GARNERBLOG

Milton Friedman on Donahue

2010-08-09T20:24:00.004Z

Yesterday I enjoyed watching these two programs, so I thought I'd share them with you, my readers. The first is from 1979, just before Friedman's TV show of Free to Choose was released; the second is from 1980, just after the book form had been published.

Amongst the things I like are Friedman's continued points that he has no interest in protecting any industry, of business in that industry: If they go broke as a result of deregulation, good! And, related to this, are his demonstrations that regulatory bodies, even if set up with good intentions, become run by the industries they are meant to regulate so as to provide such protection, against the interests of the public.

Further to this is Friedman's scuppering his conservative credentials by whole heartedly supporting the decriminalisation, not just of marijuana, but of heroin. I also liked his argument that safety regulation in car manufacturing has made cars less safe, by raising the costs, and so price of cars, meaning people keep hold of old cars longer.

The things I don't like are his intellectual sleight of hand over military spending. Donahue is quite right to say that Friedman should apply his skepticism of big government to the military, too - and Friedman, of course, is one reason why the US no longer has the draft. Friedman employs a trick to argue that military spending has gone down, whilst also showing, but not admitting, the opposite: It has gone down in relative terms; that is, it has fallen as a proportion of government spending, but since government spending across the board has risen, the fact that some bits have risen faster than military spending does not show that military spending has fallen.

The second bit I don't like is his claim that government is a kind of group through which we (US citizens) work together to get done the things we cannot get done on our own. First off, Friedman knows that the alternative to government doing something is not each individual doing things for themselves - he is, after all, a champion of the free enterprise systme, through which people specialise in the tasks in which they have a comparative advantage, in the expectation that others else will be specialising in the things the first want done, and trade the surpluses, usually by means of a medium of exchange. Friedman himself has said that the free enterprise [i]is[/i] a means by which people mutually co-operate to satisfy their respective needs.

Secondly, Friedman seems to be contradicting himself: Since he has a wider notion of "doing things ourselves" than each individual working for himself, but instead includes voluntary trade, and voluntary co-operation in this, it seems odd to suggest that people form governments to do the sorts of things that they cannot do themselves. The reason is that, if this were the case, there would be no need for governments: If people couldn't dop something themselves, but could get together to form an organisation to do so, and would have an incentive to do so, then this is what they would do. Instead of relying on government to do that thing, they would do it themselves, through these organisations. But since a broader, more plausible notion of "doing things ourselves" that Friedman would likely agree with would include these organisations, Friedman would presumably say that "things we cannot do for ourselves" includes things that these organisations couldn't do. But in that case he seems to be characterising governments as being precisely the type of organisations - organisations through which we get together to do the things we cannot do by ourselves - he says we could not form!

Government is not a club that people got together to create so that they could work together and accomplish things they could not do for themselves. Government is not a club or union. This is not how governments we formed - historically, every state, everywhere and always, had its origins in conquest, in one party imposing its rule on a vanquished foe. And it is not how government have proceeded since then: they have always proceeded by one side using government as institutionalised violence to force the other to their will, usually with the intent of exploiting them economically. In fact, related to this is Friedman's annoying faith in democracy - he points out that regulatory bodies are run by and for the industries they regulate, that government is run for the corporations like Chrysler, and he is fully aware that this is because special interests, like those in big business, have more incentive to try to influence government than the general public, and that government has more incentive to resond to their pressure than that of the general public. But he still seems to characterise the government as something in which we all have as much a say as each other, and that we can, ultimately, have control over. On the contrary, it is because government is not like this that we should allow it as little influence in our lives as possible.

The case for such a position, of course, is what Friedman expertly provides in these programs.

Milton Friedman on Phil Donahue, 1979

Milton Friedman on Phil Donahue, 1980

Equality of Opportunity

2010-08-08T20:01:00.002Z

On the Liberal Youth forum I attempted to launch an interesting discussion on equality of opportunity, which I will reproduce here. It is interesting, since the more libertarian inclined liberals are wont to say that they are away of the moral strength of the idea that if person A works harder in a more valuable job than person B, then it is right that A is rewarded more than B, and so reject some crude egalitarianism. They suggest that they compromise by favouring "equality of opportunity" over "equality of outcome": Give everybody an equal opportunity, and then permit whatever inequalities arise out of people pursuing those opportunities as they choose.

A conservative poster, Snuggles, said to a Lib Dem, Sam G, that "Frankly it always comes down to equality of opportunity vs equality of outcome and you are normally on the opportunity side of the debate with us." Sam G, for his part, agreed: "Very true snuggles, and I still am. I realise that I am probably very hard to place in the political spectrum, simply because I have not quite found my spot, which I fully accept. However, if you'll accept it, I don't believe the Conservatives have any wish to promote a level playing field. We presently live in a world that isn't level at all, equal opportunities are growing but no where near anything that could actually be described as potential for all. It would take an active government to create this, one I don't see from the present, which saddens me and was the attempted message of my post. Just my thoughts on the matter, I'm sure you'd disagree."

However, I took issue with the stated aim of creating "equality of opportunity."

Does equality of opportunity make much sense, either? Asking from a philosophical perspective that is, I mean, just what does the phrase "equal opportunity" mean? When are opportunities equal? When everybody has the same opportunity to do the same things?

Beyond that, why is it desirable? Suppose that the number of opportunities I could have could be increased, but without increasing the number of opportunities available to anybody else. Doing so would clearly upset equality of opportunity, but that would mean that maintaining equality of opportunity would mean preventing me from having more opportunities than I otherwise could have.

But then again, that takes us back to just what it means for opportunities to be equal. This thought occurs to me precisely because I realised that I may not care if the number of opportunities available to me is prevented from increasing, because I might not value having those opportunities highly. Gaining the opportunity to eat gooseberry crumble, for instance, would rank pretty low for me right now, because I don't like gooseberries that much (of course, if I am starving in a desert, this opportunity may be worth more). So, when we "equalise opportunity" are we trying to ensure that everybody has the same number of opportunities? Or are we trying to ensure that everybody has equally valuable opportunities? And must they be precisely the same opportunities, so that, for instance, either if I have an opportunity to work for a pizza company, you should have an opportunity to work for the same pizza company? Or for a different pizza company - there should be a pizza company everybody has an opportunity to work for?

Equality of opportunity sounds like a nice compromise, but answering the "equality of what" problem in political philosophy does not answer the question of why egalitarianism is attractive at all.

My chum Ziggy felt he could provide and answer to my question "Asking from a philosophical perspective that is, I mean, just what does the phrase 'equal opportunity' mean?" He said "Well it means you don't bar people from taking advantage of the opportunities to better one's life provided by society etc." But when I responded, "Why is that "equality of opportunity"? Where does the equality bit come in?" he said

Being of the libertarian mindset you’re yet again being all absolutist

When people talk about equality of opportunity they’re talking about greater opportunity & striving towards a situation where all in society have an equal opportunity.

Now its unlikely there will ever be a society where all have equal opportunity but its no bad thing to strive towards all having a greater opportunity.

On the claim that I was being, in some way, "absolutist" I wasn't at all sure what he meant, and told him so.

When Ziggy said "When people talk about equality of opportunity they’re talking about greater opportunity & striving towards a situation where all in society have an equal opportunity," I responded

Are these the same things? They sound like they might even, in some cases, be mutually exclusive. You haven't actually addressed a single part of my original post, which asked what "equality of opportunity" means, and also why it is desirable that opportunities be equal.

To Ziggy's claim that "its unlikely there will ever be a society where all have equal opportunity but its no bad thing to strive towards all having a greater opportunity" I responded

But why? Why not just ensure that people have, say, a minimal amount of opportunities, and then let anybody have as many or as few opportunities as they can obtain after that point?

Striving for "all having a greater opportunity"? What does that mean? "A" greater opportunity implies just one big opportunity, but I doubt you mean that. I suspect you mean more opportunities. But which opportunities? Why would each person what as great a number of opportunities as they can get? Why not a small number of valuable opportunities?

Moreover, striving for "greater opportunity for all" in the sense of increasing the number, or even increasing the number of valuable opportunities, or increasing the number opportunities to gain what is valuable is not the same as increasing equality of opportunity. Indeed, inequality of opportunity could increase whilst "greater opportunity for all" is achieved: By increasing opportunity for some at a much faster rate than it is increased for others. If opportunities should, in some sense, be "equal," then presumably such disparate rates of increase should be prohibited, even if that means not letting anybody and everybody's opportunities increase.

It actually seems to me that Ziggy was not in favour of equality of opportunity at all, or that he had any good reason to be.

Only Caring about Money.

2010-08-06T12:52:00.003Z

In late spring my parents returned from Central America and told me that one decision they had come to both in the few months they were there, and in the longer time they were in South America, was that they were now both opposed to capitalism.

Naturally, I took this as a challenge!

When pushed further, they explained that what they were opposed to was "caring only about money." The trouble is that opposing people "only caring about money" is neither necessary nor sufficient to be a good reason to oppose capitalism.

First off, nobody, except coin collectors maybe, "only cares about money." If the opposite were the case, then nobody would buy anything, because nobody would want to get rid of the money they had obtained. People don't only care about money; they try to get money in order to get the things they [i]do[/i] care about. If all people cared about was money, then trade would cease, capitalism would collapse!

So the notion the under capitalism people "only care about money" obviously needs to be cleared up. Beyond this, is it only under capitalism that people "only care about money"? The more "capitalist" a country becomes, does it become less and less the case that people care about other things than money, or that the more and more capitalist a country, the more and more greedy people become? That doesn't seem true. I doubt we could say that the teacher in Cuba who quits his job to become a taxi driver for tourists because it pays more is not "caring about money" in a similar sense to most people in more economically free countries like the US or Britain. This guy seems to care about getting money to me!

So, since people care about getting money in economies that have less free markets, plainly opposing people caring about getting money is not sufficient to oppose having free markets. However, as I have already said, people don't "just care about money" - they care about getting money so that they can buy, shortly, or sometime in the future, the things that they do care about. Or so that the can buy what they need to support them getting what they care about. The majority of people working for money in Great Britain right now do so to deliver their families a livelihood that is amongst the highest in the world. They sell labour services, or work as part of a company that itself sells goods that people like and value enough to spend money on, so that other people they love and care about can live well. Not just live, but live well. Of course, this doesn't just occur under capitalism - the teacher that quits and becomes a taxi driver in Cuba probably does so because he can better support his family that way, too. But this sheds further light on the nonsense that people "only care about money."

The odd thing about this "only care about money" criticism, though, is that it condems capitalism, not because of [i]what[/i] people do, but because of [i]why[/i] they do it. Despite being hampered by one of the strictest regulatory regimens in the world, the US pharmaceutical industry still makes a large portion of the world's medicines. The objection is not that they do this, but that they do so for the wrong reason. They should do so because they want to give people medicines, I suppose, not because those that want the medicines will give the pharmaceutical companies, and those that work in them, money for doing so.

But this just means that people should have one fewer reasons for doing things. Why is that a good thing?

In light of the fact that "doing things for money" is not something restricted to capitalism, I am reminded of this film, with Milton Friedman interviewed by Phil Donahue:

However, these two films, acting a part of Ayn Rand's [i]Atlas Shrugged[/i] are interesting, too.

DOING WITHOUT THE STATE

2010-06-23T13:09:00.002Z

We are all used to hearing, both, that the average person needs, for instance, the NHS, or needs the state to fund schooling, and should tax the rich to pay for this. We are also used to hearing that libertarians are nuts because the state should at least provide people with a "safety net." It is not clear what is meant by the analogy of a safety net, despite its being trotted out so regularly. One gets the idea that those that use it like to think that people should work to support themselves by their own efforts, make provisions for themselves "just in case," but, as a last resort, something exists between them and starvation/death if these efforts should fail. I think this is a fair summation. Indeed, Churchill described the concept of a guaranteed minimum income as being a floor beneath which none may fall, though they could still climb ladders to earn an even greater income. I suppose, in political philosophy terms, philosophers would refer to it as a "sufficiency theory" of distributive justice: Above a certain level, it doesn't matter how much more some have than others.

The trouble is, though, I cannot see how this idea of a welfare state as a safety net, even if it was a good idea (it might be appealing, I'll grant, but complaints could be made that it still involves some coerced transfers, or that absence of a safety net creates more incentives to develop ways to ensure one never falls, or that the cost of the safety net may itself impose height limits on Churchill's ladders, so preventing others from being as successful as they could be), justifies anywhere like the existing welfare system. The principle reason is that our welfare state, by which I mean not just the various benefit arrangements that fall under "social security," but also the NHS, the state education system, the national pension, etc., quite simply is not a "last resort."

Just take, for example, health. The NHS is considered the crowning glory of the post Second World War attempts to increase the degree of social democracy in the UK, and make this country a fabian socialist society. Touching it is political death, even now. But in 1939, even though nineteen million people were covered by compulsory national health insurance, that being two fifths of the population, another 27.5 million people still obtained GP's services through either direct payment, friendly societies, dispensaries, etc. Little of this seems to be the case now. The first port of call for most people is the NHS, and only a fifth of the population in 1990 were covered by private health insurance.

I suggest, in contrast, that the average person even in today's society, is quite capable of doing without all this, or much less of it. I would, of course, as market anarchist, suggest that the state should do nothing at all. But, I would like to show that the average person, even in today's society where prices are held up by state granted monopoly privileges, where the value of money is reduced by inflation through the state banking system, and where people are taxed on the goods they buy, the income they earn, and the property they live in, the average person does not need the state to pay for his or her child's education, needs it far less to pay for their healthcare, and needs it far less to pay for police patrols.

First off, who is the average person. Since we are talking about what the average person can afford, we need to know what the average person earns. One form of "average" is called "the mean." This is worked out by adding all incomes together and then dividing the sum by the number of incomes there are. The trouble with this figure is that if by far most people earn a small income, but a minority earn a very large income, the mean income will actually be a good deal higher than the income most people actually earn.

A better way to work out what most people earn is to find out the median income is. That is determined by putting all incomes in a line, and finding out which income is in the middle. This way the number of people earning different levels of income is taken into consideration.

Median monthly income is £2072.

A rented two-to-three bedroom house costs £550 pcm.

Food for two for a month would cost £200

Income Tax on a median income would cost £314
Council tax on a monthly basis would cost £87

National Insurance on a median income costs £178

Gas, electric, and phone/broadband/set top £130

That comes to a total monthly expenditure of £1459. Median monthly income minus monthly expenditure leaves £613.

The mean cost of a private prep-schooling per month for one child is £487 (£14,000 plus £25,000, divided by two for the mean, divided by twelve months).
Health Insurance for one adult and a child would cost £60.46.

Those come to £547.46. Taken from £613, that leaves inly 65.54 a month. That would mean no savings, and nothing set aside "just in case," or money for entertainment and clothes, etc.

Nope, a household with two earners would probably be needed to pay for all this.
If another person in the house got a part time, twenty-four hours a week on minimum wage, that would bring £554.45 a month. Income tax on that would be £10.31 a month, and National Insurance would come to £10.94. That leaves net pay of £533.20 a month. Added to the leftovers, that means £598.74 more to have for entertainment, clothes, and "just-in-case" things. Of get a private schooling for another child, and add that child, and partner, to the health insurance.

The average family income is £32,779 before tax. That is £2731.58, which is an extra £105.58 a month beyond the combined pre-deduction income of the hypothetical couple I imagined above. That means that the average family could afford what I have suggested.

So, the average family (the average number of children is 1.8) does not need state funded education and could pay for private schooling, and could afford to pay for most medical costs through private insurance.

Police concerns over private security patrols.

2010-01-08T19:21:00.002Z

Apparently the socialist police are afraid of competition:

Note the stupid desperation of the objections:

1: At 2:13 Simon Reed, Vice Chairman of the Police Federation, asks "who are they accountable to?"

Answer: How do you mean? As a business, they are accountable to their customers. If customers are not happy with the quality of service they are getting for the price being charged, then they can stop paying and either go to a competitor or go without.

Or do you mean "accountable" in terms of "who are they accountable to if they commit crimes?" In which case the answer is, "you, you idiot!" If private security personel do illegal things, the police can investigate, and prosecute. The public police have not been abolished, you know!

In the mean time, to whom are you accountable, MR. Simon Reed? If the people who are forced to pay you are not happy with their service, they can't stop paying and go to a competitor, because then they will be arrested for non-payment of taxes. So what incentive do you have to do what those you claim to protect want? And how much more is that incentive than your incentive to do what the politicians and bureacrats that decide police budgets?

To whom are you accountable should you commit a crime, Mr. Simon Reed? When we get arrangements such as "sovereign immunity," and when royal honours are given to police that oversee operations that lead to innocent Brazilians getting shot 16 times in the head because they ran to catch a train, I suspect that the answer is "No-one."

2: At 2:49 Sir Ian Blair, former Commissioner of the Metropolitan Police, declares that he doesn't see community safety as a commodity to be bought and sold. Well, people are buying it and others are selling it, so it plainly is, Sir Ian. Either you have blinkers on, or you really mean you don't think it ought to be a commodity to be bought and sold. Well, in that case, Sir Ian, don't buy or sell it. If you think it should be free to those who need it, give it away for free. Ah, wait, I see... what you really mean is that you don't think that those willing to use their property to buy it from those people willing to use their property to sell it, should be allowed to. Well, in that case, mind your own business: What people do with their person and property should be up to them, not up to you. Your job is to keep that person and property safe, not to force people to do with it what you want.

And that is the crux of the issue: In the end, you don't think community safety should be a commodity to be bought and sold... you think it should be something that people should be made to pay for, whether they want to pay or not, whether they think that what they are paying for is worth it or not, or else get thrown in prison. "Buy our protection, and nobody else's, or we are gonna come and get ya, and you won't like it" is what you really support, Sir Ian. They make films about that: Gangster flicks, about protection racketeering!

At 3:03 Sir Ian Blair worries that "this will end up" with policing going to the rich, and the poor going without... this is in a clip plainly filmed on what looks to be a fairly poor estate in Dalington, Durham, where private security is being supplied for £3.50 a week, less than a packet of fags (and most smokers don't buy just one pack a week)! Moreover, Sir Ian, like Simon Reed above, seems to think that if people are paying for the police protection they want from the supplier they want, then this means that the state police have ceased to exist, rather than merely having been supplemented. They haven't been. So if people cannot afford to pay £3-4 a week, they can simply call people like you, Sir Ian, and get policing! What the hell are you worried about!

In the mean time, of course, is the quality of protection that people in, say, South London estates recieve from the public police as good as that supplied to people who live, well, in places such as where Sir Ian lives? I seriously doubt it. I strongly suspect that the state supplies better policing to the non-poor than it does to the poor, just as it supplies the non-poor with better schools and healthcare.

Frankly, increased use of private security is a great thing, a move towards voluntary, peaceful provision of essential services, rather than the coercive compulsion of statism. Three cheers for it.

Professionals Exceding their Remits?

2010-01-05T12:04:00.002Z

What are doctors for?

Over New Years many of us decided to celebrate by loosening inhibitions. We imbibed large amounts of alcohol, probably to a point of technically poisoning ourselves, because we like the sensation of being drunk in good company and consider it worth the price and health risks.

How did the BBC celebrate? Well, five minutes into the new year they celebrated by publishing this article.

Rising alcohol addiction costs 'could cripple the NHS'

The cost of treating the growing number of people drinking heavily threatens to cripple NHS hospitals, warn experts.

If the trend continues the burden will be unsustainable, the Royal College of Physicians and NHS Confederation say.

With a quarter of England's population consuming hazardous amounts, alcohol addiction already costs the NHS more than £2.7 billion a year, they say.

Note "Royal College of Physicians" and "NHS Confederation." The article is citing one Professor Ian Gilmore. This chap has form on this sort of thing. He is one of those behind creating anti-drinking areas in towns and cities:

DRINKING blackspots will be subjected to prohibition-style laws under a radical proposal by the country’s top liver doctor.

The aim is to block alcohol sales in parts of the country where people’s health is being put at risk by drink.

The plan was put forward by Professor Ian Gilmore and it could see many inner city areas being turned into drink-free zones.

In an exclusive interview with the Sunday Express, Prof Gilmore said: “Much of the focus of drink has been on its link with antisocial behaviour, crime and disorder but our concern is about the damaging consequences of drink to health.

“When I became a liver specialist 30 years ago, alcoholic liver disease was something we only saw in middle-aged and older people. Now we’re seeing people in their twenties with end-stage liver disease.

“We need to use all the tools we’ve got to try to tackle this problem.”

Prof Gilmore wants the law changed so councils could refuse a drink licence on health grounds.

Gilmore, of course, is not willing to leave things at imposing larger local government. He has also advocated increasing the powers of global government:

"We need an international framework convention for alcohol control, similar to that on tobacco, as soon as possible, to put into practice the evidence-based measures needed to reduce alcohol-related harm.

"These include increasing the price of alcohol, reducing its availability and banning advertising, and the action needs to start now."

He has also supported legislation imposing a minimum price of alcohol, too:

Prof Gilmore, the president of the Royal College of Physicians, said the move could reduce the numbers admitted for alcohol problems by around 100,000...

It is not apparent where he snatched this "100,000" figure from. Especially since "Writing in The Lancet, however, Prof Gilmore says that the price hike would cost the average person only 23p more per week." Given that his proposal is targetted at discounted drinks in supermarkets, which apparently cost less than 20p for a can of some piss weak lager, then this price hike is plainly tiny, and yet is supposed to save 100,000 lives!

In the referred to edition of the Lancet, it is reported that

One in 25 deaths across the world are linked to alcohol consumption, Canadian experts have suggested.

One in twenty-five deaths around the world? A world that has disease, starvation, and war, and yet one in twenty-five deaths is caused by alcohol?! Sound implausible much? Scaremongering much? Wait 'til you see the figures for Europe:

Europe had the highest proportion of deaths related to alcohol, with 1 in 10 deaths directly attributable.

Ten percent of all deaths directly attributable to alcohol?! This figure is soundly questioned over at Devil's Kitchen

10% of all deaths? Let's do a quick bag-of-an-envelope calculation, shall we?

According to the ONS, there were 509,090 deaths in England and Wales in 2008 and there were 6,541 deaths related to alcohol in England. That last figure doesn't include Wales so let's be generous and add a further 500 deaths for the sheep-worriers.

Which gives us a total number of about 7,000, or 1.38% of all deaths.

Of course, that doesn't give us the percentage for the whole of Europe, but seeing as we're supposedly some of the worst drinkers in Europe (another fucking lie), that should be considered a conservative estimate. Still nowhere near 10% though, is it? It's not even close to the 1 in 25—or 4%—claimed for the whole world, and for that global total you need to factor in a billion muslims who don't drink at all, plus God knows how many people who haven't got a pot to piss in, let alone a pub to get pissed in.

.

Gimore's most recent scare story is also ably refuted at Devil's Kitchen, along with all the most basic myths underscoring the neo-prohibitionist propaganda. That these are myths is not what I am concerned with here. What I am concerned with is the fact that doctors are proposing new legislation. Undoubtably they even write the new bills before offering them to civil servants to offer to MPs, too.

It is not your fucking job!

Likewise, doctors, nurses and other healthcare professionals are not just interested in shaping new legislation, but preserving old legislation:

The BMA has written to the Department for Culture, Media and Sport (DCMS) saying it is "deeply concerned" by proposals to allow the changes, which broadcasters say will bring up to £140m a year in extra revenue.

Ministers are facing fierce opposition from medical groups, teaching unions and children's charities over plans to relax the current Ofcom rules that prevent giving certain items or brand names high visibility.

"The BMA is deeply concerned about the decision to allow any form of product placement in relation to alcohol, gambling and foods high in fat, sugar or salt (HFSS) as this will reduce the protection of young people from harmful marketing influences and adversely impact on public health," says the organisation's submission.

"By its nature product placement allows marketing to be integrated into programmes, blurring the distinction between advertising and editorial, and is not always recognisable. Studies show that children are particularly susceptible to embedded brand messages and these operate at a subconscious level."

Ben Bradshaw, the culture secretary, announced plans last year to relax the rules in order to help commercial broadcasters weather the downturn in advertising.

This is, of course, the tip of the iceberg. We are familiar with other stories, too of course

Experts from the BMA's board of science branded controls on alcohol promotion “completely inadequate” and called for a ban on drink advertising and the introduction of minimum price levels.

Dr Vivienne Nathanson, the BMA's head of science and ethics, said society was awash with pro-alcohol messaging targeted at young people: “Over the centuries alcohol has become established as the country's favourite drug.

“Young people are drinking more because the whole population is drinking more.

“In treating this we need to look beyond young people and at society as a whole.”

All this begs the question of what a doctor's remit is. What are doctors for? I shall submit this: Doctors are mechanics. Their job, and their only job, is to put people back together again when they fall apart or stop working, and possibly to offer some advice as to how they can avoid this, just as a mechanic's job is to put our car back together when it falls apart, and just as a mechanic may advise us as to how to avoid such problems in the future.

It is not my mechanic's job to decide how I should be allowed to drive my car. If I choose to drive it in a way that causes wear and tear on it, that damages it, that is my choice, because it is my car. If I choose to "drive" my body in a way that causes wear and tear on it, that is my choice, because it is my body. My mechanic can complain to me. He can continue offering advice. But, in the end, his job is simply to put my car back together when it breaks. This is precisely the same for doctors.

It is not your business how much I drink, Ian Gilmore. It is your job to fix my liver when my drinking breaks it. Stick to that.

Of course, I am forced to pay Gilmore to exceed his remit any way, as Devil's Kitchen writes:

Professor Ian Gilmore is, of course, not just "president of the Royal College of Physicians", oh no. He is also the Chair of the Alcohol Health Alliance which is, of course, a fake charity of some magnitude.

Now, a quick search of fakecharities.org for "Alcohol Health Alliance" throws up such definitely fake charities as Sustain, the Institute for Alcohol Studies and the Alliance House Foundation (formerly the UK Alliance for the Suppression of the Traffic in All Intoxicating Liquors); all of these organisations are heavily funded by the state which means, of course, that the Alcohol Health Alliance is also heavily funded by the state.

As such, Professor Ian Gilmore is a mouthpiece for the government...

It is worth pointing out that nowhere in the Telegraph article is this information pointed out.

Now me—I'd say that taking the word of a man who is the Chair of an organisation, the members of which include the formerly-named "UK Alliance for the Suppression of the Traffic in All Intoxicating Liquors", without mentioning this little nugget of information—or massive fucking conflict of interest—is the act of a deeply stupid, tit-head, biased cub reporter.

