Coyote Blog

Megan McArdle has a lot more patience than I explaining to a writer at Crooked Timber why artists don't get special tax deductions that aren't available to anyone else.

But what I thought was amazing, was the fact that they seem to blame an overbearing and over-reaching IRS on .... markets and capitalism. I'll give one example of the general tone:

One of the days, I’ll get around to reading the copy of Sandel’s ‘What Money Can’t Buy; The Moral Limits of Markets’. It’s even made the exquisitely painful cut of being one of only two dozen books brought on our three-month sojourn on the south coast of England. When I do read Sandel, I hope to acquire a greater appreciation for exactly how market thinking has permeated and corrupted so many aspects of human life.

One surprising place a weirdly attenuated and manically zealous form of market thinking has popped up is in the Minnesota tax office. (via BoingBoing) They’re running a quite unhinged vendetta against Lynette Reini-Grandell and Venus DeMars, a married couple who make music, art, poetry and teach English. The taxman running their audit says Reini-Grandell and DeMars’ creative activities don’t make enough money, and haven’t for years, thus proving the artists are mere hobbyists who shouldn’t get a tax break. Either they should turn a consistent profit by now, or have given up already and gone back to being good little consumers.

Matt Yglesias and I certainly do read history differently.  He writes recently in a Salon article:

The basic economic foundations of industrial capitalism as we've known them for the past 150 years or so have an activist state at their core. Building political institutions capable of doing these things properly is really difficult, and one of the main things that separates more prosperous places from less prosperous ones is that the more prosperous places have done a better job of building said institutions. There's also the minor matter of creating effective and non-corrupt law enforcement and judicial agencies that can protect people's property rights and enforce contracts.

The point is, it takes an awful lot of politics to get an advanced capitalist economy up and running and generating wealth. A lot of active political decisions need to be made to grow that pie. So why would you want to do all that? Presumably because pie is delicious. But if you build a bunch of political institutions with the intention of creating large quantities of pie, it's obviously important that people actually get their hands on some pie. In other words, you go through the trouble of creating advanced industrial capitalism because that's a good way to create a lot of goods and services. But the creation of goods and services would be pointless unless it served the larger cause of human welfare. Collecting taxes and giving stuff to people is every bit as much a part of advancing that cause as creating the set of institutions that allows for the wealth-creation in the first place.

Years ago I had an argument with my mother-in-law, who is a classic Massachusetts liberal  (by the way, we get along fine -- I have no tolerance for the notion that one can't be friends with someone who has a different set of politics).  The argument was very clarifying for me and centered around the notion of coercion.

I can't entirely remember what the argument was about, but I think it was over government-mandated retirement programs.  Should the government be forcing one to save, and if so, should the government do the investment of those savings (ie as they do in Social Security) even if this means substantially lower returns on investment?

The interesting part was we both used the word "arrogant."  I said it was arrogant for a few people in government to assume they could make better decisions for individuals.  She said it was arrogant for me to assume that all those individuals out there had the same training and capability that I had to be able to make good decisions for themselves.

And at the end of the day, that is essentially the two sides of the argument over government paternalism boiled down to its core.  I thought coercion was immoral, she thought letting unprepared people make sub-optimal decisions for themselves when other people know better is immoral.  As with most of my one on one arguments I have with people, I left it at that.  When I argue face to face with real people, I have long ago given up trying to change their minds and generally settle for being clear where our premises diverge.

I am reminded of all this reading Bruce McQuain's take on Sarah Conly's most recent attempt to justify coercive paternalism (the latter is not an unfair title I have saddled her with -- it's from her last book).  Reading this I had a couple of other specific thoughts

1. I am amazed how much Conly and folks like her can write this stuff without addressing the fundamental contradiction at its core -- if we are so bad making decisions for ourselves, why do we think the same human beings suddenly become good at it when they join government?  She would argue, I guess, that there are a subset of super-humans who are able to do what most of us can't, but how in a democracy do we thinking-impaired people know to vote for one of the supermen?  Or if you throw our democracy, what system has ever existed that selected for leaders who make good decisions for the peasants vs., say, selected for people who were good generals. 
2. Is there any difference between Conly's coercive paternalism and Kipling's white man's burden?  Other than the fact that the supermen and the mass of sub-optimizing schlubs are not differentiated by race?  It's fascinating to see Progressives who are traditionally energized by hatred of colonialism rejuvinating one of imperialism's core philosophical justifications.

