Tag Archives: policy

Governments and Laws

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I’ve written before about government’s regulations.  Just as pernicious, though, are government’s laws—and this is even more our own fault, because unlike regulations, which are created by nameless Executive Branch bureaucrats through delegation from Congress, laws are passed by that Congress—the very folks we elect to represent us, and then re-elect, even when they overstep or ignore our instructions to them.

Last year, the National Conference of State Legislatures reports, the states passed 40,000 laws that take effect this year, or took effect after passage last year.  The Daily Caller reports that at the Federal level, it would have taken 12 days(!), at 200 pages per day, to read all the Federal laws and regulations extant in 1925 (before the New Deal, that is).  Today, it’ll take three years.  Obamacare and Dodd–Frank, for all their excessiveness, actually added only 25 days.

Some examples at the State level include the following gems.  You’re already aware of Obamacare and Dodd-Frank; I won’t go into further Federal pearls.

California last year banned the use of UV indoor tanning beds for all minors.  Apparently, the State has decided parents are too negligent and can’t be trusted to do their own jobs.  Nor is their judgment to be trusted.

California has banned “the production, distribution or sale of beer to which caffeine has been directly added as a separate ingredient.”  Apparently the State’s distrust extends to all of its adult citizens.  The Patrons in government Know Better, and good idea or bad, mere adults won’t have that choice to make.

Kentucky has decided that selected prison inmates who have not been granted parole must serve “the final six months of their sentence in the community under supervision.”  In other words, these inmates get parole, anyway, even though they didn’t get parole.  Hmm….

In Oregon, the state’s universities and community colleges must “waive tuition and fees for current and former foster children under age 25,” and this new law also gives foster children (25 is a child?  Still, that’s consistent with the adult “child” that Obamacare allows onto a parents’ health insurance policy—at the parents’ cost) first claim on the state’s Opportunity Grants when funding can’t support 100% of otherwise eligible students.  We get yet more special treatment for favored groups—this time under the guise of glorified “affirmative action.”  The law is silent on orphans or children raised in orphanages; apparently they aren’t as deserving.

More examples can be found at the NCSL link above.

Tacitus warned us long ago:

Corruptisima republica plurimae leges.

Free Market Capitalism And Democracy

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I want to spend a little time talking about the relationship between free markets and democracy and about how closely connected the two are to each other.

A free market in this context is a market in which the participants—buyers and sellers, producers and buyers, businesses and customers, i.e., any pairing you’d care to think of involving people exchanging items of value—are free to determine for themselves both what it is that’s of value and the terms, if any, by which they’re willing to exchange those things.  Moreover, since the participants are free to bargain among each other, their collective choices, summarized into a general supply of and demand for goods and services and money determine general—and since voluntary, constantly fluctuating—terms of exchange: what can generally be expected to be available for buying and selling, and at what prices.

Capitalism in this context means private ownership of property, including money, and of the means of production: one’s body, including labor output; one’s thoughts, including intellectual property and output; and physical plant, including the entire gamut from individual hammers and screwdrivers up through whole plants and companies that use plants and employ physical and intellectual labor.  Further, capitalism occurs within the framework of a free market, and it facilitates accumulation of capital in a broad variety of forms for profit, for future expansion, and for development of new products and/or means of production.  Thus, capitalism underpins free markets.

Democracy is a means, often political, by which the members of a community decide for themselves a variety of matters, usually by voting in some manner.  A democracy may use a government as a mechanism for arriving at decisions, but in a democracy that government is subordinate to the people.  This is as opposed to a government originating decisions and handing them down to a subject people, with the people being subordinate to the government.

The aggregate of individual economic decisions is what makes up an economy.  In a free market, capitalist economy, individuals, at bottom, vote on what we want produced, vote on what we want to possess or to consume, with our economic property: dollars (which we earn in another component of the free market capitalist economy, the labor market, in which we sell our labor for a price voluntarily agreed on with an employer) and any other items we might offer in an exchange.

Every purchase we make, every sale we make, is the outcome of our voice speaking and the result of our choice made.  I’ve cited Adams before, but he’s applicable here, too: an individual’s happiness—the pursuit of which is one of those inalienable rights acknowledged in our Declaration of Independence—is this:

All men are born free and independent, and have certain natural, essential, and unalienable rights, among which may be reckoned the right of enjoying and defending their lives and liberties; that of acquiring, possessing, and protecting property; in fine, that of seeking and obtaining their safety and happiness.

Where we are free to choose for ourselves what we will do with our property, we there are free to develop our own lives toward our own goals.  And our economic property is founded on our natural right of property in our lives, our bodies, our minds, and the things we produce with those.  (As an aside, this natural right, among others, is acknowledged in our Declaration of Independence, as well as in Adams’ Massachusetts Constitution.)

It is this democracy of a capitalistic free market that enables us to manage our own ends, to reach for goals of our own choosing.  This is where we exercise our property rights in our own outputs.