So, perhaps Gilmore is not exceding his remit... if we consider that his job is not a doctor or surgeon. Instead, his job is to continue to get money, taken from tax payers under threat of punishment, to feather the nests of members of his groups, and the legislators and civil servants that implement the policies he and his dream up. He is perfectly within his remit if his job title is "government shill."

Drug Decriminalisation is Working in Portugal: Opponents and the UN admit it!

2010-01-05T11:43:00.002Z

In light of the fact that Nigel Meek and the Society for Individual Freedom are planning to publish my most recent blog post on drugs in their journal The Individual, perhaps this could be considered a follow up.

In this country if the number of deaths and cases of HIV linked to drug abuse rose, health workers in the ruling class, politicians, and all sorts of legal types would clamour for a tightening up of the laws, inevitably taking the form of greater penalties for possession (since it is easier to get arrest figures that way). And the public would lap it up.

Not in Portugal. Following an increase in drug related deaths and HIV contractions, the Portuguese government decided that the appropriate response was decriminalisation.

In the face of a growing number of deaths and cases of HIV linked to drug abuse, the Portuguese government in 2001 tried a new tack to get a handle on the problem—it decriminalized the use and possession of heroin, cocaine, marijuana, LSD and other illicit street drugs. The theory: focusing on treatment and prevention instead of jailing users would decrease the number of deaths and infections.

Note, decriminalisation, not legalisation, of course:

"Now instead of being put into prison, addicts are going to treatment centers and they're learning how to control their drug usage or getting off drugs entirely," report author Glenn Greenwald, a former New York State constitutional litigator, said during a press briefing at Cato last week.

Under the Portuguese plan, penalties for people caught dealing and trafficking drugs are unchanged; dealers are still jailed and subjected to fines depending on the crime. But people caught using or possessing small amounts—defined as the amount needed for 10 days of personal use—are brought before what's known as a "Dissuasion Commission," an administrative body created by the 2001 law.

Each three-person commission includes at least one lawyer or judge and one health care or social services worker. The panel has the option of recommending treatment, a small fine, or no sanction...

Drug legalization removes all criminal penalties for producing, selling and using drugs; no country has tried it. In contrast, decriminalization, as practiced in Portugal, eliminates jail time for drug users but maintains criminal penalties for dealers.

Of course, something closer to legalisation is what my previous blog post called for, since it was principally about getting the provision of drugs out of the hands of gangs by letting normal businesses sell it legally. However, the results in Portugal are still heartening.

Five years later, the number of deaths from street drug overdoses dropped from around 400 to 290 annually, and the number of new HIV cases caused by using dirty needles to inject heroin, cocaine and other illegal substances plummeted from nearly 1,400 in 2000 to about 400 in 2006, according to a report released recently by the Cato Institute, a Washington, D.C, libertarian think tank.

Of course, libertarians are bound to want to say that decriminalisation has had positive results, so maybe a reader would suspect the authors of this report of bias. However, even skeptics seem positive about what has happened, or not happened, in Portugal:

Peter Reuter, a criminologist at the University of Maryland, College Park, says he's skeptical decriminalization was the sole reason drug use slid in Portugal, noting that another factor, especially among teens, was a global decline in marijuana use. By the same token, he notes that critics were wrong in their warnings that decriminalizing drugs would make Lisbon a drug mecca.

"Drug decriminalization did reach its primary goal in Portugal," of reducing the health consequences of drug use, he says, "and did not lead to Lisbon becoming a drug tourist destination."

Of course, while "Spain and Italy have also decriminalized personal use of drugs and Mexico's president has proposed doing the same," some people remain unable to learn lessons:

Walter Kemp, a spokesperson for the United Nations Office on Drugs and Crime, says decriminalization in Portugal "appears to be working." He adds that his office is putting more emphasis on improving health outcomes, such as reducing needle-borne infections, but that it does not explicitly support decriminalization, "because it smacks of legalization." ...

A spokesperson for the White House's Office of National Drug Control Policy declined to comment, citing the pending Senate confirmation of the office's new director, former Seattle Police Chief Gil Kerlikowske. The U.S. Drug Enforcement Administration (DEA) and the U.S. Department of State's Bureau of International Narcotics and Law Enforcement Affairs also declined to comment on the report.

Failing to explicitly support decriminalisation does not mean that many in that UN Office may support it anyway, of course, but the lack of any comment at all from the relevant US bodies (and, apparently, those in the UK) seems like somebody burying their head in the sand, in a determined effort to ignore anything that may harm their own mindset.

Some Informative Films on US Healthcare and Statist Versus Free Market Alternatives

2009-12-08T13:49:00.004Z

Misdiagnosing the problems, and the myths of America's Uninsured

Would Obamacare Kill Medical Innovation?

As health care reform inches closer to reality, a massively important question becomes even more pressing: Will ObamaCare kill the sorts of medical innovation that makes the United States the leader in bringing new treatments, technology, and procedures to market?

"America is the only industrialized nation that doesn't have a national health plan," says Rep. Charlie Rangel (D-N.Y.), former Gov. Howard Dean (D-Vt.), and countless others who want the United States government to guarantee health coverage to all.

Protesters at a recent rally in downtown Los Angeles demanded universal coverage. They told Reason.tv that America is a cruel land where profits come before people.

"It's disgusting!" said one woman. "There should be no profits in health care!" What about those who argue that profits drive medical innovation? "I think that's kind of sick," declared another protester, who wants the U.S. to be more like Canada, where government policy keeps drug prices, and drug company profits, lower than in America.

Many regard the profit motive as cruel, but might it actually produce compassionate results? After all, America has generated vastly more medical innovations than other nations. Included in the long list is the innovation that saved the life of Dave Christensen, construction supervisor, husband, and father. After being diagnosed with cancer, Christensen was lucky enough to be given a then-experimental drug that probably wouldn't have been developed or brought to market in any other country in the world.

If America follows the lead of the rest of the world and clamps down on profits in health care, who will make tomorrow's wonder drugs?

"Drug companies that take big risks may make big profits," says Reason.tv's Nick Gillespie, who hosts the video. "But I say, Good for them. If they're saving lives, I hope they make a killing."

Uninsured in America

Uninsured in America examines the conventional wisdom that 45 million Americans cannot get health insurance and consequently do not have access to health care.

How To Fix America's Health Insurance Crisis: get Some!

reason.tv’s Nick Gillespie isn’t making a run for the White House, but he knows how to get coverage to at least half of the 45 million Americans who need it. And while Barack Obama and John McCain argue about who’s got the best health care plan, each ignores the simplest solution. Call it the Gillespie Plan: If you want health insurance, get some.

“Of people currently classified as uninsured, a conservative estimate says about 45 percent of them would be able to get health insurance right now if they wanted it,” says economist Glen Whitman. That estimate comes from a study headed by a Johns Hopkins University researcher, which separates those who could get insurance into one of two categories: Those who earn enough money to buy it, and those who qualify for existing government programs.

So how about some real straight talk for a change? If we separate those who can’t get coverage from those who can, we can focus more on helping the needy. “So if you can get coverage,” says Gillespie, “don’t wait for Washington. Go on out and get some.”

Statist Alternatives in Other Countries

Canada

The Lemon

The Lemon demonstrates how single-payer health care systems have a lot in common with the failed economic systems of Soviet-era eastern Europe.

A Short Course in Brain Surgery

A Short Course in Brain Surgery highlights the plight of an Ontario man with a cancerous brain tumor who crossed the border to the U.S. to get the medical care that is rationed in his home country.

Two Women

Two Women serves as a cautionary lesson about a politicized health care system where politicians and bureaucrats determine medical priorities.

A True Tale of Canadian Health Care: Why some canadians need to go to the U.S. for sugery

Many advocates of health-care reform are admirers of Canada's state-run, no-opt-out, single-payer system. Indeed, in 2003, President Barack Obama voiced enthusiasm for such a health-care program.

Proponents of Canadian-style health care should meet Cheryl Baxter, a Canadian citizen who waited years for hip-replacement surgery, only to be told that her operation would not happen any time soon. Instead of waiting, Baxter did what an increasing number of Canadians are doing: She flew to a clinic in the United States, paid out of pocket, and had a life-altering surgery in a matter of weeks rather than years.

Baxter's experience doesn't just throw damning light on Canadian health care. The sort of clinic she went to in Oklahoma suggests a different way of delivering health care in the United States, too: A simple fee-for-service model in which providers openly advertise their prices, service, and reputation. Rather than a frustrating, complicated mess of intermediaries such as employers and insurance companies, U.S. health-care reformers should think about bringing medicine into line with the same dynamics that help deliver great service at great prices throughout most other parts of the economy.

While Canadian health care is certainly cheaper than its U.S. counterpart (health care spending in Canada is about 10 percent of GDP versus 16 percent in the United States), it is not necessarily better or more equitable. As a recent National Bureau of Economic Research comparison concluded, "Americans are more likely to report that they are fully satisfied with the health services they have received and to rank the quality of care as excellent." Not only do Americans have far greater access to basic diagnostic tools ranging from mammograms to CT scans, the researchers found "the health-income gradient is actually more prominent in Canada than in the U.S." That is, wealthy Canadians receive far better care compared to low-income Canadians than rich Americans versus poor Americans.

"A True Tale of Canadian Health Care" was produced by Dan Hayes and Peter Suderman. Interviews were filmed by Alex Manning and the segment is hosted and scripted by Nick Gillespie. Approximately 5.11 minutes.

The United Kingdom

Operation Health Freedom - Daniel Hannan

OBAMACARE

A Red-Ink Train Wreck: The real cost of government-run health care

This CF&P Foundation video explains why healthcare proposals in Washington will result in bloated government and higher deficits. This mini-documentary exposes the pervasive inaccuracy of congressional forecasts and succinctly lists 12 reasons why Obamacare will be a budget buster. For more information: www.freedomandprosperity.org

THE REAL PROBLEMS, AND THE FREE MARKET ALTERNATIVE

How American healthcare killed my Father

American health care kills. And it's because markets for health care services are grossly distorted. That's the assessment of businessman David Goldhill, whose father died of a hospital acquired infection. Goldhill wrote up what he discovered subsequently in an article for the Atlantic Monthly entitled, "How American Health Care Killed My Father. One of the key problems in American health care, he says, is that the consumer of health care services or products is rarely paying directly.

Don't Copy Europe's Mistakes: Less Government Is the Right Way to Fix Healthcare

In this CF&P Foundation video, Eline van den Broek explains that government interference is driving up healthcare costs in America and warns that European style health "reform" will make the situation even worse. Based on what has happened in Europe, she explains that universal health coverage is not the same as universal healthcare, that insurance mandates mean more government control, and that price controls simply do not work. More Information: www.freedomandprosperity.org

Operation Health Freedom - Judge Napolitano

How To Fix Health Care: Lasik surgery for the medical debate

Make no mistake about it. Health care reform is coming. But what's the best way to fix our health care system, which is an inefficient, complicated mess of private actors, third-party payers, public subsidies, and innumerable state and federal regulations? Should we place our faith in the government or in the free market?

ObamaCare supporters argue that the answer lies in more government—more subsidies, more regulations, a law mandating individuals buy health-insurance coverage and, of course, more taxes to pay for it all.

The alternative is to base reforms on what works in the other five-sixths of the U.S. economy, where choice and competition increase quality and drive down prices over time.

Can a market-based health care system work? We can begin to answer this question by looking at Lasik, a medical procedure that's not covered by health insurance. And has gotten better—and cheaper—over time.

"How to Fix Health Care" proposes three simple reforms that will put us on a path to a health-care system that's better, more affordable, and more accessible. And get this—these market-based reforms can be implemented without creating new government programs or raising taxes.

John Mackey's Concious Capitalism

When he started his first organic food store in Austin, Texas in 1978, Whole Foods Market CEO and co-founder John Mackey had no idea that he would eventually usher in not just a revolution in how we shop but what we buy. If you dig being able to buy dozens of types of once-exotic apples, or cheese, or wine, or soaps, or countless other items, you can thank Mackey in part for helping to create cathedrals of commerce that have vastly enriched our day-to-day lives and vastly expanded our palates. (Full disclosure: Mackey has contributed to Reason Foundation, the nonprofit that publishes this website.)

In August, Mackey became one of the most controversial businessmen in America when he penned an op-ed for The Wall Street Journal outlining his company's free-market-oriented health care system and offering eight concrete reforms that would reduce costs and improve access. Noting that health care is not "a right" as that term is properly understood, Mackey forcefully argued that increasing government intervention into health care is precisely the wrong thing to do: "The last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us much closer to a government takeover of our health-care system. Instead, we should be trying to achieve reforms by moving in the opposite direction—toward less government control and more individual empowerment."

The response from the left to Mackey's op-ed was swift: Advocates of single-payer health care, union activists, and others called for protests at and boycotts of Whole Foods, despite the fact that the company provides affordable and well-regarded coverage to its employees.

As a cutting-edge entrepreneur who is comfortable quoting astrological signs and Ludwig von Mises, who practices veganism and sells some of the best meat in America, and who chases profits and is an outspoken advocate of charitable giving, Mackey confounds conventional political categories. As an advocate of what he calls "conscious capitalism," Mackey is that rarest of businessman: an articulate and passionate defender of free enterprise and free individuals.

In late September, Mackey sat down with Reason's Matt Welch and Nick Gillespie to talk about health care reform, corporate social responsibility (on which Mackey has written for Reason), why government interventions rarely achieve their goals, and how Mackey came to his unstinting belief in free markets.

Natural Food Fight: Whole Foods and Health Care

In August, Whole Foods CEO John Mackey argued in the pages of the Wall Street Journal that the solution to America's health care crisis was to be found in "less government control and more individual empowerment." His own company's unique health care plan, Mackey wrote, covers 90 percent of employees, costs less than health insurance plans, aned provides a "very high degree of worker satisfaction." But for the sin of not supporting a government take over of health care, labor unions and left-wing activists called for a boycott of Whole Foods, claiming that Mackey's solutions were unworkable and his employees were unhappy.

Reason.tv talked to protesters, Mackey, and employees about "the Whole Foods alternative to ObamaCare."

Saving The Health of The Nation: An introduction to health savings accounts

Healthcare Reform
by gregoryjude

From the Stockholm Network

FREE-TALK LIVE IS STAFFED BY A BUNCH OF CRAZY ANARCHISTS, EVEN IF THEY WON’T ADMIT IT!

2009-11-29T15:38:00.002Z

Free Talk Live’s (FTL) principle hosts, Ian Freeman and Mark Edge, both reject the label “anarchist.” I think they are wrong to do so. Now, other listeners will probably agree with me that perhaps Ian could be called an anarchist, but would be surprised that I would call Mark one. However, recent events would lead me to suspect the label is appropriate.

Ian Freeman is plainly an anarchist. Here is an account as to why I think he is wrong to reject the term:

Definitions of Anarchism

Here is a definition of anarchism from one of its more famous originators:

This brings us to Anarchism, which may be described as the doctrine that all the affairs of men should be managed by individuals or voluntary associations, and that the State should be abolished.

Benjamin Tucker

This seem to match exactly what Ian believes, so he is an anarchist according to this definition.

Likewise,

noun belief in the abolition of all government and the organization of society on a cooperative basis.

— DERIVATIVES anarchist noun & adjective anarchistic adjective.

Oxford English dictionary.

Again, this seems to be what Ian believes.

From Merriam-Webster:

Main Entry:an•ar•chist
Pronunciation:\ˈa-nər-kist, -ˌnär-\
Function:noun
Date:1678
1: a person who rebels against any authority, established order, or ruling power
2: a person who believes in, advocates, or promotes anarchism or anarchy ; especially : one who uses violent means to overthrow the established order
— anarchist or an•ar•chis•tic \ˌa-nər-ˈkis-tik, -(ˌ)när-\ adjective

Ian meets definition 1, since rebelling doesn't necessarily entail using force. On definition 2, it might be argued that he doesn’t meet the definition of anarchist, since he doesn't advocate the use of violence to overthrow a regime. However, the definition says "especially," meaning that it does not exclude those who do not advocate force to overthrow a regime: Even those who do not use force to overthrow a regime can meet the definition of “anarchist” that Merriam-Webster provides.

Merriam-Webster’s definition turns, not on whether or a person is using violence to overthrow a regime, but whether such a person is someone who believes in, advocates, or promotes anarchism. Anarchism, Merriam-Webster defines as:

Main Entry:an•ar•chism
Pronunciation:\ˈa-nər-ˌki-zəm, -ˌnär-\
Function:noun
Date:1642
1 : a political theory holding all forms of governmental authority to be unnecessary and undesirable and advocating a society based on voluntary cooperation and free association of individuals and groups
2 : the advocacy or practice of anarchistic principles

Again, Ian meets this definition.

Anarchism and Negative Connotations

Ian also rejects the title "anarchist" because it has negative connotations. But that's no reason not to think of oneself as an anarchist, it is just a good reason not to tell certain people that you are. There are plenty of other words out there, like “radical libertarian,” or words that Ian uses, like “Voluntaryist.” Usage of these words rather than “anarchist” need not mean that one is denying that one is an anarchist. It only means that one is not claiming to be to certain people.

Ian says that "anarchist" means "terrorist" to most people. That may be correct. However, someone who is not and anarchist, David Miller, wrote,

The association of anarchism with heinous acts of violence has, as I have already observed, become well established in the popular mind. From a historian's point of view this may appear quite unwarranted. Only a small proportion of anarchists have advocated terrorist methods - and only an even smaller proportion have tried to practise them - and moreover anarchist terrorism has been largely confined to two decades, the 1890s and the 1970s. Looking at the picture in another way, acts of terror have been performed by republicans, by nationalists, by revolutionary socialists, and by fascists, and if one tried to quantify the anarchist contribution to this catalogue of horror, it would turn out to be relatively small.

People have even used terrorism under dictatorships or monarchy's in order to try and bring about democracy. So some terrorists have been terrorists. When one thinks of the worst acts of terrorism, actions by the IRA, for instance, or Al Qaeda, these have been actions of rebublican democrats, or theocratic republicans, not advocates of anarchism. Historically, most terrorist acts have been performed by people not advocating anarchism, and so not by anarchists, than they have been by anarchists.

Further, it makes as much sense to say that because some terrorists have been anarchists, anarchists are terrorists, as to say that because some republicans have been terrorists, republicans are terrorists. Or, because some cats have been black and white, all cats are black and white. It is, frankly, illogical. Of course, Ian may agree with this, because he is not saying that the general public are correct to think of anarchists as terrorists, only that because they do, he won't call himself one. But he could just point out what I have said above, and try to persuade them that they are wrong on that. He is, after all, out there trying to persuade people to drop their erroneous beliefs that statism is good, and get them to embrace the ideas of peace and freedom instead, so he must think that in some cases it is better not to run away from people with erroneous views, but to try to persuade them to reject those views.

On anarchism and violent overthrow of regimes, it is plain that not everybody advocating the violent overthrow of one regime is an anarchist. Right now the US government likes to go round the world violently overthrowing particular regimes, but Bush was not an anarchist! No, it is not sufficient to be an anarchist that you advocate the violent overthrow of a regime - you need also to advocate some form of anarchism, as opposed to a new statist regime.

But is it even necessary to be an advocate of violent overthrow of regimes in order to be an anarchist? Can't one be an anarchist without advocating violence to overthrow a regime? Violent upheveal is a means, anarchism in an end. Is violent upheaval even the only means? Perhaps. Perhaps not? All I am saying is that Ian is confusing advocates of the end with advocates of a particular means to that end. One can still advocate anarchism whilst saying that the state should be abolished by people withdrawing their consent from it, refusing to co-operate with it, and by building their own voluntary alternatives (the agorist method), for instance. You would not be advocating violent overthrow of a regime then, but you would still be an anarchist.

In the end, on violent overthrow, though, Ian has provided no pricipled argument against it. He thinks it would not work, and quite accurately points out that people such as Carl Drega have not drawn many people into the liberty movement through their actions. But this is just an argument as to why violence is prudentially wrong, not why it is wrong in principle. States are little more than big gangs of robbers, and it is certainly not wrong, in principle, to violently resist bands of robbers. It just might be pointless or even harmful to do so sometimes.

Anarchism and Rules

One of the Grounds on which Ian claims that he is not an anarchist is because he believes that, by definition, anarchists oppose the existence of rules, and that since he favours voluntary rules, and owners laws on their own property, he therefore cannot be anarchist.

However, here Ian is making a grammatical error. The word “Anarchy” might be translated in an etymological manner, quite accurately, as “absence of rule.” However, it is also translatable as “absence of ruler.” The “archy” part comes from the Greek “archon” which means “ruler” or “system of rule,” just like in “oligarchy” (rule by a group) and “monarchy” (rule by one). When the suffix “an-“ means “absence of” or “negation of,” so “anarchon” means “absence of ruler.”

Ian’s grammatical error hereby becomes evident: When he says he is happy to have rules, he is using the word “rule” as a noun. When anarchists say they want no rule, they are using the word “rule” as a verb. A ruler is somebody who undertakes the activity of ruling, somebody who rules. Viewed like this, “rule” as a noun is not even the same word as “rule” as a verb, any more than the word “right” when used to mean “the opposite of left” is not even the same word as “right” when the person using it wants to say “correct.” “The opposite of left” is not a synonym of “correct.”

So, an anarchist could want there to be no rule (verb) whilst being perfectly happy with there being a rule (noun), and so still essentially hold exactly the same position as Ian holds. In that case, again, Ian would be an anarchist.

After all, anarchists like Benjamin Tucker even talked about “law” under anarchism, whilst Kropotkin has talked about the virtues of evolved customary law as opposed to centrally imposed state law. The first person to coin the phrase “anarchist,” in a positive sense, Pierre Joseph Proudhon, said he wanted to put “In place of laws, we will put contracts,” and contracts a bodies of voluntarily accepted rules.

Panarchy: Why Mark Is Also an Anarchist

Mark is often portrayed as the “voice of reason” on FTL, the sensible, moderate to Ian’s radical extremist. He is the token “minarchist,” - advocate of a constitutionally limited minimal state. When asked what he wants the government, or state, to do he says that he generally mentions “police, courts and roads,” though not because he thinks that the state would be any better at providing these things than anybody else, but because the lay person Mark is trying to persuade to adopt a more liberty oriented position may struggle to think of how these things could be provided without a state, but if Mark can persuade people that all the state should do is provide police, courts and roads, well that would be a vast improvement on how extensive and pervasive it has become now.

This position should be contrasted to that of Mark’s cohost, Ian Freeman, who has said that he wants no government or state at all: When asked how society would work in this manner, Ian has often recommended Linda and Morris Tannehill’s The Market for Liberty and has even produced an audio book version of this book. In this vision, instead of government provision of police services, people (who would have a right to bear arms and defend themselves anyway) would take advantage of a division of labour by subscribing to protection agencies, or joining protective associations, etc, so that private companies supply police protection on a competitive market economy.

Likewise, courts would also be provided on the free market, as individuals, or voluntary groupings, voluntarily chose to subscribe to, and take their disputes to, arbitration associations, or private courts, and would abide by the verdicts in order to avoid, amongst other things, the cost of any loss in reputation. So, in response to the concern that war between private protection agencies would be inevitable when police from one agency come to arrest a subscriber of a different agency, instead the different agencies, or their customers, would turn to private arbitration, supplied by private courts, and voluntary contractual rules to resolve disputes and ensure rulings are observed.

However, recent events (for instance, November the 24th, 2009) may have changed this distinction between Mark and Ian: Mark has started advocating what is called “panarchy,” or “choice in government.” I would speculate that he came across the term from Michael Rozeff at LewRockwell.com, though I could be wrong. In a debate with a listener Mark claimed that he wanted panarchy, so that people could choose the form of government they lived under: The tie between government and the land a government holds jurisdiction over would be broken, so that who your government was depended on would no longer depend on which patch of the Earth you happened to live on, or have been born on. You could be a citizen of government A and the guy in the house next to you, or even the room of your house that you let could be a citizen of another.

On practical issues, Mark has said that it would be an example of this idea if he were able, if pulled over driving down a Massachusetts highway without a seatbelt on, to say to the highway patrolman, “I am not a citizen of your government, but of the State of New Hampshire, and so your government’s laws are not my government’s laws, and so not the laws I must obey.”

Under panarchy, people would voluntarily become the citizens of whatever government they preferred, rather than whatever one happened to be operating in their geographic area. And if they no longer liked their government, they could leave and become a citizen of, or start, another. Here, then, is the ultimate expression of the secessionist idea: Not only should states be allowed to leave the Union, but counties should be able to secede from the state, towns or cities from the county, streets from cities, and individuals from streets; but if everybody in your state wants to leave the Union whilst you want to stay a member, well then that would be allowed, too, since they are free to reject any government they don’t like (in preference for an alternative), whilst you are free to become a citizen of any government you prefer, and you like the union.

In this sense, Mark can claim to still be an advocate of government, unlike Ian who doesn’t want any government, but Mark just wants choice and competition in governments: Panarchy. So, if Mark wants choice in government, how can I still claim he is an anarchist?

Well, I can do this by asking you, the reader, what actual difference there is between the Panarchy Mark advocates and what Ian advocates. Under Panarchy governments might provide police protection and courts to resolve disputes, and people voluntarily become citizens of the government, and therefore police and court service provider they prefer. Under Ian’s “voluntaryism,” on the other hand, people voluntaryily subscribe to organization that supplies courts and police protection that they prefer. It would appear to me that the only difference between what Mark advocates and what Ian advocates is that Mark calls the organizations that provide protection and court services “governments.” Plainly, since we do not, of course, call security firms that operate right now “governments,” and nor do we call arbitration firms or suppliers that operate right now “governments,” it certainly doesn’t seem correct to call something a government just because it is providing police protection and dispute resolution services.

Moreover, consider this: People often challenge market anarchists by saying “well, what if a subscriber of protection agency A thought that he had been a victim of a crime committed by subscriber of protection agency B, but the guy subscribing to B doesn’t recognize A, or thinks he is innocent of any crime, and wants his agency to provide him with protection against arrest. Won’t this result in war between the two agencies?” Market anarchists, of course, answer this question by saying, “no, the incentives in this situation are likely to be greater for agencies to agree on an arbiter rather than to fight it out.” But now, of course, we can ask Mark the similar questions: What if a citizen of government A gets in a dispute with the guy letting a room in his house, but this tenant is not a citizen of government A, but is a citizen of government B. Suppose, for instance, that the citizen of A feels that he has been assaulted, but government B doesn’t treat what the citizen of B did as assault, or even a crime? Would Government A be unable to enforce its laws against the citizen of Government B? Would Government B protect its citizen against this? Wouldn’t that lead to war between the governments?

