supply, M2 now standing at 1 Quadrillion VEF! (The chart below is in millions).

aro

Strange days indeed. And the task of discussing problems with inflation persists. Often difficult to prove until it’s too late, two different definitions of inflation create complexity and having assets excluded from already faulty inflation calculations doesn’t help. Being told by experts that inflation isn’t yet a problem makes the public’s understanding of the topic difficult to grasp. All the while, the commonly accepted method of national default is by way of printing a currency into oblivion, suffering the consequences of default through hyperinflation.

While dinner table economic talk may work with those whom you keep close company, not many of those who desire a free market appear to keep company with those deciding the narrative for the entire planet. What can be said to someone like Yellen or the Fed who gets paid to seemingly ignore the basic history and principles of inflation? Unfortunately, if it won’t come from you, then we can only hope Congress will do the right thing…

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Decentralization and Political Satisfaction

05/07/2021Kyle Ward

As the State grows larger and more centralized, combat in the political arena will grow more desperate and extreme because there is more to be won and lost in each conflict. The States are trapped in an unhealthy relationship that deteriorates more each day. Rioting and looting have become acceptable responses to injustices both perceived and real. The Capital is walled off and surrounded by military personnel. As dire as the situation is, the solution is both obvious and simple: a breakup. The Mises Institute features numerous articles and podcasts on the ethical and philosophical arguments supporting radical decentralization. This article supplements those arguments with an analysis of the 2016 Presidential election to show that local elections lead to happier citizens.

One caveat for this analysis: it ignores the impact of the Electoral College. The debate over that institution is important, but not for the point being made here. Instead, this analysis assumes that the winner of the popular vote wins the election. It will then show how local elections result in far better outcomes than national ones. The election data comes from MITs Election Data and Science Lab and 2016 was chosen because it is the last year for which precinct-level totals are available.

In the 2016 election, Hillary Clinton won the popular vote with roughly 66 million votes; however, this constituted only 47% of the total votes cast. Even had Hillary won the election based on the popular vote, most Americans would have been unhappy with the result. In Texas, 52% of voters cast their ballot for Trump while 58% of New Yorkers chose Clinton. If Texas and New York were able to elect separate leaders, a majority of voters would be represented by the person they voted for. Fewer would feel disenfranchised.

The margins improve further as you zoom in to individual counties and precincts. The chart below shows how voter happiness (defined by your candidate winning) increases at smaller geographies. When looking at the precinct level, an impressive 64% of voters voted for the candidate who won in their precinct. That is almost 24 million additional voters that would be able to live under a representative they selected.

ward

Source: Data compiled by author from MIT Election Data and Science Lab

This improvement in outcomes exists because human beings tend to join communities that align with their preferences and ideals (all else equal). This effect would strengthen if radical decentralization were to occur. As local governments wrest more power from central authorities, the variety among communities would increase. Voting with your feet would be cheaper when you only need to move between town or counties, and low-income individuals and families would be able to exercise this power to great effect along with everyone else.

This self-sorting would also lead to more peaceful communities. Eventually, Texans might care as little about New Yorkers’ thoughts on abortion as they do those of Cambodians. Austin could set policies independent of the rest of Texas. New York could implement a universal basic income. With more local control, the need to fight over national policy would no longer exist.

In 2016, we saw extreme emotional displays, marches, and rallies from Democrats after Hillary lost the election. In 2020, we saw the same from Trump supporters. Every four years, roughly half the country finds itself on the losing side of an election against an opponent they increasingly cannot relate to or even understand. As the State grows, so do the stakes. If our goal is a peaceful resolution, we must dismantle this locus of power. To control your own destiny, you must first give up the desire to control others.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Don’t Blame the J&J Vaccine Pause for a Loss in Public Trust

04/20/2021Alice Salles

The US task force and vaccines are poised to suffer a loss in public confidence. Most people blame the pausing of distribution of the Johnson & Johnson covid-19 vaccine. But the public trust was inevitably going to falter regardless.