And we must do so: if government exercises rights in our property, it also has control over our political property: it can give or withhold from us according to its approval of our voting.  Any time a government determines these things for us, even indirectly, by determining the terms of our exchanges, by determining the things we will be permitted—or required—to exchange, regardless of lofty motive, we individual participants lose our vote, we lose our voice: government is speaking, not for us and saying what we have instructed it to say; it is speaking, rather, to us and saying what its instructions to us are.

This is a two-way street.  Without political democracy, we cannot have the economic democracy of capitalistic free markets.  Within political democracy, we individually and freely vote with our political property for the things we need and want; it is through political democracy that we are able to act to preserve the freedom and capitalist nature of our markets.  The free market, our individual ownership of our property and of our productive facilities, are both demonstration and constructor of democracy.

In the end, free markets, capitalism, and democracy each needs the others; none can exist without the other two.  In fact, they are the same; they are merely economic and political sides of the same coin.

Natural Rights, Our Social Compact, and “Rights”

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The principles statement of our social compact acknowledges that all humans are endowed with certain inalienable, natural rights, and the entirety of our social compact seeks to apply those natural rights in a concrete way to the members of our compact, us American citizens.  Our Declaration of Independence says of this:

…that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed[.]

Our principles statement acknowledges further that, when an instituted government fails in its purpose, it is both our right and our duty to replace it with one that will do better, but that’s a subject of a different discussion.

On the matter of Happiness, John Adams was clear that this was—and is—more than simple personal pleasure and pecuniary wealth; although these are certainly part.  But Happiness includes far more, and far more important components, also:

All men are born free and independent, and have certain natural, essential, and unalienable rights, among which may be reckoned the right of enjoying and defending their lives and liberties; that of acquiring, possessing, and protecting property; in fine, that of seeking and obtaining their safety and happiness.

However, today (indeed, for the last 80 years, with rapidly increasing national cost, and failure) some want government to guarantee such things as jobs, retirements, and so on; they assert these to be “rights,” a continuation of Franklin Roosevelt’s Second Bill of Rights, which included such things as employment, housing, and social security.

In fact, such manufactured “rights” cannot be achieved by award from government, whether directly by fiat or indirectly by managing our economy; our government in the end is nothing more than our employee and so possessed of no more power than that.  Moreover, the thing which our government gives to one of us (vis., a retirement pension check, or an artificially cheap house), it must first take from another of us (not least in the form of tax money); it must take from one of its employers.

These “economic rights,” these “social rights,” of Roosevelt’s and today’s Progressive’s invention, though, are nothing more, and nothing less, than the inevitable output of our individual efforts when those efforts are carried out within the framework of our inalienable rights.  In the end, the obligation, freedoms, and power of American citizenship—our Happiness—under our social compact results not through the mechanism of Government as Giver of Rights, but through minimal government interference with our own efforts as we act politically and economically for our individual needs and wants.

Many, though, who were actually taught such governmental guarantees in our public schools and institutions of “higher” education, are discovering that these invented “rights,” in fact, are not automatically available, and so they think they are being denied in some way.  Their disappointment is all the more bitter because they’ve been promised that government—not they, themselves—is the proper guarantor of their prosperity and security and liberty.

In order for government to guarantee security, though, it must have complete control over individual behaviors and decisions, and so there can be no liberty.  And without liberty, there can be no prosperity, since no man then will be free to pursue his own need or his own Happiness; no man will be free to show the best that there is in him.  And without liberty, or without prosperity—much less without both—there can be no security.

This contradiction of government as the font of prosperity, liberty, and security, and that earlier described  confusion of the prior with the result, are both individually and together the source of the failure of invented guarantees.

Thoughts on Free Speech

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Here is some action on the free speech front, particularly involving the Internet and piracy and government efforts to impose control on both.

These offerings from our government are pertinent: the Senate’s Protect IP Act (PIPA) and the House of Representatives’ parallel effort, the Stop Online Piracy Act (SOPA).  Unfortunately, they’re not tightly written to address actual piracy, or theft of copyrighted material.  With their too-broad reach, each of these bills can also achieve the following (whether this potential use is deliberate or simply the result of routine political pandering and/or incompetence, I’ll leave as an exercise for the reader).

Harvard law professor Laurence Tribe suggests this:

SOPA provides that a complaining party can file a notice alleging that it is harmed by the activities occurring on the site “or portion thereof.”  Conceivably, an entire website containing tens of thousands of pages could be targeted if only a single page were accused of infringement. Such an approach would create severe practical problems for sites with substantial user-generated content, such as Facebook, Twitter, and YouTube, and for blogs that allow users to post videos, photos, and other materials.

And

The notice-and-termination procedure…runs afoul of the “prior restraint” doctrine, because it delegates to a private party the power to suppress speech without prior notice and a judicial hearing. This provision of the bill would give complaining parties the power to stop online advertisers and credit card processors from doing business with a website, merely by filing a unilateral notice accusing the site of being “dedicated to theft of U.S. property” — even if no court has actually found any infringement.

Wow.  Guilt by accusation; we’ll sort out the damages from false or erroneous accusations later.  In the meantime, we’ll shut down the whole site, and RICO-like, cutoff the financial resources of the accused.  Solely on the accuser’s say-so; he don’t need no stinkin’ courts.

