Just like I’ve never had (until recently) any reason to define capitalism, I also have never felt any need to define libertarianism.
Some people use the non-aggression principle, but that strikes me as more of a statement about how we should behave.
What if we’re trying to define the rules for libertarian governance?
In that case, my definition is very much based on property rights. What’s mine is mine and what’s yours is yours, and we both have the right to engage (or to not engage) in voluntary exchange.
I realize that’s not the most elegant or comprehensive statement of principles, but I think it provides a useful framework for the debate over vaccine mandates.
Regarding that issue, I’m glad that private companies had the expertise and opportunity to develop vaccines against the coronavirus, and I got vaccinated as soon as possible.
That being said, I definitely don’t think government should force anyone to make that choice.
But I also think that people who opt against vaccination should accept the non-governmental consequences.
What if private businesses decide that customers are only allowed if they prove they’ve been vaccinated? From a libertarian perspective, guided by core principles such as property rights and freedom of association, that should be totally acceptable. And that’s true even if we think the owners of the businesses are making silly choices. After all, it’s their property.
Written by Andrew Egger, it starts by pointing out that there’s a political fight in South Dakota because a private company has announced that all employees must be vaccinated.
South Dakota’s largest employer is Sanford Health, a hospital and health care system that employs nearly 10,000 people in the eastern half of the state. On July 22, Sanford, which operates in both Dakotas and Minnesota, announced it would begin requiring all its employees to get vaccinated for COVID by November 1. Within weeks, two Republican members of the state House, Reps. Jon Hansen and Scott Odenbach, had introduced legislation punching back. The COVID-19 Vaccine Freedom of Conscience Act would give South Dakotans “the right to be exempt from any COVID-19 vaccination mandate, requirement, obligation, or demand on the basis that receiving a COVID-19 vaccination violates his or her conscience.” …By the end of August, state House Speaker Spencer Gosch had come aboard the mandate ban effort as well. …The only problem: Noem doesn’t support the legislation.
Why is Governor Kristi Noem against the legislation?
For a very libertarian reason. She doesn’t think the government has the right to tell a private company how to operate.
…the laissez-faire approach that made Noem a conservative folk hero in last year’s fights has gotten her crosswise with her fellow Republicans on the issue of vaccine mandate bans. “Frankly, I don’t think businesses should be mandating that their employees should be vaccinated,” she said in a video posted to Twitter last week. “And if they do mandate vaccines to their employees, they should be making religious and other exemptions available to them. But I don’t have the authority as governor to tell them what to do.”
Amen.
If you believe in private property, the owners of a business should have the right to decide whom they employ and whom they do business with.
Just as consumers can choose where to shop and workers can choose to leave jobs they don’t like.
Here’s a final excerpt from the article.
“Nobody is stopping you from making that decision [not to get vaccinated], but you don’t have a right to a particular job,” Noem spokesman Ian Fury told The Dispatch. “The business owner has the right to his business. You do not have a right to an individual job, because you don’t own that business.” …Philosophically, that puts Noem firmly in the camp of free-market Republicans past: largely content to preside passively over a state economy in which companies are free to set their own standards of conduct and employees are free to work for companies that share their values—and quit jobs if they don’t.
The bottom line is that libertarians (and small-government conservatives) should not be upset about private companies making private decisions.
Instead, we should get irked when politicians try to mandate those decisions.
In a column for the Washington Examiner, Quin Hillyer condemns Joe Biden’s recent declaration that companies either must require vaccination or conduct constant testing.
President Joe Biden’s decision to require large private employers to ensure their workers are vaccinated or tested for the coronavirus is problematic not just in terms of the Constitution, statutes, and liberty interests, but it is also highly impractical. …This is crazy. If the onus is on the businesses, what are businesses to do if employees refuse to comply? Fire them all? …This rule is a recipe for lawsuits. Will businesses be caught in a bind — penalized for unvaccinated workers but also charged with unfair labor practices if they evade the mandate by reducing payrolls below 100? …If massive new testing is required as a mere screening method, even for those feeling perfectly healthy, how will medical personnel keep up? Who will keep administrative tabs on all this? And if businesses are required to provide time off for workers to get tested, how will their own efficiency and productivity suffer?
Given the fact that Biden is a career politician with no experience in the private sector, I guess we shouldn’t be surprised by this White House proposal.
After all this is an Administration that thinks copying the failed fiscal policies of Greece, France, and Italy is how you “build back better.”
Like most libertarians, I favor drug legalization for the simple reason that people should have control over their own bodies, even if they’re doing something stupid.
But I’ve never claimed legalization is a zero-cost policy. Instead, as I wrote in 2018, “I think the social harm of prohibition is greater than the social harm of legalization.”
These two flowcharts both make the same point about why the War on Drugs is foolish.
Apparently, voters and politicians are beginning to get the message. More and more states have moved in the direction of legalization.
Have the results been positive?
In an article for National Review, Aron Ravin has a very critical assessment of legalization.
…the old-fashioned, party-pooper folk with whom I find myself sympathizing tend to fall back on one point: Weed is unhealthy. Since 2002, the proportion of Americans twelve and older who reported having used marijuana in the last year has increased by over 60 percent. …Pot smoke can cause lung cancer in the same way tobacco can, and secondhand marijuana smoke may have even more carcinogens than cigarettes. Marijuana smoke can also compromise the immune system, and there’s a growing amount of scientific literature indicating a significant correlation between any form of cannabis consumption and psychosis.
As a non-user, I’m very sympathetic to the health argument.
Regularly drawing any kind of smoke into one’s lungs simply can’t be healthy.
That being said, regularly eating big mounds of french fries also can’t be healthy, but that’s not an argument for criminalization.
Ravin then asserts that legalization is a failure because there are still black markets.
Advocates claimed that legalization would cripple the black market and weaken Mexican cartels. They argued that legalizing weed would reduce children’s access to it, as licensed distributors would have a greater incentive to card than criminal dealers, and that users would actually be healthier, as the government would be better able to regulate and inspect the stuff they were smoking. …Top that all off with the Cato Institute’s promises of billions of dollars in new tax revenue and billions more in law-enforcement expenses saved, and you’d have to be silly to disagree. But the libertarians got it wrong.
And he has some good evidence about the continued presence of illegal sales.
…the predicted benefits rested on one assumption: that legal weed would render criminal dealers obsolete much in the same way that repealing prohibition weakened bootlegging mobsters. But that has not happened. It has been nearly a decade since Colorado became the first state to legalize recreational marijuana, and the state is dealing with a larger black market than ever before. …Upwards of 80 percent of all of California’s marijuana sales go through the black market. Massachusetts (70 percent) isn’t faring much better, and Nevada is growing desperate. …Legal dispensaries simply cannot match the low prices offered by their criminal competition when they’re being stifled by so much regulation and taxation, legalization advocates say. Yet weren’t generating tax revenue and protecting users major arguments for legalization in the first place?
I will admit that Ravin makes one very strong point. If libertarians were arguing that legalization would simultaneously deliver lots of tax revenue and also eliminate the black market, that doesn’t make sense.
Simply stated, excessive taxation means illegal sellers will stay in business because their prices will be much lower than their legal (but highly taxed) competitors.
That being said, at least one libertarian (ahem, me) explicitly pointed out that generating additional tax revenue was actually an argument against legalization (I included this issue in my collection of Libertarian Quandaries).
Let’s look at another perspective on legalization.
Jacob Sullum has a largely upbeat assessment of what’s happened, though he agrees that excessive taxation is a problem.
…when it comes to taxes, New York legislators do not seem very keen on helping the industry—or consumers. …The THC levy may amount to a tax as high as 30 percent, depending on costs, THC content, and product type. That’s on top of a 13 percent marijuana sales tax, which is in addition to general state and local sales taxes that can run as high as 8.9 percent. New Jersey plans to impose an excise tax ranging from less than 3 percent to more than 30 percent, depending on the average retail price per ounce… The state also will allow local governments to collect multiple taxes from growers, manufacturers, wholesalers, and retailers… New Mexico’s marijuana sales tax is simple and modest by comparison: 12 percent initially, rising gradually to 18 percent by July 2030. States such as Alaska, Illinois, Maine, Massachusetts, and Michigan tax marijuana even more lightly. These states seem to recognize that heavy taxes make it harder for licensed retailers to compete with black-market dealers. It’s a lesson that some politicians will have to learn all over again.
A 2018 Bloombergarticle is a good primer on the issue of pot taxation.
What’s the optimal tax rate on legal marijuana if the goal is to eliminate the black market? …There are signs that California, with its longstanding pot culture and thriving black market, is taxing weed too much, while Washington state has already moved to lower its rate. …Lawmakers debating the issue are typically trying to balance two goals: generating revenue to boost state coffers while also creating a legal market that will put street dealers out of business. …The economics of elastic demand hold that consumers will buy less of a product as it gets more expensive, and the theory is being tested in the various legal markets around the U.S. …Oregon and California…have struggled to eliminate the black market, in part because high tax rates and regulatory red tape have made it attractive for some producers, sellers and customers to stay underground. …Light taxation and liberal licensing under Colorado’s adult-use law slashed the black market to 33 percent of cannabis sales last year, Adams said. In contrast, illicit sales were 78 percent of California cannabis sales and were even higher this year under adult-use laws that imposed extraordinary taxes and regulatory hurdles.
For those interested, I’ve written a few times (here, here, here, and here) about California’s over-taxation of marijuana.
I also have two columns (here and here) about Colorado’s experience.
So what’s the bottom line?
I fully expect that politicians in most states will continue to set tax rates too high, which means black market sales of marijuana will remain strong.
Why will they make this mistake? For the same reason they have excessively high tax rates on income, on sales, on property, on booze, and everything else.
Greedy politicians can’t resist the temptation to over-tax anything and everything in hopes of getting their hands on more money to buy more votes.
That’s America’s real (and bipartisan) addiction problem.
I first wrote about allowing markets for body parts back in 2009 and 2010.
Let’s revisit that issue today, starting with John Stossel’s case for legal organ sales in a video for Reason.
This should be a slam-dunk issue.
I want drugs to be legal, even though I personally disapprove of drug use.
I want prostitution to be legal, even though I’ve never swapped sex for money (no matter what women offer me).
I want gambling to be legal, even though I find that activity to be very boring.
I want alcohol to be legal, even though I generally find booze to be distasteful.
So it should go without saying that I want organ sales to be legal. Indeed, the case for legalizing organ sales is far stronger because I can’t think of a legitimate argument against a policy that creates no downsides for third parties and unambiguously benefits both sides (sick people and organ donors) of the transaction.
Professor Ilya Somin of George Mason University’s law school has been a long-time advocate of saving lives with organ sales.
Many Americans die every year because they need kidney transplants, but cannot find one in time, in large part due to federal laws banning organ sales. A recently published article finds that the number of such deaths is likely to be much greater than previous estimates indicate. It finds that over the 30 years between 1988 and 2017, an average of over 30,000 Americans have died each year, because the ban on organ sales prevented them from getting transplants in time. …even if the true figure is only, say, half as high, it still represents a vast amount of unnecessary suffering that could largely be prevented simply by allowing financial compensation for organ donors, thereby increasing the supply of available kidneys to the point where it can meet the demand.
Writing for the American Enterprise Institute, Sally Satel has a very personal interest in encouraging organ sales.
…there have never been enough kidneys, livers, hearts, and other organs. Kidneys, the organ most in need and most easily donated by the living, can be given by living friends and relatives and even the occasional “good Samaritan donor.” But, by law, they must be given for free, in the spirit of “altruism.” Altruism is a beautiful sentiment, and I have personally benefited: two magnificent friends have donated kidneys to me; one in 2006 and then again in 2016. Thousands others in the U.S., where I live, and elsewhere around the world, are not so lucky – they die waiting. …Compensating donors as a way to recruit people who would like to be rewarded for saving the life of another is long overdue. …Objections…ring hollow. The most common is that compensation “commodifies the body.” We already commodify the body, speaking strictly, every time there is a transplant: The doctors get paid to manipulate the body. So does the hospital. Why, then, object to enriching the donor — the sole individual in this entire scenario who gives the precious item in question and assumes all the risk?
In an article for CapX, Sam Dumitriu and Samuel Hammond make the case for pro-market reforms in the United Kingdom.
…increasing the number of living donors is becoming a major imperative for healthcare systems worldwide. For better or worse, altruism alone won’t fill the gap. Britain needs to change the law to give organ donors, particularly kidney donors, a financial incentive to donate. Rewards for donors are currently illegal… While the average time patients spend on the kidney waiting list has declined, it still routinely takes over three years before a match is found. In contrast, it’s clear from markets where financial rewards for donors are permitted that they are effective at increasing supply. …Kidney donors not only save lives and allow patients to come off dialysis, they also save the NHS money. According to the National Kidney Federation, each kidney transplant saves the NHS over £200,000 by reducing the need for expensive dialysis treatment. That’s significantly more than $40,000 price the Nobel Laureate Gary Becker and his co-author Julio Elias estimated would be necessary to eliminate the kidney shortage altogether.
In a column for the Federalist, Liz Wolfe makes the case that she should be allowed to help others by selling a kidney.
Four thousand dollars is my price, I think. … But I can’t do any of this because the government says it’s wrong. You know what else is wrong? Having 43,000 people die annually due to the current kidney shortage in our country. I’d love to help, but I don’t currently have a huge incentive to do so. …kidney-selling should be a person’s choice to make. …the naysayer might argue, isn’t autonomy undermined by desperation? Can consent truly take place if someone is debating between a set of imperfect options—selling an organ and profiting handsomely versus starving to death? …That would be more compelling if we didn’t already allow poor people to work in horribly dangerous industries for money. …Commercial fishing has a very high mortality rate and relatively low median wages. Roofers, garbage collectors (and recyclables collectors), construction workers, iron and steel workers, electricians, and truck drivers all have high mortality rates as well. Government does not intervene to protect these people from working in these industries… Either desperation undermines autonomy and invalidates consent or it doesn’t, but we should be more consistent. …Since we’re failing at pure altruism, maybe it’s time we turn to cold, hard cash as a better way to save lives.
In a column for the Foundation for Economic Education, Hans Bader looks specifically at kidney transplants.
Kidney failure shouldn’t be a death sentence. But for thousands of people, it is, thanks to federal laws banning organ sales. Those laws radically shrink the supply of kidneys and other organs that people desperately need to stay alive. …a recent study in the Journal of the American Society of Nephrology, titled “The Terrible Toll of the Kidney Shortage”…notes that the “106,000” people “who do not receive a transplant” due to the current kidney shortage “are fated to live an average of 5 years on dialysis therapy before dying prematurely.” …kidney donor Alexander Berger…predicted that allowing kidney donors to be compensated would save countless lives by giving people an incentive to donate their kidneys, resulting in a vast increase in kidney donations. …the taxpayers would save money, too. The government would be able to simply pay for kidney transplants for poor and elderly people…rather than paying for years and years of costly dialysis treatment through Medicare and Medicaid.
The bottom line is that paying donors would be good for sick people and good for taxpayers (Medicaid and Medicare are two of the most burdensome programs in the budget).
Sadly, politicians are standing in the way. But one potential seller has launched a court case.
John Bellocchio is suing the federal government to gain the freedom to sell his organs, as reported in the New York Post by Priscilla DeGregory.
A New Jersey man is suing the federal government for the right to sell his own organs — challenging a US law that bans the practice, new court papers show. John Bellocchio, 37, of Oakland filed the suit against United States Attorney General Merrick Garland in Manhattan federal court Thursday. He says in the suit that he struggled financially and looked into offloading some of his organs — perhaps a kidney — only to find out it’s illegal to make a buck on your body parts. Bellocchio, a career academic who now owns a business that helps connect people with service dogs, argues that the law contravenes his constitutional right to freedom of contract in determining what can be done with his own personal property — or, more specifically, his own body.
Christian Britschgi wrote about this legal challenge for Reason, but also made lots of strong arguments for why organ sales should be legal.
…the 1984 National Organ Transplant Act (NOTA)…makes it a crime for anyone to “acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.” Violators of this ban face a maximum fine of $50,000 and up to five years in prison. That prohibition has left the 90,000 patients in need of a kidney on the national transplant list…it’s estimated that between 5,000 and 10,000 people die for want of a kidney transplant each year. Many more are left to undergo expensive, draining dialysis treatment. Medicare, which covers kidney patients of all ages, spent $81 billion on patients with chronic kidney disease in 2018. Medicare-related spending on patients with end-stage renal disease totaled $49.2 billion that same year.
As you probably figured out, most of the opposition to organ sales is from people who inexplicably feel squeamish or uncomfortable with the notion of using money to save lives.
But you know what’s even more important for life than a kidney? Food.
Yet that doesn’t stop us from utilizing private farms, private food processors, and private grocery stores in order to get lots of food at very cheap prices.
And even the limited intervention in this sector (farm subsidies and food stamps, for instance) have nothing to do with qualms about private provision of food.
Back in 2017, I compared the welfare state vision of “positive rights” with the classical liberal vision of “negative rights.”
To elaborate, here’s a video from Learn Liberty that compares these visions.
For what it’s worth, I don’t like the terms “positive rights” and “negative rights” for the simple reason that an uninformed person understandably might conclude that “positive” is good and “negative” is bad.
Needless to say, I don’t think it’s good for people to think they have a right to other people’s money.
That’s why I prefer Professor Skoble’s use of the terms “liberties” and “entitlements,” which we also find in this slide from Professor Imran Ahmad Sajid of the University of Pakistan.
As you might expect, there are plenty of politicians who try to buy votes with an agenda of “positive rights.” Bernie Sanders, for instance, constantly argued that people have a “right” to all sorts of goodies.
But he wasn’t the first to make the case for unlimited entitlements.
Let’s see what some other people have to say about this topic.
In his National Reviewcolumn, Kevin Williamson looks at the logical fallacy of positive rights.
Positive rights run into some pretty obvious problems if you think about them for a minute, which is why so much of our political discourse is dedicated to moralistic thundering specifically designed to prevent such thinking. Consider, in the American context, the notion that health care is a right. Declaring a right in a scarce good such as health care is intellectually void, because moral declarations about rights do not change material facts. If you have five children and three apples and then declare that every child has a right to an apple of his own, then you have five children and three apples and some meaningless posturing — i.e., nothing in reality has changed, and you have added only rhetoric instead of adding apples. In the United States, we have so many doctors, so many hospitals and clinics, so many MRI machines, etc. This imposes real constraints on the provision of health care. If my doctor works 40 hours a week, does my right to health care mean that a judge can order him to work extra hours to accommodate my rights? For free? If I have a right to health care, how can a clinic or a physician charge me for exercising my right? If doctors and hospitals have rights of their own — for example, property rights in their labor and facilities — how is it that my rights supersede those rights?
And here’s what he says about “negative rights.”
A negative right is a right to not be constrained. The right to free speech, for example, implies only non-interference. The right to freedom of the press doesn’t mean the government has to give you a press. The good of negative freedom is, in the economic sense, not rivalrous — your exercise of free speech doesn’t leave less freedom of speech out there for others to enjoy
And Larry Reed opines on the issue for the Foundation for Economic Education.