Instead of falling for the establishment narrative that points the finger at the J&J mishap, consider the root of the issue. That is the public-private nexus at the center of the country’s antivirus campaign, particularly Dr. Anthony Fauci himself and other well-connected big businesses.

Corporations amiable to government have long been the key to carrying out grand visions of the state. Justin Raimondo warned in 2013 of the dangers of pretending that these collaborations aren’t to the detriment of us all.

Giant multinational corporations, and their economic satellites, in alliance with governments and the big banks, are in the process of extending their influence on a global scale: they dream of a world central bank, global planning, and an international welfare state, with American troops policing the world to guarantee their profit margins.

Any crisis can become the health of the state, as Robert Higgs famously showed. It is precisely in times of crisis that the well-connected benefit from state measures. 

This arrangement of government and select private powers inescapably raises reasonable suspicion that corruption is afoot, or at the very least a conflict of interests. The fact there are basically now only two major vaccines in the game only exemplifies this reality further. 

Now that the J&J vaccine pause has hit everyone’s newsfeed, is that event in itself to blame for any dip in the public trust of vaccines or the experts? Blood clots in a half dozen women out of millions of people vaccinated with the J&J version was all it took?

Perhaps there’s something else going on that would cause people to doubt the covid regime’s legitimacy.

Is it not reasonable to wonder if allergy expert Fauci gains anything by this newly heightened scrutiny against J&J?

Big Money, Crony Shots 

The J&J covid-19 vaccine is the only option available in the US not produced using the novel mRNA technology. It was pulled from the US vaccination program after the Centers for Disease Control and Prevention (CDC) and the Food and Drug Administration (FDA) raised concerns regarding rare instances of blood clots. The move was defended by none other than Fauci, who stated that the blood clots patients experienced post J&J vaccination had “strong similarities” with the blood clots reported by European patients post–AstraZeneca vaccination. And that, he said, should concern Americans. But when asked if people should be hesitant to take the Moderna or Pfizer shots, he insisted the mRNA vaccines were safe.

“The question that is often asked, does this have anything to do with the other vaccines, the mRNAs, from Moderna and from Pfizer? You know, absolutely not. Only 6.85 million of those were J&J. The rest were Moderna and Pfizer, and there's no negative or adverse or red flag signal coming from any of those vaccines, which is very good news. In other words, they are very safe.”

While journalist Alex Berenson would probably disagree with Fauci’s claim given the numbers of adverse reactions provided by the CDC reportedly show that you are more likely to die after getting a covid vaccine than a flu vaccine, the fact the health czar is reluctant to even recognize the reports provided by the CDC is telling. 

Fauci is the director of the National Institute for Allergy and Infectious Disease (NIAID), a branch of the National Institutes of Health (NIH) federal agency, and has occupied the same position since 1984. In a NIAID entry from March 2020 that has since been deleted, the agency stated that its researchers had begun working on the clinical trial for Moderna’s covid-19 vaccine. In addition, it stated that the project was being funded by NIAID and that NIAID scientists were developing the serum at Moderna. 

Fauci was even quoted in the post, saying that “finding a safe and effective vaccine to prevent infection with SARS-CoV-2 is an urgent public health priority.”

J&J’s vaccine is produced by the firm’s Janssen Pharmaceuticals and funded by the J&J group in addition to grants from the US government’s Biomedical Advanced Research and Development Authority, a US Department of Health and Human Services agency. Moderna’s vaccine, however, appears to have been produced with funding allocated by the federal government under the command of an agency run by Fauci himself. 

But what about Pfizer?

Following the Johnson & Johnson vaccine news, European officials rushed to increase the number of orders from Pfizer’s BioNTech-produced covid-19 vaccine. 

While not incriminating, one of the CDC’s top donors (yes, the country’s national public health agency takes private donations!) has directly invested in BioNTech. As a matter of fact, this same donor is portrayed by the legacy media as a friend and trusty ally of NIAID and Fauci. His name is Bill Gates. 