Via Mark Perry

I reached drinking age (mercifully 18 in those days) in 1980 and I can tell you from experience that the early 80's were a beer wasteland.  Spent a lot of time learning foreign beers at a great little pub I discovered entirely by accident called the Gingerman in Houston (near Rice University).  The beer landscape in the US today is awesome by comparison.

Much has been written about 2nd and 3rd generation trustees leading charitable trusts in completely different directions from the intentions of their original founder / donor.  These charitable trusts seem to, over time, become reflective of the goals and philosophy of a fairly closed caste of, lacking a better word, non-profit-runners.  Their typically leftish, Eastern, urban outlook is sometimes bizarrely at odds with the trust's founding intentions and mission.

Here is one that caught my eye:  Bill McKibben is known as a global warming crusader, via his 350.org (the 350 refers to the fact that they feel the world was safe at 349 ppm CO2 but was headed for ruin at 351 ppm).  But if you hear him speak, as my son did at Amherst, he sounds more alike a crusader against fossil fuels rather than against just global warming per se.  I am left with the distinct impression that he would be a passionate opponent of fossil fuel consumption even if there were no such thing as greenhouse gas warming.

Anyway, the thing I found interesting is that most of his anti-fossil fuel work is funded by a series of Rockefeller family trusts.  I am not privy to the original founding mission of these trusts, but my suspicion is that funding a campaign to paint producers of fossil fuels as outright evil, as McKibben often does, is a pretty bizarre use of money for the Rockefeller family.

In contrast to McKibben, I have argued that John D. Rockefeller, beyond saving the whales, did as much for human well-being as any person in the last two centuries by driving down the cost and increasing the quality, safety, and availability of fuels.   Right up there with folks like Norman Borlaug and Louis Pasteur.

From South Bend Seven come a couple of comments I liked today.  The first was on the Left and current budget plans:

If I was on the Left I would look at these figures and then begin to think long and hard about whether knee-jerk opposition to things like Medicare block grants or defined-contribution public pensions is such a good idea. The biggest threat to redistribution to the poor is existing redistribution to the old.

To the last sentence, I would add "and redistribution to upper middle class public sector workers."  I am constantly amazed at the Left's drop-dead defense of above-market pay and benefits for public sector workers.  This already reduces funding for things like actual classroom instruction and infrastructure improvements, and almost certainly the looming public pension crisis will reduce resources for an array of programs much loved by the Left.

The second observation relates to a favorite topic of mine, on technocracy:

Often enough I think "you know, we need more scientists in charge of things." Then I remember that the scientists we get are Steven Chu and I think "yeah, maybe not so much."

Then I think about all the abominable committee meetings and discussion sessions I've been in with scientists and I think "perhaps best not to put scientists in charge."

Then I look over at my bookshelf, notice my cope of The Machinery of Freedom, and think "why are we putting anybody in charge at all?"

If this Administration has any one theme, it is a total confidence that a few people imposing solutions and optimizations top-down  is superior to bottom-up or emergent solutions.   Even the recent memo on targeted killings reflects this same philosophy, that one man with a few smart people in the White House can make better life-or-death decisions than all that messy stuff with courts and lawyers.   Those of us who understand our Hayek know that superior top-down decision-making is impossible, given that the decision-makers can never have the information or incentives to make the best decisions for complex systems, and because they tend to impose one single objective function when in fact we are a nation of individuals with 300 million different objective functions.  But the drone war / targeted killing memo demonstrates another problem:  technocrats hate due process.   Due process for them is just time-wasting review by lesser mortals of their decisions.  Just look at how Obama views Congress, or the courts.