America is a nation founded on the notion of rights. …Despite the centrality of rights in American history, it’s readily apparent today that Americans are of widely different views on what a right is, how many we have, where rights come from, or why we have any in the first place. …if you need something, does that mean you have a right to it? If I require a kidney, do I have a right to one of yours? Is a right something that can or should be granted or denied by majority vote?
He helpfully provides a list of negative rights (a.k.a., liberties).
And he argues that positive rights (a.k.a., entitlements) are not real rights.
The bottom line, he explains, is that so-called positive rights impose obligations on other people.
Indeed, they can only be provided by coercion.
The first list comprises what are often called both “natural rights” and “negative rights”—natural because they derive from our essential nature as unique, sensate individuals and negative because they don’t impose obligations on others beyond a commitment to not violate them. The items in the second are called “positive rights” because others must give them to you or be coerced into doing so if they decline. …while I believe neither you nor I have a right to any of those disparate things in the second list, I hasten to add that we certainly have the right to seek them, to create them, to receive them as gifts from willing benefactors, or to trade for them. We just don’t have a right to compel anyone to give them to us or pay for them.
There’s not much I can add to this issue, given the wisdom contained in the video and in the articles by Williamson and Reed.
So I’ll close with the should-be-obvious point that a system based on entitlements only works if there are enough people pulling the wagon to support all the people riding in the wagon.
Most Republicans and Democrats have a self-interested view of divided government.
They obviously prefer if their party controls everything. After all, that’s how Republicans got tax reform in 2017 and it’s how Democrats got Obamacare in 2010.
But they also like gridlock if that’s the only way of stopping the other party from wielding all the power.
Which is why Democrats liked gridlock after the 2018 election (they won the House of Representatives) and Republicans are going to like gridlock after the 2020 election (assuming they hold the Senate).
But what about those of us who want more economic liberty? Is gridlock good or bad?
As a matter of political economy, gridlock is good because it is harder for politicians to do anything when there’s divided government. Indeed, America’s Founders created a “separation of powers” system precisely because they wanted “checks and balances” to limit the power of politicians.
That’s the theory.
So how has it worked in practice?
First, we can look at international evidence by comparing the United States and Europe. We know two things.
European nations have parliamentary systems of government (the party that controls the legislature, by definition, controls the entire government), which means no checks and balances that can produce gridlock.
It’s certainly possible – or even quite likely – that those two points are interconnected. In other words, government has expanded faster in Europe precisely because there was no effective way of slowing or blocking statist legislation (and, as we know from the Second Theorem of Government, it’s difficult to take away goodies once voters get used to dependency).
Second, we can look at domestic evidence by comparing what’s happened in recent decades when there’s been gridlock in Washington.
Professor Steve Hanke crunched the numbers a couple of years ago. Here’s the chart he prepared showing that we got the most spending restraint (shaded in green) when there was divided government.
Steve’s data is persuasive, but I think it’s even more instructive to focus on the next column, which shows changes in non-defense spending.
By this measure, the only good results (i.e., a falling burden of spending) occurred during the Reagan and Clinton years. Since I did a video on exactly this issue, I concur that we got good results during their presidencies.
But notice that we now see very bad numbers when there was divided government during the Eisenhower and Nixon years. And the numbers for the first President Bush moved further in the wrong direction.
The bottom line is that divided government can be good, but it may actually produce the worst-possible results when you combine weak-on-spending Republican presidents with profligate Democratic Congresses.
While there’s still some ongoing election drama, it’s time to remind ourselves that politics is merely the means to an end. The goal of public policy should be to promote freedom and prosperity.
But maybe this cartoon will make libertarianism more appealing to some people.
I was thinking about saving this final image for July 4, 2021, but I think it’s a nice reminder that Americans historically have had- and hopefully still have – a rebellious spirit.
And I hope to come across many more examples, on issues ranging from red tape to gun control.
P.S. Many Americans try to avoid jury duty. If I knew I could be a juror on a case like this, I would relish the opportunity to practice jury nullification, which is a judicialversion of civil disobedience.
Moreover, there’s always a risk that those few governments with reasonably good policy will veer in the wrong direction.
I worry that’s happening in Hong Kong, and I fear it may happen today in Chile if voters make the wrong choice in a national referendum.
In a column for Quillette, Axel Kaiser from Chile’s Adolfo Ibaniez University analyzes what is happening.
In an extraordinary development, Chileans are deciding whether they want to create an entirely new constitution from scratch or preserve the existing one. …Chileans will also vote on whether the new constitution will be drafted by a mixed constitutional convention of politicians and elected representatives from the citizenry, or a constitutional assembly composed entirely of citizens. In either case, decisions by the body would require a two-thirds majority, and its deliberations must be completed within a year. …the new process portends a period of political instability, and the specter of open-ended conflicts and stand-offs between different branches of government. …To many outside Chile, it may seem strange that what has been arguably the most stable and prosperous country in Latin America would circumvent its institutions in this way… But in fact, the creation of an entirely new constitutional order has long been an ambition of the Chilean Left. …Revolutionary efforts to upend existing constitutional schemes have been a common feature in Latin America since the 19th century. …The idea that a new constitution will provide Chile with an instant solution…various forms of social conflict has become an attractive delusion. Yet the more likely scenario is that it will simply legally encode the unrealistic ideological demands that brought Chile to this point in the first place. ……many voters seem…swayed by extravagant promises of the future benefits they will enjoy under a new (and as yet undrafted) constitution. …56 percent of Chileans believe that a new constitution would lead to higher pensions, better education, and superior health care, among a long list of other improvements.
And he also explains why voters should be big fans of the current constitution.
Under the period covered by the current constitution, inflation—which had peaked at over 500 percent in 1973—fell below five percent by the 2000s. Between 1980 and 2015, per-capita income in Chile quadrupled to $23,000—the highest growth rate in Latin America. More importantly, life expectancy rose from 69 to 79, and levels of housing overcrowding fell to one-quarter of its pre-1980 levels. The middle class, as that category is defined by the World Bank, grew from 24 percent of the population in 1990 to 64 percent in 2015. Extreme poverty fell from 34 percent to less than three percent. Between 1990 and 2015, the income of the richest 10th of the population grew a total of 30 percent, while the income of the poorest 10th saw an increase of 145 percent. The Gini index, a widely used statistic that measures income inequality, fell from 52 in 1990 to about 48 in 2015. Chile also held the highest position among Latin American nations in the 2019 UN Human Development Index.
Mary Anastasia O’Grady, in her Wall Street Journalcolumn, is concerned that Chileans may be poised to make a big mistake.
Chile is on the cusp of collective political and economic suicide… On Oct. 25 Chileans will vote on whether the country needs a new constitution. Polls indicate that the “yes” vote will prevail even as the process of rewriting the highest law in the land is shaping up to be a disaster.A new constitution is likely to put at risk the model of democratic capitalism that brought Chilean poverty to below 10% in 2018, from nearly 70% in 1990. Chile also had the highest social mobility in a 2018 Organization of Economic Cooperation and Development study of 16 member countries. …Many Chileans seem to believe that a new constitution will make things right, à la Hugo Chávez’s Venezuela circa early 2000s. …Referendum backers say it is a “democratic” process. It is certainly majoritarian. But Chileans are bound to be disappointed if higher living standards and greater opportunity are the goal. The nation will be lucky if it finishes the exercise on par with the impoverished Argentine welfare state. …expect a document that reads like a litany of unattainable aspirations.
Some people favor majoritarianism, of course, especially if the result is a new set of “positive rights” to other people’s money.
In a column for the New York Times, Professor Michael Albertus hopes a new constitution will incorporate statist economic policy.
Chileans will vote to reject or approve the start of creating a new constitution. The citizens of more countries should do the same. The country’s current Constitution…has protected conservative interests and the military and has suppressed political dissent for 40 years. …The vote to convene a constitutional assembly in Chile could lead to a new document that brings the leadership closer to the people… It could also enshrine greater rights for labor unions, establish health care and education as fundamental rights… Most of Chile’s protesters and their supporters are largely motivated by bread and butter issues like higher pay, gender equity, improved health care access and quality medical care, pension reform, more rights for Indigenous peoples, access to affordable public transportation and free public education. …Protesters view a new constitution as key to delivering on these demands.
So why might Chileans be willing to gamble with their nation’s prosperity?
Early this year, Axel Kaiser offered some insight in a column in the Wall Street Journal.
He blames a left-leaning former government for creating economic malaise.
The economic pain started with the antimarket reforms of the previous government under Socialist President Michelle Bachelet, from 2014-18. Ms. Bachelet increased corporate taxes by 30%; signed a law banning the replacement of workers on strike, thereby dramatically increasing the costs of labor; increased public spending at three times the economic growth rate; and unleashed armies of regulatory bureaucrats on the private sector. Capital investment fell in each year of her term. Such a consistent reduction in investment hasn’t happened since data was first collected, in the 1960s. Economic growth collapsed from an annual average of 5.3% under the previous government of Mr. Piñera (2010-14) to 1.7% under Ms. Bachelet. Real wage growth took a 50% hit.
By the way, I take no pleasure in having predicted that Ms. Bachelet’s tenure would yield bad results.
But let’s not focus on her mistakes.
Indeed, Mr. Kaiser thinks her bad policies (and the anemic Bush/Macri/Sarkozy-type approach of the current government) are largely a reflection of a bigger problem.
The policies result from a profoundly false narrative Chilean elites tell themselves about the country. Over the past 20 years, intellectuals, media personalities, business leaders, politicians and celebrities in this Latin American nation have marketed the myth that Chile is an extreme case of injustice and abuse. It began at the universities, where progressive ideologues spread the idea that there was nothing to feel proud about when it came to Chile’s social and economic record. …Ms. Bachelet’s second term and her social justice-driven agenda were the inevitable result. …The free market didn’t fail Chile… The central problem is that a large proportion of the elites who run key institutions—especially the media, the National Congress and the judiciary—no longer believe in the principles that made the country successful. The result is a full-blown economic and political crisis. Other nations should take note: This is what elite self-hatred can do for you.
I wonder if Alex is referring to the United States when warning other nations about the danger of “elite self-hatred.”
It’s certainly true that many elites in America are quite disdainful of the nation’s economic system. Which has always mystified me since that system enabled their success – or the success of their parents, which allows them to lead very comfortable (albeit guilt-ridden) lives.
More important, it enabled ever-higher living standards for ordinary people, which should please folks on the left, at least if we believe their rhetoric (though I fear many of them are more motivated by hostility to the rich rather than love for the poor).
But let’s not digress. I want to close by noting that poor people have been the biggest winners from Chile’s free-market reforms.
This tweet from Professor Daniel Lacalle is a perfect example. It shows how poverty has plummeted, regardless of which measure is used.
P.S. I’ve already written that the most important referendum for 2020 is the upcoming vote whether to retain the Illinois flat tax. Perhaps I should have listed today’s vote in Chile?
July 29, 2021 Addendum: This chart is further evidence that Chile should not reverse the reforms that have done so much to promote prosperity.
Notice how growth exploded after reforms were implemented in the 1980s.
A pure democracy, where 51 percent of the people have the right to do anything they want, is not a desirable form of government. It means tyranny of the majority.
Some pundits and some lawmakers in Washington either don’t understand this part of American history or they want to pretend it doesn’t exist.
Fortunately, Senator Lee of Utah is not one of those people, as illustrated by this recent tweet.
This elementary observation rubbed some people the wrong way.
Indeed, it even generated a hostile article by Nathaniel Zelinsky in the Bulwark, an anti-Trump site operated by former Republicans.
This message fits a growing and disturbing trend. Among the conservative intelligentsia, especially in certain legal circles, it has become stylish to view self-governance as nothing more than a means to a very particular set of ends. And should “conservative” policies lose out in the democratic process, then liberal democracy itself should go. …Among Federalist Society members, a group once defined by a commitment to judicial restraint to protect democracy, one today hears about “active judging”—the notion that life-tenured jurists shouldn’t hesitate to strike down popularly enacted legislation. …these tendencies share a common endpoint: Upset the delicate bargain of American democracy and impose a narrow set of preferences on the rest of us. And it’s exactly this vein of illiberalism that Senator Lee tapped into. …Yes, the Founders crafted a constitutional structure that prevents the majority from easily imposing itself on a minority and places some hard limits on the government’s powers. But Senator Lee’s attack on “rank democracy”…leaves little room for…collective self-government.
At the risk of understatement, Mr. Zelinsky’s attack on Senator Lee is completely incoherent.
The Utah Senator was celebrating the “classical liberalism” of America’s founding principles. Senator Lee was extolling a system that protects individual rights.
That’s the opposite of “illiberalism.”
To be sure, there are some folks on the right who don’t embrace those values. But Senator Lee isn’t one of them.
This isn’t a new controversy, by the way. Writing last year for the U.K.-based Guardian, Quinn Slobodian accused “neoliberals” of favoring economic freedom over democracy (in Europe, they often use “neoliberal” as a term for libertarians).
The ideal world described by these indexes is one where property rights and security of contract are the highest values, inflation is the chief enemy of liberty, capital flight is a human right and democratic elections may work actively against the maintenance of economic freedom. …The definition of freedom they used meant that democracy was a moot point, monetary stability was paramount and any expansion of social services would lead to a fall in the rankings. Taxation was theft, pure and simple, and austerity was the only path to the top. …Pinochet, Thatcher and Reagan may be dead. But economic freedom indexes carry the neoliberal banner by deeming the goals of social justice forever illegitimate…the indexes help perpetuate the idea that economics must be protected from the excesses of politics – to the point that an authoritarian government that protects free markets is preferable to a democratic one that redesigns them.
Unlike the Zelinsky piece, Slobodian’s column is actually coherent.
He wants untrammeled majoritarianism, at least when he thinks it will result in bigger government.
And he’s correct that classical liberals reject that approach.
But we have good reasons for that skepticism. Writing earlier this year for the Foundation for Economic Education, Professor Gary Galles explained why it’s better to rely on “market democracy” rather than “political democracy.”
In a political democracy, a majority can also force its preferences on others in any issue. That is why our founders adopted constraints on majority abuse, such as limited, delegated powers and the Bill of Rights. However, those constraints have largely been undermined. In contrast to political democracy, free-market capitalism, which reflects democratic self-government, represents a far better ideal. Its system of exclusively voluntary cooperation based on self-ownership requires that property rights be respected; no majority can violate owners’ rights. …a superior form of democracy is to remove virtually all decisions and policies that we need not share in common (almost all of them, beyond the mutual protection of our property rights) from government dictation, even if they are “democratic,” and let people exercise self-government through their own voluntary arrangements, protected by their inalienable rights.
Pure democracy is simply another way of saying untrammeled majoritarianism.
And that system of government is a threat the rights of minorities – whether you’re talking about religious minorities, ethnic minorities, sexual minorities, political minorities, or any other subset of the population that may be unpopular at some point with mass opinion.
P.P.S. On the 150th anniversary of the Declaration of Independence, Calvin Coolidge correctly summarized the meaning of the American experiment.
P.P.P.S. If you want a horrifying example of majoritarianism in action, see Venezuela.
P.P.P.P.S. To be fair, Switzerland is a very successful example of a nation based not only on majoritarianism, but also direct democracy (my two cents is that the nation’s decentralization is the real reason for its success).
But if small government is good, would no government be even better? That’s the core argument of so-called anarcho-capitalists or voluntaryists.
To understand this approach, let’s start with the video from Learn Liberty, featuring Professor Bryan Caplan of George Mason University.
And here’s a video from Reason featuring David Friedman.
You won’t be surprised to learn that I was very happy to hear him embrace jurisdictional competition toward the end of the interview (and I also agree with him that this is a reason to be skeptical about the European Union’s pro-centralization mindset).
But let’s stick with the main topic. Is anarcho-capitalism a good idea?
Defenders of the idea frequently make the point that it’s got to be better than what we have now.
Which is the message of this sarcastic meme.
But let’s take a more serious look at the topic.
At the risk of oversimplifying, there are three big questions that always get asked about how a society could exist with no government:
What to do about pollution?
What to do about crime?
And what to do about national defense?
David Friedman’s Machinery of Freedom is the classic tome on anarcho-capitalism.
First published in 1973, here’s what he says about pollution.
The pollution problem exists because certain things, such as the air or the ocean, are not property. Anyone who wishes to use them as garbage dumps is free to do so. If the pollution were done to something that belonged to someone, the owner would permit it only if the pollutor were willing to pay him more than the damage done. …The ideal solution is to convert unowned resources into property. One could, for instance, adopt the principle that people living along a river have a property right in the river itself and that anyone who lowers the value of the river to them by polluting it, without first getting their consent, is liable to suit. …Some things, such as air, are extraordinarily difficult to deal with in this way. …The simplest solution to such a paradox is to permit parties injured by air pollution to sue for damages—presumably in class actions, by many victims against many pollutors. I would not be able to shut down your blast furnace merely by proving that a sufficiently sensitive instrument could occasionally detect sulfur dioxide in my air. But, if the concentration were high enough to be offensive, I could sue you for the damage done. At present, pollution is ‘controlled’ by governments. … Who gets away with it depends not on real costs but on politics. If pollutors must pay for their pollution, however avoidable or unavoidable, we will rapidly find out which ones can or cannot stop polluting.
Protection from coercion is an economic good. It is presently sold in a variety of forms—Brinks guards, locks, burglar alarms. As the effectiveness of government police declines, these market substitutes for the police, like market substitutes for the courts, become more popular. Suppose, then, that at some future time there are no government police, but instead private protection agencies. These agencies sell the service of protecting their clients against crime. Perhaps they also guarantee performance by insuring their clients against losses resulting from criminal acts. …In practice, once anarcho-capitalist institutions were well established, protection agencies would anticipate such difficulties and arrange contracts in advance. …In such a society law is produced on the market. A court supports itself by charging for the service of arbitrating disputes. Its success depends on its reputation for honesty, reliability, and promptness and on the desirability to potential customers of the particular set of laws it judges by. The immediate customers are protection agencies. But the protection agency is itself selling a product to its customers. …The most serious objection to free-market law is that plaintiff and defendant may not be able to agree on a common court. Obviously, a murderer would prefer a lenient judge. If the court were actually chosen by the disputants after the crime occurred, this might be an insuperable difficulty. Under the arrangements I have described, the court is chosen in advance by the protection agencies. There would hardly be enough murderers at any one time to support their own protective agency, one with a policy of patronizing courts that did not regard murder as a crime.
Though even Friedman is uncertain how national defense could be privatized.
National defense has traditionally been regarded, even by believers in a severely limited state, as a fundamental function of government. … the usual solution is to use government force— taxation—to make those benefited (and others) pay… national defense—defense against nations—must defend areas of national size, whether or not they contain nations. It is thus a public good, and one with a very large public. …The cost of a minimal national defense is only about $20 billion to $40 billion a year. The value to those protected is several hundred billion dollars a year. National defense is thus a public good worth about ten times what it costs; this may make it easier, although not easy, to devise some noncoercive way of financing it. … a national defense agency might raise enough money to finance national defense without taxation. Obviously, a system that depends on local agencies evolved for a different purpose or a ramshackle system financed by charity, passport sales, and threats to Hawaiian insurance companies is economically very imperfect. So is a system financed by coercion and run by government. …What will I do if, when all other functions of our government have been abolished, I conclude that there is no effective way to defend against aggressive foreign governments save by national defense financed by taxes—financed, in other words, by money taken by force from the taxpayers? In such a situation I would not try to abolish that last vestige of government. I do not like paying taxes, but I would rather pay them to Washington than to Moscow—the rates are lower. I would still regard the government as a criminal organization, but one which was, by a freak of fate, temporarily useful.