Did Gates directly fund Pfizer’s BioNTech-produced vaccines? We don’t know. Did he invest big money in BioNTech just months before the coronavirus pandemic broke out? Yes. Does his charitable foundation have a partnership with NIH (Fauci’s long-term employer) that involves the rollout of vaccines abroad? Yes. Did Gates openly favor the mRNA vaccine produced by the German lab, going as far as betting it would be the leader in the market? He sure did. Could this combination of factors lead one to guess that, perhaps, the US government as well as Fauci, would be happy to reward Gates by trying to boost the vaccine’s appeal? Why not? 

As the US marches through 2021 forcing us all to bear the costs of this seemingly never-ending covid-19 debacle, Americans remain impoverished. In the meantime, the legacy media urges us to celebrate the ones benefiting from the panic all the while ignoring the real story behind the J&J debacle.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Does the FOMC Even Believe What It's Saying?

04/15/2021Robert Aro

The latest Federal Open Market Committee (FOMC) meeting minutes shows a series of questionable ideas. Other than the people in the closed door meeting, it’s difficult to know whether they believe what they discuss, or just go through the motions, attempting to stave off economic collapse for as long as possible.

With just a few quotes, the direction the Fed/US Government is taking us becomes clear:

Alongside the rise in U.S. yields, broad U.S. equity price indexes increased moderately, with the largest gains in cyclically sensitive sectors.

GDP also looks to be on the rise:

The information available at the time of the March 16–17 meeting suggested that U.S. real gross domestic product (GDP) was expanding in the first quarter of 2021…

In the first quarter of 2021:

Consumer spending appeared to be increasing in the first quarter at a pace considerably faster, on balance, than in the fourth quarter of last year.

But not only is spending on the rise:

In addition, the personal saving rate jumped to an even higher level in January, and ongoing gains in labor earnings along with further fiscal support pointed to additional increases in accumulated household savings.

Per inflation calculations:

Real PCE expanded strongly in January after declining over the preceding two months, with spending likely boosted by federal stimulus payments sent out in early January.

Yields, GDP, the stock market, spending, savings, inflation, on the rise; overall debt levels, the money supply, and the Fed’s balance sheet are also on the rise. But we should pay attention to federal stimulus payments as well as central bank accommodation, which, you guessed it, are on the rise.

It’s strange that for all the central bank and government inflationary schemes, the Fed will still make claims such as:

Improved U.S. economic growth prospects and optimism about the eventual lifting of social-distancing and related restrictions globally were major drivers of asset prices abroad, spurring sizable increases in sovereign yields in advanced foreign economies.

For some peculiar reason it seems to be everything except the increase in money supply, debt levels, and currency debasement as the cause for asset prices abroad.

Naturally, other central banks reacted to this:

In response to rising yields, the Reserve Bank of Australia increased its bond purchases, and the European Central Bank indicated it would increase the pace of its bond purchases going forward.

It’s not just in America. The same interventions are being played out the world over under the guise of economic policy aimed to help the economy, or worse, achieve arbitrary employment and inflation targets. The notion that governments and central banks can spend to prosperity is highly regarded as economic dogma.

Of all the people in the meeting, with the years of experience and credentials between them, surely at least one of them would question the sustainability of an economy where everything rises due to central banks and government increasing the money supply, while simultaneously taking on debt, for no clear purpose other than obtaining stimulated economic effects.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Deregulate the Policing Market

Priti Patel (the UK secretary of state, akin to the US’s attorney general but with a much wider purview) has been recently considering new laws to tackle a spate of dog thefts across the country. The crime wave has been spurred by lockdown measures, with many people desiring “covid pets.”

This increase in demand for pets, especially dogs and puppies, has led to an increase in prices, with some puppies now costing as much as £1,883. Most Austrian economists will not be surprised that the “the bureaucracy is expanding to meet the needs of the expanding bureaucracy” but where a problem is presented that seemingly needs a solution, what else is to be done?