Of course, the same answer that anarchists give would be available to Mark: Governments that went to war wit each other would have to fund these wars by raising taxes. When citizens of a government can cease to be citizens, and so taxpayers, at will, without having to move house, raising taxes becomes hard unless all the citizens agree with what the taxes are being spent on. This would mean that governments would be unable to fund unpopular wars. This would mean that governments would be have more incentive to find alternatives to war when they are cheaper than war: Arbitration between governments is a possible alternative. So, just as Ian’s protection agencies would go to an independent third party provider of dispute resolution services in this case, so too would Mark’s “government.” Mark’s whole “Panarchy” alternative seems to function in an identical way to Ian’s “voluntaryist system,” a system which I have already identified as anarchist. And this entails that Mark’s Panarchy is the Voluntaryism that Ian advocates, and, in advocating his voluntaryism, Ian advocates anarchism, so Mark’s Panarchy is an anarchism. The fact that he calls the voluntary groupings that occur in it “governments” does not make them so, and therefore does not alter the fact that he is essentially advocating what Ian advocates, and what Ian advocates is anarchy.

So…

Ian Freeman? Mark Edge? Welcome to the fold! You are a couple of crazy anarchists just like the rest of us consistent liberty-loving-types out here!

2009-10-20T20:55:00.002Z

Something amuses me about the Libertarin Party of the UK, and this is how organisers in it repeatedly insist that it is a minarchist party. For instance, see this recent news release, which says, in the notes for the editor, "The Libertarian Party UK is a minarchist party." Likewise, party leader Ian Parker-Joseph insists that this minarchism is an official party position here:

The Libertarian Party places itself firmly in the centre ground, it is neither left nor right, despite what our detractors may attempt to tell you. Nor is it in extreme so Laissez faire that it sees no role for Government.

LPUK is a Minarchist party, it does see that Government must in some areas be there for the well-being of the nation, but that does not mean constant interference or continual control of people and events, it means reducing interference or coercion and de-coupling Government from big business.

Here is Ian Parker-Joseph again, insisting on the minarchist position:

The Libertarian Party is not anarchist in nature, it is Minarchist. We will propose policies that are both prudent and acceptable to the public whilst giving Liberty to the people away from state control wherever possible in the shortest time frame.

I mention these things, though, because the Libertarian Party UK business cards you get sent when you join the party do not suggest a minarchist position. These business cards seem to present the LPUK credo, taken from the second paragraph of this introductory piece:

Libertarians believe in individual liberty, personal responsibility, and freedom from government—on all issues at all times. We don't say government is too big in one area, but then in another area push for a law to force people to do what we want. We believe in individual liberty, personal responsibility, and freedom from government—on all issues at all times.

Now, this is not a minarchist position. It seems plainly to be anarchist, allowing no role for government whatsoever!

But there is no reason as to why the LPUK should pretend to only be a party for minarchists, and not for libertarians who are anarchists. There is a weird paranoiac presumption amongst officers that if libertarian is an anarchist then they will reject any policy to role back any amount of government unless it roles back all governmnet immediately right now. This is plainly a strawman position: Anarchism is prefectly comprehensible as a view on where we ought to end up. Logically, less government is a step on the way to no government, so why would any anarchist oppose moves towards less government?

If the UKPL wanted a more clearly minarchist motto, but still one that did not exclude anarchists, they could copy the Free State Project, who's members pledge to agree to the statement "that government exists at most to protect people's rights, and should neither provide for people nor punish them for activities that interfere with no one else." An anarchist could say that this is the most a government shoul exist to do, and preferably it should do much, much less, namely not exist. And yet it allows for minarchists who want government to have this job.

Meanwhile, on anarchism, here is a great discussion that actually aired on PBS, US public broadcasting:

It has prompted discussion over on the mises.org blogs to which my contribution was

Mike C says that he believes that "that society needs a final arbiter in certain area," and for this reason he rejects anarchism in favour of minarchism. I'm not sure where the argument is, though. What is this thing called "society," who is in it, and who is not, and why? Why does society need a final arbiter, rather than disputing parties need it? Why should everybody in a society have the same final arbiter? And if there is no reason why they should not, then how have you established a case for minarchy? If you and I have a final arbiter of our disputes, and you and your neighbour a different one, you a) have a final arbiter for disputes, and b) lack a monopoly over final decision making in society, and so a government.

Who's this handsome chap

2009-10-13T12:58:00.002Z

I am a movie star! BTW, I am wearing a black T-shirt in the film, which means that when my arms are down by my sides it appears I have very broad shoulders. I am a large chap, but not as large as the film makes me seem! (The camera adds 10lbs, as we all know!)

My points on road ownership were vague, so I will briefly explain them: in residential areas most road users are residents, or guests of residents; in retail areas most road users are business owners, staff, or customers; in industrial areas most road users are business owners or staff. If a private company owned the roads through residential, retail or industrial areas, people are unlikely to want to buy or rent a house on that road if they think they may be trapped in their house by a road company willing to enforce trespass laws, or if they will be charged an enormous price whenever they drive to leave their drive ways. For this reason road owners, who want people to live along their roads so that they have business, will be likely to grant access rights, discount prices, or even free access. But in that case most users of roads in residential areas will have a discount or free access, most road users in retail areas will have a discount or free access, etc. This reduces the availability for profits that firms could earn for providing roads in these areas may not be great, and so their incentive to provide and maintain such roads might be harmed.

One possibility, though, is that instead resident groups own and maintain roads in their areas. One way this could be arranged is that these resident groups persuade or pay people in the neighbourhood to include in the deeds of sale of their homes an agreement to join or contribute to the association for the purposes of maintaining the roads. That way anybody who moves into the community voluntarily agrees to pay for the upkeep of the roads and other public goods. In that case roads, and so much of the land in the neighbourhood, will be collectively owned by the people who live there... much like in an anarchist communist commune. So anarchist-communist-like-arrangements will likely to occur to some extent in an "anarcho-capitalist" framework.

The Hypocritical War on Some Drugs

2009-10-12T21:45:00.002Z

Originally witten for publication in the letter pages of my local rag, Nottingham's Evening Post. Needless to say they never published it! So, I posted it at The Bastard where I am also blogging under a psuedonym. Points for anybody who knows who Henry Seymour was without checking on wikipedia!

I read with amusement your report (Evening Post Sept 17th, p6) of three arrests after drugs were found... in a pub! A pub is, of course, a place where sale and consumption of drugs is normal practice - the only difference being that alcohol and tobacco and caffeine are legal drugs. Nothing else could the hypocrisy of the state's "war on drugs" better than arresting people for having illegal drugs in a place where legal drugs are regularly sold and consumed! Or should that be the "war on some drugs"?

This War on Drugs is a war that has provided the government with an ever greater pretext for invading the liberty of the British people, and yet seems to be a war with very few victories. If the goal of the War on Drugs is to reduce drug use then it has been an abject failure. In 1955 The Times reported that there were only 317 addicts to "manufactured" drugs in the whole of Britain, and that only 15% were dependent on heroin. That is a national total of just 47.5 heroin addicts! Yet after more than 50 and billions of taxpayers' pounds, this year the Serious Organised Crime Agency reported that there are 74,000 "problem drug users" in London - one person in every 100 people has a drug problem in the capital - and an estimated million users of cocaine alone in the whole country. The War on Drugs has not reduced drug usage, and therefore not reduced drug dealing, then. On the contrary, these things occur more than ever, So criminalisation has been a total failure.

As a Libertarian I believe that adults should be at liberty to do as they choose with their persons and property, or that of consenting others - the only legitimate role that the government has, if any at all, is to protect this liberty by enforcing laws against force, fraud and theft. It is not the government's job to prosecute people for crimes in which the only victim is the criminal himself, so the Libertarian Party would decriminalise drugs so they can be provided on the same basis as alcohol now is. Before labelling this policy ridiculous, let me leave you with a thought on Nottingham's recent history: This year, over the May bank holiday weekend, a father of two was shot dead in an Alley in the Lace Market. The victim was identified (Evening Post 26th of May) as Bernard Langton, 27. According to Hoods author Carl Fellstrom, criminal gangs seem to think of pubs and clubs in the Lace Market almost as their own offices. Bernard Langton, Fellstrom tells us in Nottingham Magazine LeftLion, was originally from Liverpool, but moved to Nottingham "some years ago where he had become involved in the highly profitable distribution of drugs across the city." Sometime in the first couple of hours of the 26th of May he entered a club. A fight broke out. Gunshots rang out. The gun men pursued him down the Lace market streets, and shot him in the back.

The relevance of this? Well, just ask yourselves, would Gangs be using Lace Market pubs and clubs as offices, would Bernard Langton have been lying, dying in an alley at two in the morning, would his children be orphans, if becoming "involved in the highly profitable distribution of drugs across the city" meant getting a job on the counters at Boots, a company that was selling heroin legally in the early years of the last century?

Minarchy Considered

2009-10-12T21:29:00.002Z

I have a peer reviewed academic publication in Libertarian Papers available online now. The editor, Stephan Kinsella, has called my piece "a thorough and withering analysis of defects of minarchist theories" and it was passed to Kinsella and Libertarian Papers with a recommendation after I sent a draft of it to none less than Walter Block. Here is the abstract:

Abstract: Whilst some defenders of the minimal, limited state or government hold that the state is "a necessary evil," others would consider that this claim that the state is evil concedes too much ground to anarchists. In this article I intend to discuss the views of some who believe that government is a good thing, and their arguments for supporting this position. My main conclusions will be that, in each case, the proponents of a minimal state, or "minarchy," fail to justify as much as what they call government, and so fail to oppose anarchism, or absences of what they call government.

One of the people discussed in the paper is Objectivist writer Harry Binswanger, a follower of Ayn Rand. I first came across his arguments against anarchism a few years ago on the Libertarian Alliance Forum. I wrote a fairly long (for a forum post) and detail response. The then director of the LA, Chris R. Tame, responded to my response suggesting I expand it into an article, saying that such "epistemic defenses of anarchism" were essential. Being chronically lazy, I did not get around to it, and then Chris died. Well, now I suppose I could say I have developed those points against Binswanger, much much more widely, and I wish I had dedicated the article to Chris' memory.

Migrant Blunder

2009-10-12T21:17:00.004Z

Here is a letter published in my local paper, Nottingham's Evening Post

I was saddened to read (Evening Post, August 6th) of the Pakistani worker deported by immigration authorities on July 27. In this country we are rightly concerned about immigrants who come here to get a free ride or abuse our welfare state.

However, in this case, we have a person who has come here and made an effort, not to go on welfare, but to support himself by benefiting others through his work – after all, somebody must have thought his work was worth paying for, voluntarily, with their own property.

Immigrants who come here to join our work force benefit us, and this aggressive clamp own on peaceful economic migrants makes us poorer.

RICHARD GARNER Libertarian Party (East Midlands), Sneinton

The letter is reproduced on the paper's website, and if you follow the link, you'll see I got some responses. They generally all seem to be of the type expressed by "William, WB," who wrote

More immigrant workers =

more competition for jobs and wage cuts for British workers if they want to keep their jobs. Great for big business! This is fact and is why the mainstream media are always telling us that immigration is such a good thing. Talk to workers in construction and many other industries and you'll find out what's really happening. And the Labour traitors promote this policy and say there'll be no end to immigration! The left-wing union leaders are no better.

That's why the mass media and Labour are so hostile to the BNP. They know the BNP are the only party who will put an end to mass immigration and cut off the endless supply of cheap labour that holds down the wages of British workers. That's if they are left with jobs at all.

My own response to these comments was

There is a nutty fallacy around that there is only a fixed amount of work, so that if one person gets a job, that means that there are fewer jobs left for everybody else. This is competely false. Competition for jobs will increase, sure, perhaps reducing wages again, so sure again. And these reduced wages will entice new employers, driving competition for work up again. Meanwhile money that employers save by hiring cheaper workers is money that they must either spend on products of others, increasing demand for those products, and so for demand for workers to supply them; or that they must invest in their own business, thereby increasing output relative to demand, so causing prices to fall, and also increasing employment oppottunities in that business; or they must invest it in somebody else's business, with the same results there. Meanwhile, the increased immigrants mean increased demand for goods and services, and so increased demand for workers to provide them. Just as obliging British workers to compete with cheap machines hasn't caused mass unemployment or falling wages for British workers, neither does obliging them to compete with cheap foreign workers.

Sure, this person was here illegally... But he harmed nobody, violated the rights of nobody, his immigration had no victims, and he benefitted others. Actions that do not violate rights or harm others should not be illegal, and people should not be arrested or punished for them.

Debate ended there, so I must have won!

The Welfare State is a Rip-Off

2009-09-03T11:56:00.003Z

How much of government expenditure goes on Social Security? According to this site 30% of government expenditure went on Social Security in 2000. Meanwhile, according to this site, in 2001 spending on social security was down to 27.8% of expenditure, or £103billion. Wikipedia has a chart on public expenditure in the UK from 2001 to 2007:

So, 27-30% of government expenditure goes on Social Security.

When I was made redundant at the end of January I didn't apply for any benefits but went and got work as a teaching assistant in the University of Nottingham. Unfortunately, by its nature, that was temporary, only lasting as long as the semester, so towards the end, full of regrets, I embarked on the process of claiming Jobseekers Allowance (I was marking on my own time, then, and so was available for work) and Housing benefit. I had been in work for ten years previous to this, working an average of 30 hours a week at minimum wage (it varied, sometimes less, sometimes more, and sometimes at higher pay as I occupied a higher position - This would be a conservative guestimate), and had not claimed any benefits since I was 17 (the computers at the Jobcentre still had me on record from then and they said that the lowest pay I was looking for was £3.70 - minimum wage then, illegal now!). When I started my claims I told the benefit people that I was doing casual work marking for the University and told them how much I was getting paid. They said, "OK, you are getting too much to qualify for assistance now, but as your work is temporary we will keep your claim open. Just bring us your final paycheck, and we will determine how much you are entitled to after that."

Anyway, the marking stoped at the end of June, and I got my last paycheck, and brought it in as requested. Nothing happened. Half way through August my 13 week interview came up, and I told them, "look, I've not actually recieved any money yet." They said "None?" I was like, "Yes, you should know this!" I was told to see my claims advisor, so I did next time I signed on. This claims advisor told me to check until the next friday after my 13 week interview and see whether anything came then. I did. Nothing came. In the mean time, no housing benefit was coming either. The next time I signed on, now fifteen weeks after I made the original claim, I said, "look, I haven't had any money yet." Again, they seemed surprised, like they didn't even actually know my circumstances. Checking my records they said, "ah, its because you are doing casual work and recieving too much in pay." I said, "I am doing no work and recieving nothing in pay. You know this because you told me to bring my final paycheck in when my work finished, and that you would start giving me money then." Anyway, then my claims advisor said that this was not his department, sso I should phone the benefit people. I did this, and they told me that I should have brought them a P45. I said, "well in that case you should have told me to bring a P45 when my work finished, not a sodding final paycheck." Anyway, I brought the P45 and still nothing happened. So I got on the phone again and said I had brought my P45, the Jobcentre had made a copy, and nothing is being done. The benefits guy said, "oh, they haven't made the changes to the records yet."

Anyway, finally the Jobcentre have sorted their act out and they have paid me back dated Jobseekers Allowance of £270... The Irony being that they did that this week, and I start a new job next week, so throughout my whole period of unemployment they pay me nothing, but only pay me after I have found employment! But.... As i said, no Housing benefit. I went to their offices and they said, "ah, its because your income is too high." I said "I have not bloody income!" They asked what I have been living on, and I will get to that, but I said "help from my parents whilst you guys get your act together." I told them "you know I have been getting no income because you guys told me to bring you my final paycheck after which you knew I would be recieving no more income." It turns out that they had used that final paycheck to decide I was earning too much and so was not entitled to anymore support... and that, again, I should have brought them a P45 I was not told to bring, not the paycheck I was told to bring them. They then said I would have to reapply for housing benefit from scratch, but that I can ask for it to be back-dated. The trouble is that I don't know whether to bother. You have to notify them a month in advance of any change of circumstances. As I start work in a week, that would be impossible.

What is the point of all this? Why should I, as a libertarian, bitch about not getting welfare benefits? The answer to that is that the state has been robbing me for the last ten years. It has been stealing an average of twenty-percent of my income for ten years, taking it without my permission, and claiming that it would have a right to throw me in prison if I resisted, or do similarly to my employer if my employer refused to assist in this outright theft. If your or I went around taxing people as the state does, the state itself would correctly arrest us for robbery and extrotion, but apparently these things are OK when the state does them.

But when libertarians talk about taxation this way, the most frequent comeback is "if people don't have to pay taxes, how would the welfare state function? Who would look after the poor? If redistributing wealth by taxation is unjust, then that would mean no welfare for the poor" blah, blah blah. Well, here is me, Poor. I have lived on less than £10,000 a year for most of my working life - the only time it rose above that was to £13,000 before taxes, and that was for six months, just before losing my job. I am poor. Yet the state still robbed me. And when I went to utilise this "service," this great theft excusing "benefit" by which bleeding haerts attempt to justify my being robbed, what did I get? Nothing. The state took 20% of my income for ten years. Assuming a balanced budget, it then spent 27% of that 20% on Social Security, of the pretense that such social security would be there whenever I, or anybody else needed it. Was it? Was it hell.

When I was made redundant I recieved £1,500 in redundancy, which I spent on paying off an overdraft I used to pay for my MA. I also had in the bank £2,000. This I sent to my parents to hide, knowing that I could not claim benefits if I had savings. Since the teaching ended it has been that £2,000 I have been living on. Now, if the government had not been stealing my money, and had not been forcing me to put 27% of 20% of my income (about 6 pence in every pound) aside for "Social Security," but had instead let me keep that money, and let me instead put 27% of 20% of my annual income in a bank account paying 5% interest, then when I left work and was made redundant, I would have saved in that account £6,564, which, added to the £2,000 I had anyway, would have given me £8,564 to live on, instead of the £2,000 I have been living on and the fuck-all I am getting of the money that the state stole from me on the pretense that it would give some back when I needed it. I could have accessed this money whenever I thought I needed it, without having to jump through bureacratic hopes, and place faith in the messed up chaos of some welfare official in some office somewhere. When I told my parents that I would have been better off had the state not stolen 20% of my income but let me keep and save it, they didn't believe me, but I think that a person with £8,564 to live on is better off than a person with £2,000 to live on, so I suspect that I may have been correct. In the mean time, nothing has more solidified my belief that the welfare state is the biggest fucking rip-off of all time, after the bank bailouts.

WHO OWNS YOU?

2009-07-12T12:04:00.003Z

I remember a while ago, back when William Hague was the leader of the either the Stupid Party or the Evil Party (I forget which are which!), he appeared on Question Time, and Dimbleby asked him if cutting taxes was a moral matter, whether there was something immoral about taxation. Hague balked at the question, of course. I would not. Especially over income taxes.

Suppose that you were an alien visiting from another planet and saw a farmer giving money over to somebody else and driving off with a tractor. You ask the farmer, "why did you do that?" The farmer replies, "well, I has to pay that fellow for this tractor so's I can make my living, see. I need to use this tractor to make said living, but I can't use it (legally) that is, unless I pays him for it, regular like." Now, you, the alien visiting from another world, would probably conclude from this that the farmer was renting the tractor from another chap, and that the other chap was its owner. because he was its owner, it was illegal for the farmer to use the tractor to make himself a living without paying the other chap to let the farmer use the tractor.

This seems quite realistic and probably is an accurate interpretation, most would agree. However, why would we not make the same conclusion about the tax payer. Anybody who makes an income in any way has to use themselves, their body and mind, the skills they were born with and those they learned, various things intrinsic to what makes them them. At the same time, it is illegal to earn an income beyond a certain level without paying an income tax. So, quite simply, in order to be legally allowed to make a living beyond a certain level using our own bodies or minds, we must pay the state. When the farmer had to pay somebody else in order to be legally able to use the tractor to make a living, our objective and impartial alien concluded that this must be because the other person must have been the owner of the tractor, and the farmer was renting it from him. So what does it mean if you have to pay the state in order to be able to legally use your body to make an income? Surely our objective and impartial alien must conclude that your body belongs to the state and you must rent it from the state if you want to be able to use it to make yourself an income?

The very idea that we should have to pay somebody else if we want to use our bodies or minds for anything suggests that they, and not we, are the owners of our bodies or minds. Even Marxist philosopher GA Cohen is sympathetic to this view, noting that it implies that a person subject to an income tax lacks full self-ownership.

The Harvard philosopher Robert Nozick famously wrote that

Taxation of the earnings from labor is on a par with forced labor... taking the earnings of n hours labor is like taking n hours from the person; it is like forcing the other person to work n hours for another's purpose.

This is telling in the light of an article by Adam Smith Institute director Eamon Butler, published in the Telegraph on the 24th of June.

Today is Cost of Government Day. Average taxpayers in Britain now have to work almost half the year – 176 days – to pay their share of the cost of running Gordon Brown’s administration. Every penny we have earned since January 1 has gone to feed the state leviathan. It is only from today that, at last, you have started working for yourselves and your families.

More than five months of our servitude – from New Year until May 14 – were spent working to pay taxes, such as income tax, national insurance, council tax, VAT and many others including the notorious “stealth” taxes. But all that effort was still not enough to feed the monster, and when he had run out of our money, the Chancellor, Alistair Darling, had to borrow – at £20 million an hour – to pay his bills.So for the past six weeks, day in, day out, we have been working to fund that borrowing. No wonder Mervyn King, the governor of the Bank of England, warned yesterday of the “truly extraordinary” scale of deficits.

We have had to put in 10 days’ more work than last year in order to keep the Government afloat. It is not just the money that Brown and Darling borrowed to bail out the banks. It is the fact that every bit of public spending – national and local – is rising faster than taxpayers’ incomes. In 1999 – when Brown had finished with New Labour’s 1997 election pledge to match Conservative budgets – government spending was just 36 per cent of the nation’s income. Now it is a third more – 47.5 per cent this year – and rising.

Not that you can believe official figures. The International Monetary Fund thinks things will be far worse. Our national income will take a knock, and more people will be out of work and receiving benefits from the Government rather than paying it taxes. That makes it probable that public spending will be more than 50 per cent of our income – sending Cost of Government Day into July.

It amounts to a huge surge in the burden of government for those of us trying to earn a crust – twice that in France, and even more than when Britain was reeling from the oil-price shocks in the early 1970s. In fact, it’s not far off the 1940s, when at least we were paying off the cost of saving the world from Hitler.

But then Alistair Darling’s budget predictions have proved just as over-optimistic as his predecessor’s. In November 2008, despite all the drama in the banking industry, his forecasts seemed almost rosy. Now, he expects the Government’s budget shortfall this year and in 2010 to be four times that prediction, with 2011 and 2012 about five times bigger. The gap between what the Government expects to spend and what it actually brings in has risen five-fold, from £120 billion to £608 billion in the space of six months.

At that rate, according to the Institute for Fiscal Studies, it will take 23 years to return government borrowing to anything like normal levels – Gordon Brown’s famous “golden rule”.

And of course, every year you borrow keeps adding to what you owe. Right now, the Government calculates that it owes a total of £2.2 trillion – about £144,000 per household. The figure has trebled since the bank bail-outs. Some traders are beginning to wonder if Britain can actually pay its debts. If they start pulling out, then we really are bust.

And the real picture is worse, because the Government does not record all its debts on the official books. Take all those new schools and hospitals being built on tick at a future cost equal to £5,600 per household; Network Rail’s borrowing, another £1,000 per household; nuclear decommissioning, another £2,750; those generous civil service pensions – a future cost of almost £50,000 per household; not to mention the state pension. Add those in, and the real national debt is twice the official figure.

Do not imagine that all this extra spending and borrowing are the fault of the financial crisis and the need to counter recession – interest payments, social benefits and suchlike. A good half of it is simply feeding the Government’s pre-election spending splurge.

We, who rent our bodies from the state so that we can use them to make a living, will be working an average of seven months a year so that we can afford this rent. s typical for those on the "left" to object to the evils of exploitation, but what is this but exploitation? And exploitation by the state, the public sector? All wealth has to first be produced in the private sector before there is anything to be taxed to pay for the public sector. The public sector, the state, then, could not exist without the productive efforts of private sector producers. And yet graduates can expect to earn more in the public sector than in the private:

Graduates taking jobs in the public sector are now earning higher salaries than those who go to work for private businesses, research revealed yesterday.

University leavers with jobs in the civil service or the NHS now earn better wages for the first time, with salaries averaging £21,445.

This was £1,400 more than the average salary for graduates starting work in the private sector, the report from Hay Group management consultancy found.

A spokesman said: "Public sector work is often a safer bet because it is more secure and as it is not as competitive, there is less chance of getting sacked. It is a better option for a lot of graduates."

The average pay in public sector work is 14 per cent higher than profit-making companies can offer, a recent Bristol University study found.

The study also found that while the taxpayer spending on the public sector is rising fast, the quality of many state employees is falling.

Their analysis showed that the state sector is also creaming off a bigger share of graduates and highly-qualified recruits than commercial companies.

And, further, average incomes are likely to be higher in the public sector than in the private sector:

Average salaries in 2008 were £21,413 in the public sector, 3.4 per cent higher than the £20,715 average for the private sector.

Since 2000 average annual public sector pay has risen by 37.1 per cent while the increase for private company employees was 30.5 per cent.

Surveys have shown that the ave–rage public sector worker takes nine days off sick a year, against fewer than six in the private sector.

- Lest we forget the most obvious, in every year of the series, public sector workers were paid more per year than their private sector counterparts*. 30% more on average! (There may be perfectly legitimate reasons for this, for example average experience/years worked may be higher, responsibilities may be greater… but a priori, who knows?)

- As you can see, the gap has widened, not narrowed over the decade. In fact, in euro terms, it widened 8 years out of 10! And after the two years of greater private sector increases (prizes for eyesight if you can spot them on the graph), there were huge increases in public sector pay the following year.

- Public sector pay is at least five years ahead of private sector pay. What public servants earned in 2003 took their private sector counterparts until 2008 to earn (in fact, they’re not even there yet, another €500 or so to go!).

Time for another class war, me thinks! Thankfully one political party in the UK [i]is[/i] prepared to start waging this new class struggle: The Libertarian Party. They have declared that their central policy shall be the abolition of the income tax.le would no doubt balk at this idea. These are crazy libertarians who want to abolish schools and hospitals and roads - how could we pay for all the great an necessary things that the state does without an income tax? How could we afford welfare, or education, or the NHS? Would all these things be private?" The presumption is that without the income tax much of government would become unaffordable and there would have to be tremendous cuts and privatisation. But what is the reality? Eamonn Butler writes, "If spending since 1997 had risen no faster than inflation, we would be spending a third less than we do now, and could abolish income tax, VAT, and council tax entirely." This echoes an earlier claim of his that

Government spending will reach £600 billion in 2008 – that's £10,000 for every man, woman and child in the UK, and twice as much as in 1997. If public spending had only grown in line with inflation since 1997, we could have abolished income tax, corporation tax, capital gains tax and inheritance tax, leaving the taxpayer £200 billion better off.