For what it’s worth, anarcho-capitalism may be moving from theory to reality.
At least in small doses.
I’ve previously written about Liberland, a tiny would-be independent entity on some unclaimed land between Serbia and Croatia.
There’s also the idea of libertarian-themed floating communities that would be independent of any government.
Stunning concept images for the world’s first first floating nation have been released as part of a project bankrolled by PayPal founder Peter Thiel. The plans will see the seabound city-state, complete with a handful of hotels, homes, offices, restaurants and more, built in the Pacific Ocean off the island of Tahiti… The scheme is the creation of the nonprofit Seasteading Institute, which hopes to ‘liberate humanity from politicians’. The radical plans could see the creation of an independent nation that will float in international waters and operate within its own laws. …the fantasy looks to be coming closer to reality with companies, academics and architects from the Seasteading Institute working on a prototype… Joe Quirk, president of the Seasteading Institute, said he wants to see ‘thousands’ of rogue floating cities by 2050, each of them ‘offering different ways of governance’. …’We can create a huge diversity of governments for a huge diversity of people.’ …The Institute claims it will ‘give people the freedom to choose the government they want instead of being stuck with the government they get’. If inhabitants disagree with the city’s government, they could paddle their colony to another city, forcing governments to work to attract citizens.
It’s worth noting, though, that a seasteading community was supposed to start this year, and that deadline apparently won’t be met.
Doesn’t mean it can’t happen, or that it won’t happen, but we’re still waiting to see if it actually happens and how well it will work.
There’s also the idea of anarcho-capitalism in small pieces.
Such as private police, as happened in Sharpstown, Texas.
One thing that holds many Libertarians back from converting to free-market anarchism is the idea of the police force. Many libertarians believe that one of the few functions that the government should have is the provision of police within society. …One town, though, did privatize the police… Sharpstown, Texas, is not an actual town, but rather a community. They purchase services from S.E.A.L. Security Services, LLC, a completely private firm that provides policing services. The results have been quite astounding. Their director of operations, James Alexander, gave a rundown of the success of the firm… In the 20 months leading up to February of 2015, S.E.A.L. successfully brought crime down 61%. Alexander’s numbers have been disputed, though, by Jim Bingham, president of the Sharpstown civic association. He claims that Alexander’s numbers are unbacked, and says instead that crime (particularly burglaries) went down about 32% over two years. …The people who work for the firm are private individuals being privately funded. They are subject to the same rules and regulation that go for regular people, meaning that they cannot murder or steal. Public police, on the other hand, are able to cite “stress” as an excuse for murdering unarmed black men and steal astronomical amounts of money from citizens in DUI checkpoints and through civil asset forfeiture.
This is a very appealing idea, especially given the serious problemswe’re seeing with government-operated police departments.
Let’s close with some anarcho-capitalist humor (yes, that is a genre). We’ll start with a Hitler parody about seasteading.
Here’s an example of anarcho-capitalist humor from Reddit’s libertarian page.
A couple of the above memes are based on the notion that taxation is based on coercion, or even theft.
To be fair, recognizing that taxation is coercive doesn’t make someone an anarcho-capitalist.
My two cents is that taxation is coercive, but I’m nonetheless a traditional limited-government libertarian. I’d like to believe that that the anarcho-capitalists are correct, but I haven’t been convinced.
That being said, I believe in a big tent. As far as I’m concerned, let’s all agree to get rid of the 90 percent of government that we all recognize is counterproductive. Once we get to that stage, then we can squabble over how much of the rest to eliminate.
P.P.S. If you want to see where you rank, there are several online tests and quizzes.
For what it’s worth, the Political Sextant Quiz says I am close to being an anarcho-capitalist, though my closest match is minarchism.
And if you’re willing to answer 64 questions, I very much recommend Bryan Caplan’s Libertarian Purity Test. The good news is that I got a 94. The bad news is that the top score (which definitely would qualify someone as an anarcho-capitalist) is 160.
P.P.P.S. If you enjoyed the Hitler parody above (and it’s always a good idea to mock genocidal socialists), here are other examples.
Simply stated, people should have the freedom to do business with each other – or not do business with each other – based on their personal preferences.
I may disapprove of how various people exercise those preferences, but I wouldn’t ask a politician or bureaucrat to intervene.
Which brings us to today’s topic. Here are some excerpts from a New York Poststory about a not-quite-women-only business.
The Wing was supposed to be the ultimate sanctuary for women: decidedly feminine in design, with walls and furniture in shades of millennial pink and a thermometer set at a women’s-clothing-friendly 72 degrees. …It offers perks that other co-working spaces can’t match — showers stocked with high-end beauty products…the company’s expansion and popularity has brought up a completely different issue…men wanting to come in and hang out. …it’s not against the rules for men to be at the lady lair, which costs anywhere from $185 to $250 a month in the US to join. But that’s only because legally the company can’t ban men. …The problem, multiple members have told The Post, is that the men physically take up too much space with their bigger bodies… While they aren’t using the members-only changing rooms and showers (yet), they are in the guest bathrooms. …The Wing…never had a membership policy, because, reps say, they didn’t think they’d need one. Instead, they simply billed themselves as a women’s co-working space and social club. …the New York City Commission on Human Rights…in 2018 opened an investigation into the company. The Wing’s large membership — more than 11,000 worldwide, according to reps — meant it couldn’t pass as a “social club,” and therefore can’t discriminate based on gender.
My reaction is that the New York City Commission on Human Rights should mind its own business.
If women want a female-only place to interact and do business, it’s not the job of government to interfere.
Here’s another example, though the discrimination is based on politics rather than gender. As reported by the Hill, a California restaurant wants freedom not to associate with overt Trump supporters.
A restaurant owner and award-winning author in California tweeted that he will no longer serve customers who wear “Make America Great Again” hats at his eatery. “It hasn’t happened yet, but if you come to my restaurant wearing a MAGA cap, you aren’t getting served…”Some diners told The Associated Press on Thursday that they understand the restaurant owner’s position but added that they have mixed feelings about the ban. …“I see where he’s coming from, but I don’t think you should just keep people out because of a hat,” Jamie Hwang, a San Mateo resident, told the news agency. Another diner, Esther Shek, told the publication that she believes the hats have “come to represent racism, intolerance, exclusivity” but also added that López-Alt’s choice to refuse supporters of the president might spell trouble later.
In this case, I definitely think the restaurant owner is being petty. But I also recognize that it’s his restaurant. It’s his money and it’s his property.
By the way, it’s worth noting that freedom of association is a two-way street.
It means private businesses can refuse customers, but it also means customers can reject businesses.
A black couple in Georgia turned away a white repairman who showed up to their house while flying a large Confederate flag, leaving the couple in utter “disbelief” before saying he wasn’t welcome. …After a polite conversation with the contractor, Brown said, he was in “disbelief” that the man he hired from Facebook’s local marketplace would think the flag was acceptable to fly during house calls. Brown’s wife then came outside and bluntly turned the man away, video shows. …The repairman offered to remove the flag, but the damage was already done. He later reached out to the couple on Facebook to say he didn’t mean to offend them, Zeke Brown told ABC News. Brown replied to the contractor, explaining that the flag is “extremely offensive” to people of color while urging him to do some research.
Incidentally, I may be a bit of a Pollyanna on these issues, but I’m glad that the contractor reached out to the couple with an apology.
Having spent many years in Georgia and having interacted occasionally with people who displayed confederate flags, I concluded that very few of them were motivated by racial animus. It was more a form of social signalling about being rural, or being a hell raiser (a la Dukes of Hazard).
That being said, they obviously were not sensitive to the fact that blacks had a much more jaundiced view of what the flag represents.
Let’s conclude by addressing the negative aspect of freedom of association, which is that some bad people will discriminate for odious reasons.
The stereotypical example is a business in Alabama in 1958 that refused to serve black customers. This is partly inaccurate because much of the discrimination during that era was the result of government policies that mandated segregation (a.k.a., the Jim Crow laws).
But I’m sure there was also plenty of genuinely private discrimination.
And the best news is that our society is now increasingly vigilant against bias.
For instance, the Washington Postreported about a bakery that gained customers for being welcoming to everyone.
Nino Barbalace…opened a bakery and cafe in Dorchester, Mass. …He affixed a tiny pride flag to his restaurant’s window for the pride parade in June, and it has remained there since. Then came the Yelp review.“Well, that flag says all when you delve deeper and see the real customer base here, it’s clearly geared and catered ONLY to those who rally behind the rainbow flag.” That alarmed Barbalace, who posted an image of the one-star review on the restaurant’s Facebook page. “All are welcome at Zia Gianna, even this gentleman. We’d love to show him some kindness…” Barbalace wrote in his post on Aug. 13. …Customers rallied in response. Tiffany Andrade told Fox 25 that she dropped by the cafe on Friday to offer support. …“We love your place, and love your love for everyone no matter what,” one customer said. Another said: “Haven’t been in to your restaurant before, but now I’m putting it on my must-visit list. Love is love is love. Keep flying that flag!”
Kudos to Mr. Barbalace, by the way, for reaching out to the unfriendly reviewer.
The United States has made great progress and is one of the most tolerant places in the world.
But there’s always room for more progress and you’re far more likely to change hearts and minds with outreach – Daryl Davis and Matthew Stevenson are role models – rather than demonization.
For libertarians, there aren’t many good role models in the world. There are a few small jurisdictions such as Bermuda, Monaco, and the Cayman Islands that are worth highlighting because of strong rule of law and good fiscal policy. There are also a few medium-sized nations that are – by modern standards – very market-oriented, such as Switzerland, Singapore, and New Zealand.
But Hong Kong generally gets top rankings for economic liberty. Which helps to explain why I’m so worried about a potential crackdown by China.
As I noted in the interview, intervention by Chinese security would not be good news for Hong Kong.
But it also would be bad news for China’s economy. Especially since it already is dealing with the adverse consequences of both internal statism and external protectionism.
Indeed, the only reason I’m not totally pessimistic is that the power elite in China doubtlessly would experience a big loss in personal wealth if there is a crackdown.
That being said, I can’t imagine President Xi will allow China’s implicit control over Hong Kong to diminish. So I’m reluctant to make any prediction.
But I very much hope that Hong Kong will emerge unscathed, in part because I don’t want to lose a very good example of the link between economic liberty and national prosperity.
Marian Tupy, writing for CapX, explains that Hong Kong is a great role model.
In 1950, …compared to the advanced countries of the West, Hong Kong was still a relative backwater. …the average resident of the colony earned 35 per cent and 25 per cent compared to British and American citizens respectively. Today, average income in Hong Kong is 37 per cent and 3 per cent higher than that in the United Kingdom and America. …Unlike some British ex-colonies and the United Kingdom itself, Hong Kong never experimented with socialism. Historically, the government played only a minor role in the economy… The territory kept taxes flat and low… The territory followed a policy of unilateral trade liberalisation, which is to say that the colony allowed other countries to export to Hong Kong tariff-free, regardless of whether other countries reciprocated or not. …In 1755, the great Scottish economist Adam Smith…wrote, “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice…” Hong Kong prospered because it followed Smith’s recommendations.
Here’s his chart showing how Hong Kong has surpassed both the United Kingdom and United States in terms of per-capita economic output.
In a column for the Wall Street Journal, Jairaj Devadiga explains a key factor in Hong Kong’s success.
Sir John Cowperthwaite was Hong Kong’s financial secretary from 1961-71 and is widely credited for the prosperity Hong Kong enjoys today. An ardent free-marketeer, Cowperthwaite believed that government should not try to manage the economy. One salient feature of Cowperthwaite’s policies: His administration didn’t collect any economic data during his tenure. Not even gross domestic product was calculated. When the American economist Milton Friedman asked why, Cowperthwaite replied that once the data were made available, officials would invariably use them to make the case for government intervention in the economy. …Without data, busybody bureaucrats had no way of justifying interference in the economy. In Cowperthwaite’s Hong Kong, the government did only the bare minimum necessary, such as maintaining law and order… The rest was left to the private sector. …When asked what poor countries should do to emulate Hong Kong’s success, he replied, “They should abolish the office of national statistics.”
Now that we’ve looked at some of the factors that enabled Hong Kong’s prosperity, let’s consider what may happen if there’s a crackdown by China.
Professor Tyler Cowen shares a pessimistic assessment in his Bloomberg column.
Hong Kong has been a kind of bellwether for the state of freedom in the wider world. …By 1980, Milton Friedman’s “Free to Choose” series was on television, portraying Hong Kong as a free economy experiencing huge gains in living standards. The skyline was impressive, and you could get all the necessary permits to start a business in Hong Kong in just a few days. The territory showed how Friedman’s theories worked in the real world. Hong Kong stood as a symbol of a new age of freer markets and growing globalization. …Hong Kong still ranks near or at the top of several indices of economic freedom. But…[n]ot only is there the specter of Chinese intervention, but there is also a broader understanding that the rules of the game can change at any time… Meanwhile, many Hong Kong residents know their behavior is being monitored and graded, and they know the role of the Chinese government will only grow. …Freedom is not merely the ability to buy and sell goods at minimum regulation and a low tax rate, variables that are readily picked up by economic freedom indices. Freedom is also about the…legitimacy and durability of their political institutions. …Circa 2019, Hong Kong is a study in the creeping power and increasing sophistication of autocracy. While it is possible there could be a Tiananmen-like massacre in the streets of Hong Kong, it is more likely that its mainland overlords will opt for more subtle ways of choking off Hong Kong’s remaining autonomy and freedoms. …right now, I would bet on the Chinese Communist Party over the protesters.
If Cowen is right, one thing that surely will happen is that money will flee.
And that may already be happening. Here are some excerpts from a Bloomberg report.
Private bankers are being flooded with inquiries from investors in Hong Kong…wealthy investors are setting up ways to move their money out of the former British colony more quickly, bankers and wealth managers said. A major Asian wealth manager said it has received a large flow of new money in Singapore from Hong Kong over recent weeks, requesting not to be identified due to the sensitivity of the issue. One Hong Kong private banker said the majority of the new queries he receives aren’t coming from the super-rich, most of whom already have alternative destinations for their money, but from individuals with assets in the $10 million to $20 million range. …The extradition fight reinforced concerns among Hong Kong investors and democracy advocates alike that the Beijing-backed government is eroding the legal wall separating the local judicial system from the mainland’s. …The recent demonstrations are the latest trigger in a long process of Chinese money flowing to Singapore, London, New York and other centers outside Beijing’s reach. …“Hong Kong has shot itself in the foot,” said Chong, a Malaysian who has permanent residency in both Hong Kong and Singapore. “Can you imagine Singapore allowing this?”
And keep in mind that big money is involved. Here’s a chart that accompanied the analysis.
Looking at these numbers, I want to emphasize again that China also will suffer if a crackdown causes money to flee Hong Kong.
Which is President Xi should resist the urge to intervene.
I’ll close with this visual depiction of Hong Kong’s amazing growth.
Let’s hope Beijing doesn’t try to reverse this progress.
P.S. You’ll notice that I didn’t advocate for democracy, either in this column or in the interview. That’s because I’m more concerned with protecting and promoting liberty. Yes, it’s good to have a democratic form of government. If I understand correctly, there’s also an empirical link between political freedom and economic freedom. But sometimes democracy simply means the ability to take other people’s money, using government as the middleman. That’s why the people of not-very-democratic Hong Kong are much better off than the people of democratic Greece.
Two days ago, I wrote about how the Constitution was designed, in large part, to protect Americans from majoritarianism.
The Supreme Court is doing a reasonably good job of protecting some of our liberties (or, in the Heller case, restoring our liberties), but I point out in this clip from a recent interview that the Justices have failed to protect our property rights.
But since I’m now a lawyer, let’s focus instead on what legal scholars have written on this issue.
In the meantime, here are some excerpts from an article he wrote for Chapman Law Review.
The original Constitution of 1787 granted limited powers to each of the three branches of government… The federal government was limited in power so that it could not deprive citizens of their privileges and immunities… The Constitution was passed by delegates who had lived under and were steeped in the common law. Most terms and provisions of the Constitution are of common law origin and cannot fully be understood without reference to the common law. Thus, although there were no specific protections for the right of property or economic activity or press and speech, the United States government was given no power in the Constitution to deprive people of these common law rights.
Siegan explains some of the thinking that motivated James Madison.
The most influential Framer of both the United States Constitution and the Bill of Rights was James Madison, a delegate to the Constitutional Convention from Virginia… He spent considerable time preparing for the Convention by studying the writings of leading authorities on government, particularly the Scottish philosopher and historian David Hume, who advocated freedom for commerce as essential to the viability and progress of a nation. As a result of his…extensive review of literature on the subject of government, Madison concluded that for a nation to be politically and economically successful considerable limitation of government powers was required, enabling the productive, inventive, and competitive talents of the people to flourish. He believed that the welfare of a nation mandated the creation of a commercial republic that would depend on freedom of the markets and not on the authority of the state.
There’s also an excellent book, The Dirty Dozen, written by Robert Levy and William Mellor, which outlines twelve terrible Supreme Court decisions that expanded the power of government (including Wickard v. Filburn and Kelo v City of New London).
Here are some excerpts from remarks by Levy.
The Tenth Amendment says quite clearly that the federal government is authorized to exercise only certain enumerated powers, the ones that are listed there and that are specifically delegated to the national government. The Tenth Amendment goes on to say, if the power is not listed there, if it’s not enumerated and delegated to the national government, then it is reserved to the states or, depending on the provisions of state constitutions and state laws, to the people. …No matter how worthwhile the goal, no matter how much Congress thinks that it has identified a really important problem, and no matter how sure Congress is that it knows how to fix the problem, if there’s no constitutional authority to pursue it, then the federal government has to step aside and leave the matter to the states or private parties.
They even included an amendment as part of the Bill of Rights to reinforce those limitations on the power of government.
Speaking of amendments, advocates of bigger government could have used that approach to expand the power of Washington. But, as Levy points out, they didn’t need to follow the rules because the Supreme Court decided to no longer protect economic liberty.
…the Supreme Court has accomplished through the back door what the states and the Congress could not have accomplished through the prescribed amendment process. Regrettably, I think, the modern court has lost its compass… Much of the court’s enduring mischief…started during the New Deal and continues today.
…the Constitution…does offer broad and specific protections to private property through the Takings Clause (“nor shall private property be taken for public use without just compensation”4×4. U.S. Const. amend. V. ) and through the Due Processes Clauses of the Fifth and the Fourteenth Amendments (providing that neither the federal government nor the states may deprive any person of “life, liberty or property, without due process of law”5×5.Id.; id. amend. XIV. ). …a unified conceptual framework should apply to what are called economic and personal liberties, even if it were possible to articulate some hard-edged separation between them. The analytical origin of this position is that voluntary contracting, whether for the transfer of goods and services or the formation of long-term associations, works as well in the one domain as in the other.
Epstein points out that there was a spirited debate when the Constitution was drafted and adopted, but both sides in that debate would oppose the expansion of government power that largely began in the 1930s.