In this case it’s existing regulation (prelockdown) that is causing the most major problems for this not to be a state issue. It's about crime and how it pays. According to the most recent data (as of July 2019), only 7.8 percent of all reported crimes in England and Wales end in a conviction.

The usual calls when this happens are for more police to be dropped on the streets, as if this were some God Simulator computer game where spawning enough units eventually gets the job done while the economy shuffles on certis paribus. But this is the real world, and the economic constraints of resources, funding, training times, and acquiring competent applicants exist.

So what is the alternative? Deregulate the policing market. Why should we leave a government monopolist police to concentrate on petty theft and dog napping when rape convictions are at their lowest point ever? Private police forces already exist in the UK, mostly in response to state budget cuts (another argument against monopoly is that the state’s ability to “giveth and taketh away” on a whim often does not correspond to local demand).

However, the role of private police forces needs to have the support of the home secretary in regard to jurisdiction. This became the issue with the port authorities (who have had private police in the UK since the 1840s). Delivering criminals from the port to custody meant breaching a “mile radius” zone of jurisdiction and so making it illegal to bring a criminal to justice! Luckily the powers of the constable were increased to ensure this was legal.

Private policing, being nothing new, adds a whole host of benefits to the area of policing as well, including increased conviction rates and reduced costs. There are opportunities for communities to have their own police from their own backgrounds (the UK police are still not trying to understand why young black men won’t join the Met [Metropolitan Police] or why nationalists won’t trust the PSNI [Police Service of Northern Ireland]).

The state police are needed at the moment to deal with serious crimes: rape, murder, child grooming, and abuse. These serious damages to person are in a rational society detestable, and no one, excepting the most lunatic fringes of liberal academia, would want to see their perpetrators roaming the streets. Whether these are sent for treatment or punishment is another debate, but their exclusion from society is accepted by most.

So let’s give the private police a chance to prove that this is a market that can not only reduce the government’s time and money, but can have an exponential amount of positive externalities. We can begin to let people trust their own police, run by them for their community, in accordance with the laws of the land, of course. This is not a call for miniwarlords, just a way for the market to prove its efficiencies over the state.

It’s unlikely, given the new Tory (see Labour) method of tax and spend that an actually viable, free market solution will be picked up. However, getting this conversation started and offering solutions that are more than just “stop and search” or “hug a hoodie” is important. We must look to all the options before our police force is given powers they don’t need to fight crimes that are none of their concern or dwindle into a restricted, powerless force that simply protects the wealthy and is mistrusted by everyone else.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Development Issues in Production, Innovation, and Inclusion

The problem of "development" continues to be a topic that draws the attention of academics and is also becoming more and more the concern of every person. This is especially seen when government policies, such as those made in relation to the spread of covid-19, present clear cases which directly affect the lives and well-being of individual citizens.

For the Austro-libertarian, the definition of sustainable development by the Brundtland Commission back in 1987 carries several questionable implications, as argued by Morgan Poliquin. Nowadays, however, development studies as a practice has evolved to include other ideas in the attempt to see different and multifaceted understandings of development.

In online lectures by Jeffrey Sachs based on his book The Age of Sustainable Development, he notes that development has evolved into a more practical and holistic approach composed of three pillars: economic development, environmental sustainability, and social inclusion. Despite the broader definition, it is important to remain critical, so for this article, we shall critique of these aspects to see what could be usefully applied in practice.

Economic Development

Traditionally, the first pillar of economic development has been measured using gross domestic product, or GDP for short. Asim Hussain argued that GDP cannot measure the quality of life, and Frank Shostak outlined how GDP growth doesn’t necessarily indicate true economic growth. This single number, often used by governments to report to citizens how well or poorly their country is doing economically, has been lauded as the main economic indicator for a long time, and questioning it has been long overdue.