By closing an entire facility over an (alleged) infraction by one individual or involving just a few documents, an entire avenue of speech is shut down: not just the speech of the Web site’s operators, but the speech choices of those who wish to hear (read) what contributors to such a Web site has to say, on any subject.  Imagine a closely contested election in which a Web site favors one candidate over another.  One of those “other materials” is claimed by the other candidate to be harming his campaign.  Where might the greater harm be occurring?

Oh, but I’m overreacting.  Ex-Senator Chris Dodd (D, CT) has the answer.  The bills are only asking for the same power the People’s Republic of China has for Internet censorship:

When the Chinese told Google that they had to block sites or they couldn’t do [business] in their country, they managed to figure out how to block sites.

Hmm….

We don’t need any more free speech laws, or government intervention into free speech.  We have too much of this, already.  Besides, we already have a fine free speech law, one that doesn’t run to 2,000 or more pages worth of…speech:

Congress shall make no law…abridging the freedom of speech, or of the press[.]

And it took our Founders only 14 words, and rather less than a single page, to write it.

Update: Added some final thoughts.

The European Union’s Deal

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The European Union agreed, last Friday, to the outlines of an arrangement that might leader to greater unity for the economies of the 17 nations of the euro zone plus six to nine additional members of the EU that are not part of the euro zone.  Only Great Britain has, for certain, demurred.  Leaving aside the question of the legality of the new terms (which arise because Great Britain has refused to go along, preventing the unanimity required by the EU’s governing treaties), what has actually been accomplished?

The EU other than Great Britain has agreed to a financial transactions tax.  This would be a fee that every investor, from an individual to the largest investment bank, would be required to pay on every financial transaction, from brokering a merger of large corporations to any individual buying—or selling—a single share of stock.  Britain couldn’t hack that because the financial industry is 10% of their economy, and they were concerned about the effect of such a large (in the aggregate) tax on their economy.

The biggie, though, was an agreement to more fully integrate the member nations’ economies, to the point of submitting national budgets to EU scrutiny.  Every nation, under this fiscal union, is bound to limit its budget deficit to no more than 3% of that nation’s GDP.  Failure to do so would bring virtually automatic sanctions (the sanctions could be waived on an individual basis, provided 5/6 of the fiscal union members agreed to the waiver).

This raises a critical question, though: what are those sanctions?  As I said, what’s been agreed is an outline, not anything of substance.  The specific sanctions are To Be Determined.  Further, if the negotiations of this (and other) detail hew to the schedule laid out by the fiscal union’s primary proponents, French President Nicolas Sarkozy and German Chancellor Angela Merkel, the deal must be done—and the sanctions identified and agreed—by next March, an ambitious schedule.  Also left unidentified is the or else should the deal not be done by then.  Mr. Market is likely to identify the or else in that eventuality.

There’s another critical question that’s left unanswered, also.  That’s how the fiscal union addresses the present problem of impending rampant sovereign debt insolvency.  The European Financial Stability Facility, the new European Stability Mechanism (which in the end replaces the EFSF; it does not complement it), and the IMF together aren’t enough to bail out Italy and/or Spain (assuming a bailout is appropriate in the first place).  And that’s a problem: the fiscal union sidesteps this question.  The EU is left to hope for the change of heart that will allow the European Central Bank to print euros and/or buy sovereign bonds in quantity and/or sell Euro Bonds.  The wisdom of any of these three ECB options is an open question.  Mr. Market is likely to forcefully express an opinion here, too.

There is yet another question.  How does the fiscal union address lack of homogeneity in the social, economic, and money imperatives of fiscal union members?  It does not; instead, the union attempts a Procrustean chopping and stretching to jam all the nations into a single, ill-shaped bed.

Layered on top of this is the EU leadership’s differing views of the EU’s  and the fiscal union’s role:

  • Merkel sees the EU as a political partner of the United States;
  • Sarkozy (ignoring the likelihood of Sarkozy’s defeat in next year’s elections) sees the EU as an independent power bloc competing with the United States.
  • Merkel sees the fiscal union (I’m reluctant to abbreviate this similarly) as a means of imposing extra-national discipline and control over national budgets;
  • Sarkozy sees the (structure of the) fiscal union as preserving an essential national sovereignty—most especially French sovereignty.
  • The existing EU governance power structures—the ECB, the European Commission, and the European Council—are allying with each other in order to preserve their own turf, power, and prerogatives against the (apparent) supremacy of Sarkozy and Merkel, of Germany and France, in the new fiscal union.  And they’re attempting to use Euro Bonds as their tool of artifice.

I remain not sanguine about the euro’s long-term survival as the common currency of 17 nations, nor am I sanguine about the long-term survival of the 26- or 27-nation European Union.  I’m also not convinced that a breakup of either is necessarily a bad thing.  A collection of four or five groups, each consisting of truly homogeneous nations, with Great Britain and France back in their traditional roles, and all operating in a grand free trade comity, will serve all the nations, and Europe as a whole, better.

Update: Withdrew an editorial note.