…there were many differences between the Federalists and Antifederalists, but anyone would be hard pressed to find a single point of contention that could be cashed out to support the hallmark legislation of the New Deal. …the Contracts Clause imposes limitations on how the state could regulate ot only existing contracts, but also those contracts that had not yet been made. And whatever doubts that existed were largely removed by the adoption of the Fourteenth Amendment, where the correct reading of the Privileges or Immunities, Due Process, and Equal Protection Clauses all place powerful limitation on the scope of state power to regulate economic and noneconomic matters alike. …neither the Federalists nor the Antifederalists in the ratification debates supported such massive federal schemes as the National Labor Relations Act.
Let’s close with this clever image someone posted on Facebook.
P.S. Here’s some satire about Obama and the Bill of Rights.
P.P.S. And here’s what Professor Epstein said about his interactions with Obama at the University of Chicago.
P.P.P.S. I image Levy/Mellor book would be re-titled The Dirty Thirteen if it was updated to include the horrific Obamacare decision.
While she’s mostly known for radical proposals such as confiscatory tax rates and the Green New Deal, Alexandria Ocasio-Cortez also made waves with recent comments about imposing “democracy” on the economy.
In a discussion last year at Ponoma College in California, I explained why majoritarianism is misguided.
For all intents and purposes, unchecked democracy gives 51 percent of the people a right to rape and pillage 49 percent of the people.
Professor Victor Davis Hanson explains how they recognized the dangers of majoritarianism.
The half-millennia success of the stable Roman republican system inspired later French and British Enlightenment thinkers. Their abstract tripartite system of constitutional government stirred the Founding Fathers to concrete action. Americans originally were terrified of what 51 percent of the people in an unchecked democracy might do on any given day—and knew that ancient democracies had always become more not less radical and thus more unstable. For all the squabbles between Adams, Jefferson, Hamilton, and Madison, they agreed that a republic, not a direct democracy, was a far safer and stable choice of governance. …We often think that a Bill of Rights was designed to protect Americans from monarchs and dictators. It certainly was. But the Founders were just as terrified of what that the majority of elected representatives without restraint might legally do on any given day to an individual citizen. …All consensual governments are prone to scary wild swings of mob-like emotion—and to demagogues who can almost rein in or goad the dêmos. But the Founders sought to make American government immune to Athenian-style craziness through a system of checks and balances that vented popular frenzies without a great deal of damage.
In a column for the Foundation for Economic Education, Professor Gary Galles explains the difference between liberty and democracy.
…far too little attention seems to be given to the differences between democracy—the process by which we select members of government—and liberty—the key to good government. …our Constitution and Bill of Rights…put some things beyond majority determination… Unfortunately, democracy…is entirely consistent with choices that destroy liberty…the growing reach of government makes our exercise of democracy an increasing threat to liberty, defending that liberty requires understanding the limits of democratic determination.
George Will, citing the work of Professor Randy Barnett, explains that the fight is – or should be – between statist majoritarians and libertarian constitutionalists.
Regarding jurisprudence, Democrats are merely results-oriented, interested in…expanding government’s power… Republicans…have grown lazily comfortable with rhetorical boilerplate in praise of “judicial restraint.” …all progressives are Hobbesians in that they say America is dedicated to a process — majoritarian decision-making that legitimates the government power it endorses. Not all Lockeans are libertarians, but all libertarians are Lockeans in that they say America is dedicated to a condition — liberty. …Lockeans favor rigorous judicial protection of certain individual rights — especially private property and freedom of contract — that define and protect the zone of sovereignty within which people are free to act as they please. Hobbesians say the American principle is the right of the majority to have its way. …Lockeans say the Constitution, properly construed and enforced by the judiciary, circumscribes the majoritarian principle by protecting all rights that are crucial to individual sovereignty. …Barnett says, yes, the Constitution — “the law that governs those who govern us” — is libertarian. And a Lockean president would nominate justices who would capaciously define and vigorously defend, against abuses by majoritarian government.
You don’t have to be a Randian to heartily endorse and embrace this sentiment (h/t: LibertarianReddit).
The most cogent warning about majoritarianism comes from the great Thomas Sowell.
"In the modern welfare state, a vote becomes a license to take what others create — and these others include generations yet unborn."
When talking with people who dislike free enterprise, it’s quite common that they will admit (at least once I share some of the evidence) that markets produce more prosperity than statism.
But that generally doesn’t convince them. In part, this is because they believe it is wrong to have significant income disparities. Especially if they’ve been snookered into thinking that the rich are getting richer at the expense of the poor.
To be fair, they generally don’t favor rabid redistribution. And I rarely find anyone who agrees with the twisted IMF prescription to hurt the poor so long as the rich suffer even more. But it bothers them that some people are poor and others are rich.
They’re also skeptical about capitalism because they think it implies the stereotype of a Randian world of ultra individualism where people are so fixated on making money that family and community are afterthoughts.
It is true that individualism-based societies generate much more prosperity than collectivism-based societies, at least according to research from scholars at the University of California at Berkeley.
But does that additional growth come at a cost? Are individualism-based societies cold, harsh, and disconnected?
We have the answer, thanks to a study authored by academics at the University of Tartu in Estonia. They investigated this very issue.
Many social scientists have predicted that one inevitable consequence of modernization is the unlimited growth of individualism, which poses serious threats to the organic unity of society. Others have argued that autonomy and independence are necessary conditions for the development of interpersonal cooperation and social solidarity. We reanalyzed available data on the relationship between individualism-collectivism and social capital within one country (the United States) and across 42 countries.
They considered the hypothesis that individualism corrodes community.
…many theorists have seen the unlimited growth of individualism as a threat to the organic unity between individuals and society. Particularly in France, the concept of individualism has historically carried a negative meaning, denoting individual isolation and social dissolution… For many critics, individualism mainly fosters social atomization, which, in its turn, leads to the disappearance of social solidarity and to the dominance of egoism and distrust. …Thus, in the opinion of communitarians, society should exert a balancing force to excessive individualism, which endangers both individual rights and civic order.
And they also considered the opposite hypothesis, which says that individualism builds social capital.
…individualism does not necessarily jeopardize organic unity and social solidarity. On the contrary, the growth of individuality, autonomy, and self-sufficiency may be perceived as necessary conditions for the development of interpersonal cooperation, mutual dependence, and social solidarity. …normative or ethical individualism even elevates social welfare by promoting trust as well as by encouraging people to work creatively, from which others can benefit…individualism (as it is conceptualized in psychology) is also associated with higher self-esteem and optimism…individualistic cultures are higher on subjective wellbeing…and they report higher levels of quality-of-life… People in individualistic cultures tend to have more acquaintances and friends…they are more extraverted and open to new experience…and they are more trusting and tolerant toward people of different races.
The authors crunched numbers for states and nations.
Here’s what they found in American states.
…states with higher levels of social capital tend to be more individualistic. According to Figure 1, high levels of both community-based social capital and individualism prevail in the states that belong to the Plains region: Montana, North Dakota, South Dakota, and Nebraska. Low social capital and collectivistic tendencies, on the other hand, can be found in the area of the former Confederacy, in the states of South Carolina, Louisiana, Mississippi, Georgia, and so on.
As you can see, there’s a clear correlation showing that more individualism is associated with higher levels of social capital.
And the same is true for countries.
Figure 2 shows that the countries with the highest levels of interpersonal trust are the countries most characterized by high levels of individualism: Finland, Norway, Sweden, Denmark, the Netherlands, Canada, and the United States.
As you can see from the chart, interpersonal trust and individualism are correlated.
As is so often the case, it’s interesting to look at the outliers.
The authors note that Utah and Nevada are outlier states. I’m assuming those results may have something to do with Mormonism and gambling, respectively. But maybe there are other explanations.
Looking at nations with high levels of interpersonal trust, China is a big outlier at one end and the Nordic nations are outliers at another end. For what it’s worth, the authors admit that the Chinese results are counterintuitive.
Now let’s circle back and consider policy implications.
I’ve argued that big government undermines charity, it undermines civil society, and that it undermines societal capital as well.
In a free society, by contrast, people have the ability to strive and prosper in order to have the time and resources to enjoy the things – such as family, neighborhood, friendship and community – that are the sources of happiness and contentment.
Though I confess I’m not sure how to best explain this to skeptics.
I’ve suggested that Australia as an option if the United States ever suffers a Greek-style collapse, but my answer wasn’t based solely on that country’s level of freedom.
Another option is to look at Economic Freedom of the World, which is an excellent resource, but it only measures the degree to which a nation allows free markets.
If you want to know the world’s freest nation, the best option is to peruse the Human Freedom Index. First released in 2013, it combines economic freedom and personal freedom.
The 2018 version has just been published, and, as you can see, New Zealand is the world’s most-libertarian nation, followed by Switzerland and Hong Kong. The United States is tied with Sweden for #17.
If you scan the top-20 list, you’ll notice that North America, Western Europe, and the Antipodes (Australia and New Zealand) dominate.
And that also is apparent on this map (darker is better). So maybe “western civilization” isn’t so bad after all.
Here is an explanation of the report’s guiding methodology. Simply stated, it’s a ranking of “negative liberty,” which is basically freedom from government coercion.
The Human Freedom Index casts a wide net in an attempt to capture as broad a set of freedoms as could be clearly identified and measured. …Freedom in our usage is a social concept that recognizes the dignity of individuals and is defined by the absence of coercive constraint. …Freedom thus implies that individuals have the right to lead their lives as they wish as long as they respect the equal rights of others. Isaiah Berlin best elucidated this notion of freedom, commonly known as negative liberty. In the simplest terms, negative liberty means noninterference by others. …This index is thus an attempt to measure the extent to which the negative rights of individuals are respected in the countries observed. By negative rights, we mean freedom from interference—predominantly by government—in people’s right to choose to do, say, or think anything they want, provided that it does not infringe on the rights of others to do likewise.
Unsurprisingly, there is a correlation between personal freedom and economic freedom.
Though it’s not a perfect correlation. The Index highlights some of the exceptions.
Some countries ranked consistently high in the human freedom subindexes, including Switzerland and New Zealand, which ranked in the top 10 in both personal and economic freedom. By contrast, some countries that ranked high on personal freedom rank significantly lower in economic freedom. For example, Sweden ranked 3rd in personal freedom but 43rd in economic freedom; Slovenia ranked 23rd in personal freedom but 71st in economic freedom; and Argentina ranked in 42nd place in personal freedom but 160th in economic freedom. Similarly, some countries that ranked high on economic freedom found themselves significantly lower in personal freedom. For example, Singapore ranked in 2nd place in economic freedom while ranking 62nd in personal freedom; the United Arab Emirates ranked 37th in economic freedom but 149th in personal freedom; and Qatar ranked 38th in economic freedom but 134th in personal freedom.
This raises an interesting question. If you had to move, and assuming you couldn’t move to a nation that offered both types of freedom, would you prefer a place like Sweden or a place like Singapore?
As an economist, my bias would be to choose Singapore.
But if you look at the nations in the top-10 for personal freedom, they’re all great place to live (and they tend to be very market-oriented other than their big welfare states). So I certainly wouldn’t blame anyone for instead choosing Sweden.
P.S. There are some very attractive micro-states that were not including in the Human Freedom Index, presumably because of inadequate data. I suspect places such as Bermuda, Liechtenstein, Monaco, and the Cayman Islands would all get very high scores if they were included.
Politically aware people generally understand the policy differences between conservative and liberals (as they are currently defined, not classical liberals).
For those who don’t follow politics, there’s an accurate – and amusing – guide from Playboy that explains the difference between Republicans and Democrats.
And it includes libertarians and greens as well, which is a nice touch for those of us with unconventional views.
But what actually causes someone to pick an ideology?
In February, I shared a bunch of research that looked at how various personal characteristics are associated with – and may even cause – political differences.
This is interesting research. Though I suspect it irks many of us, regardless of our philosophical orientation, since it implies that our views aren’t necessarily the result of reason.
According to an article in Business Insider, this type of research even shows that differences extend beyond politics.
…what in the brains of conservative and liberal voters actually drive their belief systems? Scientists have been researching the psychological differences between people with different stances, and there are a few key ways that people on opposite ends of the political spectrum see the world. …Liberal and conservative tastes in music and art are different. …liberals enjoyed more cubist and abstract art. …conservative readers tended to say they’d rather visit Times Square than the Metropolitan Museum of Art. …conservative voters were found to be more likely to agree with statements like: “I often have tender, concerned feelings for my family members who are less fortunate than me.” But their responses suggested such feelings did not extend to people from other countries. Liberals, on the other hand, were more likely to feel that same level of compassion for people around the world, and even to non-human and imaginary subjects like animals and aliens. …A longitudinal study of more than 16,000 people in the UK found that… “Children who showed higher levels of conduct problems — that is, aggression, fighting, stealing from peers — were more likely to be economically left-leaning.”
What about libertarians?
In his Bloomberg column, Professor Tyler Cowen reveals that we are the most thoughtful group.
Libertarians measure as being the most analytical political group. That’s according to something called the cognitive reflection test, which is designed to measure whether an individual will override his or her immediate emotional responses and give a question further consideration. So if you aren’t a libertarian, maybe you ought to give that philosophy another look. It’s a relatively exclusive club, replete with people who are politically engaged, able to handle abstract arguments and capable of deeper reflection.
Trump voters and independents, by contrast, are less informed and more impulsive.
What else can we learn from this new study of political and analytical tendencies, conducted by Gordon Pennycook and David G. Rand of Yale University? …one group that measured as especially nonanalytical was Democrats who crossed party lines and voted for Donald Trump. There is a stereotype of a less well-educated voter, perhaps both white and male, who reacts negatively and emotionally to Hillary Clinton… For all the dangers of stereotyping, the study’s data are consistent with that picture. …independents do poorly on the analytic dimension. …that group measures as relatively impulsive and prone to less informed judgments.
And here’s some research on “free-marketeers” from the U.K.-based Times.
Clever children will probably grow up to have free-market economic views, according to new academic research. The direct link between intelligence and economic conservatism holds true even if the self-interest that high earners have in a lower-tax, free-market economy is taken into account. The authors of the research, Gary Lewis and Timothy Bates, psychologists at Royal Holloway, University of London and Edinburgh University respectively, state: “Intelligence assessed in childhood [ages 10-11] was predictive of adult [30-33] economic conservatism.” …The authors studied data from the 1970 British Cohort Study and the National Child Development Study of 1958, both of which measured the intelligence of more than 17,000 children before they were distorted by educational differences. The authors also adjusted for sex, parental social class and childhood conduct problems.
I like these results, for the obvious reason.
But also notice that the authors adjusted the data based on the assumption that a “lower-tax, free-market economy” generates greater wealth. Interesting (and accurate) admission.
Now let’s consider the statist side of the spectrum.
According to some revised research that was reported by the New York Post, our friends on the left have authoritarian tendencies.
A political-science journal that published an oft-cited study claiming conservatives were more likely to show traits associated with “psychoticism” now says it got it wrong. Very wrong. The American Journal of Political Science published a correction this year saying that the 2012 paper has “an error” — and that liberal political beliefs, not conservative ones, are actually linked to psychoticism. …“The descriptive analyses report that those higher in Eysenck’s psychoticism are more conservative, but they are actually more liberal; and where the original manuscript reports those higher in neuroticism and social desirability are more liberal, they are, in fact, more conservative.” In the paper, psychoticism is associated with traits such as tough-mindedness, risk-taking, sensation-seeking, impulsivity and authoritarianism.
Since we’re on the topic of authoritarianism, let’s close by looking at some new research, reported by PsyPost, that doesn’t reflect well on the right or left.
New research provides evidence that left-wing authoritarian attitudes exist in the United States. The preliminary findings, published in the scientific journal Political Psychology, suggest liberals could be just as likely to be authoritarians as conservatives. …Conway and his colleagues developed a measure of left-wing authoritarianism, which was adapted from the right-wing authoritarianism scale developed by psychologist Bob Altemeyer. …The new LWA scale, on the other hand, asks questions such as: “It’s always better to trust the judgment of the proper authorities in science with respect to issues like global warming and evolution than to listen to the noisy rabble-rousers in our society who are trying to create doubts in people’s minds” and “Our country desperately needs a mighty leader who will do what has to be done to destroy the radical new ways and sinfulness that are ruining us.” …The researchers found that left-wing authoritarianism was associated with liberal views, dogmatism, and prejudice.
In other words, partisans on both sides are tempted to use the coercive power of government to impose their beliefs.
Which underscores why government shouldn’t have much power in the first place!
The good news is that we still have lots of freedom. At least compared to the rest of the world.
The bad news is that we have less freedom than we used to have.
There’s a big controversy about whether business owners with traditional religious beliefs should be coerced by government into doing business with gay couples who want to get married.
Back in 2015, I explained that the real issue is freedom of association, not whether gay marriage is right or wrong (I’ve always wondered why government should have any role in marriage, but that’s a separate topic).
It’s time to revisit this issue now that the Supreme Court has released its decision on the case involving a Colorado baker who didn’t want to decorate a cake for a gay wedding. The Wall Street Journalopines that the decision was in favor of the baker, but on very narrow grounds.
The Supreme Court ruled 7-2 Monday for a baker who refused to custom-bake a cake for a same-sex wedding out of sincere religious belief. …this apparent victory for religious freedom may be short-lived. …While seven Justices on the High Court held for Mr. Phillips, the majority decision could have gone the other way had some facts been different. Writing for the majority, Justice Kennedy notes that Mr. Phillips was “entitled to a neutral decision-maker.” …As is his wont, Justice Kennedy strains to avoid a clear and decisive ruling. While “religious and philosophical objections [to same-sex marriage] are protected, it is a general rule that such objections” don’t allow the denial of services “under a neutral and generally applicable public accommodations law,” he writes. Perhaps the best that can be said is that florists, make-up artists, photographers and other people of faith have lived to fight another day. A ruling against Mr. Phillips would have been catastrophic for religious liberty, but the majority’s muddle provides only gossamer protection. …The message is that governments can punish religious beliefs as long as they keep their animus toward religion in the closet.
Since I’m not a lawyer, I’m not sure what to think about the Court’s contorted decision.
But as a libertarian, I think the government should not be involved.
Jeff Jacoby of the Boston Globeunderstands what the issue is all about. Here’s some of what he wrote shortly before Trump’s inauguration.
Freedom of association is a vital human right. …I support…the singers who refuse to sing for Trump, the fashion designers who refuse to design, the landlords who refuse to rent, the dancers who refuse to dance. No one should be forced to play a role in a celebration they want nothing to do with, or to hire themselves out to clients they would prefer not to serve. …if a caterer turns down a request to prepare the meals for Trump’s inauguration? Or a florist declines to provide the floral arrangements? Or a calligrapher says “thanks but no thanks” to addressing the invitations? I’d back them, too, and for reasons having nothing to do with Trump or Republicans or inaugurations — and everything to do with freedom of association. The right to discriminate — to choose with whom we will and won’t associate — is vital to human liberty. A dressmaker who can’t say no to a commission to design a gown isn’t free, and it doesn’t matter whether the gown is for a first lady or for the brides in a lesbian wedding. A liberal baker who declines to create a lavish cake decorated with the words “Congratulations, President Trump” is entitled to as much deference as a black baker who declines to decorate a cake with the Confederate flag, or a Muslim baker who declines to decorate a cake with the message “No Muslim Immigrants.” …Tolerance and pluralism are important values in a free society. So are choice and association. Your choices may not be mine; my preferred associations may not be yours. In a diverse, live-and-let-live culture, our differences are manageable — as long as government doesn’t interfere.