So, far from the idea of scary cuts in spending, the abolition of the NHS, etc, government could have grown since 1997 - hardly itself a period of tiny government, with no NHS, no state schooling, etc - and we could have afforded to abolish the income tax, corporation tax, capital gains tax and inheritance taxes, if only the state had grown in line with inflation!

The LPUK press release goes on,

Party Leader, Patrick Vessey, said, "Income Tax raised £143 billion in 2006/07, about one quarter of the £534 billion spent by government last year.

"But savings on unnecessary spending could easily be found: for example, current annual spending on Britain's hundreds of unaccountable QUANGOs—including such patent time-wasters as the British Potato Council, the Milk Development Council and the Wine Standards Board—is running at around £175 billion.

"The Libertarian Party believes that the tax burden should be substantially reduced, and that those taxes that remain should be levied on spending, not on income. This policy will reward those—especially the poorest—who spend within their means and who save for their future."

The Party's Director of Communications, Chris Mounsey, added, “This may seem like pie-in-the-sky but, in 2001/02, the government spent £378 billion. Were we to return to those spending levels, we could abolish personal income tax and still have £13 billion left over—sufficient also to abolish, at current revenue levels, Inheritance Tax, Capital Gains Tax, and duty on beer and wine.

“The people of Britain are beginning to understand that simply throwing money at public services doesn't work. The Libertarian Party is dedicated to allowing every person in this country to choose how their hard-earned money is spent – and the best way in which to do that is not to steal it from them in the first place.”

Abolition of the income tax is not some whacky idea that would decimate government (actually, decimate means to dispose of ten percent of it, and the tories are proposing ten percent cuts!). In fact, the fact it would have such a little impact on the government at all is telling as to just how enormous the state has grown.

Of course, in the present economic crisis, the government's deficit is so huge that many people would wonder whether tax cuts, let alone abolition of the income tax, are plausible. However, Eamonn Butler's article continues:

And do not believe the spin that the Conservatives would make 10 per cent cuts to balance the books. They have pledged not to cut education, the NHS, or overseas aid, and they are stuck with the debt repayments and the EU’s demands; even if they cut 10 per cent off everything else, it amounts to just 3 per cent overall. They would be shrinking next year’s spending bill from £717 million to £695 million. That is still more than Labour has ever spent.

“What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom,” wrote Adam Smith. If your family had debts as big as the Government’s, you would know what you had to do:spend less or earn more – and preferably both.

The Government won’t earn more by putting up taxes. The Centre for Economic and Business Research estimates that the proposed 50 per cent top tax rate will make 25,000 people leave the UK, costing 140,000 jobs and reducing revenues. Britain is already overtaxed.

And the private sector has borne nearly the whole burden of the economic downturn. Wages have fallen, and unemployment is heading up to 3 million. But the public sector has been largely unaffected. That is why people are so angry when they see how much of their 176 days’ effort is simply wasted – or abused, as with MPs’ expenses.

The task is to reduce public expenditure without it showing. A freeze on spending and recruitment for a couple of years, then pegging it to inflation, would be surprisingly effective at re-balancing the books. (If spending since 1997 had risen no faster than inflation, we would be spending a third less than we do now, and could abolish income tax, VAT, and council tax entirely.)

Another useful move would be to publish online every cheque the Government signs, so we can see what it is spending and where. Private firms would be able to show what they could do more cheaply. And citizens could point out where they think their money is being scandalously wasted, as with the £300 million on departments’ service contracts, wasted through bad management, or the £200 million lost through bad procurement of hospital buildings.

Then there are the IT projects, such as the NHS records system, that are billions over budget and months or years late (the Department of Employment alone spent £59 million on a computer system that did not work). Exposing such wasteful incompetence would help eliminate it. And do we really need to spend tens of billions on ID cards?

Along with the Royal Mail, we can privatise the Tote, Channel 4, BBC Worldwide, air traffic control and various utilities, which would bring in a handy £20 billion. And we can get rid of central bureaucracy by measures like simply handing head teachers their bit of the budget and telling them to get on and spend it as they see fit, rather than as Whitehall bureaucrats think they should. The same could go for health – give the budget to patients or their doctors, not to layers of bureaucracy such as the strategic health authorities. And the quangos need to be culled again: they have grown in number, cost and power under Brown. For what gain?

Meanwhile, dozens of local government officers are now paid more than £100,000 and retire on generous index-linked pensions – something now almost unknown among the private-sector employees that work to support them. As this newspaper reported yesterday, PricewaterhouseCoopers claims that 96 per cent of companies regard final salary schemes as unsustainable.

About a third of Child Benefit is little more than pin-money for the middle classes. It should be given to the poorest. By taking everyone on the minimum wage out of tax entirely, we would see a stampede into work by those who we presently make better off on benefits.

Another huge saving would be to speed up the plans to raise the pension age, reflecting improvements in health and longevity. This is by far the largest spending change one could make. Yes, many people would not like it – though others would be delighted to avoid forced retirement at 65. But it would be hugely symbolic – a return to honesty in the public finances, and an end of the idea that we can all live at someone else’s expense. If this recession has taught us anything, it should have taught the politicians that.

There is one final saving that I would also add to Dr. Butler's proposals: An end to the war on drugs. The regulated legalisation of all drugs could save the British public £14 billion a year one study has found.

For many years the government has been under pressure to conduct an objective cost-benefit analysis of the current drugs policy, but has failed to do so despite calls from MPs. Now the drugs reform charity, Transform, has commissioned its own report, examining all aspects of prohibition from the costs of policing and investigating drugs users and dealers to processing them through the courts and their eventual incarceration.

As well as such savings is the likely taxation revenue in a regulated market. However, there are also the potential costs of increased drug treatment, education and public information campaigns about the risks and dangers of drugs, similar to those for tobacco and alcohol, and the costs of running a regulated system.

The report looked at four potential scenarios, ranging from no increase in drugs use to a 100% rise as they become more readily available.

"The conclusion is that regulating the drugs market is a dramatically more cost-effective policy than prohibition and that moving from prohibition to regulated drugs markets in England and Wales would provide a net saving to taxpayers, victims of crime, communities, the criminal justice system and drug users of somewhere within the range of, for the four scenarios, £13.9bn, £10.8bn, £7.7bn, £4.6bn."

...

Taxing drugs would also provide big revenue gains, says the survey. An Independent Drug Monitoring Unit estimate, quoted in the report, suggests up to £1.3bn could be generated by a £1 per gram tax on cannabis resin and £2 per gram on skunk.

Thankfully the LPUK also plan to legalise all drugs.

Some Honesty

2009-02-04T21:33:00.002Z

Ok, time for some honesty. In an earlier post I said that Roosevelt's New Deal did not reduce the unemployment of the Great Depression. I am now not entirely sure if that is true. I suppose it depends on what the New Deal was. The New Deal Coalition, dominated the Democratic party until 1968. Social Security, the Federal Deposit Insurance Corporation, Tennessee Valley Authority, United States Securities and Exchange Commission, National Labor Relations Board all still exist today (notoriously, so too do Fanny Mae and Freddie Mac, also creations of the New Deal to underwrite mortgages). The National Recovery Administration was, of course, found unconstitutional in 1935, but many of the labour law aspects of the administration were imposed under the Wagner act in the same year. The largest aspect of the New Deal, however, was the Works Progress Administration (renamed Works Projects Administration in 1939).

So what aroused my doubts about the earlier claims (other than comments by readers)? Well, in the article I listed the unemployment figures from 1931 to 1939. It was, however, pointed out to me that this was disengnuous of me, since Roosevelt's first term did not start in 1931, but in 1933 (until 1937). From 1933 to 1937 unemployment actually [i]fell[/i], from 24.9% to 14.3%. That is actually a fall of over ten percent.

What further aroused my doubt was this film from Reason.TV (making similar claims about the New Deal as I did, but favouring a monetarist solution):

My main concern with this film is that the graph shown in the film, (2:42 minutes in) shows that unemployment clearly did fall between 1932 and 1937, during Roosevelt's first term, and following the so called First New Deal. Of course, it also rose dramatically in 1937 (not necessarily during his entrance to the second term).

So, was I wrong, did the New Deal help? Perhaps not. The historian and social theorist Robert Higgs has shown that that investment did not recover as a result of the New Deal, and, indeed, may have been deterred by "Regime uncertainty." Like wise, real output didn't seem to recover. Per Capita GDP fell under Roosevelt, as did personal consumption expenditures.

But what about unemployment? That at least seems to have been improved by the New Deal, doesn't it? Well, a problem in claiming it was the New Deal that caused the reduction in unemployment between 1933 and 1937, especially that it was the Works Progress Administration, is that the WPA was not instituted until 1935, though it extended relief programs similar to the Reconstruction Finance Corporation started by Hoover in 1932. That means that by the time Roosevelt's WPA was started up, unemployment had already fallen from 24.9% to 20.1%, a fall of 4.8% without the help of the New Deal. After the WPA started up, of course, it fell further, to 14.3%. This is a faster fall in unemployment than that which preceeded the WPA, not not really that much faster. And then unemployment rose, again, even though the Works schemes stayed in place.

So, sure, unemployment fell during the New Deal. But it might have fallen without it, and it might also have been the case that the New Deal caused the unemployment that followed in Roosevelt's second term, under the 1937 Recession, since the monetary based increased over 100% during between 1933 and 1939. Other things also increased unemployment during that second term. Commenting on the book discussed in the Reason video above, Thomas DiLorenzo writes

FDR and his advisors mistakenly believed that the Depression was caused by low prices, therefore, high prices—enforced by threats of violence, coercion and intimidation by the state—would be the "solution." Moreover, it is hardly a secret that if less production takes place, fewer workers will be needed by employers and unemployment will subsequently be higher. Thus, the First New Deal could not possibly have been anything but a gigantic unemployment-producing scheme according to standard neoclassical economic theory.

FDR's tripling of taxes, his regulation of business, and his relentless anti-business propaganda also contributed to a worsening of the Great Depression, but his labor policies were probably the most harmful to the employment prospects of American workers. In this regard the most disappointing thing about the Cole-Ohanian article is that they do not even cite the pioneering work of Richard Vedder and Lowell Gallaway—Out of Work: Unemployment and Government in Twentieth Century America—first published in 1993.

Indeed, it is somewhat scandalous that they do not cite this well-known work while making essentially the same arguments that Vedder and Gallaway do. They recite many of the same facts about labor policy: The NIRA codes established minimum wages for less-skilled and higher-skilled workers alike; employers were told that they must bargain collectively with unions, which were given myriad legislated advantages in the bargaining process, all enforced by the newly-created National Labor Relations Board. All of these policies made labor more expensive. Consequently, as the economic law of demand informs us, the inevitable result had to be less employment.

Strike activity doubled from 14 million strike days in 1936 to 28 million a year later, and wages rose by about 15 percent in 1937 alone. The union/nonunion wage differential increased from 5 percent in 1933 to 23 percent by 1940. Newly-enacted Social Security payroll and unemployment insurance taxes made employment even more expensive. What all of this means is that during a period of weak or declining derived demand for labor, government policy pushed up the price of labor very significantly, causing employers to purchase less and less of it.

Vedder and Gallaway conducted an econometric evaluation of these labor cost-increasing policies and concluded that most of the abnormal unemployment of the 1930s would have been avoided were it not for these policies. They estimated that by 1940 the unemployment rate was eight percentage points higher than it would have been without the legislation-induced growth of unionism and government-mandated employment costs. They conclude that "The Great Depression was very significantly prolonged in both its duration and its magnitude by the impact of New Deal programs" (p. 141).

Cole and Ohanian reach the exact same conclusions, but express them in the somewhat convoluted language of the "top economic journals": "New Deal labor and industrial policies did not lift the economy out of the Depression . . . . Instead, the joint policies of increasing labor's bargaining power and linking collusion with paying high wages prevented a normal recovery by creating rents and an inefficient insider-outsider friction that raised wages significantly and restricted employment . . . . the abandonment of these policies coincided with the strong economic recovery of the 1940s."

This last conclusion—that the abandonment of FDR's policies "coincided" with the recovery of the 1940s is very well documented by another author who is also ignored by Cole and Ohanian, Robert Higgs. In "Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War" (Independent Review, Spring 1997), Higgs showed that it was the relative neutering of New Deal policies, along with a reduction (in absolute dollars) of the federal budget from $98.4 billion in 1945 to $33 billion in 1948, that brought forth the economic recovery. Private-sector production increased by almost one-third in 1946 alone, as private capital investment increased for the first time in eighteen years.

In short, it was capitalism that finally ended the Great Depression, not FDR's hair-brained cartel, wage-increasing, unionizing, and welfare state expanding policies.

The Argument from Implicit Consent

2009-01-30T19:58:00.002Z

For my own personal benefit, since I will cover it in teaching in the next few years, here is why the argument from implicit consent fails to account for the legitimacy of a state. Refutation of this argument is important, since it is common for people to say things like, "well, you aren't forced to support the state, or pay this tax, or obey the draft, since you can avoid doing so simply by emigrating. If you choose to live in this country, you implicitly consent to support the state/pay that tax/be subject to the draft."

However, breaking the argument from implicit consent down premise by premise shows that it is logically flawed:

The conclusion of the argument is "therefore state is legitimate." The premises are, as follows,

1: The state has a legitimate claim to the territory it claims sovereignty over.
2: Continued residence within that territory indicates consent to the sovereignty of the state, and its laws.
3: If a state rests on consent it is legitimate.

and so the conclusion: therefore the state is legitimate.

The only trouble is, premise 1 assumes your conclusion, for if the state is not legitimate, it can have no legitimate claim to the territory it holds sovereignty over. So for premise 1 to be true, the conclusion of the argument would have to first be true. But that is what the argument is supposed to show.

If premise 1 is not true, though, then continued residence does not indicate consent.

Economic crisis

2009-01-30T15:58:00.003Z

I am aware that I haven't actually blogged on the economic crisis. This, some may think is ironic, since I actually used this blog in July 2007 to predict the recession - a year before it happened!" I then followed this up by announcing the beginning of the crisis - the collapse of Northern Rock.

I suppose that the reason I haven't reported is, a) because so many others have, and b) because it has struck close to home. As I type this it is mid afternoon on my last day of work having been made redundant. My company, forced to cut costs in the present crisis, decided the rent of my shop is too high and has laid me off. I will be doing four hours of teaching a week, starting next week, but, that aside, I am unemployed.

On this crisis, my views echo those of Sean Gabb:

For many years, interest rates have been held below the sort of level needed to balance the supply of savings and the demand for loans. The result has been inflation. That many consumer prices have been falling is no argument against this proposition. Inflation is best seen not as price increases but as monetary expansion. There was a time when monetary expansion led fairly soon to price rises. Where at least Britain is concerned, though, most consumer goods are imported. So long as foreigners are willing to finance a growing current account deficit without devaluation, demand for imported consumer goods can expand rapidly and for years without any increase in prices.

The new money will therefore be used partly for investments in new production that may or may not be wise in the long term - and also to bid up the prices of property and of paper assets.

These bubbles never last. There comes a point where people lose faith in a currency, and where the upward spiral of asset prices is checked. The fall in the currency will push up consumer prices. Overvalued assets will fall in at least real terms. Many other investments will be shown to have been unwise. The immediate reasons for their bursting are less important than that they always will burst. This has now happened. There is no definite rule in these matters. But it seems that the length and intensity of the boom is roughly in proportion to the scale of the recession that follows.

The financial collapse we are now witnessing, therefore, should not be seen as some autonomous fall in aggregate demand that can be offset by increasing other variables in the national income income equation. It is instead part of the unavoidable correction to past experiments in demand management...

We should never have got ourselves into this mess. Failing that, the recession should have been allowed to hit last year. Since it was then deferred, it should be allowed to hit now. It will do nothing to moderate the inevitable recession. But there is a good case for cutting taxes and government spending now by at least a third, and then by five per cent a year every year for the next decade. And there is a case for returning to a fully convertible gold standard.

The thing that really annoys me, in light of this account of what has caused the recession, are the ridiculous "solutions" to the recession proposed. I mean, the first thing to notice is the term "solution": Recessions, as the above account shows, should best be called corrections. The creation of cheap credit lead to all sorts of investments that should not have happened, and would not have happened otherwise. Part of the process of recession is the liquidation of these investments that should not have occurred.

On top of this is the claim that banks are not lending to each other enough and that consumers are not spending enough. But as I said in the blog post where I predicted the recession, it was the existing saving and lending ratios that indicated the onset of the recession in the first place. before the recession the saving ratio was 2.1%, or, in other words, we were saving, on average, one pound for every £50 we recieved in take home pay. Meanwhile, the booming loan rates were such that household debt had trippled over 30 years to the equivalent of £55,000 for every household. The idea that banks are now not lending enough and consumers are not spending enough is basically the idea that we should go back to precisely what was occuring before the recessaion and caused it! As the Libertarian Alliance have announced,

Final responsibility for this crisis rests with the authorities. For at least ten years, the Bank of England - and the central banks in most other countries - has kept interest rates below the market equilibrium. The result has been an orgy of credit creation by the commercial banks. This led to an asset price bubble that has now burst.

This should never have been allowed to happen. Interest rates should have been allowed to settle at levels that equalised the supply of savings and the demand for loans.

Instead, of course, the Bank of England has reduced interest rates, and the media and politicians have publicly denounced banks that have not passed on these interest rate cuts. In fact, this has been done whilst we are told that the government should bail out banks to recapitalise them so they can start lending. Errrrr... how about this as a means of recapitalising them and giving them the means to start lending again: Encourage saving. How do we encourage saving? Certainly not by reducing interest rates. In other words, this crisis will be solved quicker if people save more.

Another ridiculous proposal is that the quantity of money in circulation should increase. Confusing falling prices with deflation, there have been calls for actual inflation, or for the government to increase the money supply, part of a process of "quantitive easing." It is ironic that one method of quantitive easing that got the most coverage, that of the central bank buying assets from banks in exchange for currency, was actually proposed by one of the Diretors of Barclays bank! In other words, the director of Barclays bank used "saving us from the recession" as an excuse for the Bank of England to buy huge amounts of "assets" from Barclays bank in exchange for currency! And the reason he proposed this is to reduce interbank loan interest rates... so, in other words, he can get cheap loans!

Does the money supply need increasing? Well, this is what the money supply looked like before the crisis:

So, like encouraging borrowing and lending rather than saving, qantative easing is, basically, doing what the government and BofE was already doing! Is there history of "quantative easing" working? It was tried in Japan during the recession of the 1990s and >didn't work there.

The new President of the United States of America, Barrack Obama, has joined calls for a "New New Deal," a "stimulation package," whereby the US government attempts to "stimulate" the economy by engaging in huge public spending sprees, funded either out of present taxes, or out of borrowing (later taxes), or by printing more money (funding it out of present taxes is impossible because the revenue is not there, funding it out of future taxes means reducing economic activity later, and funding it through increasing the money supply means stagflation and destroyed savings, so, no real stimulation). The belief is that this sort of "stimulation" worked after the last economic crisis as great as this one, the Great Depression. That stimulus, instituted under Roosevelt, package was called "The New Deal," hence the "New New Deal"!

Did it really work? No, not really. Public works schemes were introduced to try to end the massive unemployment that the 1929 crash had caused. This, of course, meant that jobs were created on these public works schemes, but jobs would be created if the government spent money hiring people to dig holes and then fill them in again all day. The question is whether this lead to increase economic activity in the actual real economy, in the private sector. What are the figures for unemployment during the years that Roosevelt "saved" America from the Great Depression? Well, here they are:

1931 15.9
1932 23.6
1933 24.9
1934 21.7
1935 20.1
1936 16.9
1937 14.3
1938 19.0
1939 17.2

Unemployment, as you can see, did clearly did not come down as a result of this stimulus package. Likewise, Real output (once one has taken account of inflation) was about as low in 1938 as if had been in 1932. UCLA economists Harold L. Cole and Lee E. Ohanian wrote, in the August 2004 Journal of Political Economy, arguably the top academic economics journal in the world, in an article entitled "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," that "Real gross domestic product per adult, which was 39 percent below trend at the trough of the Depression in 1933, remained 27 percent below trend in 1939" and "Similarly, private hours worked were 27 percent below trend in 1933 and remained 21 percent below trend in 1939." Thomas DiLorenzo writes,

This should be no surprise to anyone who has studied the reality of the Great Depression, for U.S. Census Bureau statistics show that the official unemployment rate was still 17.2 percent in 1939 despite seven years of "economic salvation" at the hands of the Roosevelt administration (the normal, pre-Depression unemployment rate was about 3 percent). Per capita GDP was lower in 1939 than in 1929 ($847 vs. $857), as were personal consumption expenditures ($67.6 billion vs. $78.9 billion), according to Census Bureau data. Net private investment was minus $3.1 billion from 1930–40.

This is what Obama wants to emulate!!!

The greatest, most quotable assessment of the various proposed "solutions" to the economic crisis comes from Perry de Havilland:

A large number of people, certainly the majority of the political looter class, think the best way to deal with the rapidly deepening economic crisis is via 'stimulus packages' with money plucked off the magic money tree... which is to say, by trying to re-inflate the credit bubble that actually caused the crisis. This is a bit like treating alcoholics by urging them to buy more whiskey.

So what is the solution to the economic crisis? Here, again, I echo the Libertarian Alliance:

The British Government is proposing to use £50 billion of the taxpayers' money to buy shares in illiquid banks and other institutions...

However, it is obvious that £50 billion will not be enough to restore stability. There are trillions of pounds of imaginary money on the markets. The fundamental problem is that no one really believes in this money today, and it just disappears whenever people stop looking at it. No government on earth can painlessly clean up the mess left by the bursting of the credit bubble.

Governments can stand back and let weak institutions fail. This will bring on the worst financial collapse since 1931, and be followed by a nasty recession. Or they can spray vast amounts of our tax money into the financial markets, which might briefly delay the worst financial collapse since 1931 and a nasty recession to follow.

Do nothing. People are aghast at the suggestion that the government should do nothing - or less (cut spending and taxes). Something, they say, has to be done. Industries cannot be allowed to collapse and fail, the people working in them cast out on the street. However, this ignores the fundamental position of the do-nothing advocates: The stimulus will fail, bailouts cannot be enough, slashing interest rates and increasing the money supply will simply restore the scenario that lead to the crisis in the first place. At best, they will postpone a massive economic crash and a recession to follow, but they will not prevent it. The industries will still crash, their workers thrown out on the street, but, on top of this, taxpayers will be burdened with billions, trillions of pounds or dollars in debt. At worse, the economic collapse will bre greater, the recession harsher (Historical parallels: There was a crash in the US in 1921. After that, fallimng prices were held up by strengthened tariffs, falling wages by tightened immigration controls, and the Fed held interest artificially low, leading to the creation of cheap credit and excessive lending, falling saving. The result? At the end of the 1920s the stock markets crashed worse than they ever have since, and the Great Depression was ushered in).

Great Quote

2008-12-24T11:50:00.002Z

I haven't kept any quotes of the day, week, month, or whatever, but this is a good quote, from somebody joining the general lambasting of Mark Chapman's latest terrible piece for Reason:

Isn't it odd how the "greater good" is always the greater good of someone else?

Aside from the fact that "somebody" would have been better than "someone," very insightful! And the author calls him- or herself Smartass Sob.

SCHOOLS OF THOUGHT

2008-11-17T23:22:00.002Z

Reproduced from my old blog

SCHOOLS OF THOUGHT

It seems that there is much rowing about university fees at present. Interestingly, someone I know well once said to me that the government's whole justification for top up fees is ridiculous. The argument we hear from government ministers is that top up fees are the fairer way to fund higher education than general taxation is, because general taxation would force poor people to pay for education their children is not recieving, and which generally goes to benefit the non-poor. My associate said that this must be wrong because such an argument would justify privatising the entire education industry.

Quite! Yes, well libertarians have been using that argument for decades for precisely that purpose. Yes, it does justify privatising the education industry, and most other parts of the so-called public sector. What is interesting, though, is why should the fact that the logic of the argument justifies policies that my associate (and the Labour party) don't want to accept make that logic false? It doesn't make the argument any less true at all. If funding higher education through general taxation forces poor families to pay for the education of non-poor children, without delivering any benefits to the non-university going (or even non-existent) kids of poor households, then such an arrangement is hardly fair. Pointing out that other state services are unfair on precisely the same grounds is not good reason to suddenly start thinking that it is fair after all!

Anarchist communist author, Colin Ward, made precisely the same argument in his classic Anarchy in Action

Today, as the educational budgets of both rich and poor nations get more and more gigantic, we would add a further criticism of the role of the state as educator throughout the world: the affront to the idea of social justice. An immense effort by well intentioned reformers has gone into the attempt to manipulate the education system to provide equality of opportunity, but this has simply resulted in a theoretical and illusory equal start in a competition to become more and more unequal. The greater the sums of money that are poured into the education industries of the world, the smaller the benefit to the people at the bottom of the educational, occupational and social hierarchy. The universal education system turns out to be yet another way in which the poor subsidise the rich. Everett Reimer, for instance, remarking that schools an almost perfectly regressive form of taxation, notes that the children of the poorest one-tenth of the population in the United States cost the public in schooling $2,500 each over a lifetime, while the children of the richest one-tenth cost about $35,000. "assuming that one-third of this is private expenditure, the richest one-tenth still gets ten times as much as the poorest one tenth." In his suppressed UNESCO report of 1970 Michael Huberman reached the same conclusion for the majority of countries in the world. IN Britain, ignoring completely the university aspect, we spend twice as much on the secondary school life of a grammar-school sixth former as on a secondary modern school-leaver, while, if we do include university expenditure, we spend as much on an undergraduate in one year as on a normal schoolchild throughout his life. "While the highest social group benefit seventeen times as much as the lowest group from the expenditure on our universities, they only contribute five times as much revenue." We must thus conclude that one significant role of the state education system is to perpetuate social and economic injustice.

There are, of course, arguments against this view point. One of them is that the rich pay more in taxes, so whilst they get more in public funds spent on taxes, they also pay into them, more. This is possible, but not massively likely. The the non-poor do not pay enormously more tax than the poor do, since income tax cannot collect that much and indirect taxes fall very much on the poor.