In a critique of Obama's inaugural address, John Cohen writes:

To suggest that anyone who'd like to see less heavy-handed government regulation thinks one person can do everything alone is a straw-man argument. It indicates a lack of understanding of how the private-sector economy works and how libertarians or conservatives actually think about economics. The private sector isn't just a bunch of people "acting alone." As Matt Welch pointed out in his critique of the speech, making and selling an object as basic as a pencil is such a complex endeavor that it takes lots of different specialists. No one person has the knowledge to accomplish that seemingly simple task; that's how decentralized knowledge is in society. And with a truly complex product, like a computer or movie, the need for people to work together is even greater still. The private sector isn't fundamentally about everyone being secluded and isolated from each other; it typically involves many people working together.

With markets and private enterprise, cooperation occurs voluntarily, for mutual gain.  With government, "cooperation" occurs at the point of a gun, via coercion, generally solely to improve the interests of some third party who has clout with the political class.

I continue to be fascinated by the frequent intersection of classical liberals / libertarians and Occupy Wall Street, at least in the diagnosis of what ails us.  This post by Russ Roberts I linked previously is a great example.   Both groups get energized by criticisms of the corporate state and crony government.

Where they diverge, of course, is in solution-making.  The OWS folks see the root cause in the behavior and incentives of private corporations which corrupt government actors with their money, and thus advocate solutions which increase state power over these private entities.  In contrast, libertarians like myself see the problem as too much state power to create winners and losers in the market and shift wealth from one group to another.  Given this power, the financial incentives to harness it in ones favor are overwhelming and will never go away, so the only way to tackle it is to reduce the power to play favorites.

I will quote from Don Boudreaux (who was in turn commenting on his own quote of the day, which happened to be from Brink Lindsey, my old college roommate).

In other words, very many people – nearly everyone on the political left, yet plenty also on the political right – remain creationists.  They continue to fail to grasp the nuances, deep meaning, and full implications of the science of spontaneous order that first flowered among scholars in 18th-century Scotland.

Barack Obama argues that the last election gave him a mandate to raise taxes on the rich.  Put another way, he is arguing that 52% of the people voted to raise taxes on 2%.  Did they?

Well, they certainly did something like this in California.  Let's take a look at two propositions:

• Prop 30, which propose to raise taxes on on the rich to help close the deficit (there was a token 0.25% sales tax increase for cover, but everyone knew it to be a tax on the rich).
• Prop 39, which was a broad-based income tax increase which raised taxes on most everyone (or at least on the 50% or so who pay income taxes).

So, let's look at the results:

• Raise taxes on only the very rich:  PASS
• Raise taxes on everyone (including me):  FAIL

The California election was a crystal clear mandate:  People want more taxes as long as they are on somebody else.  By targeting the richest few percent, we can get a lot of money but make sure the people taxed don't have any hope of fighting the increase, even if they vote as a block.

So I think Obama clearly has a mandate to raise taxes on not-me.  The question is, do we think we have, or do we want, a government where this is possible?  Where majority votes can do anything they wish to minorities?

I should hope not.  I will remind you of a famous quote, from a different context, but entirely relevant:

First they came for the communists,
and I didn't speak out because I wasn't a communist.

Then they came for the socialists,
and I didn't speak out because I wasn't a socialist.

Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.

Then they came for me,
and there was no one left to speak for me.*

 

* there seem to be many variations on this out there, you may have heard other similar versions.

Republicans before the election worked to convince Libertarians that a vote for Gary Johnson (or any other third party) was a wasted vote -- that Libertarians needed to be voting against Obama and therefore for Republicans.  Some libertarians have argued that the only way to change the Republican Party is from within.  Libertarians need to join the party and then work to make the party less statist.