This controversy should have nothing to do with sexual preference. One of my former interns is gay, but does not want to force others to associate with him.
Being a gay libertarian…you are a pariah among your peers. …So-called civil rights groups like the American Civil Rights Union…say…that “when businesses are open to the public, they’re supposed to be open to everyone.” …Well, folks, I am gay myself – I am even married – and I stand by Philipps’ right to discriminate against whoever he wants. That, of course, makes me a traitor, a turkey voting for Thanksgiving – and if I were African American, it would also make me an Uncle Tom. …many liberals stand by the ACLU’s faulty reasoning… Faulty because it implies that, once you start selling a product or service, you automatically lose your right to freely and voluntarily interact with other people. It’s opened to the public, so it suddenly becomes public “property”… Following that logic, a Muslim baker would be forced to make a cake with Mohammed’s face on it – an unspeakable moral crime in Islam – Hooters would have to hire anyone as a server and gay bathhouses would have to welcome female patrons. …the infamous Jim Crow laws not only maintained an apartheid-like state for African Americans, but they also dictated how private businesses needed to interact with these people. …instead of having government force businesses to serve anyone, I want it to let them discriminate in the open. This way, I know exactly where not to do business. Because even if I were heterosexual, I would very likely boycott businesses that discriminate on arbitrary traits like sexual orientation or skin color. It’s not a crime – no one’s life or property is endangered by this refusal of doing business – but it goes against my moral standards of treating every human being as an equal.
Excellent analysis. Indeed, I’d like to take partial credit. Except Pierre already was a solid libertarian when he started working for me.
Here’s another column with the same perspective, which appeared in the Federalist.
…it should be simple to appreciate why religious people who deeply oppose socially changing marriage to include same-sex couples would not wish to endorse or participate in a same-sex wedding. …Masterpiece Cakeshop, as with many caterers, florists, and photographers, has merely declined to participate in an event or associate their brand with that event. Why do LGBT activists perceive this as a direct attack on the validation of their relationships? …I would not seek employment or request a table at a Planned Parenthood event and expect them to accommodate me. Why would I help them raise money or support their business model? If I encountered an individual morally uncomfortable with participating in an activity with me and my boyfriend, such as couple photos or planning a party, it would be uncomfortable for me to force her. …I would be taken aback by a rejection, I would feel it is my responsibility to choose another photographer rather than force another person to violate her faith for my satisfaction.
Interestingly, some folks on the left openly express their affinity for discrimination. Here’s Michael Moore exercising his right not to do business with theaters in North Carolina, along with a comment by someone who wants Moore to be philosophically consistent.
Ouch, that retort had to leave a mark. Though Moore isn’t bothered by hypocrisy, so he probably doesn’t care.
And speaking of hypocrisy, I wonder what my friends on the left think of the following examples of discrimination.
Here’s freedom of association in action, as reported by the Washington Times.
A boy whose letter to President Trump made national headlines last month reportedly wanted a pro-Trump cake for his birthday party, but his mother was unable to find a baker willing to fulfill the order. …his mother “made him one herself, because she couldn’t find a bakery willing and able to do it.” Michael P. Farris is president, CEO and general counsel of the Alliance Defending Freedom, …wondered why bakers are allowed to decline to make birthday cakes supporting Mr. Trump, but not wedding cakes supporting same-sex marriage. …“The fact is that these cake shops have freedom of speech,” he continued. “They have the right to decline to use their artistic talents to celebrate events or promote messages that violate their beliefs, even if it offends a nice little kid.”
Kudos to Mr. Farris. He wants sauce for the goose to be sauce for the gander. But more important, he wants the right sauce, i.e., nobody should be coerced by government to associate with others.
The New York Posthighlights another example of how freedom of association works.
Bartenders at a West Village hot spot served up discrimination — with a liberal twist — refusing to serve a customer because he was wearing a “Make America Great Again” hat, according to a lawsuit. …Greg Piatek, 30, an accountant from Philadelphia, claims he was snubbed…by workers at The Happiest Hour on West 10th Street over his conservative fashion statement… “Anyone who supports Trump — or believes what you believe — is not welcome here! And you need to leave right now because we won’t serve you!” Piatek claims he was told as he was shown the door by a manager. …Piatek’s lawyer Paul Liggieri called the incident “humiliating,” saying it was his client’s “saddest hour.”
I think Mr. Piatek is being a snowflake. If some establishment didn’t want to serve me because of my libertarian values, I would shrug my shoulders and find a place that did value my cash.
I just wish folks on the left had the same perspective. Moreover, I wonder if they’ve considered the implication of their approach. This humorous item from LibertarianReddit could become reality if the government had the power to force all of us to do business with each other.
And here’s another story showing how people choose to discriminate.
Brian Ashworth…was in the office when one of his employees walked back to tell him that a woman and four or five men…were in the dining room of Ace Biscuit & Barbecue… One wore a “Make America Great Again” shirt, and another had a shirt promoting the British white nationalist punk band, Skrewdriver. A third man sported a shirt that said, “Pinochet Helicopter Company,” a reference to former right-wing Chilean dictator Augusto Pinochet, accused of tossing Communists and other political opponents from aircraft. …the group was behaving, minding its own business. …”One employee said to me, ‘Brian, be cool. Let them eat,'” the restaurant owner recalled. …Suddenly, the young man in the Skrewdriver shirt threw up a Nazi salute, which the others reciprocated, he said. “That was it. Oh my God, are you kidding me? ‘Get out of here. You’ve got to go,'” Ashworth told them, admittedly in unkind words. …They countered that they had rights, and Ashworth conceded they had rights but said, as a business owner, …he reserves the right to deny service to other groups. His employees don’t have to serve them, he said.
Amen.
I imagine most of my leftist friends will agree with the restaurant owner’s decision, but there’s part of the story that may cause them heartburn.
“I got a round of applause from the customers who saw me throw them out,” he said. “A round of applause is good, but it doesn’t keep anybody safe.” …He decided to close for the day, for the safety of his staff and customers. …Ashworth brought his two .45-caliber pistols to work… He supposes he’ll keep bringing them to work until he feels safe again.
Last but not least, Marissa Mayer explains for FEE how she doesn’t think government should get involved solely because someone does not want to do business with her.
This week I was denied a service because the company’s values are at odds with the values that Alliance Defending Freedom stands for — values I personally hold. And guess what? I’m okay with that. …Using my work information, I signed up for an online course created by Moceanic, a team of talented fundraisers who have created a coaching and training business to help writers better connect with donors. …What I didn’t know when I signed up for the course, however, is that Moceanic does a lot of work with organizations such as the ACLU, Planned Parenthood, and LGBT activist organizations. …ADF and these organizations don’t exactly share the same values. …I received an email notifying me that they had refunded the cost of the course with no explanation as to why. I was a little perplexed by the email… That’s when I starting digging deeper into the brains behind Moceanic, and it didn’t take long for me to discover the values statement on their website. …”we reserve the right to choose not to train people working directly for, or on behalf of, organisations whose missions or values do not align with ours.” …I get it… Moceanic shouldn’t be forced to coach me on how to speak in a way that generates excitement and engagement for a cause that they disagree with any more than Jack should have to create a cake celebrating a marriage that conflicts with his beliefs.
Marissa is intellectually consistent and practices tolerance.
Too bad the same can’t be said for many other people.
I’ll close by noting that we all discriminate. We discriminate in the foods we buy, the friends we choose, the people we love, and the businesses we patronize. And I don’t think the government should coerce us to make different choices.
That being said, we also should recognize that some choices are fine and some choices are bad.
Because I have the taste buds of a child, I discriminate against restaurants with spicy food. Plenty of my friends tease me for my limited tastes, but I can’t imagine anyone (other than my mother when I was a kid) wanting to force me to eat foods I don’t like.
But what if I wanted to discriminate against people simply because of their race or religion? In that case, I would hope my friends would cease to be my friends and instead would upbraid me for my moral failings (I also hope some of them would be like Daryl Davis or Matthew Stevenson and try to rescue me from such odious forms of collectivism).
However, I wouldn’t want them to enlist government coercion. Believing in free speech also means allowing reprehensible forms of free speech. Believing in a free press also means allowing awful viewpoints. Believing in freedom of association means allowing disgusting forms of discrimination.
So bake a cake or don’t bake a cake. But if you have a bad reason for not baking a cake, you won’t be getting my business (even if your discrimination is economically rational).
Speaking at New York City’s Unitarian Church of All Souls…, MacLean…answered an audience member’s question about the motivations of the late economist James Buchanan, whom she considers to be one of the founders of libertarianism. In response, she suggested that Buchanan might have been on the “autism spectrum.” “It’s striking to me how many of the architects of this cause seem to be on the autism spectrum,” she said an hour into the talk. “You know, people who don’t feel solidarity or empathy with others and who have difficult human relationships sometimes.”
I don’t know anything about how autism is measured, so I can’t agree or disagree with her assertion. Though I’m tempted to reflexively disagree because MacLean’s book on Buchanan was incredibly shoddy.
But I will admit that libertarians can be a bit dorky. Heck, I’ve specifically shared humor noting our nerdy tendencies.
Moreover, Jonathan Haidt, who is a serious and non-shoddy academic, has done some work quantifying the libertarian psyche.
We’ve been deluged in recent years with research on the psychology (and brain structure) of liberals and conservatives. But very little is known about libertarians — an extremely important group in American politics that is not at home in either political party. …In a project led by Ravi Iyer, we analyzed data from nearly twelve thousand self-described libertarians, and compared their responses to those of 21,000 conservatives and 97,000 liberals. …The findings largely confirm what libertarians have long said about themselves, but they also shed light on why some people and not others end up finding libertarian ideas appealing. Here are three of the major findings:
Here’s how libertarians score on “moral values”.
Libertarians match liberals in placing a relatively low value on the moral foundations of loyalty, authority, and sanctity (e.g., they’re not so concerned about sexual issues and flag burning), but they join conservatives in scoring lower than liberals on the care and fairness foundations (…e.g., they don’t want a welfare state and heavy handed measures to enforce equality). This is why libertarians can’t be placed on the spectrum from left to right: …They really do put liberty above all other values.
Here’s how they score on “reasoning and emotions”.
Libertarians have the most “masculine” style, liberals the most “feminine.” We used Simon Baron-Cohen’s measures of “empathizing” (on which women tend to score higher) and “systemizing”, which refers to “the drive to analyze the variables in a system, and to derive the underlying rules that govern the behavior of the system.” Men tend to score higher on this variable. Libertarians score the lowest of the three groups on empathizing, and highest of the three groups on systemizing. …On this and other measures, libertarians consistently come out as the most cerebral, most rational, and least emotional. On a very crude problem solving measure related to IQ, they score the highest.
And here’s what characterizes libertarians on “relationships”.
Libertarians are the most individualistic; they report the weakest ties to other people. They score lowest of the three groups on many traits related to sociability, including extroversion, agreeableness, and conscientiousness. They have a morality that matches their sociability – one that emphasizes independence.
In other words, based on the final category, maybe there is some truth to the stereotype that we’re introverted, disagreeable, and self-centered.
I don’t know if that means we are more likely to be autistic, but dorkiness might be a semi-fair insult.
But folks on the left should be careful about stereotyping since they have vulnerabilities of their own.
Here’s a story from the U.K.-based Times, for instance, on how leftists are more likely to be weaklings.
A study has found that weaker men are more likely to be in favour of redistributive taxation. …That is one interpretation of research by academics from Brunel University, who assessed 171 men for how buff they were – looking at strength, bicep circumference, weight and height. Writing in the journal Evolution and Human Behaviour, they found that those men who looked more formidable were…much less likely to back policies that redistribute wealth. Michael Price, from Brunel University London, said that this fitted with some of the predictions of evolutionary psychology. …“Our minds evolved in environments where strength was a big determinant of success. If you find yourself in a body not threatened by other males, if you feel you can win competitions for status, then maybe you start thinking inequality is pretty good.” The question was which way did the relationship go? Were men who were naturally strong also more likely to be less egalitarian – calibrating their morals to fit their abilities? Or was it that men who were less egalitarian felt more need to go to the gym, unconsciously believing they needed the strength in order to reach a better place in a red-in-tooth-and-claw social hierarchy? When Dr Price factored in time spent in the gym some, but not all, of the link disappeared – implying some truth to the second explanation.
For what it’s worth, I shared a similar story on this kind of research back in 2012.
The researchers claim that never before has the effects of physical attractiveness on politics been examined on this level and that there is “good reason to believe that individuals’ physical attractiveness may alter their political values and worldviews”. They said that their findings prove attractive people tend to lean towards the right because they have better social skills and are more popular, competent and intelligent due to the “halo effect”… Writing about their findings in the Politics and Life Sciences journal published in December 2017, the pair said that on average, hotter people have an easier life so don’t see the need for more welfare, aid and government support, unlike their left-wing counterparts.
A recently published study in the Journal of Public Economics concludes that the attractiveness of a candidate does correlate with their politics. They find that politicians on the right are more good looking in Europe, the United States and Australia. The study shows correlation, not causation, but the researchers float a simple economic explanation for why this might happen. Numerous studies have shown that good-looking people are likely to earn more, and that people who earn more are typically more opposed to redistributive policies, like the progressive taxes and welfare programs favored by the left. The researchers also offer a more general psychological explanation for the trend: That good-looking people are often treated better than others, and thus see the world as a more just place. Past studies have found that the more attractive people believe themselves to be, the lower their preference for egalitarianism, a value typically associated with the political left.
For what it’s worth, the three articles I just cited don’t reflect well on folks on the left, but conservatives shouldn’t feel good either since the research sort of implies that they’re entitled and arrogant jerks.
It’s unclear where libertarians score on these measures.
Now let’s shift from soft science to hard science. A 2012 study from Trends in Genetics advances the hypothesis that ideology and values may be hard-wired.
…we review the ‘genetics of politics’, focusing on the topics that have received the most attention: attitudes, ideologies, and pro-social political traits, including voting behavior and participation. …there has been a recent shift in perspective by both life and social scientists that emphasizes the interplay between genes and the environment, and gene–culture coevolution, which has proven more accurate than any position favoring either nature or nurture. It is against this background that a growing movement has begun to address the substantial, but not exclusive, role of genetic influences in the manifestation of political differences. …These findings are summarized in Figure 1, which shows that genetic influences account for a substantial proportion of individual differences in political traits.
And here is Figure 1, which shows that genetics (the blue bars) matters a lot for certain things like overall ideology and doesn’t matter at all for other factors such as party identification.
By the way, I have no way of judging whether this is good science or bad science, and I don’t even know if the results are positive or negative from a libertarian perspective. I’m simply sharing the results because they’re potentially illuminating/interesting.
Let’s close with some research that teases out some differences between libertarians (or “economic conservatives,” which I assume is a proxy) and other groups.
It is frequently asserted that conservatives exhibit a cognitive style that renders them less well disposed toward science than progressives, and that they are correspondingly less trusting of scientific institutions and less knowledgeable about scientific ideas. Here we scrutinize these assertions, using data from the U.S. General Social Survey. We distinguish between three different definitions of ‘conservative’: first, identifying as conservative, rather than as liberal; second, holding socially conservative views, rather than socially progressive views; and third, holding economically conservative views, rather than economically leftist views. We find that self-identified conservatives and social conservatives are less scientifically literate and optimistic about science than, respectively, self-identified liberals and social progressives. However, we find that economic conservatives are as or more scientifically literate and optimistic about science than economic leftists.
In other words, folks that lean more libertarian rank at the top in terms of knowledge and attitudes.
And here’s an article about underlying value systems.
Political battles in the US are often portrayed as a clash between “bleeding heart” liberals and “pull yourself up by your bootstraps” conservatives. …Scientists are beginning to zero in on a few key differences in the ways that people on opposite ends of the political spectrum react to stimuli. …A study published in the journal Behavioural Brain Research in January suggests that you might be able to tell whether someone is liberal or conservative simply by the way they react to pictures of gross things like blood, feces or vomit. The authors found that socially conservative students will physically look away from “disgusting” images more quickly than their liberal peers (but the same didn’t hold true for people with fiscally conservative beliefs). …There’s also evidence that the areas of the brain that process and express fear are more active in conservative voters, which might make them more likely to quickly turn away from something that could make them sick. …New research on compassion is de-bunking the myth that liberal voters might inherently be more empathetic and kind-hearted people than conservatives.
Since folks on the right donate more than folks on the left, I’ve always thought the stereotype about generous leftists was absurd.
But what I noticed in the article was the difference between fiscal conservatives (presumably more libertarian?) and general conservatives. We may be allies on some issues, but we’re not the same (though I’m not sure why anyone would want to look any longer than necessary at pictures of blood, feces, and vomit).
My last item is a video exploring the research of Haidt and others on libertarian values.
Haidt isn’t a libertarian, but his research (which I’ve cited before) seems honest and rigorous.
My goal in all this is to figure out how nerdy libertarians can be more persuasive.
In my first column on jury nullification, I applauded ordinary citizens for producing a not-guilty verdict when the federal government tried to impose bad U.S. tax law on a Swiss banker who lived in Switzerland and obeyed Swiss law. Simply stated, borders should limit the power of a government.
In my second column on jury nullification, I approvingly wrote about how citizens on another jury rebelled against the government’s persecution of western ranchers (while also noting that dramatically reducing government land ownership would be the solution to the underlying controversy).
To be sure, I don’t think jury nullification is the ideal way of dealing with over-criminalization and abusive law enforcement. It would be much better to repeal bad laws and get rid of the bad people working for government. But until those things happen, I’m glad nullification exists as a last line of defense.
Now let’s look at a third example. Except it’s probably more accurate to say it’s an example of pre-jury nullification.
You may have heard that saying: If prosecutors want to, they could get a grand jury to indict a ham sandwich. It’s a knock on how much control prosecutors hold over the grand juries to whom they give evidence for possible indictments. The 269th Pima County Grand Jury could not be controlled like that. …this one was led by a criminal-defense attorney and populated by freethinkers who took to heart their role as “conscience of the community.” They went so far as to decline to indict people even though there was enough evidence to show probable cause, foreman Natman Schaye and others told me. That, in essence, is grand-jury nullification — not carrying out the law because, in the jury’s opinion, it is unjust.
This grand jury, which was labeled as “The Notorious 269th” by the press, decided that justice was more important than obeying the government.
Rick Myers, a well-known Tucsonan who is a member of the Arizona Board of Regents, also was on the Notorious 269th. What bothered him was the many cases of small quantities of drugs that were charged as Class 4 felonies, as state law dictates. He said he began making a distinction between what’s actually a “crime” and what’s “breaking the law.” The reason, another grand juror, Jodi Kautz, said was: They were presented with possession cases involving drug amounts as tiny as 2/100th of a gram, a trace amount. …Myers said. “There’s a whole lot of people getting charged for things that are not hurting other people.”
Here’s some background info on the role of the grand jury.