Another argument against it that is popular in government circles is that education benefits the whole of society. This is a popular argument in favour of public funding of schooling. It may been seen as an argument against the idea that public funding of schooling is a regressive taxation on the grounds that those that hold this position believe that there are enormous external benefits of education that do not solely go to the consumer, but go to eveyone. Hence, even if the non-poor do get more education than the poor, the poor may benefit.

This argument says that society as a whole benefits from generations of well educated school leavers, most obviously because of the increased productivity they can bring. Of course, the only reason, economically speaking, as to why this might be a case for state intervention (and a very weak one at that) is if this external benefit is so great that it encourages people to free-ride it and so not bear any of the costs. In this case, a person, seeing how much he benefits if everybody else goes to school, realises that he benefits substantially, even if he doesn't go to school himself, and so has no incentive to go. The result of people thinking like this, though, is that nobody goes to school, and so that generation of well educated school children does not appear and neither do any of its benefits. Classic prisoners' dilemma game.

The trouble is that this theory is a crock! Is it really plausible to suggest that I might be much better off not going to school than going, so long as everybody else goes? Is the cost of my paying for my own education? or anybody else doing so voluntarily for me) really more than the additional benefit I would reach if I didn't sit on my butt waiting for the benefits of that generation of well-educated kids to come roling round to me? Of course not. So, no free-rider problem, no lack of demand for education due to major positive externalities, and so no reason to assume that the market would undersupply schooling. David Friedman has one of the best on-line articles regarding education that I have seen. He discusses this very same "a-good-education-system-benefits-society-as-a-whole-and-not-just-student-or-pupils" argument:

It is said that since education increases human productivity, by educating my child I increase the wealth of the whole society, making all of us better off. One obvious problem with this argument is that, if correct, it applies to a lot of things other than education. Physical capital also increases productivity; does it follow that all investments ought to be subsidized? Better transportation allows workers to spend more time working and less time commuting; should we subsidize the production of cars? The argument suggests that everything worth doing ought to be subsidized-leaving us with the puzzle of what we are to tax in order to raise the money for the subsidies.

What is wrong with this argument is that it misses is the way in which the price system already allocates "social benefits" to those who produce them. Building a factory may increase the wealth of my society-but most (in the limit of perfect competition, all) of the increase goes to the investors whose capital paid for the factory. If I use a car instead of a bus to commute, the savings in time is added either to my leisure or my income. If education makes me a more productive worker, my income will be higher as a result. That is why top law schools are able to sell schooling to willing customers at a price of about twenty thousand dollars a year.

Schooling-like a new car-produces non-market benefits as well. But these too go mostly to the student, enabled by education to appreciate more of the riches of the culture he lives in. There may be effects on other people as well, but they are typically small compared to the benefits to the student, and their sign is not always clear. When my child becomes an expert in Shakespeare and quantum mechanics one result may be to enlighten and entertain her friends, but another may be to make them feel stupid. In just the same way, the beauty of my new car may produce the pleasures of aesthetic appreciation or the pains of envy in those who watch me drive it down the street. To base the design of our institutions for schooling on the uncertain effect on such third parties rather than the direct effect on the schooled makes no more sense than to base the design of cars on their value to everyone except the owner.

Murray Rothbard has written,

While in a free private school market most children would undoubtedly attend schools near their homes, the present system compels a monopoly of one school per district, and thereby coerces uniformity throughout each area. Children who, for whatever reason, would prefer to attend a school in another district are prohibited from doing so. The result is enforced geographic homogeneity, and it also means that the character of each school is completely dependent on its residential neighborhood. It is then inevitable that public schools, instead of being totally uniform, will be uniform within each district, and the composition of pupils, the financing of each school, and the quality of education will come to depend upon the values, the wealth, and the tax base, of each geographical area. The fact that wealthy school districts will have costlier and higher-quality teaching, higher teaching salaries, and better working conditions than the poorer districts, then becomes inevitable. Teachers will regard the better schools as the superior teaching posts, and the better teachers will gravitate to the better school districts, while the poorer ones must remain in the lower-income areas. Hence, the operation of district public schools inevitably results in the negation of the very egalitarian goal which is supposed to be a major aim of the public school system in the first place.

Moreover, if the residential areas are racially segregated, as they often tend to be, the result of a compulsory geographical monopoly is the compulsory racial segregation of the public schools. Those parents who prefer integrated schooling have to come up against the geographical monopoly system...

The geographical nature of the public school system has also led to a coerced pattern of residential segregation, in income and consequently in race, throughout the country and particularly in the suburbs. As everyone knows, the United States since World War II has seen an expansion of population, not in the inner central cities, but in the surrounding suburban areas. As new and younger families have moved to the suburbs, by far the largest and growing burden of local budgets has been to pay for the public schools, which have to accommodate a young population with a relatively high proportion of children per capita. These schools invariably have been financed from growing property taxation, which largely falls on the suburban residences. This means that the wealthier the suburban family, and the more expensive its home, the greater will be its tax contribution for the local school. Hence, as the burden of school taxes increases steadily, the suburbanites try desperately to encourage an inflow of wealthy residents and expensive homes, and to discourage an inflow of poorer citizens. There is, in short, a break-even point of the price of a house beyond which a new family in a new house will more than pay for its children's education in its property taxes. Families in homes below that cost level will not pay enough in property taxes to finance their children's education and hence will throw a greater tax burden on the existing population of the suburb. Realizing this, suburbs have generally adopted rigorous zoning laws which prohibit the erection of housing below a minimum cost level—and thereby freeze out any inflow of poorer citizens. Since the proportion of Negro poor is far greater than white poor, this effectively also bars Negroes from joining the move to the suburbs. And since in recent years there has been an increasing shift of jobs and industry from the central city to the suburbs as well, the result is an increasing pressure of unemployment on the Negroes—a pressure which is bound to intensify as the job shift accelerates. The abolition of the public schools, and therefore of the school burden–property tax linkage, would go a long way toward removing zoning restrictions and ending the suburb as an upper middle-class-white preserve.

Rothbard was writing in the context of the US, but his arguments apply equally well. The UK has similar monopolistic "school district" arrangements, in that secondary schools give priority to those people that live within their catchment areas, and only if there are spaces left do they give them to people that live outside these areas. So again, there is good reason to believe that state interference in education benefits the non-poor at the expense of the poor.

Spending more on education means spending less on other things. People who say that enough is not being spent on education therefore imply that too much is being spent on other things, and that spending on jobs and investment in the areas of the economy producing those other things should be cut. OK, socialists sometimes say, "sure, cut the money spent on bombs and war in Iraq," but this money came at the expense of other things too. Less had to be spent employing people in other industries, and less had to be spent investing in other industries, so that either the arms or the education industry could be funded. I am happy with this - it is inevitable that resources cannot be used to produce every good, but will be allocated to some areas of the economy and away from others. However, the question, at least for a utilitarian, is surely "are resources being used in the most valuable way - are we allocating resources to where they are most valued, and away from where they are valued the least?" This is a question that the defendent of increased state funding for education needs to answer. Is the increased funding to education worth all the lost goods, lower incomes, lost wages, and decreased investment elsewhere? And how do you know.

The definitely not libertarian (he was a student of Marxist GA Cohen) philosopher Jonathon Wolff, in his An Introduction to Political Philosophy, writes

Suppose that a certain good - garlic, say - costs a certain price: 50 pence per bulb. Then a respected scientist publishes a report indicating that consuming a bulb of garlic a day wards off cancer and heart disease. Accordingly, demand for garlic soars. Garlic retailers sell out rapidly, and prices spiral. Huge profits are made in the garlic industry.

The prospect of such profits will prompt new producers to enter the garlic market. Supply begins to rise, and as it does the price falls again, until a new equilibrium is established. Eventually demand equals supply at a price where garlic producers achieve the same profit levels as are available elsewhere in the economy.

This banal example of economic life shows the remarkable powers of markets. First, the price system is a way of transmitting information. The fact that the price of a good rises indicates that the good is in short supply; if the price falls then it is oversupplied. Second, the profit motive gives people a reason to respond to that information. If prices rise in a sector because of increasing demand, this normally means that larger than average profits are to be made, and so0 new producers rush in. If prices fall, because of falling demand, generally profits will fall, and so some firms will leave the industry. IN both cases the equilibrium will eventually be established, where the rate of profit for the industry is roughly equivalent to the average rate of profit for the economy as a whole.

These are the key features of the market: it signals information, and it gives people an incentive to respond to that iunformation by changing production patterns. Nor should we forget the importance of competition in driving down prices, and driving up quality. In combination these factors lead to the consequence that, broadly, in markets people (with money) get what they want from other people.

Many theorists accept that the market can distribute goods to individuals in a way in which no planned economy could match. If I want a certain good and if I have the money I can go and buy it. I can express my preferences in my purchasing behaviour, and others try to make as much profit as they can by responding to them. In the planned economy there are two problems. How will the planner know what I want? It might be common knowledge that people like ice cream, and need socks, but how can the planner know that I prefer vanilla ice cream to chocolate, or plain socks to patterned ones? And why should the planner take the trouble to make sure I get what I want? Real planned economies have been plagued by chronic shortages of some goods, such as winter tights, over-production of others such as low-grade vodka, and a depressing lack of quality and variety in those goods that are available. In order to run an economy as efficiently as the free market, the planner needs a level of omniscience, omnipotence, and benevolence rarely attributed to mere human beings.

If the demand for schooling in a free market rises, then profits to be made from supplying this increased demand also rise. These increased profits attract new suppliers, these suppliers will need labour, land and capital, but since their demand for such would increase, incomes to be made from working in the education industry, or investing in it will rise, attracting new people into it. Obviously, these new increases will come from elsewhere in the economy, but since people would be buying more education, they would be buying less of other things, this causing a drop in demand for those other things, and so fewer profits and less incentive to provide them. The fact that they choose to do this proves that they value increased schooling more than they value other uses of their money, which means that the resources being allocated to education and away from elsewhere are being allocated to where they are most valued and away from where they are less valued. Without the price mechanism, the state has no means of knowing whether its investment in education is more valuable than the resources and jobs and investments it is destroying elsewhere, or less.

Wolff said that their were exceptions to the general superiority of free markets, in the case of market failures. Examples he gave were of positive externalities. I don't agree that such cases justify, either on utilitarian grounds or on grounds of justice, state interference, but that is irrelevent, since we have already seen, with the quote from David Friedman, that these examples of market failure do not apply in the case of education, which is almost a pure private good, with no free-rider problem.

Since firms in the free market are under pressure from competition, they have every incentive to make sure they deliver the greatest benefits to their customers, utilising the least amount of resources. This inbuilt mechanism protecting against wasteage means that education providers in a free market have every incentive to keep their costs as low as they can. A nationalised education system has no such features, since it doesn't have to compete for its revenue to cover its costs, nor actually work to please those that use it, in order to obtain this revenue. Local Education Authorities's tend to absorb any additional funds for schools, and workers in the industry present powerful special interest groups.

And just as Mars prefers to price its chocolates as close to cost as it can and get lots of customers, rather than price them extraordinarily highly and hope that rich people with extreme sweet teeth will cover the company's entire costs, firms in the education industry will tend to price their services within reach of as many people as possible. After all, the car industry doesn't only provide gold plated cars for billionaires.

Of course, many people will talk about the nineteenth century, and people not getting any education before it was compulsory and tax funded. However, firstly, in the early nineteenth century, newspaper sales were very high, conservative were worried about radical literature falling into the hands of the poor (so they imposed the stamp duty, and taxed paper), and so literacy was actually quite high and widespread.

Secondly, one of the most important and prolific writers on the histroy of education before and after compulsion and public funding, EG West, wrote,

Contrary to popular belief, the supply of schooling in Britain between 1800 and 1840 was relatively substantial prior to any government intervention, although it depended almost completely on private funds. At this time, moreover, the largest contributors to education revenue were working parents and the second largest was the Church. Of course, there was less education per child than today, just as there was less of everything else, because the national income was so much smaller. I have calculated, nevertheless, that the percentage of the net national income spent on day-schooling of children of all ages in England in 1833 was approximately 1 percent. By 1920, when schooling had become “free” and compulsory by special statute, the proportion had fallen to 0.7 percent.

As West says, there wasn't universal education, because the national income was too small to provide this. However, his writing seems to suggest that as productivity increased through out the nineteenth century, so consumption of education increased.

This matches contemporary views. According to UNESCO, in developing countries in 1926, 75% of the population were illiterate. In 1948 this had fallen to 52%, and by 1970 it had fallen to 20%. Between 1965 and 1998, the average income of the world's citizen almost doubled, from $2,497, to $4,839. However, this didn't come about through the richest nations multiplying their incomes. During the same period, the the average income in the richest one-fifth of the world's population increased from $8,315 to $$14,623, which is by almost 75%. The average income in the poorest one-fifth, though, more than doubled, from $551 to $1,137. So consumption of education increases as prosperity increases, and so it increases as productivity increases.

So, state education redsitributes money from the poor to the non-poor, misallocates funds, can't plan the provision of the good, relative to other goods, or relative to altranative forms of the good properly without a price mechanism to relveal demand. It is aburden on poor families, and on everybody else, and we would be better off without it.

AN ELECTED GOVERNMENT, UNDER MAJORITY RULE?

2008-11-16T19:59:00.003Z

The accountability of our government versus, say, various private bodies, is often taken for granted. Regulation of the economy, for instance, it is presumed, means making "unaccountable" companies (i.e. firms that respond to changes in supply and demand!) beholden to "accountable" public bodies.

Well, with this in mind, I will reproduce a forum post I made today, because I like it. It was in response to somebody who said that under democracy a large proportion of the public give their assent to the laws of that society. My response was this:

Which planet is this on? Since 1997 there has been an average of one new law passed every day. I'm sure you don't even know what most of them are, let alone have given your assent to them.

Take all the people employed by the state: Thats 520,000 civil sevants added to the armed forces, police, school teachers, and local government employees, plus 300 odd quangos, the total number of people employed by the state is in excess of six million, more than a tenth of the population. There are 650 MPs. So saying the government is elected is a bit of a stretch - actually it is only one thousandth of one percent of the government that is elected.

You might say that by "government" you mean, as the media often means, the ruling party. However, in reality the ruling party is that which gets the most votes, but the prime minister is the leader of that party, and he is not elected by anybody other than some of the party members eligible to vote for him. The prime minister then selects a cabinet - it is not elected.

New laws are debated by both houses, and have to pass three readings by the houses. Of course, one of those houses is the house of lords, full of unelected people. Then it has to be signed by the queen - also unelected.

And this is ignoring other details: In the last few years we have had unelected prime ministers: John Major, Gordon Brown. On top of that, during an election, government carries on as normal, because that is seen to by the civil service, who are unelected. Judges are unelected, military officers, customs officials, treasury bureaucrats, civil servants, and local cheif directors, all unelected, and yet they all do work administering and enforcing the law.

So the reality is that far from government being elected, only a tiny percentage is. The actual governing is done by thousands of other people who never had to submit to an election, never had to persuade voters that they are worthy of the positions they hold. It is these people who decide how to do what parliament decrees, and so weild enormour power - they are the executive branch of government, and are largely unelected. So most of the actual power holders in our government are unelected.

Beyond this, you have the reality of elections, which is far from being majority rule. Tony Blair's win in 2001 is called a landslide win. Labour got 10.7 million votes in that election. That means that the majority of those who voted, 15 million people, including eight million Conservatives, voted against Labour. 30% more people voted against Labour than voted for them.

On top of this, there are 45 million registered voters in the UK. If, in 2001, 10.7 million voted Labour, and 15 million voted for somebody else, then 25.7 million out of 45 million registered voters voted. In other words, less than 60% of the electorate voted. So, even bigger than the majority of 15 million who voted against Labour, is the 18 million eligible voters who couldn't be persuaded that anybody in the election was worth voting for.

So, we have a government which is called elected when in reality less than a thousandth of a percent of all the people working in it are elected, and real power is excercised by those who aren't. We also have a government called "majority rule" under which a landslide victory is claimed from election by a party that does not recieve the majority of votes, but actually gets 10.7 million votes for it compared to 33 million against it. If we had majority rule, then the 33 million who chose against Labour would get their way.

Of course, 2001 is not the only example. Thatcher won a famous victory in 1983 after the Falklands War. That was another result that was called a landslide win. In that election no less than 162 of her MPs won a majority of the votes cast in their constituencies. That means that over 40% of her MPs came from constitutencies where most people who cast a vote did so for somebody else. Labour fared even worse, though, in that election: 68% of Labour MPs failed to win a majority. But all these people went to Westminster, claiming to have been elected by their constituents, rewarded themselves fat salaries and expense accounts from the public purse, and called themselves "Honourable"!

Once elected, of course, MPs are free to switch parties without the approval of their constituents. You could vote a Labour MP into office and suddenly find yourself "represented" by a Tory!

But we can go further. Although MPs are supposed to represent their constiuents (how they represent people that preferred somebody else did the job, I don't know!), they are not actually obliged to vote in parliament. Only 40 MPs, out of 650, are required for a quorum. This means that even on some big, headline grabbing laws (i.e., the tiny minority that you may have actually heard of), hundreds of MPs may not actually turn up to vote.

And since we are talking about laws, lets go back to those unelected civil servants. After all, it is they, not the MPs, that draft the laws. A final polish is added by a committee containing only a handful of MPs, and then parliament is asked to vote. The few MPs that turn up to vote on it may well not have even read the law, which can contain pages and pages of detail, have been presented to them at an antisocial hour, and in legalese language few could understand. Usually the law is passed at a nod.

The above is a summary from a book, of course. The person hearing these facts announced afterwards, "But if the government authority is supposed to be based on the will of the people, on the will of the majority at least, and if what you say is true, then the British government has no real authority at all."

Owining Silver Veins

2008-09-10T11:04:00.002Z

Recently I had a heated discussion with two close relatives touching on third world poverty. It was suggested that the wealth in the third world is being taken to the first world and enriching people there rather than in the poor countries (forgetting, of course, that incomes of the world's poorest quintile have been rising faster than those of the richest). As an example, it was pointed out that in Bolivia a new, massive vein of silver had been discovered, but the silver belongs to an American company, so they would be profitting from it, not the Bolivians. My relatives in question supported the proposition, instead, that Eva Morales, the president of Bolivia, nationalise the mine, so that its profits can be put to public use. I, on the other hand, felt that natural resources should belong to whoever first finds them and uses them, by mixing their labour with, or working them, regardless of what country the individual or organisation that finds them comes from, or what country they are found in.

I could discern two positions from my relatives' arguments. The first was that mineral, as was pointed out to me explicitly, in fact, mineral deposites belong to the person under who's property they are found, and this was "quite legal, proper and fair." The second position was that those displaced by the silver mine should be compensated. I supose the first position may follow from the second, or be a motive for supporting it.

It is, of course, legal practice that people own the mineral rights under their property. I forget the name of the legal doctrine, but the theory is that people's property extends in a gradually diminishing cone (to make space for other property) to the Earth's core. Of course, the same theory is that their property extends in a gradually incresing cone outwards and upwards from the earth. The result, of course, is that, if this theory of property should be the one we adopt, it would be incredibly hard to arrange flightplans without committing trespass: Every flyover would be a tort. Presumably this consequence would be ridiculous.

The idea that people displaced by the mine should be compensated may motivate sentiments to cling to this odd legal doctrine, but it employs a fallacy: Sure, I shouldn't damage your house, or your farm, or whatever, on the surface, but it doesn't follow that you should therefore own whatever is under your property, or over it. If property rights, at least in part, to protect our uses of things, then so long as my mining under your property doesn't damage your property, then what claim do you have against me? Or, in other words, if it is the case that people are being forced off their land so this US corporation can mine silver, then this should not occur, and is a gross injustice... but it doesn't follow from that that the silver should be nationalised, or given to people who own property over it, or that it should not belong to an American company able to mine it without damaging the property of those over it or without forcibly depriving them of it.

In any case, neither of these arguments seems to justify nationalisation. Nationalisation would be making the silver the property of the entire nation. Of course, that would really mean that the people who got to decide over it, and decide who benefits from it the most, would be the ruling class and their lackeys. Unless all votes by the entire country regarding it and income earned from it were passed by unanimous vote, it wouldn't really be the entire nation enjoying it, but only some of the nation. Morales and his co-workers would be the only ones with power to decide what is done with it, and they would benefit those with the most political pull, because that is how government works.

Regardless of this, though, lets just think of nationalisation in the abstract - it belongs to the nation. Why? Why is "the nation's" claim any better than anybody elses. Remember, the arguments were that a) it is established legal practice that mineral rights belong to those under who's property they are, and that b) people will be displaced by the mine, losing their homes, etc. But both of these arguments, if they have any weight at all, which I have disputed, suggest that the silver should belong to those who have property in the top soil over it, not to the entire nation. Why should the fact that demolishing my house to make way for a silver mine makes me homeless imply that everybody else in the country, and nobody else, has as much right to that silver, and the income it generates, as I do? Or why should the fact that the silver is under my land, and established law extends property conically to the earth's core, mean that it belongs to everybody else in the country, and nobody else, as much as it belongs to me? Neither of these positions justify's the silver being seized by the state.

I suppose it could be suggested that, if the established legal practice is that property extends conically to the centre of the earth, and the silver was found under Bolivia, then the silver belongs to Bolivia, and so everybody in it. But, then, "Bolivia" is an arbitrary designation in itself. Why does the border of Bolivia stop where it does rather than extend, say, fifty mile further out, or fifty miles further in? A person is a Bolivian simply due to being accidentally born one side of a line that could have been drawn anywhere and has probably only been drawn where it is because that has been the point where strength of arms, the might of war, has only been sufficient to maintain it. The silver is as much under South America as it is under Bolivia, or as much under America as it is South America, etc, etc. It is certainly far more under the property of the people displaced from the mine that it is under a part of Bolivia possibly hundreds of miles away.

The sentiment seems to be that Bolivians are being made worse off by somebody other than their state owning this silver. Ignoring the possibility that land was seized to make way for the mine, which is not what I am defending anyway, Bolivians may well not be made worse off. The reason? They didn't even know the silver was there, and were not making use of it. Somebody else profitting from something I knew nothing of and wasn't trying to use does not worsen me. They may not be bettering themselves, that is true, but that is not the same as being worsened. Of course, it will be said, "fine, then it should be nationalised, not because the US company is making Bolivians worse off, but because, by nationalising it, Bolivians will be made better off." Sure. But are the Bolivians the worst off people in the world? Maybe not. In which case, maybe the Bolivian silver should be nationalised by, say, Etheopia? Why better the position of Bolivians rather than some other group?

In the end, it is deeply odd to say that some Bolivian who did nothing to get the silver, nothing to, in effect, create it (since, at least for all intents and purposes, until its discovery, it may as well not have existed), nothing to make it useful to people, and who's life is not worsened, though it may not be improved, by somebody else taking the silver has a better claim to it than those who did these and was using the silver first.

Roderick Long on Noam Chomsky

2008-09-10T10:28:00.002Z

Roderick Long has an excellent short article on Noam Chomsky's claim to be an anarchist over at The Art of The Possible (Nigel, if you are reading, Long's article may be worth reproducing?). The article has sparked an even more interesting discussion that makes me feel nostalgic for discussion forums where I don't have to spend my time arguing that all jews aren't collectively guilty for anything that goes wrong in the world.

Professor Long's view is that Chomsky is about as anarchist as Karl Marx was, with his blathering about the eventual withering away of the state. Of course, Marx and his followers wanted to massively build up the state to incredibly totalitarian proportions first, run by shrewd and Machiavellian characters. So, make government bigger, then abolish it. The trouble is that Chomsky is the same. He may say that "In the long term, I think the centralized political power ought to be eliminated and dissolved and turned down ultimately to the local level, finally, with federalism and associations and so on." But he follows it with "right now, I’d like to strengthen the federal government." In other words, like Marx, bigger government now, abolish it later - and not just Marx: Cold Warrior interventionists like William F Buckley also advocated "temporary suspension of liberties" or the Constitution until the threat of communism was over. Reduce government later, grow it now. As Roderick Long says, "anarchy, but not yet."

In the discussion a defender of Long accidentally leant a defender of Chomsky a weapon, saying

Realize that smarter libertarians (and Dr. Long is certainly that) fully realize that if we, all of the sudden right now, with people having the beliefs that they have now, adopted anarchism, things might get a little … dicey.

The defender of Chomsky quite rightly responded by quoting Long: "Anarchy, but not yet."

But there is a fundamental difference that makes the Chomsky defender's position fallacious: Chomsky is not just saying "anarchism, but not yet." He is saying "much further from anarchism now." Long may recognise that anarchism can arrive only gradually, as the result of changes in the ideological hegemony, institutional changes, and the creation of alternative institutions, occurs, but that the process should start now. Chomsky is saying the opposite.

A chap calling himself TGGP has an excellent post well worth quoting:

When the government is locking up 1% of the population waging the war on drugs, bombing and shooting people in Iraq and will shoot or arrest you if you refuse to pay it tribute, it’s just obvious that the real problem is BIll Gates and Warren Buffet! All that nasty stuff the government is doing is their fault anyway, and once capitalism is abolished the state will wither away. Isn’t that what happened in all those communist countries?

Someone responded,

Or maybe, TGGP, the real problem is Blackwater; and the Carlyle Group; and Lockheed-Martin; and Kellogg, Brown, and Root; and Halliburton….

To which the obvious response was "Well let’s see Avram… who is their employer? Oh yes, the US gov’t. So again, the problem would be the government and its corporate vassals."

To quote, out of context, a guy that massively grew the government deficit whilst stealing libertarian rhetoric, President Reagan in his first inaugural speech, "Government is not the solution to our problem. Government is the problem."

Who isn't insured in America?

2008-08-27T08:27:00.002Z

Watching Hillary Clinton's speech to the Democratic convention on the Parliamentary Channel, I noticed how popular "universal healthcare" is to Democrats. I personally think that the Democrats are likely to win the next presidential election, and hence suspect that some sort of (even more) government led healthcare in US is coming soon.

The language is infuriating. After all "universal health care" - who wouldn't want that? Thats like saying "we want good things." How could anybody oppose that? Who wouldn't want everybody to have access to health care?

Of course, there is "universal food" in the US, but these people seem to think providing health care the same way food is provided won't achieve that. There is universal clothing in the US, but these people don't think that providing health care the same way clothing is provided will achieve that. For some reason advocating "universal healthcare" means imposing some huge government program, nationalised hospitals, funded from general taxation, free at the point of consumption (alternatives are some sort of forced saving, but since the US already has that, through medicare and medicaid, I'm not sure what the difference would be). Due to connection of the idea of "universal healthcare" with advocacy for such a huge government program, opposition to such a program is translated into the public mind as opposition to univeral healthcare, opposition to everybody getting healthcare, as though the absence of some corrolary government program for food in the US means that not everybody in the US gets food.