Even Jeffrey Sachs acknowledges that GDP has limitations, which is why he posits that other measures of development are also important for a more complete picture of development. These can range from metrics that consider and aggregate other aspects of development, like the Human Development Index, or metrics that try to measure subjective happiness, such as the Cantril ladder.

Such approaches are at least better in that the human factor is given more emphasis, but as with any mathematical model made in an attempt to aggregate human experiences, we should always remain skeptical, and as with GDP, understand and be wary of their limitations. In this way, policies enacted to reach such measures of economic ends should rightly be scrutinized.

Environmental Sustainability

The next pillar that needs to be examined is that which ties development to the state of the environment. However, this leads to several problems regarding how to approach growing the economy, especially when this always seems to be at odds with the usage of resources and the environment. The Austro-libertarian perspective favors a movement toward innovation, which will manage, at its own accord, without further prodding, to create the goods and services that we need for our day and age, and not only in an environmental sense.

Tyler Watts wrote a critical argument about how concepts of environmental sustainability are at odds with economics. Among the ideas discussed was the power of innovation: in a free market economy, innovation would happen more naturally. The creation of cheaper, more efficient—and, by extension, cleaner and less wasteful—products and services is bound to happen as a consequence of progress and functional prices, due to the enabling of entrepreneurs to create competitive goods in the economy.

The idea that innovation pushed by economic freedom in the market is inherently reckless certainly needs to be examined. As Gary Galles contends, it is not a zero-sum game, for society as a whole prospers through innovation. The betterment of the world can come from allowing entrepreneurs to thrive.

Social Inclusion

Finally, the more human elements of development can be addressed in the last pillar, which is about humanity itself. Development should never be seen independently of the context of the people who make up society, and it is a valid human desire to be part of a society wherein they feel enabled to participate.

There are, of course, various ways to include people in society, and this continues to be a subject of debate and scrutiny. Nevertheless, there are humanity-centered approaches to development that can further the position of an Austro-libertarian—such as the human security approach or the capabilities approach—but one of them stands out in particular: the rights-based approach.

An inclusive society through the rights-based approach means that all persons should be able to live with their fundamental rights intact, and where they are not oppressed, but rather empowered. This should include the ability of individuals to participate fully in the economy and to have their personal liberties protected. To be able to live in a free society that honors these rights is a goal for social inclusion, and a desirable end for the Austro-libertarian.

The other approaches, such as the human security approach, which can be used to promote the value of peace and denounce the horrors and ultimate costs of war, or the capabilities approach, which can highlight the importance of realizing individual freedom, could also be looked into for similar valuable insights. War and slavery are, after all, unwelcome in an inclusive and free society.

Conclusion

Contemporary approaches and theories in sustainable development expand the definition of its study to consider perspectives beyond the original definition of the Brundtland Commission. These are perspectives that can be compatible with the Austro-libertarian perspective. The need to critically examine these emerging ideas, to lobby for the values of the free market and of personal liberty, and to hold governments accountable for desirable ideas of development, continues to be as relevant and important as before.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Democrats Are Poised for a Federal Takeover of Elections in America

01/28/2021Ryan McMaken

Listen to the Audio Mises Wire version of this article.

The Capitol riots of January 6 are the gift that keeps on giving to the Democrats' drive to pass a number of new expansive pieces of legislation. At least in the short term. For now, in the realm of elections, Democrats are claiming state control over election methods led directly to the riot. The riot, it is claimed, was fueled by the Trump administration's claims that the election was not conducted in a fair manner. 

The solution? More federal control. If and when federal officials can dictate and oversee how elections are conducted in every corner of the nation, then we'll know everything was done in a free and impartial manner. According to the AP:

Democrats, asserting constitutional authority to set the time, place and manner of federal elections, want national rules they say would make voting more uniform, accessible and fair across the nation. The bill would mandate early voting, same-day registration and other long-sought reforms that Republicans reject as federal overreach.