Grand juries have their roots in 12th-century England, but in early America took on more of a judicial role — that of a body of citizens standing between the government and a person accused of a crime. The grand jury eventually came to stand as a check, ensuring the government had enough evidence to pursue a criminal case. …Prosecutors run the grand-jury sessions… They bring proposed indictments to the jurors and call police officers as witnesses, without a defendant or a defense attorney present. The grand jurors, though, make the ultimate decision as to whether to indict, and on what charges.
Unsurprisingly, government officials don’t approve of grand jurors exercising independent thought.
As to the grand jurors’ decision to reject some cases with adequate evidence, Acosta said that really isn’t their place. They take an oath to follow the law before taking their seats, she said. “If somebody has a particular agenda, I suppose they can go to the Legislature and say, ‘We don’t like this law, maybe you should change it.’ But the grand jury isn’t the place for that kind of activity,” she said.
Sorry, Ms. Acosta, that’s not right.
The grand jury (or regular jury) may not be the ideal place to protect against injustice, but it’s better than nothing when governments have bad laws and/or government officials abuse citizens.
There’s a philosophical principle involved. In many cases, nullification is appropriate because governments have criminalized actions that have no victims. Which is why the movement’s motto, as noted in this Ron Swanson meme, is that there is no crime when there’s no victim.
I’ll close on a personal note. I’ve lived in Fairfax County for almost three decades and I’ve only received one summons for jury duty. When that happened, I immediately fantasized about being a hero and using nullification to block an unjust gun prosecution or unjust drug prosecution. But it turned out that the case was a lawsuit between a contractor and consumer, so I was happy they wound up finding enough people before my name was called.
But maybe my nullification fantasy eventually will become a reality. Though I’ve noted that my fantasies (at least the ones involving public policy) never seem to happen.
I eagerly combed through that report, which (predictably) had Hong Kong and Singapore as the top two jurisdictions. I was glad to see that the United States climbed to #11.
The good news is that America had dropped as low as #18, so we’ve been improving the past few years.
The bad news is that the U.S. used to be a top-5 country in the 1980s and 1990s.
But let’s set aside America’s economic ranking and deal with a different question. I’m frequently asked why European nations with big welfare states still seem like nice places.
My answer is that they are nice places. Yes, they get terrible scores on fiscal policy, but they tend to be very pro-market in areas like trade, monetary policy, regulation, and rule of law. So they almost always rank in the top-third for economic freedom.
To be sure, many European nations face demographic challenges and that may mean Greek-style crisis at some point. But that’s true of many developing nations as well.
Moreover, there’s more to life than economics. Most European nations also are nice places because they are civilized and tolerant. For instance, check out the newly released Human Freedom Index, which measures both economic liberty and personal liberty. As you can see, Switzerland is ranked #1 and Europe is home to 12 of the top 16 nations.
And when you check out nations at the bottom, you won’t find a single European country.
Instead, you find nations like Venezuela and Zimbabwe. Indeed, the lowest-ranked Western European country is Greece, which is ranked #60 and just missed being in the top-third of countries.
Having now engaged in the unusual experience of defending Europe, let’s take a quick look at the score for the United States.
As you can see, America’s #17 ranking is a function of our position for economic freedom (#11) and our position for personal freedom (#24).
For what it’s worth, America’s worst score is for “civil justice,” which basically measures rule of law. It’s embarrassing that we’re weak in that category, but not overly surprising.
Anyhow, here’s how the U.S. score has changed over time.
Let’s close with a few random observations.
Other nations also improved, not just the United States. Among advanced nations, Singapore jumped 16 spots and is now tied for #18. There were also double-digit increases for Suriname (up 14 spots, to #56), Cambodia (up 16 spots, to #58), and Botswana (up 22 spots, to #63). The biggest increase was Swaziland, which jumped 25 spots to #91, though it’s worth pointing out that it’s easier to make big jumps for nations with lower initial rankings.
Now let’s look at nations moving in the wrong direction. Among developed nations, Canada dropped 7 spots to #11. Still a very good score, but a very bad trend. It’s also unfortunate to see Poland drop 10 spots, to #32. Looking at developing nations, Brunei Darussalam plummeted an astounding 52 spots, down to #115, followed by Tajikistan, which fell 46 spots to #118. Brazil is also worth highlighting, since it plunged 23 spots to #120.
P.S. I don’t know if Moldova, Ukraine, and Russia count as European countries or Asian nations, but they all rank in the bottom half. In any event, they’re not Western European nations.
P.P.S. I mentioned last year that Switzerland was the only nation to be in the top 10 for both economic freedom and personal freedom. In the latest rankings, New Zealand also achieves that high honor.
When I explain to people how the government’s War on Drugs violates the rights of people to do dumb things to their own bodies, they intellectually understand but they’re usually not convinced.
When I also explain why the Drug War causes additional crime and enriches mobsters, they almost always nod their heads in agreement but resist the obvious implication that we should decriminalize.
When I then explain that the War on Drugs has led to horrific policies such as civil asset forfeiture and senseless policies such as costly and ineffective money-laundering laws, they agree that the consequences are bad but they’re generally unpersuaded about legalization.
The stumbling block in every case is that they fear decriminalization will lead to more drug use, more addiction, and more suffering families.
Unfortunately, we don’t have a lot of real-world examples to put their minds at ease. But “a lot” isn’t the same as “any.”
This report about Portugal from the U.K.-based Guardian is must reading and may convince the doubters that we can end the War on Drugs without societal chaos and decay. It starts with an observation about the ravages of illegal drugs.
It was the 80s, and by the time one in 10 people had slipped into the depths of heroin use – bankers, university students, carpenters, socialites, miners – Portugal was in a state of panic. …one in every 100 Portuguese was battling a problematic heroin addiction at that time… Headlines in the local press raised the alarm about overdose deaths and rising crime. The rate of HIV infection in Portugal became the highest in the European Union.
This led to predictable responses.
In the early days of Portugal’s panic, …the state’s first instinct was to attack. Drugs were denounced as evil, drug users were demonised, and proximity to either was criminally and spiritually punishable. The Portuguese government launched a series of national anti-drug campaigns that were less “Just Say No” and more “Drugs Are Satan”.
But something remarkable then happened. Rational voices began to push a libertarian-oriented message.
The first official call to change Portugal’s drug laws came from Rui Pereira, a former constitutional court judge who undertook an overhaul of the penal code in 1996. He found the practice of jailing people for taking drugs to be counterproductive and unethical. “My thought right off the bat was that it wasn’t legitimate for the state to punish users,”
And Portugal ultimately went in that direction – and got very positive results.
In 2001, …Portugal became the first country to decriminalise the possession and consumption of all illicit substances. …The opioid crisis soon stabilised, and the ensuing years saw dramatic drops in problematic drug use, HIV and hepatitis infection rates, overdose deaths, drug-related crime and incarceration rates. HIV infection plummeted from an all-time high in 2000 of 104.2 new cases per million to 4.2 cases per million in 2015. …The official policy of decriminalisation made it far easier for a broad range of services (health, psychiatry, employment, housing etc) that had been struggling to pool their resources and expertise, to work together more effectively to serve their communities.
Here’s a summary of the Portuguese approach, which certainly seems more humane and logical than what we do in America.
Portugal’s policy rests on three pillars: one, that there’s no such thing as a soft or hard drug, only healthy and unhealthy relationships with drugs; two, that an individual’s unhealthy relationship with drugs often conceals frayed relationships with loved ones, with the world around them, and with themselves; and three, that the eradication of all drugs is an impossible goal.
Want some additional evidence?
Here’s a chart from the invaluable Mark Perry of the American Enterprise Institute.
A 2009 study from the Cato Institute also highlighted the benefits of Portugal’s reform.
Because more than seven years have now elapsed since enactment of Portugal’s decriminalization system, there are ample data enabling its effects to be assessed. Notably, decriminalization has become increasingly popular in Portugal since 2001. …very few domestic political factions are agitating for a repeal of the 2001 law. …none of the nightmare scenarios touted by preenactment decriminalization opponents — from rampant increases in drug usage among the young to the transformation of Lisbon into a haven for “drug tourists” — has occurred. …The political consensus in favor of decriminalization is unsurprising in light of the relevant empirical data. …drug usage rates in Portugal, which, in numerous categories, are now among the lowest in the EU, particularly when compared with states with stringent criminalization regimes. …drug-related pathologies — such as sexually transmitted diseases and deaths due to drug usage — have decreased dramatically. …judged by virtually every metric, the Portuguese decriminalization framework has been a resounding success.
By the way, allow me to reiterate that my support for decriminalization is not an endorsement of drug use.
It’s not just that I’m a teetotaler and want others to make the same choice. Stories like this one from CNN genuinely worry me.
Regina Mitchell, a co-owner of Warren Fabricating & Machining in Hubbard, Ohio, told The New York Times this week that four out of 10 applicants otherwise qualified to be welders, machinists and crane operators will fail a routine drug test. …”We have a 150-ton crane in our machine shop. And we’re moving 300,000 pounds of steel around in that building on a regular basis. So I cannot take the chance to have anyone impaired running that crane, or working 40 feet in the air.” …For 48 of the 50 years her company has been around, drug abuse had never been an issue, she told Smerconish.”It hasn’t been until the last two years that we needed to have a policy, a corporate policy in place, that protects us from employees coming into work impaired,” she said. …there are almost 12,000 open skilled labor jobs in Mahoning County.”There are good-paying jobs and the opportunity for people in our area. We just can’t find people to show up who can pass a drug test,” she said.
This is not good news for the country. And I’ve personally spoken to several employers in other parts of the country who have made the same point.
But I’ll simply observe that we have this problem with drugs being illegal already. Given the evidence from Portugal, I’m hopeful that decriminalization might lead to less drug use.
I also wonder whether redistribution programs enable reckless behavior. In other words, people may decide it’s okay to be stoners because they can rely on handouts to stay alive instead of staying clean and having a job.
In any event, let’s review a couple of additional stories. Here’s a column from National Review, written by Michelle Malkin, which shows continuing progress on the right.
My own interest in pediatric use of medicinal marijuana is more than academic. When my daughter, Veronica, fell ill in late spring of 2015 — unable to breathe normally, bedridden with chronic pain and fatigue — she saw of specialists. …The various drugs prescribed to my daughter weren’t working and had awful side effects. …To our surprise, the mainstream neurologist suggested Veronica try CBD. This doctor had other young patients who used CBD oil with positive results… So we did our own independent research…consulted with other medical professionals and friends — and entered a whole new world. Two physicians signed off on our daughter’s application for a medical-marijuana card. She became one of more than 360 children under 18 to join Colorado’s medical-marijuana registry in 2015. …we became pediatric pot parents. For Veronica, CBD provided more relief than all the other mainstream pharmaceutical interventions she had endured, and without the scary side effects.
To her credit, Michelle has learned that the harm of government intervention exceeds any potential benefit.
As a lifelong social conservative, my views on marijuana policy may surprise some of you. I used to be a table-pounding crusader for the government’s war on drugs. …But the war on drugs has been a ghastly quagmire — an expensive and selective form of government paternalism that has done far more harm than good. What has this trillion-dollar war wrought? Overcrowded jails teeming with nonviolent drug offenders. An expanded police state enriched by civil asset forfeiture. And marginalization of medical researchers pursuing legitimate research on marijuana’s possible therapeutic benefits for patients with a wide variety of illnesses. …let me be clear as a liberty-loving, conservative mom: Keep your hands off. Let the scientists lead. Limited government is the best medicine.
Now let’s add some economic analysis to the discussion.
Here’s some insight from the Foundation for Economic Education about how the Drug War is increasing the potency and danger of drugs.
One issue that is often mentioned but rarely explained is the increasing potency of illegal drugs, whether it be cannabis with a high percentage of THC in the US or super potent MDMA (Ecstasy) in Europe. What’s behind this phenomenon? …economic theory might have the answer. …The theory that can explain rising drug potency under prohibition was first described in 1964 by Armen Alchian and William R Allen. It states that when the price of two substitute goods is increased by a fixed per-unit amount (such as transportation or taxation) the consumer will opt for the higher priced, higher quality good because the price of the more expensive product has sunk in proportion to the price of the less expensive product. …In the particular case of illegal drugs, two different kinds of drugs–let’s say two different kinds of cannabis–act as the substitute goods. When buying illegal drugs on the black market, you do not only pay for the drug itself. On top of the monetary price comes the potential social cost you pay. This can range from a small regulatory offence, where you must pay a fine, to a felony where you can face a prison sentence. This comes with other problems: losing your job, family, social status and so on. This is the fixed per-unit cost added on top of the price of the drug itself.
All of which leads to yet another reason why prohibition is backfiring and another reason why decriminalization is the answer.
It is not worth the risk to buy a low-quality product regarding the potential price you must pay. …Drug cartels have recognised this behaviour and increased the potency of their drugs (i.e. improved the quality of their product) so you get more value for the potential fixed per-unit cost you pay. …What sounds good in economic theory becomes a massive public health problem in real life. The potency of many drugs has increased too much. As it is in most prohibitionist countries, many consumers don’t know exactly what drug they are taking and in which dosage they are consuming the drug: not to mention added substances that increase quantity. …If drugs were decriminalized, customers would have knowledge about the contents of their MDMA, their cocaine, their cannabis. Drugs that are too potent could easily be avoided. Legalized drugs would include packaging with the specific content. Sales in specialized stores would allow customers to receive medical help if they show signs of problematic consumption, without fear of being imprisoned over it.
And since we’ve veered into some economic analysis, one of the reasons I favor legalization is that I don’t want law enforcement resources being misallocated.
Police in Ohio are blaming a lack of resources for the fact that unsolved homicide cases greatly outnumber the cases that are solved, yet they seem to have the resources to arrest thousands of suspected cannabis users. …in the state of Ohio…an average of over 20,000 people are arrested on charges of cannabis possession each year. …despite the fact that they seem to have plenty of resources when it comes to arresting and detaining nonviolent offenders, police in Ohio are blaming a lack of resources for the fact that the number of homicide cases they solve continues to decline. …How did police in the United States go from solving over 90 percent of homicides in the 1960s to around 60 percent today, with cities like Columbus solving as little as 30 percent of homicides? It was not a change in resources—it was the introduction of the Drug War. …“Around the country, police make more arrests for drug possession than for any other crime,” an ACLU and Human Rights Watch report found last year. “More than one of every nine arrests by state law enforcement is for drug possession, amounting to more than 1.25 million arrests each year.” In fact, police make more arrests for marijuana possession alone than for all violent crimes combined. …As states like Ohio find that the number of unsolved homicide cases greatly outnumber the cases that are solved, it makes you wonder—what more could they accomplish if they were able to use their resources to track down violent murder suspects, instead of wasting them on nonviolent individuals who are found in possession of a plant?
Let’s close with some wisdom from Milton Friedman (h/t: Reddit).
P.S. It’s an open question whether the War on Drugs has been more damaging or less damaging than the War on Poverty. I guess the moral of the story is that there are a lot of “friendly fire” casualties when politicians declare war.
The late Mancur Olsen was a very accomplished academic economist who described the unfortunate tendency of vote-seeking governments to behave like “stationary bandits,” seeking to extract the maximum amount of money from taxpayers.
I’m not nearly as sophisticated, so I simply refer to this process as “goldfish government.”
Tax competition is a way of discouraging this self-destructive behavior. Politicians are less likely to over-tax and over-spend if they know that jobs and investment can migrate from high-tax nations to low-tax jurisdictions (borders can be a hassle, but they are beneficial since they presumably represent a limit on the reach of a government’s power).
I want politicians to be afraid that the geese with the golden eggs may fly away. This is one of the reasons why “offshore” nations play a very valuable role in the global economy.
But it’s important to realize that there’s also a moral argument for tax havens.
Ask yourself whether you would want the government to have easy access to your nest egg (whether it’s a lot or a little) if you lived in Russia? Or Venezuela? Or China? Or Zimbabwe?
Ask yourself whether you trust the bureaucracy to protect the privacy of your personal financial information if you lived in a country with corruption problems like Mexico? Or India? Or South Africa?
Here’s a story from France24 that underscores my point.
Turkish President Recep Tayyip Erdogan declared Sunday that businessmen who move assets abroad are committing “treason”, adding that his government should put an end to the practice. “I am aware that some businessmen are attempting to place their assets overseas. I call on the government not to authorise any such moves, because these are acts of treason,” Erdogan said in televised comments to party members in the eastern town on Mus.
Allow me to translate. What Erdogan is saying is “I don’t want escape options for potential victims of expropriation.” For all intents and purposes, he’s basically whining that he can’t steal money that is held offshore.
Which, of course, is why offshore finance is so important.
Professor Tyler Cowen elaborates in a Bloomberg column.
I’d like to speak up for offshore banking as a significant protection against tyranny and unjust autocracy. It’s not just that many offshore financial institutions, such as hedge funds registered in the Cayman Islands, are entirely legal, but also that the practice of hiding wealth overseas has its upside. …offshore…accounts make it harder for autocratic governments to confiscate resources from their citizens. That in turn limits the potential for tyranny.
Tyler looks at some of the research and unsurprisingly finds that there’s a lot of capital flight from unstable regimes.
A recent study shows which countries are most likely to use offshore banking, as measured by a percentage of their gross domestic product. …The top five countries on this list, measured as a percentage of GDP, are United Arab Emirates, Venezuela, Saudi Arabia, Russia and Argentina, based on estimates from 2007. In all of those cases the risk of arbitrary political confiscations of wealth is relatively high. …When I consider that list of countries, I don’t think confidential offshore banking is such a bad thing. …consider some of the countries that are not major players in the offshore wealth sweepstakes. China and Iran, for instance, have quite low percentages of their GDPs held in offshore accounts, in part because they haven’t been well integrated into global capital markets. …Are we so sure it would be bad for more Chinese and Iranian wealth to find its way into offshore banks? The upshot would be additional limits on the power of the central leaders to confiscate wealth and to keep political opposition in line.
From the vantage point of Western liberalism, individuals should be free from arbitrary confiscations of their wealth, connected to threats against their life and liberty, even if those individuals didn’t earn all of that wealth justly or honestly. There is even a “takings clause” built into the U.S. Constitution. On top of these moral issues, such confiscations may scare off foreign investment and slow progress toward the rule of law.
By the way, the moral argument shouldn’t be limited to nations with overtly venal governments that engage in wealth expropriation. What about the rights of people in nations – such as Argentina and Greece – where governments wreck economies because of blind incompetence? Shouldn’t they have the ability to protect themselves from wealth destruction?
I actually raised some of these arguments almost 10 years ago in this video from the Center for Freedom and Prosperity.
Since my job is to proselytize on behalf of economic liberty, I’m always trying to figure out what motivates people. To be blunt, I’ll hopefully be more effective if I understand how they decide what policies to support. That’s a challenge when dealing with my friends on the left since some of them seem to be motivated by envy.
Unsurprisingly, there are people on the other side who also contemplate how to convert their opponents.
Harvard Professor Maximilian Kasy wrote a column for the Washington Post that advises folks on the left how they can be more effective when arguing with folks on the right. He starts with an assertion that conservatives are basically impervious to facts.
Worries about…our “post-factual era” impeding political debate in our society have become commonplace. Liberals…are often astonished at the seeming indifference of their opponents toward facts and toward the likely consequences of political decisions. …A common, though apparently ineffective, response to this frustration is to double down by discussing more facts.