I thought this was a crock at the time and think so even more now.  Here is the key thought:  Republicans are not going to change their platform and their candidates and their positions to woo voters they are already getting.  After the election, no one in the Republican leadership was talking about what a mistake it was to run a big government Republican like Romney -- the ex-governor of Massachusetts for God sakes -- who authored the predecessor to Obamacare.  No one was wondering about Gary Johnson as a 2016 candidate.

What the GOP did do is panic at the shellacking they got among Hispanic voters.  The ink was not even dry on the ballots before Republican leadership was considering abandoning their anti-immigrant stance in order to win more Hispanic voters.  I am not sure that will get them Hispanic voters, but whether they are right or not, that is the conversation they were having.  They were asking, "How do we attract voters WE DID NOT GET" -- not, "how do we attract voters we are already getting".

The turn of the century Progressive Party (William Jennings Bryant, free silver, etc) never won a Presidential election but both the Republicans and Democrats co-opted many of their platform positions because they sought to attract voters they were losing to the Progressives.

I don't see how Libertarians can look at a party that has fielded John McCain (author of speech restrictions) and Mitt Romeny (author of the proto-Obamacare) as any sort of long-term home.  Heck, the Republicans more seriously considered Rick Santorum and Donald Trump than Gary Johnson or Ron Paul.  I respect what Mr. Paul has done in bringing libertarian issues to the debate, but as long as he keeps reliably delivering his voters to whatever lame statist candidate the party fields, the GOP is never going to seriously address libertarian concerns.

Mike Rizzo raises a point that is a common theme here at Coyote Blog.  People often propose a statist solution because they distrust some private actor (e.g. large corporations) and want someone with power over the top of them.  However, to create such a regulatory structure, one has to give even more power to the state's regulator than the corporation has.  At least one has the choice of whether or not to deal with a private entity (unless of course it is a government-enforced monopoly, but that just takes us back to statism).  We give private actors power only to the extent that we choose to transact with them.   When we give government power, there is no longer this sort of opt-out.  Rizzo observes:

Just ask the person a question. “I can respect why you think this. But can you do me a favor? Can you imagine getting your ideal world in place, and then rather than “your guys” being in charge, how would you feel if the person/people running it were people you completely mistrusted, despised and disagreed with? Would you feel good about your system? Why or why not?”

I tell folks all the time - I don't trust private actors any more than the people in government.  What I trust more are their incentives and the tools I have for enforcing accountability on them.

Matt Curran has spot-on comments about the death penalty in a letter to the Tampa Bay Times

Robyn Blumner's column highlighting the wrongful executions of Carlos DeLuna and Cameron Todd Willingham was a very compelling argument against the death penalty. I am a Republican who rarely agrees with Blumner, but in this case she was spot on. While I believe that there are individuals who certainly deserve to lose their lives for the crimes they commit (John Couey comes to mind), I simply do not trust the government to administer such a process fairly or accurately. This is because the government is run by human beings, who like the rest of us are motivated by narrow self-interest and restrained by limited knowledge. Because those in government rarely face the consequences of their decisions, they often make the wrong ones, even if their intent is pure.

What I find puzzling is how Blumner can so effectively articulate these failings of government when it comes to civil liberties in one column, and in the next champion its abilities and competence in economic matters. A criminal trial is a grueling and exacting process that seeks to administer justice in a very narrow, specific instance. If government doesn't deserve our faith in doing that correctly, how can we trust it to control and coordinate the countless decisions that hundreds of millions of Americans make each day in our economic lives?

For more from Matt, his blog is here.

Those who argue that corporations should not have the same rights as individuals (e.g due process, speech, search and seizure) are essentially arguing that individuals should lose all their rights the moment they start cooperating.  This is a seemingly odd position for the Left to take, given their commitment to group and community action.  The only way to reconcile it is to assume that the Left wants all cooperation to occur only via the state.

I want to thank Professor Mike Rizzo and members of the University of Rochester Alexander Hamilton [sic] Society for having me up to speak last week.  I had an awesome time touring campus, some quality pub time with some of the students, some really good donuts, and then a speaking engagement followed by literally hours of questions and discussions.  Here are some of us out the next day hiking the waterfront (Professor Rizzo is fourth from the right).  This is at a "lighthouse" which I had expected to be some sexy Maine-type thing but turned out to be a 3-foot wide steel column with a blinking red light on top.  We are on one of the breakwaters at the mouth of the Genessee River as it pours into Lake Ontario.