People outside the US even think that health care is provided on a free market in the US, not one where monopolies of privilege are granted to specific insurers; where employers are penalised if they don't buy insurance for their staff; where staff are penalised if they don't accept it; where insurers are forced to provide insurance to certain people; and to insure them for various treatments whether the insured want that coverage or not; where a massive government bureacracy has let millions die whilst holding medicines off the market, imposing regulatory standards that may or may not be necessary, but mean that only the dominant medicine providers can afford to supply medicines; and where dominant healthcare providers are sheltered against competition when the competitors come from the other side of an arbitrary line called a "border"; and where everybody is taxed to pay into a pool of funds, on the state and national level, from which healthcare costs will be paid for anybody deemed suitable by bureaucrats.

And this point should be emphasised along with the fact that healthcare systems that the Democrats seek to emulate do not achieve universal healthcare, and cannot. We in the UK regularly get news reports about people in some areas being told some form of treatment is not available in their local hospital, that they have to go to another, or that the NHS won't provide it at all because it is "too expensive" (how much gets spent on the NHS a year? Has anybody ever capped NHS spending?) So the huge government programs don't achieve "universal health care" either.

So why the pressure for "universal health care" in the US? Because people like Hillary Clinton bandy around this figure that "45 million people" in the US have no health insurance. In Clinton's speech last night, it was 47, actually. Of course, if people ran around saying "two hundred and sixty million people in the US have health insurance" one gets a quite different response, though that would be saying the same thing!

But where does this figure of 45 million come from? This is an interesting documentary that actually says that number is false, the number of uninsured in the US is actually far lower, 8 million:

The transcript, including sources for claims, is here.

Returning to the point that universal healthcare has not been a achieved by vast government programs, here are two other, shorter films, buy the same film maker:

Lest people think that I am claiming the status quo in the US is a good thing, I'll post another film: A while ago I made this post about Cuba that mentioned a film by libertarian major network anchorman John Stossel. Well, here is his documentary on the failings of the US system and what may be done to improve it:

Minimum Wages and Monopoly Prices

2008-05-09T22:25:00.002Z

An interesting possible line of argument not explored often enough is that the minimum wage law is actually a monopolistic privilege, effectively enforcing cartelisation of the labour supply.

Think of it like this: A cartel is classically thought of as occurring when different competitors in an industry, or supply a particular type of good or service, get together to agree not to undercut each other. They threaten to withold supply of goods unless buyers agree to pay a higher price, or they just reduce the supply anyway, so that supply falls relative to demand, and prices increases.

Well, what examples do we have of this? People like to alledge that supermarkets do this, that railways did it in the nineteenth century, and other such examples. However, surely the most common occurence of a cartel, or collusion in order to withhold supply in order to raise prices is one that people just don't like to point out. Maybe because they are supposed to be nice, benevolent things. The most common attempts at forming cartels are unions.

Think about it: Unions are when suppliers of labour get together so that they can threaten to strike unless they get a better wage. Ultimately the idea of "collective bargainning" with union negotiated wages rests on this power of striking, that is the threat to withhold supply unless the price rises. This is classical, typical cartel behaviour.

Now, libertarians believe that people have a right to form unions. Unions may well occur in free markets - which is not to say that they can effect general wage levels, because they will not be able to charge monopoly prices. The reason why people should be free to form unions, is because if one person has a right to withhold his labour, by virtue of owning himself and hence his labour, if follows that a large number of people have the same rights. On utilitarian grounds, though, people sometimes fear the power of unions "in restraint of trade." I think they are wrong to do so, because cartels are inherently unstable in a free market economy.

Why is this the case? For at least two reasons. Firstly, the most obvious, if you were a businessman and you, with reasonable certainty, knew that your competitors were going to keep their prices high, or raise them, though costs, say, were falling, what would you do? Cut your prices, of course, and take business from your competitors. A cartel agreement provides this certainty, by definition: It is when a bunch of your competitors, and you, get together and announce to each other that you will fix prices. However, you don't know if anybody else will also stick to this agreement, so perhaps it is not so certain. So, suppose you don't know whether your competitors will keep their prices high? Again, you will reduce yours, so that you don't lose business to them in case they cut prices too.

So, either you can be certain they will stick to the cartel agreement, in which case you don't. Or you can't be certain they will stick to it, in which case you don't. Either way it simply is not rational for you to abide by the cartel agreement.

Secondly, though, the new, higher price will attract new suppliers to compete with the established suppliers in that industry. The cartel would then be forced to compete with these new suppliers, and could only do that by reducing prices.

However, moving away from a free-market, a cartel can be made more stable if these instabilities are removed. What the cartel needs is a means to ensure that members will abide by the agreement to keep prices high - that means a method to enforce the cartel agreement. But what is also needed is a way to stop new competitors selling at less than the cartel price.

Unions have accomplished both these things. Cartel agreements are strengthened by unions threatening to withhold benefits or legal support or protection, etc, for members that cross picket lines. They also support legislation preventing employers from hiring "scabs," or even to force workers in a particular workplace to join a particular union. In fact, many unions workers are also professional workers, meaning that workers in that industry must be licensed, and the licensing authorities are usually staffed by members of that industry, probably unionised.

However, one of the most effective ways of enforcing the cartel agreement is for the government to simply enforce the cartel price, and make it illegal for members of the cartel to sell at less than the monopoly price. This is precisely what the minimum wage does.

Milton and Rose Friedman wrote, in Free to Choose, that

These laws are defended as a way to help-low income people. In fact, they hurt low-income people. The source of pressure for them is demonstrated by the people who testify before Congress in favour of a higher minimum wage. They are not representatives of the poor people. They are mostly representatives of organized labour, of the AFL-CIO and other labour organisations. No member of their unions works for a wage anywhere close for the legal minimum. Despite all the rhetoric about helping the poor, they favour an ever higher minimum wage as a way to protect the members of their unions from competition.

The minimum wage is a means of ripping off employers by enforcing a cartel agreement.

TRIMMING THE WEEDS

2008-05-08T09:36:00.002Z

Home secretary, Jacqui Smith, decided, yesterday, that cannabis should be reclassified from a class C to a class B drug.

Smith justified her decision by highlighting the strength of "skunk" strains of herbal cannabis now widely available.

Last week, Gordon Brown warned of the "more lethal quality" of much of the cannabis now available, described it as a gateway drug, and said that the reclassification was needed to "send a message to young people that it was unacceptable".

The home secretary told the Commons today: "Reclassification reflects the fact that skunk, a much stronger type of the drug, now dominates the cannabis market."

She said it accounted for 81% of cannabis available on the streets compared to just 30% in 2002.

The average age of first use is 13 years old and young people may binge on skunk in the same way as alcohol, trying to achieve the maximum effect

This story comes hot on the heels of another, however, that smoking marijuana might help prevent cancer. This does not come from someone with a great history of supporting cannabis use, but from UCLA medical school professor Donald Tashkin, who

was the lead investigator on studies dating back to the 1970s that identified the components in marijuana smoke that are toxic. It was Tashkin et al who published photomicrographs showing that marijuana smoke damages cells lining the upper airways. It was the Tashkin lab reporting that benzpyrene -a component of tobacco smoke that plays a role in most lung cancers- is especially prevalent in marijuana smoke. It was Tashkin's data documenting that marijuana smokers are more likely than non-smokers to cough, wheeze, and produce sputum.

Nevertheless,

Tashkin's team interviewed 1,212 cancer patients from the Los Angeles County Cancer Surveillance program, matched for age, gender, and neighborhood with 1,040 cancer-free controls. Marijuana use was measured in "joint years" (number of years smoked times number of joints per day). It turned out that increased marijuana use did not result in higher rates of lung and pharyngeal cancer (whereas tobacco smokers were at greater risk the more they smoked). Tobacco smokers who also smoked marijuana were at slightly lower risk of getting lung cancer than tobacco-only smokers.

And

As to the highly promising implication of his own study -that something in marijuana stops damaged cells from becoming malignant- Tashkin noted that an anti-proliferative effect of THC has been observed in cell-culture systems and animal models of brain, breast, prostate, and lung cancer. THC has been shown to promote known apoptosis (damaged cells die instead of reproducing) and to counter angiogenesis (the process by which blood vessels are formed -a requirement of tumor growth). Other antioxidants in cannabis may also be involved in countering malignancy, said Tashkin.

So, it is nice to know that our own Home Secretary may well be putting us more at risk of cancer than we need otherwise be! So why the fear of "skunk" that has lead to the reclassification? There have been claims that it can be linked to schizophrenia amongst regular users. If use has been increasing amongst our nation's youth, and this link with mental illness is real, then this may indeed be a problem. However, returning to the Guardian article,

The ACMD chair, Professor Sir Michael Rawlins, refused to criticise the home secretary, saying that the ACMD's recommendations were based entirely on harmfulness - but that the government had the right to consider other factors.

He said: "We don't take into account 'the message', we don't take into account policing priorities; we are obliged by law only to take into account the harmfulness.

"The government may want to take into account other matters. That's their right; they are the government. We are only an advisory committee and from time to time governments, for their own reasons, may wish to ignore the advice."

...

His council heard evidence that the potency of homegrown herbal cannabis tended to be two and a half times that of imported resin. But they said users now often moderated their intake.

They were also told that the incidence of new schizophrenia cases reported to GPs had gone down, not up, between 1998 and 2005, indicating a weak link between increased potency and use in the past two decades and mental health problems.

Since cannabis was downgraded in 2004 the proportion of young people using it has fallen each year from 25.3% in 2003-04 to 20.9% now. Among those aged 16 to 59, the proportion over the same period has fallen from 10.8% to 8.2%, according to the British Crime Survey.

Libertarians believe that people should be free to do as they choose with their own person and property as they want. That means free to put it at risk if they think doing so is worth the benefits. Here we have two opinions - and it is common in serious medical matters for patients to seek a second opinion. But in this case, as in so many others, the government has decided to try to prevent people from following the second opinion and is trying to force you to accept its preferred opinion. It has decided that it, and not you, should be the one that decides when or when not it may be worth putting your body at risk. It is, thereby seizing control of your body. And yet so many people seem to find this fact so less nauseating than I.

How sad.

Walter Block on Free Market Environmentalism

2008-04-05T20:43:00.002Z

Part 1

Part 2

Part 3

Part 4

Part 5

Also of relevance:

On the Ivory Trade

Related fragmemts from discussion:

From Samizdata's group blog

Daniel Hannan, writing on his Telegraph blog, gives a good example of how the free market is more environmentally-friendly than state ownership:

Kenya banned the killing of elephants in 1979, effectively nationalising its herd. At around the same time, Rhodesia (as it still was) made elephants the property of those whose land they were on. The result? Thirty years on, Kenyan elephants have been all but wiped out, while Zimbabwe’s are as numerous as ever.

People say that the market promotes selfishness, but it turns out that it is when things are owned collectively that greed thrives.

From Matt Ridley's

The Origins of Virtue

Leviathan [political authority] creates tragedies of the commons where none were before. Consider the case of wildlife in Africa. All across the continent countries nationalised their game during colonial regimes and after independence in the 1960s and 1970, arguing that it was the only way to prevent ‘poachers’ wiping out this commonly held resource. The result was that peasants now faced competition and damage from government owned elephants and buffalo, and had no longer any incentive to look after the animals as a source of either meat or revenue. ‘The African farmer’s enmity towards elephants is as visceral as Western mawkishness is passionate,’ said the head of the Kenya Wildlife Service. The decline of African elephants, rhinos and other animals is a tragedy of the commons created by nationalisation. This is proved by the fact that it has been spectacularly reversed wherever title to wildlife has been re-privatised to communities, such as the Campfire programme of Zimbabwe in which sport hunters bid to buy rights to kill game from committees of villagers. The villagers rapidly change their attitudes to the now-valuable game animals on their land. The acreage of private land devoted to wildlife has increased from 17,000 to 30,000 square kilometres since Zimbabwe granted title over wildlife to landowners.

Some private game and nature reserves in South Africa.

In the course of discussion of Walter Block's videos, and the examples of private nature reserves in South Africa someone mentioned, "30% of elephants no longer have tusks and thanks to this no body wants to hunt them." I thought that this was interesting: Maybe long tusks is genetic, and so, if long tusked elephants are shot, preventing them from breeding and reproducing, thus breeding out long tusks. Whatever, someone else replied,

A similar phenomon was observed in Pennsylvania some years back. Pennsylvania has a very large deer population and deer hunting is very popular - upwards of a million licenses used to be issued annually. But the hunters went for "trophy" bucks with huge antler racks. Such bucks apparently have become much less common than they used to be, suggesting a reduction in the gene pool of the "large rack" genes.

I asked, "Hmmmm, if the licenses were issued by a private company, I wonder what would have been different?" And my friend responded,

I never thought of that, but I guess they could issue a special, more costly, license which would be required to shoot a deer with more that a prescribed number of "points". This would be perfectly feasible because as it is the season is divided into a 12-day "buck season" (Sundays being excluded) and a two day "doe" season. There is a minimum antler requirement in the buck season and a complimentary maximal antler requirment in the "doe" season - i.e. the criterion is not the gender of the deer. About as many deer are normally taken in the doe season as in the buck season.

But, it would be quite possible to manage hunting so that the "trophy" deer were better preserved. Usual arguments might suggest that private interests would be more desirous than government interests of such preservation.

I did point point out,

There would still be a problem of over hunting the deer, though, and that results from the fact that whilst a company could sell fewer licenses, if anybody could go into business selling licenses, the benefits would be undermined. That is why exclusive control of the land is required. Say, nobody is allowed to hunt deer in that area without a license issued by company X.

Apart from that, there is a proposal for private management of deer hunting.

TERRORISM, COLLATERAL DAMAGE, AND DOUBLE EFFECTS

2008-04-04T22:04:00.002Z

There is a classic and obvious way of defending the loss of innocent life in acts of war as morally justifiable that draws on the utilitarian or consequentialist tradition. This is, broadly, that "the ends justify the means." In practice, this means that the innocent people are "expendable," in order to achieve a weightier goal, for instance, to take a simple example, the saving of even more lives. The phrase "collateral damage" is used to refer to such innocent casualties, and it lends itself perfectly to this idea: Collateral is what we put up for risk in order to achieve some higher end.

Let's take, as a paradigmatical example, for instance, the idea collateral damage in war is justified so long as the loss of innocent life is outweighed by the lives that would be saved as a result of the military action. So, for example, if fify people will die in a bombing raid on village where a chemical weapon laboratory is based, but the chemical weapons there would be used to kill thousands if the raid were not to go ahead, then the attack, on this consequentialist line of argument, would be justified.

However, what may be problematic in accepting such an argument is that defenders of such casualties in war may well not also be able to reject terrorism as a legitimate means. After all, a terrorist might equally say that a terrorist attack in which fifty people are killed is justified if it fosters public pressure and influence on government to get it to reject a policy that would kill thousands. So, just as with the village example, the terrorist could say, "yes, fifty people were killed, but thousands were saved, so it is justified." The argument is precisely the same: So long as the benefits (in numbers of human lives saved) outweigh the costs (the number of human lives lost), the action is justified. Indeed, terrorists could likewise refer to the lost lives as "collateral damage" in a war. I have no idea if they really do, but terrorist characters did in an Arnold Schwarzenegger film. In this film the terrorist leader tells Arnie that his family, killed in a bombing, were collateral damage no different from when the US goes to war.

Another common argument is used to justify "collateral damage," and I think it may be a merit of this argument that it avoids what may be, for consequentialists, the problem of avoiding justifying the use of terrorism. This is the doctrine of double effect, an ethical theory developed by the scholastics and, most importantly, Catholic theologian Thomas Aquinas. I am not intending, here, to either justify the doctrine of double effect, or to justify the loss of innocent life as collateral damage. All I intend to do here is show how the doctrine of double effect helps highlight normatively significant differences between loss of life as collateral damage and as terrorism.

Terrorism, for the purpose here, is defined as ideologically motivated violence, or threats of violence, against otherwise innocent or unrelated people (hence different from assasination) for the purpose of generating terror, which, in turn, is for the purpose of generating pressure to effect public policy (either to change from a given status quo, or to reverse a course of change. Terrorism is, then, a means to a means to an end - the initial act, say a bombing, is a means to generating widespread fear or terror, which in turn is a means to changing policy or social habits.

The doctrine of double effects says that a harmful affect of an action is justified, under four conditions:

1) The nature of the act is itself morally good, or at least neutral.

2) The bad effect is not intended, though it may be foreseen.

3) The good effect of the action outweighs the bad effect.

4) The good effect does not go through the bad effect.

So, lets take two cases:

A: The airforce makes a bombing raid on a chemical weapons lab that is certainly known to be located in the centre of the village. The airforce knows that innocent people will be killed in the raid, but also knows that the chemical weapons will be used by the government of that village's country to gas a thousand innocent people. Fifty innocent civilians die in the otherwise successful raid.

B: A terrorist cell bombs the village hall of a village where there is a chemical weapons laboratory. It does this to generate fear amongst the populace of a country that they could become victims in similar events unless the terrorist demands are met. These demands are that the government closes down a chemical weapons laboratory producing a weapon that would a kill thousand people. Fifty people die in the terrorist bombing and the government shuts down the factory.

In both these cases the consequentialist seems to say that the action was justified, whether it is the airforce bombing raid, or the terrorist attack. However, the doctrine of double effect allows us to point out significant and morally relevant differences between A and B.

The most obvious difference that leaps out is regarding conditions 2) and 4): The bad effects, though, foreseen are not intended in A, but are in B, and the good consequences in both cases (getting rid of the chemical weapons factory and so saving a thousand lives) does not go through the bad effect (killing the fifty innocents) in A, but does in B. The air force foresaw the innocent deaths, but did not intend those deaths. Their intention was not to kill the innocents, but to get rid of the factory. They would have gone through with their bombing even had their been no innocents there. On the other hand, the terrorists intended to kill the innocent people. Had there been no innocents there, they would not have bombed where they did.

Likewise, the the good consequences of the air force's raid was not achieved by achieving the bad consequences. The air force did not get rid of the factory by killing the innocents, whilst that was precisely how terrorists accomplished it.

So, to reiterate, I am not intending to either defend collateral damage or to defend the doctrine of double effect as a tool. What I intended, and what I think I have done, is to show that the killing of innocents as collateral damage is not the same as killing innocent people in terrorist acts. Terrorism and collateral damage are different in normatively significant ways.

TAXATION IS VOLUNTARY; REPETITION MAKE IT SO

2008-04-04T21:46:00.002Z

In interview Democratic Senator, Harry Reid, tries to argue that taxation in the US is not "forceably taking money from some people to give it to others," because the tax system in the US is "not forceable" but is "voluntary."

Check it out.

Now, one commentator there, Kevin T. Keith, responds that Reid is actually correct, saying

Reid is making a perfectly standard - and correct - point about our mechanism for collecting taxes. The US system is "voluntary" in the sense that it is up to the individual to declare their own tax liability and make sure it has been paid by paying any extra taxes owed if their paycheck withholding is not sufficient. As he points out, perfectly correctly, in many other countries the individual has no role in the payment of their own taxes - the government deducts the money without asking them what they owe or what exemptions they may be entitled to. Even with paycheck withholding, in the US the individual must make the effort to reconcile their own taxes at the end of the year.

The standard term used in tax policy discussions for such a system is "voluntary". That's the term Reid used. Of course the system is not optional - and Reid says so explicitly. But it is different from other systems, and there is a standard term used to express that difference, and that was the term he used. (And that term is surely no more euphemistic that Mr. Flourescent Necktie's harping on the word "forced", which US taxation is not.)

You don't have to like the terminology that knowledgeable people use, but you make yourself look like a fool by proving that you don't know what it means.

OK, lets concede this argument. I am not a US tax lawyer, so I won't dispute the terms. However, Kevin Keith is still wrong to say, as he later did,

Complaining that he was wrong because it is not "voluntary" in the colloquial sense, when he was using the term correctly, in this context, in the strict sense, is just buffoonery. You don't have to like the tax system, but it's idiotic to criticize knowledgeable people who discuss it knowledgeably, using the terminology used by experts in the field. There is no "evidence to the contrary" regarding the voluntary nature of US tax policy - the US system is voluntary, as that term is used by people who are trying to discuss tax policy alternatives rationally and not playing silly word games.

He is wrong to say this because Reid is clearly attempting to conflate the two senses of voluntary. He is plainly trying to say that taxation is voluntary in the "colloquial" sense because it is voluntary in the technical sense of people declaring their own income taxes rather than having the taxman deduct it at source.

The fact is that there are threats involves in the tax system. Perhaps not everybody pays in response to a threat. I could give a robber money because I like his face, regardless of the fact that if I don't he would shoot me. However, it is still the case that the government will do nasty things to you, things you presumably prefer less than keeping your money, and things that would be illegal for others to do, if you do not give it your money, and that it intends that its doing these things, or promising to do them, will create an incentive for your to accede to its demands to turn your money over.

Now, perhaps people do "voluntary" accede to threats - they choose to do what the threatener wants because they prefer that alternative to others. But that is plainly not really what people mean when they say that something is "voluntary." In fact, under that terminology, there could be no such thing as forced labour: Saying that people are free to choose not to pay taxes, but will face civil or criminal consequences if they don't, is much like saying that slaves were free not to work, but would face consequences such as floggings if they did.

Taxation is not voluntary.

Classic Post: The Marxian Theory of Exploitation

2008-03-06T23:54:00.002Z

Reproduced from my old Blog:
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Many socialists have regaled against the market economy as inherently exploitative. One of the most well known examples and influential examples of this is in the writings of Karl Marx. This theory was developed most completely in his massive three volume economics treatise Capital, but is neatly summarised here by Arthur P. Mendel:

“The entire argument in Capital rests on the labor theory of value. As was the case with virtually all the parts that Marx fused into his system, this concept was borrowed from earlier writers, in this case from the ‘classical’ economists such as Adam Smith and, especially, David Ricardo. It is primarily a price theory, according to which ‘commodities’ should exchange on the basis of the ‘socially necessary’ labor time devoted to their production. In other words, the amount of time a laborer works to produce a particular item determines its "exchange value": two products of equal labor value would thus be exchanged for one another.

“Having incorporated the labor theory of value, Marx derived from it a second step in his demonstration: the theory of ‘surplus’ labor value. According to this theory, the worker does not receive in wages an amount equal to tile value of the goods he produces. We must keep in mind that the influence of tile "pessimistic economists" still prevailed, as did the conditions promoting their pessimism. Drawing their conclusions from their own observations and from official government reports on working-class conditions in England during the industrial revolution, economists like Malthus and Ricardo argued that an "iron law of wages" existed that would keep wages down to a minimum necessary to meet the workers' basic needs. Marx accepted this and drew the conclusions he desired: on the one hand, the labor theory of value argued that labor created all the value of the goods sold by the capitalist; on the other hand, an ‘iron law of wages’ kept the laborer's income down to a subsistence minimum consequently, it must follow that the workers were not receiving the full value of their labor, that there was a ‘surplus’ kept by the capitalist owner of the means of production.”

Our first response to this argument is to look at the “Iron Law of Wages.” This theory is clearly false, for numerous reasons. The theory is, basically, that if wages rise for a time above enough to pay for mere subsistence then population will increase, resulting in increased competition for jobs amongst workers, resulting in lower wages. If, on the other hand, wages are lower than subsistence, fewer children are born, malnutrition kills off a certain percentage of the population, so competition for wages falls, and wages rise. Thus, it is argued, wages will always tend to a mere subsistence level.

However, Malthus, Ricardo, and Marx held the theory of the Iron Law of Wages in the nineteenth century, but in that century wages doubled, population increased over two and a half times. Rising real wages after 1850 did not lead to a rise in the birth rate, but the exact opposite – the birth rate fell from 35 per thousand in 1850 to 28.7 per thousand in 1900. (See JL Hanson, A Textbook of Economics, pp 311). So empirical evidence doesn’t back up the Malthusian argument. Secondly, the Iron Law of Wages only approaches the question of what determines the price of labour from the perspective of supply and not demand (and then only crudely, for it doesn’t recognise that the worker is buying a wage at the same time as selling their time, and thus take in the relative value they place on their uses of it). For instance, it is likely that a rise in population will result in a rise in demand for labour, so if population were to rise as a result of higher wages (as the Iron Law says it would), there is not necessarily a reason to expect a fall in wages as a result, because of an increase in demand for labour. This is, in fact, why an increased population as a result of free immigration or an absence of state control of reproduction will actually be likely to increase wages in the long term – increased population means more mouths to feed, means more demand for workers to feed them, means higher wages. Indeed, the Iron Law of Wages doesn’t even take account of how productive a worker is – surely an employer would offer more to a skilled and dedicated worker than a talentless lay about, because the former will get more work done than the latter? If so, then, at least to that degree, wages will reflect productivity.

Thirdly, the phrase “subsistence level” is so ambiguous as to be almost useless. Cave men subsisted on a lot less than the average UK worker – or even the least paid UK worker – so why haven’t UK wages fallen to the level needed to provide subsistence to a cave man. Workers in today’s Britain live a lifestyle many would have thought luxurious by the standards of one hundred years ago.

So the “Iron Law of Wages” fails to hold any water. Given this, Marx’s presumption that wages will always tend to be less than the true value of the labour spent producing becomes untenable, and, if this is the case, his claim that capitalism is exploitative looks shaky too.

However, we may go further – having disposed of the theory about what determines how much value a capitalist gives a worker, lets turn to the theory about how much value a worker gives the capitalist. This theory, as stated above, is “…primarily a price theory, according to which ‘commodities’ should exchange on the basis of the ‘socially necessary’ labor time devoted to their production. In other words, the amount of time a laborer works to produce a particular item determines its ‘exchange value’: two products of equal labor value would thus be exchanged for one another.” In short, the exchange rate, or price, of one hour of socially necessary labour time, in a free market economy, would be another hour of socially necessary labour time – an hour of work from a farmer will buy an hour of work from the builder. Hence the belief, also iterated above, that “labor created all the value of the goods sold by the capitalist.”

However, it is obvious that labour doesn’t create all the value of the goods (remember that the argument isn’t that only labour creates goods, but that only labour creates the value of those goods, or, in other words, only labour gives those goods value). Surely if a group of identical workers spent an identical amount of time building an identical house next to a land fill site or a sewage works as they did building one next to a site of great natural beauty, the latter would fetch a higher price than the former. Isn’t this obvious? If so, then it must also be obvious that the exchange value, the price, of each house is not solely determined by the labour put into producing it, but by the geographical position too – and by the attractiveness of that position to those who would live in the house. Hence it is the utility, the preference satisfaction derived from owning that house, which determines its price.