This is a remarkable assertion. I’m a libertarian rather than a conservative, so I don’t feel personally insulted. That being said, conservatives generally are my allies on economic issues and I’ve never found them to be oblivious or indifferent to facts (I’m speaking about policy wonks, not politicians, who often are untethered from reality regardless of their ideology).
So let’s see how Mr. Kasy justifies his claim about conservatives. Here’s more of what he wrote.
…maybe the issue is not conservatives’ ignorance of facts, but rather a fundamental difference of values. Taking this point of view seems essential for effective communication across the political divide.
I basically agree that differences in values play a big role, so I’m sort of okay with that part of his analysis (I’ll return to this issue in the conclusion).
But my alarm bells started ringing at this next passage.
Much normative (or value-based) reasoning by liberals (and mainstream economists) is about the consequences of political actions for the welfare of individuals. Statements about the desirability of policies are based on trading off the consequences for different individuals. If good outcomes result from a policy without many negative consequences, then the policy is a good one.
Huh? Since when are liberals (and he’s talking about today’s statists, not the classical liberals of yesteryear) and mainstream economists on the same side?
Though I admit it’s hard to argue about the rule he proposes for policy. He’s basically saying that a change is desirable if “good outcomes” are more prevalent than “negative consequences.”
That’s probably too utilitarian for me, but I suspect most people might agree with that approach.
But he makes a giant and unsubstantiated leap by then claiming it would be wrong to repeal a supposedly good policy like Obamacare.
When Sen. Kamala D. Harris (D-Calif.) remarked on the Affordable Care Act this spring, for example, she said, “…we’re talking about something that would deny those in need with the relief and the help that they need, that they want and deserve…” In other words, if a policy will harm the welfare of individuals in need, it’s a bad policy.
If facts are important, shouldn’t he be weighing the costs and benefits?
In other words, Kasy must be in some sort of cocoon if he thinks the Obamacare fight is between Republicans motivated only by values and Democrats motivated by helping individuals.
His analysis of the death tax is similarly off base.
…consider the example of bequest taxes, labeled “estate taxes” by liberals and “death taxes” by conservatives. A liberal might invoke various empirical facts…our empiricist liberal might conclude that bequest taxes are an effective policy instrument, providing public revenue and promoting equality of opportunity. The conservative addressee of these facts might now just shrug her shoulders and say “no thanks.” Our conservative likely believes that everyone has the right to keep the fruits of her labor, and free contracts of exchange between any two parties are nobody else’s business. …Taxing bequests thus means punishing moral behavior, the exact opposite of what the government should do.
Once again, Kasy is deluding himself. Conservatives do think the death tax is morally wrong, so he’s right about that, but they also have very compelling arguments about the levy’s negative economic impact. Simply stated, the death tax exacerbates the tax code’s bias against capital formation and results in all sorts of economically inefficient tax avoidance behavior (with Bill and Hillary Clinton being classic examples).
His column concludes with some suggestions of how folks on the left can be more persuasive. He basically says they should appeal to conservatives with values-based arguments such as these.
We should evaluate the policy based on its effect on individuals, and assign a higher weight to the majority of less wealthy people. …nobody can be said to consume only the products of their own labor. We rely on social institutions including markets and governments to provide us with all the goods we consume, and absent a theory of just prices (which present day conservatives don’t have) there is no sense in which we are entitled to specific terms of exchange.
I’m not the ideal person to speak for conservatives, but I don’t think those arguments will win many converts.
Regarding his first suggestion, Kasy’s problem is that he apparently assumes that people on the right don’t care about the poor. Maybe I’m reading between the lines, but he seems to think conservatives will automatically favor lots of redistribution if he can convince that it’s good to help the poor.
Let’s close with a column by Alberto Mingardi of the Bruno Leoni Institute in Italy. Published by the Foundation for Economic Education, the piece is relevant to today’s topic since it looks at why an unfortunate number of intellectuals are opposed to economic liberty.
…some have replied that the main reason is resentment (intellectuals expect more recognition from the market society than they actually get); some have pointed out that self-interest drives the phenomenon (intellectuals preach government controls and regulation because they’ll be the controllers and regulators); some have taken the charitable view that intellectuals do not understand what the market really is about (as they cherish “projects” and the market is instead an unplanned order).
Alberto then shares Milton Friedman’s answer.
I think a major reason why intellectuals tend to move towards collectivism is that the collectivist answer is a simple one. If there’s something wrong pass a law and do something about it. If there’s something wrong it’s because of some no-good bum, some devil, evil and wicked – that’s a very simple story to tell. You don’t have to be very smart to write it and you don’t have to be very smart to accept it.
My two cents, based on plenty of conversations with well-meaning folks on the left, is that there’s actually a lot of agreement of some big-picture values. We all want less poverty and more prosperity. In other words, I think most people have similar good intentions (I’m obviously excluding communists, Nazis, and others who believe in totalitarianism).
But similar good intentions doesn’t translate into agreement on policy because of secondary values. Especially differences in whether we view “equality of outcomes” as an appropriate goal for government. Some on the left openly are willing to sacrifice growth to achieve more equality (Margaret Thatcher even claimed that they would be willing to hurt the poor if the rich suffered even more). Folks on the right, by contrast, are much more focused on helping the poor with growth rather than redistribution.
In 2010, I contemplated the challenging issue of libertarians and patriotism. My view, for what it’s worth, is captured by this t-shirt.
In 2011, I pondered research about the partisan implications of patriotism and the 4th of July.
In 2012, I shared an inspirational video about freedom and individualism from Ronald Reagan.
In 2013, I discussed the proper meaning of patriotism in the aftermath of revelations about NSA snooping.
In 2014, I decided on a humorous approach with one a Remy video about government being “up in your grill.”
In 2015, I waded into the controversial topic of what happens when flag burning meets the modern regulatory state.
In 2016, I looked at how government has increased the cost of celebrating Independence Day.
I actually did two columns in 2011. I also put together a satirical Declaration of Dependence for my left-wing friends. Here’s how it started.
We hold these truths to be self-evident, that all people should be made equal, that they are endowed by their government with certain unalienable Rights, that among these are jobs, healthcare and housing.
I’m definitely not in the same league as P.J. O’Rourke or Mark Steyn, but I thought I was being at least halfway funny and somewhat clever.
But Bernie Sanders must have read it and took it seriously, at least if this tweet is any indication.
Republicans talk a lot about freedom and choice. But you cannot truly be free if you can't afford health care or food or medicine.
In other words, he’s saying you have a “right” that is predicated on other people paying for you.
When I first saw that tweet, the first thing that came to mind was the cartoon about the choice between “work hard” and “free stuff.”
Then I thought about the failure of nations that go too far down the path of redistribution, such as Greece and Venezuela.
And I wondered whether Senator Sanders actually understands what he’s saying. In other words, is he crazy, blind, or evil?
Or perhaps immoral? In his Washington Timescolumn, Richard Rahn looked at the ethical implications.
Sen. Bernie Sanders keeps repeating that “all Americans have a right to health care” — nice applause line, but what does it mean? There is no such right mentioned in the Declaration of Independence or the Constitution. Health care is not a free good — someone has to pay for it. Ask yourself — who should pay for your health care? …Do you have the obligation to pay for someone else’s health care? If so, how much and why? …The 13th Amendment to the Constitution prohibits “involuntary servitude” and slavery. At what point does a tax on someone’s labor — where the proceeds of that tax are largely used to provide income or services to others — constitute “involuntary servitude”? …Those who think they have the right to the labor of those they revile, i.e., the “rich,” have the same mentality of the slaveholder who also thought he had the right to others’ labor.
Ultimately, this is about a conflict between the classical liberal vision of “negative liberty” and the welfare state vision of “positive liberty.”
Libertarians, along with many conservatives, believe in the right to be left alone and to not be molested by government. This is sometimes referred to in the literature as “negative liberty,” which is just another way of saying “the absence of coercive constraint on the individual.” Statists, by contrast, believe in “positive liberty.” This means that you have a “right” to things that the government will give you… Which means, of course, that the government has an obligation to take things from somebody else. How else, after all, will the government satisfy your supposed right to a job, education, healthcare, housing, etc.
I also should have pointed out that negative liberty doesn’t impose obligations on other people. My freedom of speech doesn’t conflict with your freedom of speech. My freedom or religion doesn’t conflict with your freedom of religion. My freedom to earn and produce doesn’t conflict with your freedom to earn and produce.
But that’s not true with so-called positive liberty. If I have a “right” to health care, that means the government will use coercion. Either indirectly by using the tax code to take money from other people, or directly as explained by Senator Rand Paul.
P.S. Before Bernie, there was FDR, who was also misguided or malicious about the supposed right to other people’s money.
Economists are sometimes considered to be a bit odd, and the same thing is sometimes said about libertarians.
And since I’m a libertarian economist, I realize that makes me doubly suspect.
So when I’ve written about the desirability of market-based organ transplants (see here, here, and here), I realize some people will instinctively object because selling one’s organs is somehow distasteful and icky.
Or it makes people subject to exploitation. For instance, writing for the Washington Post, Scott Carney argues that organ sales would take advantage of the poor.
What would happen if the United States legalized the sale of human organs? …Whether we like it or not, we live in the era of globalization, and if the U.S. legalizes the market for body parts, there is no reason to think that international economies won’t play a role in how a patient decides to procure transplant organs. …According to the National Foundation for Transplants, a kidney transplant costs about $260,000. In the illegal organ markets in India, Egypt and Pakistan, the same procedure rings in at just shy of $20,000 — certified organ included. …The only thing stopping the typical American transplant patient from going abroad and buying an organ is the difficulty of making contact with a broker and the threat of what might happen if they get caught. …the market for human body parts is a lot like the one for used cars: They’re only worth what someone is willing to sell them for. …hundreds of thousands of people are available and willing to sell their flesh for pennies on the dollar.
My view, for what it’s worth, is that I shouldn’t be allowed (and the government shouldn’t be allowed) to block a willing seller and a willing buyer from engaging in a mutually beneficial exchange.
But folks like Mr. Carney think that poor people will get exploited.
…it’s helpful to review what happened in the market for human surrogate babies. In the United States, it is legal to pay a woman to carry a child… Once the market was clearly defined in the United States, other countries, with looser definitions of human rights, fought for their share of the market. In 2002, India became the go-to destination for procuring a budget surrogate womb. To the surprise of no one, the Indian industry soon began to cut corners. Women were housed under lock and key in houses known to the press as “baby factories.” …Late last year, India finally outlawed surrogacy tourism after non-stop incidents and official inquiries into the surrogates’ well-being. Now the commercial surrogacy boom seems to be moving to Cambodia where regulations are still loose.
So what’s his bottom line?
We cannot solve our own organ shortage by exploiting the poor and helpless people on the other side of the world.
I don’t doubt that there are shady people willing to exploit the poor by not giving them relevant information and/or not fully compensating them, though that’s not an argument against organ sales (just as similar periodic bad behavior by car salesmen and insurance brokers isn’t an argument against markets for automobiles and life insurance).
A Wall Street Journal column by two attorneys from the Institute for Justice approaches the issue more dispassionately, noting that a market for bone marrow could save many lives.
Hemeos is aimed at one of the most pressing problems in medicine: the shortage of bone-marrow donors to combat deadly blood diseases. Thousands of Americans are waiting for a lifesaving donor, and thousands more have died waiting. Marrow donors provide blood stem cells, which reproduce continuously in the patient and restore the ability to make healthy blood. …Blood is drawn from one arm, the blood stem cells are skimmed out, and the blood is returned through the other arm. Donated marrow cells regenerate quickly and fully. Despite the ease of donating, thousands of patients with leukemia or other blood-related disorders are desperately searching for donors because a specific genetic match is required. …Hemeos plans to revolutionize donor recruitment by taking one simple step: compensating donors with a check for around $2,000. As with every other valuable thing in the world, we will get more marrow cells when we pay for them. It’s Econ 101.
Sounds great, right? A classic example of a win-win situation!
Except, well, government.
In 1984 the National Organ Transplant Act (NOTA) made it a federal crime to pay donors. Unlike plasma, sperm and egg donation—for which compensation is legal and common—paying marrow donors remains illegal. The result? Shortages, waiting lists and unnecessary suffering.
Fortunately, the courts have stepped in.
Ms. Flynn has three girls with Fanconi anemia, a genetic disorder that causes marrow failure. Wanting to do everything to save her girls and others, Ms. Flynn, along with several cancer patients in need of bone marrow, sued the Justice Department to end the ban on compensating marrow donors. A federal appeals court ruled in 2011 that because Congress expressly said that NOTA wouldn’t affect compensation for blood donation, …Congress couldn’t have intended the law to restrict compensation for marrow donations using modern, nonsurgical techniques.
But, still, government is government.
But a year after Ms. Flynn won her case, the Department of Health and Human Services announced that it might enact a regulation effectively nullifying the court’s ruling—and thus Ms. Flynn’s victory. …And while HHS fiddles, patients die. Thousands of Americans have died awaiting a marrow transplant since HHS embarked on this needless diversion. How many could have been saved? And of those still alive, how many could have received a transplant faster and with a better-quality donor? This is a lesson in how a faceless, lumbering bureaucracy smothers innovation and optimism.
Here’s a very powerful video from IJ on this issue.
It’s hard to watch that video and think about what you would do if your children faced the risk of death.
Sally Satel of the American Enterprise Institute adds her two cents, writing on kidney sales from the unique perspective of being someone who has received two kidneys solely because of human kindness.
I am almost obscenely lucky. Within a 10-year period, two glorious women rescued me from years of grueling dialysis and a guarantee of premature death. …tremendous generosity allowed me to live many years in peace instead of constant worry. …I understood the general reluctance to donate. After all, giving a kidney is by no means risk-free (roughly a 0.02 percent, or 2 in 10,000 mortality rate, a 3–5 percent rate of serious complications, and perhaps a 25 percent chance of minor complications). Also, some people want to “save” their kidney lest, say, their own child needs it. Then, too, a lot of people are simply put off by surgery, and some handful—no one knows the extent of this group—can’t afford time off and lost wages. Of the 120,000 people waiting for organs, 101,000 are waiting for kidneys.
And for those who aren’t as lucky, Sally points out that current policy puts them in a very difficult position.
My transplants were a matter of private policy. My friends saved me—out of empathy, out of principle, out of affection. I’m beyond fortunate for them, because our public policy is failing far too many people who need organs. Twenty-two people die each day because they cannot survive the wait for an organ; 12 of those die from lack of a kidney in particular. The core of the problem is that prospective donors are legally required to relinquish an organ in the spirit of “altruism.” Despite the risk they take on, they are not allowed to benefit materially in any way. This mandate is part of the 1984 National Organ Transplant Act, the law that established the national system of organ procurement and distribution. Any exchange of an organ for any sort of “valuable consideration,” is a felony punishable by up to five years in prison and/or a $50,000 fine.
Indeed, current policy is causing people to needlessly die.
The original law was intended in good faith. The point was to prevent a classic free market where only wealthier patients could afford to buy organs; it also sought to avert the scenario where poor donors were the “suppliers” for the well-off. …But more than enough time has now elapsed to conclude with certainty that an altruism-only system is sorely inadequate. And as in so many realms, it is the poor (especially poor minorities) that have suffered the most because of the deficit. They are less likely to be referred for transplant, more likely to die on dialysis, and less likely to receive an organ from the national pool even when they are referred.
One lawmaker is trying to push policy in the right direction.
In May, Pennsylvania Rep. Matt Cartwright introduced a bill called the Organ Donor Clarification Act of 2016. Its goal is to permit study of the effect of rewarding people who are willing to save the life of a stranger through living donation: Not through a free market with direct cash payments… Rather than large sums of cash, potential rewards could include a contribution to the donor’s retirement fund, an income tax credit or a tuition voucher, lifetime health insurance, a contribution to a charity of the donor’s choice, or loan forgiveness. Only the government, or a government-designated charity, would be allowed to distribute these benefits. (The funds could potentially come from the savings of stopping dialysis, which costs roughly $80,000 a year per person.) In other words, needy patients would receive kidneys regardless of their ability to reward donors out of their own pockets. …The donors’ kidneys would be distributed to people on the waiting list according to the rules now in place.
Congressman Cartwright’s proposal obviously wouldn’t create a genuine free market. But it would allow compensation to become part of the equation. So his proposal presumably would save lives compared to the current system.
Oh, by the way, it’s worth noting that criminalization of organ sales doesn’t fully stop the practice. Other nations step in, often with policies that are disgusting.
…one of the most horrific markets operating today: Communist China’s selling of organs harvested from prisoners of conscience. Ten thousand “transplant tourists” travel annually to communist China, where they pay top dollar to get organs transplanted on demand. …Free countries may not be able to stop this horrific practice, but they could reduce the demand for these organs by allowing free people to exercise the choice to sell their organs. Currently, free countries rely only on altruism, which has resulted in severe shortages of organs and black markets.
In other words, the policies advocated by Mr. Carney (the first story cited at the start of this column) would enhance the profitability of the Chinese organ-harvesting system. That doesn’t seem like a good outcome.
Here’s a map showing how the kidney trade works right now, with the underground economy playing a big role.
My bottom line is that poor people would get more money and have more legal protections if the system was fully legalized and operating above ground.
P.S. When I wasn’t busy causing trouble in college, I would sell my plasma twice weekly. The $15 I received from the medical company was sufficient to cover my food budget. They exploited me and I exploited them.
Libertarians are sometimes described as people who don’t want the government to interfere in either the bedroom or boardroom, which is a shorthand way of saying that there should be both personal freedom and economic freedom.
Based on this preference for liberty and a desire to avoid government coercion, what’s the most libertarian nation in the world? Is it Australia, which I recommended as the best option for escaping Americans if the U.S. becomes a failed welfare state?
Not quite. According to the new Human Freedom Index, Australia gets a very good score, but the most libertarian-oriented place in the world isn’t even a country. It’s Hong Kong, a “special administrative region” of China.
For what it’s worth, European nations dominate the rankings. Other than top-rated Hong Kong, New Zealand (#3), Canada (tied for #6), and Australia (tied for #6), every single nation in the top 20 is from the other side of the Atlantic.
So kudos to our friends from across the ocean. Most of them have big welfare states, but at least they compensate with free market policy in other areas, along with lots of personal freedom.
And what about the United States? We’re ranked #23, which certainly is decent considering that there are 159 countries that are scored, but obviously not worthy of superlatives.
The infographic below contains the specific scores for the United States. As you can see, our economic freedom score (7.75 out of 10) is worse – in absolute terms – than our personal freedom score (8.79 out of 10). But since more nations (especially in Europe) get high scores for personal freedom, our relative ranking for economic freedom (16 our of 159) is better than our relative ranking for personal freedom (28 our of 159).
And if we look at the sub-categories for personal freedom on the left side, you’ll notice that America’s main problem is a very mediocre score for rule of law. Thanks, Obama!
Let’s now look at the nations that have the most personal freedom.
I already mentioned that the United States is in 28th place, so we obviously don’t show up on this top-20 list. But you will find 17 European nations, along with Australia (tied for #12), Canada (#15), and Hong Kong (tied for #19).
By the way, Switzerland is the only nation to be in the top 10 for both personal and economic freedom. So maybe that country’s improbable success isn’t so improbable after all. You do the right thing and you get good results.
And honorable mention to Ireland, Australia, and the United Kingdom for just missing being in the top 10 in both categories.