Professor Rizzo teaches four economics courses, including a couple of the introductory survey courses, and many students go out of their way to take all four, even if they are not even in the department.  The group had an incredible vibe, the kind of student-professor learning group we all thought would be typical of college but most of us seldom actually encountered.  It reminded me of Dead Poet's Society, except with economics rather than poetry and without the suicides.

In addition to being a popular professor, Rizzo also is a vastly outnumbered campus defender of individual liberty and economic sanity.  I can't tell me how many kids told me they had been converted to the cause of free market economics by Professor Rizzo.

Professor Rizzo is also a constant campus gadfly on cost-benefit sensibility.  Featured in an upcoming post will be a U of R solar charging station that was one of Rizzo's favorite targets.  Which brings us to the issue of the group's name and why I keep writing [sic].  Apparently creating a new campus organization and 501c3 was way too costly, so they just piggy-backed on an existing group, despite the incongruity of the "Alexander Hamilton" name on a group generally dedicated to exploring small government.

I seem to be having some odd problem subscribing to his feed in Google Reader (all I get is Viagra Spam) but his blog is here:  The Unbroken Window.  Update:  I could never get his feed to work for me so I burned a new one on my feedburner account.  http://feeds.feedburner.com/UnbrokenWindow

The problem with the media is not outright bias, but an intellectual mono-culture that fails to exercise the most basic skepticism when stories fit their narrative.

By the way, I find it likely that there are factories in China making products with household names for western markets that have practices from wildly unsafe to outright slavery that deserve shaming and boycotts, as a minimum, when discovered.

But I often find the discourse around "sweatshops" to be colored by weterners' middle class notions of what our own personal alternatives are.  "I would never work for a $1 a day..."  Sure, but your alternative is not 15 hours a day in a rice paddy with the constant threat of outright death and starvation for your entire family if one years' crops fail.

Best Buy is apparently increasing its customer return window from 14 days to 30 days.

Why?  This certainly costs them money, not just from lost revenue but from the cost of restocking and returning to the manufacture (not to mention fraud).

Are they doing this because they are good guys?  Hah.  Do you really expect goodwill out of an electronic retailer?

They did it because they felt they had to.  As the top dog in dedicated electronics stores, they are constantly under competitive assault.  They are the reference point competitors start from.  Wal-mart attacks them on price.  Amazon.com attacks them on price and convenience.  Smaller retailers attack them on knowledge and integration services.  Everyone attacks them on the niche details like return policies.

Best Buy did this not because they wanted to, but because they felt they had to under competitive pressure.  The accountability enforced by the market works faster, on more relevant variables, and far more powerfully than government regulation.

When the government does regulate variables such as this, such regulation often actually blunts the full accountability of the market.  Retail laws in many European countries set maximum hours and discount levels, protecting large retailers like Best Buy from upstarts trying to provide a better of different service.

Kevin Drum asks whether money corrupts politics, and comes to the conclusion that it does.  I disagree.

Money does not corrupt politics, the expansion of state power corrupts politics.  Every time the state gains a new power to take money from person A and give it to person B, or to throttle company A's business in favor of company B, private individuals start to scheme how they might access that power to their own benefit.

Think back to the much smaller US government of the 19th century.  Don't you long for the day when political corruption mainly meant packing the Post Office with one's kin?  It is absolutely no coincidence that the largest political scandal of that century (the Crédit Mobilier) accompanied the largest expansion of Federal power in that century (the Federally-funded construction of the Transcontinental Railroad).

Political corruption follows the power.  Sure, this power is often bought in dollars, but if we were to entirely ban money from the political process, the corruptions would remain.  And it would shift payment from money to other goods, like quid pro quo's, barter, and access to grass roots labor supplies.  Anyone remember machine politics?