An old complaint against the traditional labour theory of value (as stated by Adam Smith and David Ricardo) was that it implied that useless labour would fetch an equal price as useful labour. For example, an hour’s worth of delicate and life saving brain surgery would buy an hours worth of digging holes and filling them in again. Or, more crudely, that if I spent the same amount of time making a shit sandwich as I did making a cheese sandwich, consumers would happily spend as much on each of them! This is obviously not the case, so the price of a good cannot be determined by the amount of time spent working on it.

However, this was not Marx’s claim. As Robert Nozick points out, “Marxist theory does not hold that the value of an object is proportional to the number of simple undifferentiated labour hours that went into its production; rather, the theory holds that the value of an object is proportional to the number of simple undifferentiated socially necessary labour hours that went into its production.” This claim is backed by reference to page 46 of Marx’s Capital. The point is that Marx qualifies the traditional labour theory of value by also requiring that labour hours be socially necessary, and this, he believes, saves him from the above argument.

Marx writes that “Nothing can have value without being an object of utility. If a thing is useless so is the labour embodied in it; the labour does not count as labour, and therefore creates no value.” (Capital pp48) However, even accepting the condition that an object has to be of some utility, there still remain some problems. For instance, what if a worker works for 893 hours on something that is of only very slight utility. This satisfies the condition that it must be of some utility, so should we now believe that here on in only the time spent making it matters, that only the amount of labour matters, so that, now that it is of some utility it will buy a 893 products that are of incredible utility but only took an hour to make. Nope, because, as Marx says “…the labour spent on them (commodities) counts effectively only insofar as it is spent in a form that is useful to others.” (Capital pp97-98) In other words, the 893 hours of labour are only valuable insofar as they are of utility to those that consume them, as is the hour of the other goods mentioned, which implies that the value of a good depends on its degree of utility to its consumer, that the labour embodied in it is only as valuable as it is of utility to its consumer. Marx even claims that “Whether that labour is useful for others, and its product consequently capable of satisfying the wants of others, can be proved only by the act of exchange.” In other words, the only way to tell if a commodity is valuable or not, or even if it has value, is by observing the action of the market process – the act of exchange. This is a hell of a concession! But what becomes clear is that, by tacking on the qualifying condition that labour need be socially necessary in order to have value, Marx has in fact ended up with something much different from a labour theory of value. He has claimed, in effect, that the value of a product is determined insofar as it is useful in satisfying the preferences of the consumer and not by the amount of labour time spent producing it at all!

But we can approach this from a different direction. Imagine that things are being produced as efficiently as they can be, but that too many of them are produced to sell at a certain price. The price at which the market clears is lower than the apparent labour values of the products; a greater number of efficient hours went into producing them than people were willing to pay for. Does this show that the number of average hours spent making an item of sufficient utility doesn’t determine its value? Marx’s answer to this question is to say that if such overproduction occurs that the market won’t clear at a certain price, then the labour devoted to making an object was inefficiently used – less of the thing should have been made – even though the labour itself was efficient. Thus, not all those efficient labour hours constituted socially necessary labour time. The product does not have less value than the number of socially necessary labour hours expended on it, because there were simply fewer socially necessary labour hours expended on it than meets the eye.

“Suppose that every piece of linen in the market contains no more labour than is socially necessary. In spite of this, all the pieces taken as a whole may have had superfluous labour-time spent on them. If the market cannot stomach the whole quantity at the normal price of 2 shillings a yard, this proves too great a portion of the total labour of the community has been expended in the form of weaving. The effect is the same as if each weaver had expended more labour-time upon his particular product than is socially necessary.”

(Marx, Capital, p 120)

Robert Nozick neatly sums up the consequences of this view: “Thus Marx holds that this labour isn’t all socially necessary. What is socially necessary, and how much of it is, will be determined by what happens on the market!! There is no longer any labour theory of value; the central notion of socially necessary labour time is itself defined in terms of the processes and exchange ratios of a competitive market.” So on one hand Marx concocts a theory about prices that actually tells us that prices are not determined by labour, and then on the other he tells us that workers are exploited because all the value of the product they create is determined by labour! This is simply intellectual dishonesty!

The classic labour theory of value is clearly wrong because it cannot explain why a shit sandwich won’t buy a cheese sandwich when they both take the same amount of time to make. In fact, the labour theory of value is not even useful in economics because it cannot explain what goes on in an economy. For instance, I can buy cola in one-litre-bottles, and I can also buy it in two-litre-bottles. However, the price of a two-litre-bottle is not twice that of the one-litre-bottle even though it holds twice the contents. Why is that? Modern economics, abandoning anything approaching a labour theory of value, can answer this, but the labour theory of value cannot.

In terms of modern economics, it is easy to explain: It is less important to me that I get a second litre of cola than it is that I get a first. Once I have one litre, I care less about getting the second; the marginal utility of a second litre is lower than the first. Thus, if the company wanted to sell me a second litre, they have to make it cost me less than the first, because it is less important to me than the first. This is why the two litres of cola in a two-litre bottle will not be the same price as the two litres in two one-litre bottles.

But the amount of labour time spent producing the second litre was exactly the same as that spent producing the first litre. Therefore the labour theory of value cannot explain why two-litre bottles of cola are cheaper than two one-litre bottles. Marx’s changes to the labour theory of value lead us further and further away from an account of exploitation, because he would have to say that the labour embodied in the second litre in the two-litre bottle was less “socially necessary” than that of the first, but can only do so on the grounds that the market for cola wouldn’t clear if it was twice the price, which moves us into a position of saying “price of a good on the market tells us how much of the labour was socially necessary,” and into one that says “the price of a good on the market is determined by the amount of socially necessary labour time spent producing it.”

However, we can reject the Marxist theory of exploitation without even rejecting the labour theory of value. David Gauthier sums up the Marxist argument:

“Marxism offers a direct challenge to our account of the Market which, if sustained, would refute the claim that market interaction is impartial. For the Marxist insists that private ownership of the means of production, a fundamental presupposition of the market, is necessarily exploitative. The argument is simple. Under private ownership, nothing can prevent the emergence of a situation in which some individuals (capitalists) own the means that others (workers) need if they are to engage in productive activity. These others are then compelled to sell their labour power to the owners of the material means that production requires. This sale is exploitative. For the essential and distinctive characteristic of labour is that it produces more than the cost of its own production; labour thus reproduces itself and in addition produces what in Marxist thought is called surplus value. Now labour power is bought and sold, as any other commodity, at a price sufficient to cover its cost of production. Hence the buyer of labour necessarily receives the surplus value, since he pays the worker a wage equal to the cost of producing the labour power sold, and receives a price equal to the value of what that labour power produces. The market systematically favours the buyer of labour power over the seller; hence its operation is in principle partial to the capitalist.”

Gauthier begins studying this position from the claim that the market price of what labour produces is greater than the cost of its own production. Imagine that the price of labour power was equal to the cost of producing it. It is obvious that under these conditions there would be a demand for more labour, because buyers (capitalist employers) profit from the difference between the price they pay for labour power and what they receive in exchange for its product, which, under these conditions, would be nothing (because price equals cost). This demand for more labour power would continue until the marginal product of an additional unit of labour power is equal to the marginal cost of producing that additional unit. However, at this point the price of labour – the wage paid – is equal to the price that is received for its product. There can be no surplus value when the supply of labour is brought into equilibrium with the demand for it. “The worker receives a wage equal to the marginal difference her labour power adds to the total product” – workers are paid according to their marginal productivity.

Marxists attempt to escape from this conclusion by denying that supply and demand come into equilibrium. The claim is that the buyer of labour power is able to keep its price, the wage, below the price he receives for its product, because the supply of labour will always exceed demand for it because of what Engels called “The reserve army of the unemployed.” However, we have just seen that if the wage is below the price received for the product of labour, then there will be an effective demand for more labour – demand will be greater than supply. So the Marxist is trapped in a contradiction: The buyer of labour power is able to derive surplus value from labour – to pay the worker less than he receives for the product of labour – only if labour exceeds demand. But if there is a surplus to extract then this creates amongst capitalists a demand for labour in excess of the existing supply. As Gauthier says,

“Or, to put it another way, if the supply of labour exceeds the demand for it, this can only be because the cost of producing labour exceeds the price that can be received for it’s product. So there can only be surplus value if supply exceeds demand if supply exceeds demand there can be no surplus value.”

So, if, as Marxists suppose, labour power is a commodity, then the operation of a competitive market must bring the supply of labour into equilibrium with the demand for it. Thus, at equilibrium, there can’t be any surplus value for the buyer of labour power to extract, and so there can be no exploitation of the seller of labour power – the worker. Thus, in a competitive market, there can be no exploitation of workers, at least in the Marxist sense.

Kevin Carson's New Book

2008-03-03T20:03:00.002Z

Kevin Carson's long awaited new book on anarchist organisation theory is almost with us. Sean Gabb has already commended it as "a devastating attack on big business from a libertarian point of view. I cannot recommend them too highly."

A LIBERTARIAN MANIFESTO?

2008-02-13T22:59:00.003Z

The Libertarian Party of the United Kingdom is set to have its first official meeting some time in March. Regular readers will know that I have supported the idea of a UKLP, though the contest I wrote my support for was won by an article opposing the suggestion. Ah well, Neil Lock doesn't have to get involved!

However, with both my post and the first meeting in mind, here is either a manifesto or a set of policy suggestions.

Economic policy

1: Seek to cut the size of government realtive to GDP by 25%.

2: End compulsory regulation. This idea is kind of lifted from a thought experiment in Charles Murray's What it Means to be Libertarian. In this thought experiment regulation is no longer compulsory. People don't have to submit their goods, their businesses, their manufacturing processes, etc, etc, to governments for inspection and approval. They don't have to prove to the government that they are conforming to statutory standards, etc. If they want to, then they can. If they don't want to, then they have to stamp or market their goods "government unregulated," or put up signs in clear view "government unregulated" in their stores, etc.

3: Abolish the income tax and replace it with a flat tax.

4: Abolish the welfare state, except for support for the physically disabled (eg, paraplegics, people with extreme MS, etc.). Replace it with a negative income tax, on Friedman's line.

5: Abolish the minimum wage that is causing such disemployment amongst our youth.

6: Declare unilateral free trade, and start reducing tariffs and quotas with an aim to their being zero in five year's time.

7: Have an enquiry on the extent of corporate welfare, and end all instances, no subsidies, grants, etc.

Foreign Policy

8: Withdraw from the EU (because 6 would be a waste of time without doing so!

9: Freeze military spending.

10: Start withdrawing troops from Iraq, Afghanistan, and reduce troop numbers over seas.

Domestic policy

11: End the War on Drugs, decriminalising drug use, possession, manufacture and sale.

12: Decriminalise prostitution, pimping, and brothels.

13: Decriminalise sadomasochism.

14: Bring to an end blasphemy laws and laws against "incitement of religious hatred" and racial counterparts.

15: Implement the principle of subsidiarity, returning powers to local councils that have been taken by central governments over the last few decades. The simple reason is that it is easier to vote with one's feat against local governments than it is against national governments. Whilst it is still a burden for people to move house if they don't like the way their Council is run, it is less of a burden than emigrating from the entire country is, and so the ability to vote with one's feat is a more effective check on local government power than on national government power.

16: Full tax credits for people using private alternatives to government services, such as private health care and insurance, private schooling or homeschooling, private policing, rubbish collecting, or use of arbitration rather than courts in civil disputes, and for community based schemes providing alternatives or supplements to government services. "Privatisation" usually ends up meaning the government setting up a firm, or firms, then selling it off, even though it shouldn't really own it in the first place, and then regulating the entire new industry, often with disasterous effects, and with a "free enterprise" rhetoric that allows the inevitable failure to smear free markets ever more. A better alternative is to allow markets to evolve from below by simply avoiding forcing those willing to use private alternatives to pay twice for their service. Whilst a scheme of "voluntary taxation would be better," simply refunding the part of people's taxes that would be spent on this service, in a tax credit, is pretty close to doing this, and avoids the problems associated with voucher schemes.

Is Charity Enough

2008-02-10T21:21:00.000Z

Discussing libertarianism inevitably involves answering the question "what about the poor"? And then, when libertarians suggest that those that want to help the poor can do so through private charity, the discussion inevitably ends with a doubt that charity would be enough. The answer is, of course, "enough for what?" It certainly isn't the be all and end all. Firstly, it is plain that the poor in the more capitalist tend to be much better off than the poor in the less capitalist countries. The claim that libertarians want to defend the interests of the rich only and don't care about the poor, when shown in this light is utterly falacious: Capitalism, where it has been allowed to work, has been better for the poor than socialism has, both in terms of actual wealth, ensuring that even if the poor get a smaller slice of the pie, it is a much bigger pie they get a slice of, and in terms of equality: The division between the rich and poor is less in more capitalist countries than, say, between racking members of the Comintern compared to the poorest person in the USSR. Libertarianism would also mean an end to corporate welfare, redistribution to the rich, and the provision of monopolistic privilege by the state. And, lastly, libertarianism would also mean the freeing of the creative energies of people themselves to come up with theri own solutions to problems and hazards, including the risk of poverty and the inability to provide for oneself. That means the development of mutual aid and insurance arrangements.

So, libertarians do not simply rely on private charity. However, what can be said in defense of charity and in answer to this question, would it be enough? Well, the question itself is odd. The supposition is that people don't want to help the poor, or those in need, or those incapable of helping themselves. But if that is the case, then why would they ever vote for a government to force them to do so? As David Friedman wrote,

Suppose that one hundred years ago someone tried to persuade me that democratic institutions could be used to transfer money from the bulk of the population to the poor. I could have made the following reply: 'The poor, whom you wish to help, are many times outnumbered by the rest of the population, from whom you intend to take the money to help them. If the non-poor are not generous enough to give money to the poor voluntarily through private charity, what makes you think they will be such fools as to vote to force themselves to give it?'

So, if the vast majority of people are too selfish to help those in need, then it plainly follows that no democratic institutions would result in the transfer of money from the majority to the poor. People wouldn't be likely to vote for such a government. But people do vote for such governments. Of course, one must not neglect various facts, such as the fact that the state employs between about a fifth and a quarter of the entire workforce of the UK (the NHS is, I hear, the biggest employer in Europe), and so that inevitably means that a huge part of the electorate will be made up of people who's continued income depends on voting in support of various government activities and policies. It also means that some of the most powerful pressure groups on government policy will be public sector, as opposed to private sector, unions. Given this, support for an extensive welfare state is likely to come, in large part, from those actually employed by that welfare state, not necessarily from those it serves, or from those exclusively interested in using it to help people. Beyond this, the welfare state also helps people who are not poor, not needy. The NHS is there fore all who want to use it, rich or poor (in theory, at least). Likewise for schooling, and so many other things. Some of those non-poor who support the welfare state may well do so because it helps them, not because they care for the needy who cannot help themselves, then.

However, in the end, surely a large reason that people vote for welfare statist policies is because they support and favour the use of democratic institutions to help the poor and the needy and those who cannot help themselves. Libertarians say, then, that if people want to help the poor, then they don't need governments to force them to do it, and if they don't want to help the poor, then it is odd to think that they will support governments to force them to do it.

Of course, the response to that is that the defenders of the welfare state are voting to force the unwilling to help, as well as themselves. However, surely the number of unwilling people isn't that big. I find it totally incredible that they would comprise any significant part of the electorate. In fact, I would use the unpopularity of libertarianism as evidence that it is not. Hardly anybody likes libertarianism, and the principle reason that they dislike libertarianism, it seems to me, is because libertarians say that there is a big problem in forcing people to contribute to looking after the poor, and the reason that most people reject such a position is because most people have a fear that, without such force, the poor would not be looked after. It should, therefore, follow that most people care for the poor considerably, and would, then, continue to give money to help them were they not forced to.

So, to build an answer to the question, we can accept that, given the popularity of the welfare state even amongst those that are not net beneficiaries of it, support enough to maintain its existence, it is reasonable to assume that most people would continue giving large portions of their income to help those in need. Lets assume that a third of them would, or that total voluntary donations would amount to a third of the amount that government provides now.

Beyond this we have the question of how many now in receipt of welfare are actually people that those who support the welfare state for altruistic reasons actually want to help. By this I mean, how many of these people are actually capable of providing for themselves. Mary Ruwart wrote,

During the 1980s, I rented to welfare recipients. Ninety percent of my tenants were able-bodied women with children who simply chose welfare instead of work. Indeed, one woman who tried to give me friendly advice suggested that I stop fixing up the apartments at night and give up my day job. "Have some kids and get on welfare so that you can enjoy your life," she counseled me. Although I did not take her advice, many young women did. Low-income teens often told me that they became pregnant in order to receive welfare checks and establish their own residences. The more children they had, the bigger their welfare stipend.

In 1992, New Jersey eliminated part of the monthly increase that women received for new children. Even though stopping this stipend only decreased the welfare package 4%, births to welfare mothers went down by 10%. Clearly, many women were getting pregnant as a means of self-support. No wonder that one in eight children now receive some form of government "aid."

Why would someone choosing to conceive children as meal tickets and live on welfare? By the mid-90s, a person would have to earn $5.50 to $17.50 per hour (depending upon your state) to get more after-tax benefits than they'd receive on welfare! Of course, choosing welfare instead of work didn't give a person job experience or regular raises, so choosing poverty as a teen was generally a life sentence.

When Ohio required capable welfare recipients to work, 40% of them decided that they didn't need help after all. Oregon tried to place its able-bodied welfare population in jobs by offering employers a subsidy to take them. Once welfare recipients found that they were going to have to work for someone, 80% went out and found an unsubsidized job. Clearly, a great deal of the welfare population simply chooses not to work when tax dollars, usually in excess of what they would initially earn, are readily available. Giving money to those who could work results in less money for those who can't.

In 1987, Wisconsin began requiring people on aid to seek or train for work. By 1997, Wisconsin had 55% fewer families on welfare than it did in 1987, while the rest of the nation experienced an average increase of 16%. In other words, Wisconsin's work program cut welfare by 71%!

Of course, this is from America. People may say that the UK is different, that our welfare state is more discriminating and better safe guarded against abuse and fraud. I'm not sure what possible grounds they could argue such a ridiculous thing on - so far as I can tell, welfare fraud is widespread. Such a thing has formed the basis of James Bartholomew's work on the welfare state, and I would direct them there. Mary Ruwart's claim was that "Giving money to those who could work results in less money for those who can't." People may think that money about benefit fraud and welfare mothers is only for the selfish and greedy minded, but this is a real reason to oppose such a thing: Less welfare fraud means more for those who actually need it. Private charity is more discriminating than government. Its funds more limited. If people don't think that a particular charity is helping, and helping more than anybody else can, then they will stop donating. This means that charities are under a competitive pressure to be successful, and it means that if funds are being wasted on those that don't need them rather than those that do, then a charity is wasting the funds of its donors - funds that they can simply stop donating if they discover such a thing, unlike those that fund the welfare state. Mary Ruwart writes,

In 1987, Wisconsin began requiring people on aid to seek or train for work. By 1997, Wisconsin had 55% fewer families on welfare than it did in 1987, while the rest of the nation experienced an average increase of 16%. In other words, Wisconsin's work program cut welfare by 71% !

Let's assume that Wisconsin's experience was atypical and that nationwide, only 50%, rather than 71%, of the people on welfare are capable of supporting themselves. Private charities would be likely to weed out such people. Thus, if we simply gave the equivalent of the welfare budget to churches and other private charities for distribution, twice as much help would go to the truly needy--virtually overnight!

Make a conservative guess that half of the people actually on welfare or claiming some sort of benefit are actually capable of supporting themselves, and that private charity would cut off all support for such people. Now add in our previous position that, absent government compulsion, people would voluntarily donate funds equal to half the current money that the government provides for the poor. That would mean that the actual needy, instead of those who are able to support themselves, would recieve just as much without a welfare state.

However, we needn't stop there, since we have the effectiveness of government versus charity itself to bring in. James Rolph Edwards has an excellent paper on this in the Journal of Libertarian Studies. He reminds us that "Some fraction of each dollar taxed will always be absorbed in wages and salaries of the administrative bureaucracy, costs of purchasing, powering, maintaining and replacing equipment, buildings, etc., and other overhead costs. Only the remainder will actually be received by the target population in the form of cash or in kind payments. Many advocates of compulsory income redistribution have tended to ignore this inconvenient fact altogether in their writings, however. Indeed, most of the public discussion proceeds with an implicit assumption of costless, dollar-for-dollar income transfers." Given this, it is very worth considering where the overheads will be higher, how much money gets absorbed in costs - in state welfare, or in private charity. Edwards writes,

Of course it is also true of private charities dependent on voluntary donations that they have costs absorbing part of their revenue, but there is a huge difference in the efficiency with which they operate relative to government. Contrary to Okun, public income redistribution agencies are estimated to absorb about two-thirds of each dollar budgeted to them in overhead costs, and in some cases as much as three-quarters of each dollar. Using government data, Robert L. Woodson (1989, p. 63) calculated that, on average, 70 cents of each dollar budgeted for government assistance goes not to the poor, but to the members of the welfare bureaucracy and others serving the poor. Michael Tanner (1996, p. 136 n. 18) cites regional studies supporting this 70/30 split.

In contrast, administrative and other operating costs in private charities absorb, on average, only one-third or less of each dollar donated, leaving the other two-thirds (or more) to be delivered to recipients. Charity Navigator www.charitynavigator.org), the newest of several private sector organizations that rate charities by various criteria and supply that information to the public on their web sites, found that, as of 2004, 70 percent of charities they rated spent at least 75 percent of their budgets on the programs and services they exist to provide, and 90 percent spent at least 65 percent. The median administrative expense among all charities in their sample was only 10.3 percent.

Edwards suggest that actually this two-thirds figure is conservative: Charity Navigator only records charities that are tax exempt 501 (c)(3) organisations required to provide informational tax returns. That excludes religious organisations. Such organisations often use donated labour, and so can exclude labour from their total costs. Why this difference in costs?

The basic reason for this large differential in costs between private and public agencies is not difficult to see. Depending largely on voluntary contributions, most private agencies are under strong pressures to operate efficiently and keep costs low. Benevolent citizens naturally wish a large fraction of their donations to reach the needy, and many will not keep donating to an agency that does not accomplish that. Donors can select among private nonprofit charities, and competition between charities for donations tends to insure efficiency. Public aid agencies, in contrast, are budgeted their funds by Congress, which obtains them through compulsory taxation. These agencies are not under competitive pressures to keep costs down that are remotely equivalent to those of private charities. Indeed, their incentives may be much the opposite, as Niskanen (1994) has argued. Yet another factor promoting efficiency of private charities is that those operating at levels of inefficiency comparable to the average government agency are often prosecuted—by the government (which never applies the same standards or threat to its own agencies)—for fraud. Pressure on private charities to avoid such prosecution, and the bad publicity and loss of public trust resulting, is strong.

Where does this leave our argument now? Mary Ruwart again provides the answer: "Of course, public welfare gives over 2/3 of every tax dollar we give them to overhead (e.g., salaries of the bureaucrats who administer the program). Private charities, however, give 2/3 of every dollar to those who need help. By switching to private distribution, we'd cut overhead in half. In other words, we'd double the dollars available to the needy once again."

So, we have the fact that so many people who are not themselves net beneficiaries or employees of the welfare state continue to vote for or support welfare statist policies itself indicates a good chance that huge numbers of people would continue to donate money were the compulsion removed. On a conservative estimate I said that a third of the present government expenditure could be raised through voluntary donations.

I then established a conservative suggestion that half of the total revenue spent by the government on welfare is collected by those that can support themselves, and would be denied support by private charities. That means doubling the remaining funds for anybody left. That gives us two thirds or the present expenditures.

Lastly we have the superior efficiency of charity over government, averaging twice as efficient. So we can double our two thirds of government expenditure. The result is that leaving support for the needy could well leave us with 33% more support, in financial terms, for the actual needy than is presently provided by the state.

Is charity enough? It is more than enough

OH. MY. GOD! This guy is a hero!

2008-01-13T12:53:00.000Z

Ezra Levant is a publisher in Alberta, Canada. He aroused fury by republishing the Danish cartoons that mocked Mohammad, portaying the alledged prophet and his followers as terrorists. For this crime Levant has been dragged into a court. Not a real court, of course. Nope, he has been dragged in front of something calling itself the "Alberta Human Rights Commission." Here is his description of the commission:

The commission was meant as a low-level, quasi-judicial body to arbitrate squabbles about housing, employment and other matters, where a complainant felt that their race or sex was the reason they were discriminated against. The commission was meant to deal with deeds, not words or ideas. Now the commission, which is funded by a secular government, from the pockets of taxpayers of all backgrounds, is taking it upon itself to be an enforcer of the views of radical Islam. So much for the separation of mosque and state.

I have read the past few years’ worth of decisions from this commission, and it is clear that it has become a dump for the junk that gets rejected from the real legal system. I read one case where a male hair salon student complained that he was called a “loser” by the girls in the class. The commission actually had a hearing about this. Another case was a kitchen manager with Hepatitis-C, who complained that it was against her rights to be fired. The commission actually agreed with her, and forced the restaurant to pay her $4,900. In other words, the commission is a joke – it’s the Alberta equivalent of a U.S. television pseudo-court like Judge Judy – except that Judge Judy actually was a judge, whereas none of the commission’s panellists are judges, and some aren’t even lawyers. And, unlike the commission, Judge Judy believes in freedom of speech.

I am not here passing judgement on the content of the Danish Cartoons and the rest of Levant's publications. What excites me is the passionate defense of freedom of speech and the propper respect for the limits on a limited government.

Opening Statement

Levant is given a chance for an opening statement in his interrogation by the Human Rights Commission, and uses the opportunity to point out the irony that a government organisation calling itself a "Human Rights Commission" funded by taxpayers under a secular government, should be having a hearing to decide whether or not a Canadian should get to speak freely.

What was Your Intent

The commissioner asks Levant what his intent was in republishing the Danish cartoons. Levant responds by asking why the commissioner would want to know that. He gets her to admit that any answer is irrelevent in law - in law, it doesn't matter what his intent was. So, despite having given reasonable reasons for publishing the article in other interviews, when interviewed by the government, when asked by the government what the reason he exercised his right of free speech, he heartily accepts that it was to offend precisely the people that were offended in precisely the manner he offended them... AND TO DO SO IS HIS RIGHT! There is an exellent line where Levant points out that someone had accused him of offending the prophet Mohammad. Levant's response: "and he's dead, by the way, so I don't think I've offended him much".