In case you’re wondering why Hong Kong had the highest overall score even though it was “only” #19 for personal freedom, the answer is that the jurisdiction scores so much higher for economic liberty than the European nations.
P.S. For what it’s worth, I find it surprising that China, which ranks rather low for overall freedom (141 out of 159), is so tolerant of widespread freedom in Hong Kong. I assume (hope?) this is a positive sign that China will evolve in a positive direction.
P.P.S. The very last country on the list is Libya, so perhaps we can conclude that the Hillary Clinton/Barack Obama intervention has not produced good results. Meanwhile, I’m guessing that the thugs in Caracas (154 out of 159) are happy that Venezuela isn’t in last place.
Proponents of liberty generally are big fans of federalism. In part, this is simply an issue of “good governance” since both voters and lawmakers at the state and local level are more likely to actually understand the real issues in communities and be able to develop policies that are more sensible.
The obvious implication is that if we can dramatically shrink the federal government so that it only handles the few (enumerated) powers envisioned by the Founding Fathers, that would give states far more authority to determine tax burdens and the degree of redistribution, and they would presumably do a better job because they would compete with each other for jobs and investment.
This is why I’m always interested when organizations produce rankings that show the degree to which states seem inclined to adopt good policy. For instance, I routinely highlight the findings of the Tax Foundation’s State Business Tax Climate Index so I can see which states have acceptable tax policy. And the Mercatus Center’s Ranking the States by Fiscal Condition is a must-read publication to see which states follow sensible budget policy.
The latest addition to this group is the Cato Institute’s Freedom in the 50 States. It’s a comprehensive publication with lots of data and number-crunching, so wonks will have a field day digging into the details.
But if you simply want the highlights, I first looked to see which states have the best fiscal policy. Here’s the relevant table from the document and I’ve modified it to show which states have no income tax (blue stars), which ones have flat taxes (red stars), and which ones have no sales tax (black stars).
The obvious implication is that having no state income tax is probably the single most important way of controlling the fiscal burden of government.
But fiscal policy is just one variable of economic freedom. And while states obviously don’t have any leeway on monetary policy and trade policy, they have considerable powers over issues related to regulation.
And when you add these factors to the mix, you can get a measure of overall economic freedom.
If you compare these first two tables, there are some predictable similarities (New York and California score poorly while South Dakota, Tennessee, and New Hampshire do well).
But you also get some odd results. Pennsylvania, for instance, is 13th for fiscal policy, but drops to 30th for overall economic policy. I guess this means they are regulatory maniacs.
By contrast, Indiana is ranked a mediocre 26th for fiscal policy, but jumps to 11th place for overall economic policy, which presumably means a very laissez-faire approach to red tape.
Now let’s add personal freedom issues to the equation (issues such as guns, gambling, sex, education, booze, and even fireworks).
The bottom line, if you value overall liberty, is that you better be tolerant of cold weather since New Hampshire and Alaska are atop the rankings. New York is in last place by a comfortable margin.
Interestingly, if you compare the fiscal ranking with the above table for overall freedom, you’ll notice that there’s a lot of overlap. New Hampshire is first in both and New York is last, for instance.
But there are some odd anomalies. Iowa, for example is 9th for overall freedom but only 30th for fiscal freedom, a gap of 21 spots. There’s also a big difference for Kansas, which is 33rd in fiscal freedom but 16th for overall freedom.
Conversely, Texas is 10th for fiscal freedom, but drops to 28th place for overall freedom. And Alabama also has a split personality, ranking 6th for fiscal policy but 23rd for overall freedom.
Why are some states bad on fiscal policy but good on regulation and personal freedom, like Iowa and Kansas? Or, in the case of states like Alabama and Texas, the other way around?
Beats me. Maybe some southern states like controlling people’s lives so long as it doesn’t involve the power of the purse (sort of like Singapore). And maybe some farm states exploit the power of the purse, both otherwise leave people alone (sort of like the Nordic nations).
Here’s something easier to understand, a measure of which states have improved the most and deteriorated the most in the 21st century.
The bad news is that only nine states have moved in the right direction, with Oklahoma easily winning the prize for pro-liberty reforms. Honorable mention to Alaska, Maine, and Idaho.
But why have Kentucky, Nebraska, and Tennessee fallen so much?
P.S. Since we’re ranking states, here’s one final bit of information.
I wrote recently to debunk the left’s claim that California is an economic success story. My main point was to share per-capita income data from the BEA to who that California has been losing ground over the medium-term and long-term to states such as Kansas and Texas. And even in the short-term as well if you look at Census Bureau data on median household income.
But some leftists pushed back by arguing that the numbers nonetheless showed higher income levels in California. That’s certainly what we see in both the BEA and Census data, though I would argue that’s actually not relevant unless one (incorrectly) claims that California became a rich state because of big government. As i wrote in that column, “we’re focusing on changes in per-capita income (i.e., which state is enjoying the most growth, regardless of starting point or how much money can buy in that state).”
Speaking of “how much money can buy,” let’s look at some great work from the Tax Foundation on that topic. If you have $100 of income, where will you be able to buy the best basket of goods and services. As you can see, you’re far better off in Texas or (especially) Kansas than in California.
The bottom line is that living standards in Texas and Kansas would be higher than those in California if BEA and Census numbers were adjusted for purchasing power parity (as happens when comparing living standards across nations).
Some people may want to live in California (or some other high-tax state) because of the climate or scenery. They just have to accept lower living standards caused by bigger government. Just like there are certain benefits of living in nations such as France and Italy, but you have to accept bloated government and economic stagnation as part of the package
Like all good libertarians, I hate waiting in government-mandated lines. Heck, you don’t even have to be a curmudgeonly libertarian to have unpleasant thoughts about the Post Office or Department of Motor Vehicles (not to mention the virtual lines that exist for people stuck on hold after calling the IRS or some other inefficient bureaucracy).
Since I have to do a bit of travel, I’m especially resentful of the lines I face for customs and immigration when I cross borders. In some cases, these restrictions can even turn “Heaven into Hell.”
My aversion to government-mandated lines is so strong that I’m a big fan of the European Union’s “Schengen Zone” that has made crossing many European borders as simple as crossing from one American state to another (and regular readers know that I’m normally very reluctant to say anything nice about the policies concocted by the crowd in Brussels).
Given all this, I was very interested to see that the leading bureaucrat of the European Commission, Jean-Claude Juncker, has said that borders are “the worst invention ever.”
Was he making a libertarian argument about the value of making it easier for people to travel and/or move? Let’s investigate. Here’s some of what was reported about Juncker’s comments in the U.K.-based Daily Mail.
EU chief Jean-Claude Juncker risked widening divisions with European leaders today by saying borders were the ‘worst invention ever’. He called for all borders across Europe to be opened, despite the chaos caused over the last year from the flood in refugees fleeing Syria and the wave of terror attacks hitting various continent’s cities. …Mr Juncker also said a stronger EU was the best way of beating the rising trend of nationalism cross Europe. In another extraordinary remark, he appeared to warn of war on the continent if the EU disintegrates as he echoed the warning from the former French president Francois Mitterrand, who said nationalism added to nationalism would end in war.
Writing for the American Enterprise Institute, Michael Barone offered a different perspective.
He starts with the observation that Juncker’s home country of Luxembourg is rich because of borders.
Juncker comes from Luxembourg, a 998-square mile country… If you look up Luxembourg in lists of world economic statistics, you’ll find it rated No. 2 in gross domestic product per capita. That’s thanks to what Juncker called politicians’ worst invention ever, borders. Luxembourg is a financial haven and headquarters of the world’s largest steel company, Arcelor Mittal. Without their borders and national laws, the 576,000 Luxembourgers wouldn’t be as affluent as they are.
Barone is correct. Luxembourg is only a very successful tax haven because it has the right to have tax laws inside its borders that are attractive relative to the tax laws that exist in adjoining nations such as France and Germany.
For those who care about foreign policy, Barone also pushes back at the notion the European Union somehow has prevented World War III.
Juncker said, “We have to fight against nationalism, we have the duty not to follow populists but to block the avenue of populists.” Such is the faith of the Eurocrats: The EU exists to prevent another war between France and Germany. Never mind that the chance of such a war has been zero since 1945, 71 years ago. …Juncker was denouncing Austria and other nations for erecting border controls to keep out Muslim refugees. Evidently he believes that World War III will somehow break out if they are kept out.
This is surely right. The people in Western Europe no longer have any interest in fighting each other. And to the extent any international organization deserves credit for that, it would be NATO (even if it no longer serves a purpose).
Let’s now shift back to the role of borders and the size and power of government.
If you want a really good libertarian-oriented explanation of why borders are valuable, let’s go back in time to 2004. Professor Andy Morriss wrote an article for The Freeman that explains borders are good for liberty because they limit the powers of governments.
Borders come from property rights and are essential to a free society…are wonderful things. Lorain and Cuyahoga counties in Ohio must compete for my family’s residence. Choosing to live where we do is related to the taxes charged by the communities where we might have lived.
The value of borders, Andy explains, is that they represent a territorial restriction on the power of government and people can cross those borders if they think governments are being too greedy and oppressive.
Investors make similar choices. …Choosing bad policies produces an exodus; choosing good policies leads to immigration of both capital and people. …the competition offered on local taxation policy and other regulatory issues is important in restraining governments from infringing liberty. …National borders are also important sources of liberty. …without borders we would not have the competition among jurisdictions that restricts attempts to abridge liberty. …Jurisdictions…compete to attract people and capital. This competition motivates governments to act to preserve liberty.
…states compete for corporations, with Delaware the current market leader. Delaware corporate law offers companies the combination of a mostly voluntary set of default rules and an expert decision-making body (the Court of Chancery). As a result, many corporations, large and small, choose to incorporate in Delaware, making it their legal residence. (Their actual headquarters need not be physically located there.) Corporations get a body of liberty-enhancing rules; Delaware gets tax revenue and employment in the corporate services and legal fields. That state’s position is no accident. At the beginning of the twentieth century, New Jersey was the market leader in corporate law. When New Jersey’s legislature made ill-advised changes to its corporations statute that reduced shareholder value, Delaware seized the opportunity and offered essentially the older version of New Jersey’s law.
Statists are correct that competition among jurisdictions will make clear the costs of the policies they promote. …The former divide between East and West Berlin is a fine example of the impact of cross-border comparisons. East Germans could see the difference in outcomes between the two societies, and East Germany had to resort to increasingly costly and desperate measures to prevent its citizens from voting against communism with their feet. …Competition between the two Germanys exposed the cost of East German policies.
In an observation that could have been taken from today’s headlines, he also notes that uncompetitive governments try to prop up their inefficient welfare states by clamping down on pro-market policies in other nations.
To prevent cross-border competition from exposing the costs of their favorite policies, …special interests attempt to forestall it. …High-tax, heavy-regulatory jurisdictions in the European Union are waging just such a fight now, arguing, for example, that Ireland’s low taxes are “unfair” competition.
He’s exactly right. Which is precisely why it’s so important to block efforts to replace tax competition with tax harmonization.
Andy’s conclusion hits the nail on the head. We may not like having to wait in lines and fill out forms to cross borders, but the alternative would be worse.
Even though borders can be an excuse for reducing liberty, a world with lots of borders is nonetheless a far friendlier world for liberty than one with fewer borders. They promote competition for people and money, which tends to restrain the state from grabbing either. Borders offer chances to arbitrage regulatory restrictions, making them less effective. Without borders these constraints on the growth of the state would vanish.
Before closing, let’s look at an example of how governments are forced to dismantle bad policy because of the the jurisdictional competition that only exists because of borders. It’s from an academic study written by Jayme Lemke, a scholar from the Mercatus Center. Here are some excerpts from the abstract.
Married women in the early nineteenth century United States were not permitted to own property, enter into contracts without their husband’s permission, or stand in court as independent persons. This severely limited married women’s ability to engage in formal business ventures, collect rents, administer estates, and manage bequests through wills. By the dawn of the twentieth century, legal reform in nearly every state had removed these restrictions by extending formal legal and economic rights to married women.
Why did states grant economic liberty and property rights to women?
Was it because male legislators suddenly stopped being sexist?
Maybe that played a role, but it turns out that people moved to states that eliminated these statist restrictions and that pressured other states to also reform.
…what forces impelled legislators to undertake the costs of action? …interjurisdictional competition between states and territories in the nineteenth century was instrumental in motivating these reforms. Two conditions are necessary for interjurisdictional competition to function: (1) law-makers must hold a vested interest in attracting population to their jurisdictions, and (2) residents must be able to actively choose between the products of different jurisdictions. Using evidence from the passage of the Married Women’s Property Acts, I find that legal reforms were adopted first and in the greatest strength in those regions in which there was active interjurisdictional competition.
The moral of the story is that competition between states improved the lives of women by forcing governments to expand economic liberty.
And since even the New York Times has published columns showing that feminist-type government interventions actually hurt women, perhaps the real lesson (especially for our friends on the left) is that you help people by expanding freedom, not by expanding the burden of government.
P.S. There is a wealth of scholarly evidence that the western world became rich because of borders and jurisdictional competition.
And to further demonstrate my independence, it’s time for me to endorse another Democrat.
Yes, you read correctly. The person I want in the White House is….(drum roll, please)…the 22nd and 24th President of the United States, Grover Cleveland.
He’s mostly famous for being the only President to serve non-consecutive terms (he won in 1884, lost in 1888, and won again in 1892). And perhaps also for marrying a 21-year woman while in the White House.
But he should be remembered instead – and with great fondness – for his belief in classical liberal principles.
Cleveland was the leader of the pro-business Bourbon Democrats who opposed high tariffs, Free Silver, inflation, imperialism, and subsidies to business, farmers, or veterans. His crusade for political reform and fiscal conservatism made him an icon for American conservatives of the era. Cleveland won praise for his honesty, self-reliance, integrity, and commitment to the principles of classical liberalism. He relentlessly fought political corruption, patronage, and bossism. …He also used his appointment powers to reduce the number of federal employees, as many departments had become bloated with political time-servers. …Cleveland used the veto far more often than any president up to that time.
Perhaps his most glorious moment came when he rejected the Texas Seed Bill.
After a drought had ruined crops in several Texas counties, Congress appropriated $10,000 to purchase seed grain for farmers there. Cleveland vetoed the expenditure. In his veto message, he espoused a theory of limited government:
I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. …the lesson should be constantly enforced that, though the people support the government, the government should not support the people. The friendliness and charity of our countrymen can always be relied upon to relieve their fellow-citizens in misfortune. This has been repeatedly and quite lately demonstrated. Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character, while it prevents the indulgence among our people of that kindly sentiment and conduct which strengthens the bonds of a common brotherhood.
Wow, can you imagine any President saying these words today?
President Cleveland’s steadfast behavior and sound principles have garnered him some well-deserved praise.
Writing for Investor’s Business Daily back in 2011, Paul Whitfield opined about Cleveland’s track record.
If free-market advocates could resurrect a U.S. president to deal with today’s problems, many would choose Grover Cleveland. …He vetoed hundreds of spending bills, refusing to succumb to political temptation whether it was wrapped in patriotism or sob stories. …Union military veterans had become a powerful special interest group. Expenditures on their pensions increased about 500% over 20 years… When Congress passed a bill granting pensions to veterans for injuries not caused by military service, he vetoed it. …He vetoed 414 bills during his eight years — 1885-89 and 1893-97 — in the White House, forcing Congress to curb its appetite for spending.
President Cleveland even had a libertarian approach to overseas entanglements.
Cleveland had a simple approach to foreign policy. He said America should “never get caught up in conflict with any foreign state unless attacked or otherwise provoked.”
Let’s go back even further in time. Here’s some of what Lawrence Reed wrote in 1996.
I give high marks to those presidents who actively sought to uphold the Constitution, and who worked to expand the frontiers of freedom. I’ll take a president who leaves us alone over one who can’t keep his hands out of other people’s pockets any day of the week. Honesty, frugality, candor, and a love for liberty are premium qualities in my kind of president. The one man among post-war presidents (post-Civil War, that is) who exemplified those qualities best was Grover Cleveland… Cleveland took a firm stand against a nascent welfare state. Frequent warnings against the redistributive nature of government were characteristic of his tenure. He regarded as a “serious danger” the notion that government should dispense favors and advantages to individuals or their businesses. …Disdainful of pork barrel politics, he felt that those who would use and gain from such projects should pay for them. …He rightly argued that tariffs stifle competition, raise prices, and violate the people’s freedom to patronize the sellers of their choice.
The article points out that Cleveland wasn’t perfect.
But, on net, he pushed for liberty. Heck, look at this quote from President Cleveland, which Lawrence Reed shared in an article from 1999.
When more of the people’s sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and the expense of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of a free government.
Wow. Taxation to fund beyond limited government equals “ruthless extortion.” That warms my libertarian heart!
Robert Higgs, the great economic historian, shared another great quote from President Cleveland.
Cleveland believed in keeping government expenditure at the minimum required to carry out essential constitutional functions. “When a man in office lays out a dollar in extravagance,” declared Cleveland, “he acts immorally by the people.”
Let’s begin to wrap up with some wisdom from Burton Folsom, who wrote about President Cleveland for the Freeman back in 2004.
For a U.S. president, one test of this courage is the willingness to veto bad bills— bills that spend too much money or that contradict Article I, Section 8, of the Constitution. In that test of character, perhaps no president passed more convincingly than Grover Cleveland… During Cleveland’s first term (1885–1889), he vetoed 414 bills, more than twice the total vetoed by all previous presidents. …Over half of Cleveland’s vetoes involved pensions to Civil War veterans. Congressmen, especially Republicans, were increasingly trying to funnel taxpayer dollars to unqualified veterans in hopes of capturing “the soldier vote.”
Sadly, politicians today not only go after the “soldier vote,” but also the “farmer vote,” the “elderly vote,” the “urban vote,” etc, etc, etc.
And we don’t have principled leaders like Grover Cleveland with a veto pen.
Let’s look at some historical budget data to understand how truly lucky the nation was during Cleveland’s era. During the 1880s, in his first term, total primary spending (which is total outlays minus expenditures for net interest) averaged just 1.7 percent of GDP.
And this was before the income tax was enacted. After all, there was no need to have a punitive levy when the fiscal burden of government was so small.
What if we’re trying to define the rules for libertarian governance?Within weeks, two Republican members of the state House, Reps. Jon Hansen and Scott Odenbach, had introduced legislation punching back. The COVID-19 Vaccine Freedom of Conscience Act would give South Dakotans “the right to be exempt from any COVID-19 vaccination mandate, requirement, obligation, or demand on the basis that receiving a COVID-19 vaccination violates his or her conscience.” …By the end of August, state House Speaker Spencer Gosch had come aboard the mandate ban effort as well. …The only problem: Noem doesn’t support the legislation.
what are businesses to do if employees refuse to comply? Fire them all? …This rule is a recipe for lawsuits. Will businesses be caught in a bind — penalized for unvaccinated workers but also charged with unfair labor practices if they evade the mandate by reducing payrolls below 100? …If massive new testing is required as a mere screening method, even for those feeling perfectly healthy, how will medical personnel keep up? Who will keep administrative tabs on all this? And if businesses are required to provide time off for workers to get tested, how will their own efficiency and productivity suffer?
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