This will all be fixed by new legislation, HR 1. Of course, it is never explained why federal bureaucrats and regulators are less corrupt or more efficient or less prone to bias than state-level officials. The ideological reasoning behind HR 1 is just a retread of the usual Washington view, which assumes that no one outside the Beltway can possibly hope to do anything right without federal oversight. (For the more cynical among us, of course, it must also be pointed out that Democrats support the bill because they think it will get them more votes.)

Yet, this is the zeitgeist we live under: Americans can't be trusted to run their state governments competently, so it's up to the federal regulators in office buildings hundreds or thousands of miles away to determine the best way to do things. 

Naturally, no one in Washington or in the federal courts cares that this sort of thing contradicts more than two centuries of real-world practice in conducting elections. What matters is that the nation continue to move toward putting every institution, process, law, and custom under the oversight of federal officials. 

The Member States Have Historically Controlled Elections 

Most Americans probably assume that elections are now and always have been, constitutionally, the domain of the federal government. But, this has never been the case. The Federal Election Commission wasn't even created until 1975, and even now, the FEC's power is limited primarily to regulating campaign finance, and not elections. 

The federal takeover of elections, to the extent that it has been successful, has primarily been carried out by the courts, with the Supreme Court and other federal courts handing down decisions to states in regard to how elections must be conducted. 

Historically, however, states have controlled voting requirements and systems precisely because the United States was intended to be a union of independent states. 

This was explicit in the first constitution of 1776 (i.e., the so-called Articles of Confederation) but continued in a watered-down form with the new constitution in 1788. In terms of congressional representation, states were to elect their representatives in a manner chosen by the state, with state control over who could vote. The member states of the union were to be treated as truly independent states, united in policy for only a handful of purposes such as foreign policy and trade agreements. 

For example, there is no particular reason why all members of NATO must select their lawmakers in a similar way. Similarly, it is not necessary for all member states of the US to have "uniform" election systems. 

Indeed, this sort of thinking continued to be reflected in methods of selecting US senators until the Seventeenth Amendment. Although many think that the Constitution mandated that state legislatures appoint US senators prior to the Seventeenth Amendment, the fact is states employed a variety of methods in selecting US senators prior to the change. While the US Constitution says the state legislatures shall elect the US senators, it does not say how that should be done. For example, must most candidates for US Senate receive a majority of legislative votes or will a plurality do? Can those senators be recalled by the legislature? The US Constitution is silent on this. Moreover, in practice, states were free to pass their own state laws creating popular elections for senators that were then binding on members of the state legislature.

In other words, until 1913, the states themselves were to determine how their delegations in the US Senate were elected and by whom. 

Not surprisingly, states have implemented a variety of different policies at different times when it comes to voting and elections. 

Indeed, various states engaged in a wide variety of electoral policies, with most coming down on the side of liberalization. For example, as the nineteenth century entered the Jacksonian era, states greatly expanded who could vote. By 1845, nearly all states had removed the land-ownership requirement for voting, resulting in near-universal suffrage for nonslave males. 

During the nineteenth century, many Western and Midwestern states also had very liberal laws when it came to what is called "declarant alien voting," by which twenty-two states and territories extended the vote to noncitizens. By doing so, the states also—in effect—lowered the bar for citizenship while encouraging immigration into those states.

Western states also were among the first to extend the franchise to women. Wyoming was the first in 1869, a full fifty years before the federal government followed suit. 

Montana was the first state to elect a woman to Congress—Jeanette Rankin—before the adoption of the Nineteenth Amendment federalizing policy on women's suffrage. Today, women comprise a higher percentage of representatives in state legislatures than in the US Congress. (Colorado has the highest percentage, with 42 percent of General Assembly members being women.)

All the while, the federal government had little role in dictating to states how elections should be conducted or whom should be granted the right to vote. 

The Gradual Federal Takeover of Elections

Over time, however, the federal government has increasingly intervened in local election prerogatives. 

The largest expansion of federal control over state election laws arrived with the Voting Rights Act of 1965. The act sought to end local efforts to curtail voting by nonwhites in some Southern states, specifically through literacy tests and related measures. 