Here is an example from an Administration schooled from an early age in Chicago machine politics

The Heritage Foundation has issued a new report that charges the Obama administration sent presidential earmarks, taxpayer dollars, to Democratic lawmakers to help convince them to vote for controversial proposals such as cap and trade and the health care bill.

“When you examine the recipients of those grants, there were at least 32 vulnerable house Democrats who received significant federal grant money during the run-up or directly after the votes on those pieces of legislation,” says Lachlan Markay, one of the authors of the report.

The amount of earmarks spiked around the time of difficult votes such as cap and trade, then dropped, only to spike again around controversial financial regulations known as Dodd/Frank, and spiked the most just before the vote on the health care bill....

On their websites, lawmakers didn’t advertise their votes, but did tout at length the money they’d gotten for various local projects.

“As a way to counteract the negative voter sentiment that would come from voting for unpopular legislation,” says Markay. “These were attempts to make sure that constituents knew they were bringing money home to their district.”...

Numbers from the non-partisan Congressional Research Service show that the value of administration earmarks under President Obama increased by a 126 percent in his first two years in office and the actual number of administrative earmarks increased by 54 percent.

Those are dramatic increases that are 11 times more than Congress itself increased earmarks, which the White House did not explain today.

By the way, of all the ways that access to political power can be bought, political spending under our current rules is by far the most transparent.   Just as in narcotics or prostitution, a ban wouldn't eliminate it, it would simply drive it further underground and into other forms of currency.

Massachusetts liberals up the penalties for women (and men) using their bodies in ways the government does not like.   Proving once again that the women's groups' motto, "keep your laws off my body," was in fact a fake libertarianism, aimed at exactly one thing -- abortion -- and nothing else.  Those on the Left who mouthed this slogan seem to be A-OK with regulating consensual sex, salt and soda pop consumption, access to medical procedures, health care choices, etc.

Also, this seems to be yet another law that purports to promote women's rights by treating them like they are ignorant rubes unable to make the smallest decisions for themselves.  The implicit assumption in the law is that all prostitutes are in the profession solely due to male compulsion.  This is consistent with a certain philosophy among feminists that all behaviors of women with which they don't agree are not due to a normal excercise of free will by people who simply have different preferences, but are due to some sort of enslavement by the patrimony.

But one high-priced online hooker said she’s no victim — and she doesn’t know any women who are.

“If you are an escort, you go into it of your own free will,” she said. “Absolutely no one is forced into doing this. You don’t have to be affiliated with any agency. I’m not forced to do anything I don’t want.”

What’s more, the new law’s focus on johns, she said, will hurt her lucrative-though-lawless trade.

“If that’s the law that’s been written, then yes, it’s going to impact business,” she said when read the new penalties.

There is no doubt that some women get into situations where they are abused or forced into work or have a large portion of their earnings taken.  But this tends to be a result of the profession being underground, giving women no legal recourse when they are abused and defrauded.  If one really is worried about women's working conditions, the best thing to do is legalize prostitution, instantly giving them access to the legal system to redress wrongs.

This is a story I don't know enough about

Farmers from 18 households in Xiaogang signed a secret life-and-death agreement ending collective farming with their thumbprints. (From Cowen and Tabarrok, Modern Principles: Macroeconomics)

The Great Leap Forward was a great leap backward – agricultural land was less productive in 1978 than it had been in 1949 when the communists took over.  In 1978, however, farmers in the village of Xiaogang held a secret meeting.  The farmers agreed to divide the communal land and assign it to individuals – each farmer had to produce a quota for the government but anything he or she produced in excess of the quota they would keep.  The agreement violated government policy and as a result the farmers also pledged that if any of them were to be killed or jailed the others would raise his or her children until the age of 18. [The actual agreement is shown at right.]

The change from collective property rights to something closer to private property rights had an immediate effect, investment, work effort and productivity increased.  “You can’t be lazy when you work for your family and yourself,” said one of the farmers.