Yet, by 1970, federal provisions on literacy tests had been expanded to all fifty states, regardless of the purpose or motivation behind such measures. 

Federal control over elections has continued to expand. Perhaps most damaging among these new measures are federal court rulings preventing state governments from requiring that voters provide proof of identity in order to vote. 

In the United States, one can't so much as drive down the street or purchase cough syrup without government-issued identification. Yet federal courts consider it beyond the pale that voters confirm they are who they say they are. 

Federal officials have also suggested expanding federal control over elections in the name of combating "hacking" by Russians and other foreigners. Following the 2016 elections, pundits and politicians suggested that federal agencies be put in charge of "securing" voting data. 

Now, of course, we have the drive to greatly expand federal control in the form of congressional Democrats' HR 1. It's just another nail in the coffin of American federalism.

Image source:
Getty
When commenting, please post a concise, civil, and informative comment. Full comment policy here

Don't Worry, "the Economists" Have Everything under Control

01/22/2021Robert Aro

Listen to the Audio Mises Wire version of this article.

At Tuesday’s Senate confirmation hearing, former Fed chair and President Biden’s pick as US Treasury secretary Janet Yellen claimed to have an appreciation for the nation’s debt burden, then proceeded to show she clearly doesn’t:

But right now, with interest rates at historic lows, the smartest thing we can do is act big. In the long run, I believe the benefits will far outweigh the costs…

This imprecise term, "act big," is apparently being used to describe economic ideas, mainly how the government plans to spend $1.9 trillion. It’s a statement devoid of any calculation, open to an infinite number of interpretations. When she says the benefits outweigh the costs, this claim cannot be substantiated. Unfortunately, we live in an era where few question the expertise of the “economic experts.” As Treasury secretary, Yellen will be in a tremendous position of power, making decisions on our behalf. It’s in our best interest to consider the rationale behind such “big” ideas.

Yellen expressed some of her rationale for supporting the proposed spending bill:

I think there is a consensus now: without further action, we risk a longer, more painful recession now—and long-term scarring of the economy later.

Who are these economists? Where is this consensus? This was not the first time in the past week that “economists” were cited as supporting inflationist policies. In last Thursday’s speech, where the $1.9 trillion spending plan was initially unveiled, Biden referred to “economists” five times!

Like Yellen, the appeal to a higher economic power is strong. The first of his references mirrored hers:

We have to act and we have to act now. This is what economists are telling us….Our growing chorus of top economists agree that in this moment of crisis, with interest rates at historic lows, we can not afford inaction.

These economists are apparently in favor of borrowing trillions of dollars to fight against the pandemic, forced shutdowns, and a recession. The newly appointed president of the United States of America attempts to make the case for more debt compelling by telling us:

A growing number of top economists have shown, even our debt situation will be more stable, not less stable if we seize this moment with vision and purpose.

In what sounds like Fedspeak, supposedly taking on debt today will make our debt situation “more stable” in the future.

Finally, near the end of Biden’s speech, we are given an inkling as to who these economists could be who advocate spending trillions of dollars. He acknowledges it “does not come cheaply,” however, he urges that failure to act would be a much worse fate. After all:

The consensus among leading economists is we simply can not afford not to do what I’m proposing. Independent, respected institutions from around the world, from the Federal Reserve to the International Monetary Fund have underscored the urgency. Even Wall Street firms have reinforced the logic.

The “economists” providing this information remain unknown. Nevertheless, the Federal Reserve, the International Money Fund, and Wall Street firms are said to be on board with the Biden/Yellen spending plan. Perhaps with good reason, as they tend to benefit handsomely from government stimulus bills, which are paid for by society. As for those who don’t fall into those categories, that remains to be seen, since the threat of currency collapse and national bankruptcy continues to fall outside the purview of the Fed and the world’s leading economists.

Image source:
Getty
When commenting, please post a concise, civil, and informative comment. Full comment policy here
Shield icon power-market-v2