Word of the secret agreement leaked out and local bureaucrats cut off Xiaogang from fertilizer, seeds and pesticides.  But amazingly, before Xiaogang could be stopped, farmers in other villages also began to abandon collective property. In Beijing, Mao Zedong was dead and a new set of rulers, seeing the productivity improvements, decided to let the experiment proceed.

We would all like to think we would bravely stand up for what we believe in against any tyranny, but I wonder.  It takes a lot of guts not to just go along, especially when your life is on the line.  This man, refusing to give the Nazi salute, apparently died in captivity or was killed in 1944.

Good stuff from Roger Pilon at Cato:

It’s true that our Framers, unlike many others, especially more recently, did not focus their attention on rights. Instead, they focused on powers— and for good reason. Because we have an infinite number of rights, depending on how they’re defined, the Framers knew that they couldn’t possibly enumerate all of them. But they could enumerate the government’s powers, which they did. Thus, given that they wanted to create a limitedgovernment, leaving most of life to be lived freely in the private sector rather than through public programs of the kind we have today, the theory of the Constitution was simple and straightforward: where there is no power there is a right, belonging either to the states or to the people. The Tenth Amendment makes that crystal clear. Rights were thus implicit in the very idea of a government of limited powers. That’s the idea that’s altogether absent from the modern approach to constitutionalism—with its push for far reaching “active” government—about which more in a moment.

During the ratification debates in the states, however, opponents of the new Constitution, fearing that it gave the national government too much power, insisted that, as a condition of ratification, a bill of rights be added—for extra caution. But that raised a problem: by ordinary principles of legal reasoning, the failure to enumerate all of our rights, which again was impossible to do, would be construed as meaning that only those that were enumerated were meant to be protected. To address that problem, therefore, the Ninth Amendment was written, which reads: “The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.” Over the years, unfortunately, that amendment has been misunderstood  and largely ignored; but it was meant to make clear that the people “retained” a vast number of rights beyond those expressly enumerated in the document....

The idea, then, that our Constitution is terse and old and guarantees relatively few rights—a point Liptak draws from the authors of the article and the people he interviews—does not explain the decline in the document’s heuristic power abroad. Nor does “the commitment of some members of the Supreme Court to interpreting the Constitution according to its original meaning in the 18th century” explain its fall from favor. Rather, it’s the kindof rights our Constitution protects, and its strategy for protecting them, that distinguishes it from the constitutional trends of recent years. First, as Liptak notes, “we are an outlier in prohibiting government establishment of religion,” and we recognize the right to a speedy and public trial and the right to keep and bear arms. But second, and far more fundamentally, our Constitution is out of step in its failure to protect “entitlements” to governmentally “guaranteed” goods and services like education, housing, health care, and “periodic holidays with pay” (Article 24 of the UN Universal Declaration of Human Rights). And right there, of course, is the great divide, and the heart of the matter.

I am always fascinated by folks who fear private power but support continuing increases in public / government power.  For me there is no contest - public power is far more threatening.  This is not because I necesarily trust private corporations like Goldman Sachs or Exxon or Google more than I do public officials.  Its because I have much more avenues of redress to escape the clutches of private companies and/or to enforce accountability on them.  I trust the incentives faced by private actors and the accountability mechanisms in the marketplace far more than I trust those that apply to government.

Here is a good example.  First, Kevin Drum laments the end of privacy because Google has proposed a more intrusive privacy policy.  I am not particularly happy about the changes, but at the end of the day, I am comforted by two things.  One:  I can stop using Google services.  Sure, I use them a lot now, but I don't have to.  After all, I used to be a customer or user of AOL, Compuserve, the Source, Earthlink, and Netscape and managed to move on from those guys.  Second:  At the end of the day, the worst they are tying to do to me is sell me stuff.  You mean, instead of being bombarded by irrelevant ads I will be bombarded by slightly more relevant ads?  Short of attempts of outright fraud like identity theft, the legal uses of this data are limited.

Kevin Drum, who consistently has more faith in the state than in private actors, actually gets at the real problem in passing (my emphasis added)

And yet…I'm just not there yet. It's bad enough that Google can build up a massive and—if we're honest, slightly scary—profile of my activities, but it will be a lot worse when Google and Facebook and Procter & Gamble all get together to merge these profiles into a single uber-database and then sell it off for a fee to anyone with a product to hawk. Or any government agency that thinks this kind of information might be pretty handy.

The last part is key.  Because the worst P&G will do is try to sell you some Charmin.  The government, however, can throw you and jail and take all your property.  Time and again I see people complaining about private power, but at its core their argument really depends on the power of the state to inspire fear.  Michael Moore criticizes private enterprise in Capitalism:  A Love Story, but most of his vignettes actually boil down to private individuals manipulating state power.  In true free market capitalism, his negative examples couldn't occur.  Crony capitalism isn't a problem of private enterprise, its a problem of the increasingly powerful state.  Ditto with Google:  Sure I don't like having my data get sold to marketers, and at some point I may leave Google over it.  But the point is that I can leave Google .... try leaving your government-enforced monopoly utility provider.  Or go find an alternative to the DMV.

A great example of this contrast comes to us from Hawaii:

There may be some trouble brewing in paradise, thanks to a seemingly draconian law currently under consideration in Hawaii's state legislature. If passed, H.B. 2288 would require all ISPs within the state to track and store information on their customers, including details on every website they visit, as well as their own names and addresses. The measure, introduced on Friday, also calls for this information to be recorded on each customer's digital file and stored for a full two years. Perhaps most troubling is the fact that the bill includes virtually no restrictions on how ISPs can use (read: "sell") this information, nor does it specify whether law enforcement authorities would need a court order to obtain a user's dossier from an ISP. And, because it applies to any firm that "provides access to the Internet," the law could conceivably be expanded to include not just service providers, but internet cafes, hotels or other businesses.

Americans fed up with Google's nosiness can simply switch email providers.  But if they live in Hawaii, they will have no escape from the government's intrusiveness.

via

That is the purposely inflammatory title of my article this week at Forbes.com, finding the roots of crony capitalism not in capitalism itself, but in progressive legislation.  An excerpt:

The core of capitalism has nothing to do with, and is in fact inherently corrupted by, the exercise of state power.  At its heart, capitalism is one simple proposition -- free exchange between individuals based on mutual self-interest.  There is no room in this definition for subsidies or special government preferences or bailouts.  The meat and potatoes activities of crony capitalism are corruptions rather than features of free markets.  Where state power to intervene in economic activity does not exist, neither does cronyism.

Believe it or not, the Occupy movement reminds me of nothing so much as 1832.  Flash back to that year, and you will find Federal officials with almost no power to help or hinder commerce... with one exception: the Second Bank of the United States, a powerful quasi-public institution that used its monopoly on government deposits as a source of funds for private lending.  The bank was accused of using its immense reserves of government cash to influence elections, enrich the favored, and lend based on political rather than economic formulae (any of this sound familiar?).  Andrew Jackson and his supporters, the raucous occupiers of their day, came into office campaigning against the fraud and cronyism at the Bank.

Jackson, much like the current OWS folks, was a strange blend of sometimes frontier anarchist and sometimes tyrannical authoritarian.  But in the case of the Second Bank, the OWS movement could well learn from Jackson.  He didn't propose new and greater powers for government officials to help check abuses of the existing powers -- he proposed to kill the Bank entirely.  Eliminate the source of power, and men can no longer tap it for their own enrichment.

Unfortunately, the progressive Left which makes up most of the OWS movement has taken exactly the opposite approach over the last century or so, expanding government powers and economic institutions (such that today the scope of the second bank seems quaintly limited) and thus the opportunity for cronyism.   In fact, most of the interventions that make crony capitalism possible are facilitated and enabled by the very progressive legislation that the progressive Left and the OWS protesters tend to favor.  Consider some examples...