The Real Violence in Edmonton

The judge claims that the republishing of the Danish cartoons contributes to an atmosphere of hatred for Moslems, and so puts them at risk of violence. Levant Makes the excellent and quite correct response that what actually creates hatred for Islam and Moslems is fundamentalist nuts fire bombing people's synagogues in liberal countries, launching nuisance suits against magazines critical of Islam and Moslems, and using government kangeroo courts to try their publishers. The Moslem showing of outrage in response to the cartoons contributed more to an atmosphere of hatred for Moslems than the cartoons themselves did.

I Don't Answer to The Government

Again, Levant decries the Kangeroo Court he is being interrogated in. He suggests that it is quite proper for him to be judged in civil society, for society to punish him through ostracism for his views, for advertisers and doners to stop funding his magazine, etc. But the government has neither the legal nor the moral authority to censor him and it is outrageous for it to attempt to do so.

You're Entitled to Your Opinions

This bit is hilarious. I'm not sure what the context is, but after Ezra makes some point that McGovern clearly disagrees with McGovern retorts "well, your'e entitled to your opinions"!!! DUH! Why is he being interrogated by a "Human Rights Commission" as a response for publishing images and views offensive to some people if he is entitled to his opinions, then? He replies, "I wish that were the fact," since Levant is plainly only entitled to the opinions that the Human Rights Commission will let him hold.

Levant's website is here

The really real Sicko

2007-11-09T21:48:00.000Z

In his new "documentary," Sicko, Michael Moore criticises US healthcare, which he is quite right to do, since it is a ridiculously flawed system. However, he controversially compares it with "socialised" healthcare systems in the UK, France, Canada, and... Cuba. Yes, Cuba. This is interesting, because, early in the film Moore shows his audience a chart from the World Health Organisation ranking countries by the effectiveness of their health care. He does this to show how bad the US ranks, way down at 37. He doesn't comment on the fact, and hopes his audience has missed it when he holds the chart up, that Cuba ranks 39, worse than the US!

In Sicko Moore rounds up a group of 9/11 heroes, police, firefights and the such, and takes them to "the only place in the USA where healthcare is free": Guantanamo Bay. Unfortunately the military won't let them in, so they go to Cuba instead. The results... well, you can see them in the video from John Stossel below. The short Stossel video is a trailer for a show I will post at some other date.

Stossel Takes on Michael Moore about Cuba healthcare myth:

And here is, first, an interview from YouTube introducing some videos from hospitals in Cuba, and then the videos themselves:

Videos taken by doctor Darsi Ferrer and smuggled out of Cuba by therealcuba.com's webmaster show the real health care regular Cubans receive. Very different from the flagship hospital for the Elite, paying foreigners and special interest useful idiots where Michael Moore went for his Sicko propaganda movie. This is only the beginning, there is plenty more this came from and a lot of the raw videos are already here in this youtube profile. These are the hospitals from the other side of the apartheid for regular Cubans that Sicko wouldn't show

Miguel Enriquez Hospital for regular Cubans

This is the outside of the Miguel Enriquez Hospital, in Havana. Notice the garments hanging from windows; broken windows; near the end there is a view of the inside staircases and you can see that the exterior panel glasses are missing. Some pieces of wood have been placed on the floor against these windows to prevent people from falling. See another video titled: Elevators / Garbage containers in Hospitals for Cubans

Elevators / Garbage containers in Hospitals for Cubans.

This video was taken at the Miguel Henriquez Hospital in Havana. Only one of the elevators is functioning. The panel glasses at the end of the hall by the elevators are missing and now they have placed some pieces of wood on the floor and against the window to prevent someone from falling down. For more videos visit www.therealcuba.com

Dead Patient in Hospital for regular Cubans

This video was filmed in August of 2007 inside the 10 de Octubre Hospital (formerly known as "La Dependiente") in Havana, Cuba. This is a hospital for regular Cubans, very different from those hospitals for foreigners and tourists where regular Cubans are not allowed. In the video, a relative of another patient is told by a nurse to watch when the patient on the next bed stops breathing, because that would be a signal that he was dead. If you watch closely, 24 seconds into the video, you'll see a fly landing on top of the dead patient's pajamas

Patients in Hospital for Cubans part 2

More videos showing patient's rooms at the 10 d... (more)
More videos showing patient's rooms at the 10 de Octubre and Miguel enriquez hospitals in Havana. Notice how some of the beds have bed sheets that are not the typical white sheets used in most hospitals. This is because many patients have to bring their own bed sheets, pillows and towels.

Room at a Hospital for Cubans

This room at the Miguel Enriquez Hospital (Formerly known as Benefica) happened to be empty at the time and it was possible to take a more detailed video. Notice the filthy conditions of the patient bathroom; the mattresses; pieces of plastic and rags covering the broken windows.

I don't care about consumers of books

2007-10-24T23:24:00.000Z

Must be true. After all...

"Providing healthcare shouldn't be about making a profit; it should be about caring for people."

I help provide books to readers for a profit. So presumably I don't care for readers of books. Or...

Can you say "false dichotomy?"

More On Guns

2007-10-21T20:37:00.000Z

In response to my last post on guns Matt Wardman made an interesting response:

It seems to me that you have the wrong end of the statistical stick, and your argument is specious.

The original proposition you question:

However the connection between liberal gun laws and a high gun crime rate is very questionable.

The final conclusion you draw:

There is, therefore, little evidence from the US supporting a correlation between high rates of gun ownership and high murder rates.

You have refuted a different proposition from the one you claim to countering. You have switched from "gun murder rates" to "overall murder rates" at some point. No one asserted that there was a correlation between liberal gun laws and high OVERALL crime rates.

Looking at your stats, and using the rates for GUN crime - not overall crime - as these are the ones you set out to address, your argument proves the original assertion you set out to question.

I actually suspect Matt's criticisms are on target: The stats I used did switch from gun crime and gun murder rates to murder in general. However, I suspect his conclusion is false. The stats I was able to find from a quick google search suggested that the percentage of murders that are committed with a gun is lower in heavily armed states than in states where the populace is less well armed.

The percentage of the population who own guns in the least heavily armed states are Hawaii 8.7%, New Jersey 12.3%, Massachusetts 12.6%, Rhode Island 12.8%.

The percentage of murders by gun in Hawaii is 43.5 %. In New Jersey it is 61 %. In Massachusets its 47.4%. In Rhode Island its 63.4%.

The four most heavily armed states the ones where the perecentage of population owning guns is highest, is Wyoming, at 59.7%, Alaska, at 57.8%, Montana 57.7%, South Dakota 56.6%.

The percentage of murders committed with a gun in Wyoming is 40%. In Alaska it is 52.9%, in Montana it is 50%, in South Dakota its 33%.

The average rate of gun ownership in four least heavily armed states is 11.6% The average murder rate in the four least heavily armed states is 3.025 people in 100,000. The average percent of the murders that is committed by gun in these least heavily armed states is 53.825%

The average rate of gun ownership in the most heavily armed states is 57.95%. The average murder rate in the most heavily armed states is 3.325 people in 100,000. The average percentage of these murders that is committed by gun is 43.975%.

So you are only very slightly more likely to be murdered in one of the states where gun ownership is most widespread than you are in one of the states where it is least widespread, but you are much less likely to be killed with a gun in states where gun ownership is most widespread than you are in states where gun ownership is least widespread.

Moreover, the figures I have used have been percentage of homicides committed by gun, not percentage of murders. Homicides can include lawful killings. This would make the actual percentage of murders committed by guns even lower. On top of this, I only had figures on gun-caused homicides for the states, not districts. I have no doubt that stats for DC would tip things even further in favour of gun ownership.

Source, in addition to my article source.

As cream for the pudding, here's this story, with the accompanying video:

A guy with a gun caught career burglar in his house. Being armed, he was able to detain the criminal until the police arrived. had he not been armed, the criminals could have got away... or worse. What is the lesson?

Drew Carey Solving LA's Traffic Problems

2007-10-17T23:17:00.000Z

DELETED SCENES: WHAT WOULD YOU PAY TO ESCAPE GRIDLOCK?

DELETED SCENES: EXPRESS LANES VS. CAR POOL LANES

URBAN LEGEND - GRIDLOCK & ASPHALT

RELATED: ROBERT POOLE ON FUNDING NEW ROADS

State Capitalism and Burma

2007-10-15T18:58:00.000Z

Amongst opponents of free market economies, some of the most under handed are those who pretend to be the exemplars of capitalist economies: The large corporations. When people speak of laissez faire, it is usual that opponents will point to the actions of various large corporations to "prove" that laissez faire cannot work. Likewise, "vulgar libertarians" that should know better correctly use economic theory against their critics to refute claims that the free market wouldn't work, but then seem to be persuaded by their critics that "actual existing capitalism" is laissez faire.

The reality is, of course, very different: Both the "vulgar libertarians" and the "vulgar authoritarians" are incorrect - the status quo is not libertarian, is not free market, and is not capitalst. Some countries more closely approximate free markets than others, and do so in some respects and not others, but none does so very much, and many does so barely at all.

It is often in third world countries that both the vulgar authoritarianism and vulgar libertarianism come into play. Socialists point out the plight of workers in sweatshops as "proof" that markets can't help workers, and laissez faire only grants employers the power to exploit workers, and that, instead, international effort is justified to force governments to intervene in economies to enforce minimum working standards and wages. Vulgar libertarians then respond that, in a free market workers earn according to their marginal productivity, and so attempts to raise their incomes above the price the market will pay will result in pricing them out of the market, into even worse black market conditions, or starvation... therefore the low wages experienced in the thirld world are justified, and a necessary stage in the development of the industrialised countries.

The trouble with the libertarian response is that, whilst correct in many places, it is not universally true, and it is untrue precisely because the libertarian response assumes that the socialist critic is correct and that what is happening in the world is the result of free markets. Often, however, it is definitely not. And the vulgar authoritarian is wrong to assume that corporations favour laissez faire when the reality is that they all to often favour state intervention when it serves their purposes.

The most pertinent example in today's news is Burma. Burma, or Myanmar, has been in the news recently where mass protests have been shaking the streets of the capital Rangoon.

About 20,000 protesters led by Buddhist monks and nuns on Sunday mounted the largest anti-government protest in Myanmar since a failed 1988 democratic uprising, shouting support for detained pro-democracy leader Aung San Suu Kyi.

At one point a small crowd of about 400 -- about half of them monks -- split off from the main demonstration and tried unsuccessfully to approach the home where Suu Kyi is under house arrest. The monks carried a large yellow banner that read: "Love and kindness must win over everything.

The support of the monks was key in the protests.

In our country the monks are the highest moral authority. When the monks take the leading role, the people will follow," said Soe Aung, a spokesman for the National Council of the Union of Burma, a coalition of opposition groups based in neighboring Thailand.

So what does this have to do with state capitalism? The answer is here: "The protests began on Aug. 19 as a movement against economic hardship, after the government sharply raised fuel prices, increasing the overall cost of living."

So, again, "what has this got to do with state capitalism"? Why aren't these just more socialists calling for state intervention to provide for people when the market fails? Because it is the rising fuel prices that was the trigger for the protests, and it is in the fuel prices that the hand of the corporate state is most evident:

Fueling the military junta that has ruled for decades are Burma's natural-gas reserves, controlled by the Burmese regime in partnership with the U.S. multinational oil giant Chevron, the French oil company Total and a Thai oil firm. Offshore natural-gas facilities deliver their extracted gas to Thailand through Burma's Yadana pipeline. The pipeline was built with slave labor, forced into servitude by the Burmese military.

The original pipeline partner, Unocal, was sued by EarthRights International for the use of slave labor. As soon as the suit was settled out of court, Chevron bought Unocal.

Chevron's role in propping up the brutal regime in Burma is clear. According to Marco Simons, U.S. legal director at EarthRights International: "Sanctions haven't worked because gas is the lifeline of the regime. Before Yadana went online, Burma's regime was facing severe shortages of currency. It's really Yadana and gas projects that kept the military regime afloat to buy arms and ammunition and pay its soldiers."

The U.S. government has had sanctions in place against Burma since 1997. A loophole exists, though, for companies grandfathered in. Unocal's exemption from the Burmese sanctions has been passed on to its new owner, Chevron.

Rice served on the Chevron board of directors for a decade. She even had a Chevron oil tanker named after her. While she served on the board, Chevron was sued for involvement in the killing of non-violent protesters in the Niger Delta region of Nigeria. As in Burma, Nigerians suffer political repression and pollution where oil and gas are extracted, and live in dire poverty. The protests in Burma were actually triggered by a government-imposed increase in fuel prices.

In addition to oil and fuel, however. 16 percent of all of Burma's exports go to the US. Most of these are apparel, clothing etc. exports of which greatly increased during the 1990s, growing 272 percent since 1995. 80 percent of all exported apparel from Burma goes to the US, bought by companies such as Adidas, Kohl’s, Warner Bros., Bugle Boy, Jordache, and Nautica, a consortium of low-cost-clothing providers.

Note, however, in the above quote, the mention of forced labour. This reminded me of an interesting article in Journal of Libertarian Studies a while ago. Ellennita Meutze Hellmer restated the typical free market economic argument against critics of sweatshop labour, against those that demand that companies improve working conditions and wages in poorer parts of the world (an excellent summary of the argument, in fact, well worth reading). However, she then says

Given these points, many observers —especially libertarians— tend to view the actions of such student organizations as USAS as actions arising from an ignorance of basic economics (e.g., Block 2000). However, it is not necessarily correct to entirely dismiss the sense of injustice felt by these groups. Although these organizations may be misguided in only attacking the wages paid by corporations, the claims of injustice are not always fictitious, not by a long shot. In some countries, such as Burma/Myanmar, workers are forced by the state to work in miserable manufacturing jobs for powerful multinational corporations (The Economist 2000; Amnesty International 2004).

Hence it is wrong for both vulgar authoritarians to point to the plight of Burma's sweatshop workers as proof that laissez faire free's employers to exploit workers, and it is wrong for vulgar libertarians to try to use free market economic theory to defend the low incomes and poor working conditions of those workers. As Hellmer went on,

a number of other grassroots organizations, including the Free Burma Coalition, Global Exchange, and the Campaign for Labor Rights, have campaigned in the past to use the force of the state to end the importation of apparel made in Burma. Generally, reasons for concern cited are the usual anti-sweatshop rhetoric, most notably contempt for corporate profits. For example, a study by the National Labor Committee (NLC) concerning the source of NBA hooded sweatshirts manufactured in Burma reports that garment workers’ wages are as low as 7 cents per hour, and that the workers in Burma are paid just 4 cents for each NBA hooded sweatshirt they
sew; their wages add up to less than one-tenth of 1 percent of the NBA’s $60 retail price for the garment.

Sadly, however, the NLC and most other organizations miss the linchpin in an attack on the Burmese system of manufacturing. Mentioned (very briefly) in this report is the fact that merely questioning factory conditions can result in imprisonment. This last fact is reasonably well-documented but tragically far from the ony individual
liberties violation that is a way of life in Burma. However, it is brushed over by an organization that claims to care for international labor rights. The truth is that the military regime of Burma abducts its own citizens and forces them to work in factories owned by multinational corporations. Often, the laborers are political dissidents or petty thieves, but the criminality requirement is a mere formality.
Many innocent people, as well, are forced to work in the factories as well, bringing the number of slaves to a total of 800,000 (The Economist 2000). These forced laborers toil all day in dangerous and disease-ridden conditions under the gaze of armed guards. Often, they are chained together for months at a time. Those who refuse to work are beaten; thousands are raped or killed (Amnesty International 2004). The U.S. and the international community have imposed sanctions on Burma, but the regime and the state-dominated economy continue to thrive.

In this case, it is clear that many of the economic objections made by free-market defenders do not apply. The condition of slavery prevents many of the workers from pursuing better jobs, even when manufacturers move to the country to take advantage of the cheap labor. According to capitalist theory, the high profits made by corporations that manufacture their clothes in less-economically developed nations attract more entrepreneurs who want to further increase their profits, and these new entrants into the Burmese manufacturing market then have to bid up wages in order to entice workers to work for them. However, this logic only applies when workers are free to choose which jobs to work and receive the benefit of their productivity in the form of wages, which is not always the case in Burma. Here, the government is often paid by the multinational firms in order to utilize the labor of the prisoners. In such a situation the bidding up of the price of labor does not affect the incentives of the prisoner-workers. Rather, correct economic reasoning suggests that the politicians would respond to the increased demand for their cheap workers by raising the price that they (the government) charge for the labor. The upward movement in prices in turn provides the ruling classes with an incentive to enslave even more workers, ceteris paribus. As long as this upward movement in the price of labor allows corporations to maximize profit, they will continue to locate manufacturing in this nation, and this will lead, in a truly vicious circle, to still more enslavement of the population and little increase in
the standard of living for the impoverished worker.

In the light of this, government responses to the protests can be seen to be benefiting the corporate allies of the Burmese state. And those responses have been harsh:

In the pre-dawn hours Wednesday, military vehicles were patrolling the streets using loudspeakers to blast the warning: "We have photographs. We are going to make arrests!"

Shari Villarosa, the acting U.S. ambassador in Burma, told The Associated Press that military police were pulling people from their homes in the middle of the night and citizens of Burma's largest city were terrified.

"From what we understand, military police ... are travelling around the city in the middle of the night, going into homes and picking up people," she said.

CTV's Paul Workman, reporting from neighbouring Thailand since journalists are now banned from entering the country, said several young monks had made the escape across the border, telling horrific stories of the violent crackdown.

"They witnessed of course people being beaten up and arrested and had come across the border for safety, although they say they do want to go back," Workman told CTV Newsnet.

"But they had certainly come because they wanted to get out of Burma for at least a period of time and were being given some refuge in that part of Thailand."

and

A SENIOR Burmese intelligence official claims thousands of protesters are dead and the bodies of hundreds of executed monks have been dumped in the jungle.

After defecting from the military junta and fleeing to the Thai border, Hla Win told a reporter from London's Daily Mail: "Many more people have been killed in recent days than you've heard about. The bodies can be counted in several thousand."

The horrific details emerged as Burma's top general continued to snub the UN's peace envoy, who is in Rangoon on a mission to convey the world's outrage to the junta.

With protests quashed and many monasteries empty, fears are growing for those who have disappeared into Burma's grim jails.

Observers say many detainees have been taken to the city's notorious Insein prison, the Government Technological Institute, the police battalion number seven compound, the Kyaikkasan racetrack and possibly elsewhere...

A Swedish diplomat told the Daily Mail of more reports that monks had been tortured and killed in large numbers.

"We were informed from one of the largest embassies in Burma that 40 monks in the Insein prison were beaten to death today and subsequently burned," the diplomat said.

At least there will be more cheap slaves for multinational corporations then!

The proper libertarian position on this sort of thing is plain, and it is not the vulgar libertarian apologetics for the exploitation of the Burmese. As Brad Spangler has put it:

What you might not be aware of is that oil companies Chevron and Total are business partners with the Burmese state. These enterprises are complicit in propping up a tyrannical regime. Agorists recognize that, like most of the corporate dominated “white market” economy, the source of their wealth is not really production and exchange but subsidies, sweetheart deals and generally cozy relationships with the bandit gangs more commonly referred to as “governments”...

Chevron and Total are complicit in the atrocities in Burma via their relationship with the Burmese government. This constitutes an active disregard for the rights of the Burmese, rather than the merely apathetic passive disregard of the average person who feels to overwhelmed with the challenges of day to day life to pay attention to such things and is not directly involved in the first place. Chevron and Total, by means of their business partnership with the Burmese government ARE involved.

It is my opinion that this active disregard rises to a level sufficient to nullify corporate property claims, at the very least until such time as Chevron and Total sever all ties with the Burmese government.

Brad concludes from this that "If I were on a jury, as a matter of moral conscience I could not vote to convict anyone of a property crime involving purported property of Chevron or Total — from petty shoplifting through multi-billion dollar embezzlement and including destruction of property where no egregious risk to others was created by the destructive act." I'm personally not certain that this would be appropriate: The petty theif and shoplifter stealing from Chevron or Total is not a victim of them. Rather, I suggest it would be much more appropriate for the workers, the slaves that the Burmese state forced, in exchange for bribes, to work for these companies and others, to rise up and seize those companies for themselves. They built them, after all.

In the meantime, we might be able to use our purchasing power, or, rather, non-purchasing power to punish those companies supporting the Burmese military Junta with a boycott.

More on Anarchism and selling out: Hayek on the role of libertarian anarchism:

2007-10-12T21:59:00.000Z

Whilst constructing my previous entry I was reminded of a quote from Hayek. Hayek's point, I think, was that libertarianism (he, and Friedman, said liberalism), in order to become successful they should learn from the socialists. Socialism has been all too successful (don't believe me, look at Marx's 10 "short term goals" in the Communist Manifesto, scroll down, and see how many are in place, or check out the appendix in Friedman's Free to Choose where he shows how much a 1930's platform for the Communist Party is already in place by 1980). Hayek suggests that a reason for this is that whilst, via the Fabians and the like, socialists have accepted pragmatic and gradual reform, socialists have also been able to hold up a vision of utopia, a reason to get excited about the project, a future socialist-communist society. Inspired by this, Hayek wrote

We must make the building of a free society once more an intellectual adventure, a deed of courage. What we lack is a liberal Utopia, a programme which seems neither a mere defence of things as they are nor a diluted kind of socialism, but a truly liberal radicalism which does spare the susceptibilities of the mighty (including the trade unions), which is not too severely practical and which does not confine itself to what appears today as politically possible… Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our livliest minds, the prospects of freedom are indeed dark. But if we can regain that belief in power of ideas which was the mark of liberalism at its best, the battle is not lost.

(Studies in Philosophy, Politics and Economics, p194)

It could be the case that anarcho-capitalism serves this purpose.

Does Britain Need a Libertarian Party?

2007-10-12T21:35:00.000Z

I’m going to be controversial. Controversial for a British libertarian, that is. Whilst the generally accepted view, insofar as there is a generally accepted view, in the Libertarian Alliance, is that Britain does not need a Libertarian Party, I will answer the above question in the affirmative. As I see it, there are a number of problems that generally cause British libertarians to be sceptical of the merits of a Libertarian Party of Britain. These include, but are not limited to, the disaster of the Libertarian Party of the United States, the acceptability of voting for radical libertarianism, and then the concerns that libertarianism is too radical to stand a chance at winning support, or that libertarians will have to “sell out” in order to win support.

One response to a number of objections would be to explore what a Libertarian party would be for, what purpose it would serve. Critics of the suggestion worry that, like the US LP, it would stand no chance of electoral success without drastically watering down policy recommendations. On the concern of watering down policy recommendations, I shall return to this later, but on the lack of electoral success, that issue maybe misjudges what a Libertarian Party should be for. In my opinion, the primary end that would be served by establishing a UK LP and campaigning in elections is not electoral success, but publicity. Campaigning and running in elections allows Libertarians to gain publicity, and allows libertarian critiques of existing government publicity to reach a wider forum. So, in the end, it doesn’t matter that the LP will not be winning seats in local or central government. What matters is that libertarianism, and the libertarian outlook will be reaching a wider audience.

Brian Doherty, in his recent history of the movement, observes, only from an American context, that British libertarian pessimism is justified, as “What the government takes, what it presumes it can regulate, has been getting larger, not smaller.” Couple this with the developing hegemony of personal helplessness and irresponsibility, reflected in an increasing acceptance of a nanny state that controls our health and choice “for own good” because it is increasingly accepted that we can’t do it ourselves. I am reminded of John Hurt’s words towards the end of the film V for Vendetta, as his dictator character faces an impending anarchist uprising. Hurt’s character says,

What we need now is a clear message to the people of this country. This message must be read in every newspaper, heard on every radio, seen on every television…. I want this country to realise that we stand on the edge of oblivion; I want every man, woman and child to understand how close we are to chaos; I want everyone to remember WHY THEY NEED US!

The word’s of Hurt’s character are the words of a dictator who realises that his last chance of retaining power lies in inculcating and building the fears of the public and then convincing them that salvation lies in the arms of the state. The scenario is frighteningly close to home, as our own government is feeding off a “State of fear,” with obesity crises coupled with “size zero” anorexia pandemics, coupled with passive smoking, global warming and environmental destruction, terror over fatty foods, even willingness to accept alcohol prohibition. The message is “read in every newspaper, heard on every radio, seen on every television,” that in every aspect of our lives there is a looming crisis that can only be solved by our benevolent rulers.

A pessimistic outlook indeed. Given the level of ruling class propaganda, especially distributed at the hands of the openly biased state propaganda engine that is the BBC, any efforts that libertarians can take to publicise our views should be seized, but beyond this, being able to put convictions into practice is needed. One thing is plain: We cannot rely on the Cameroon party now masquerading as modern Conservatism. This is a guy who refused to even consider a fairly reasonable program of tax cuts, advocates green taxes, flip flops on fighting the growing EU “evil empire” and thinks crime should be fought by “hugging hoodies”! There is absolutely no hope for libertarianism from the Tories who want to continue Blair’s terrible legacy. Of course, there is always UKIP, but what why would libertarians who complain about a Libertarian Party lack of electoral success then turn to UKIP?

I suggest that people seeking alternatives to the politics of the status quo are disenfranchised by mainstream politics. There is an entire position that goes entirely unrepresented, a more or less libertarian position that I suspect is held by some people out there, and this unrepresented position provides us with a target we can aim at to market libertarianism, to market the idea that life isn’t a perpetual crisis that can only be solved by an ever growing government. Doherty asks us to picture a person. This person has a rough, vague idea that people ought to be free to do as they choose so long as they don’t harm others, embraces a tolerant, live-and-let live world view. This is also a person that grew up after the fall of the Berlin wall, and so knows that central economic planning leads to “an ugly situation, a poor decrepit mess that people are willing to risk being shot to escape,” and so to an appreciation for the market economy. Such an economic position may endear him to the Republicans in a US context, or Conservatives in the UK.

However, our person is a young adult, and doesn’t want to push people around in affairs he believes are their business, and none of his. He doesn’t want to lock people up for what they smoke, or see people treated differently under the law because they are gay. On top of this, he may also he may also oppose Republicans for their bellicose foreign policy.

So here we have a liberal, tolerant person, opposed, at least loosely, to an interventionist foreign policy, and in favour, at least loosely, of free markets. So where do we place him? It is reasonable to place him amongst libertarians, at least insofar as they are summarised by the slogan, “socially liberal, fiscally conservative.” Doherty continues

So what are you? You may start thinking of yourself as a libertarian. Even in right-wing circles, libertarianism has maintained a mostly admirable cred that pivots between edgy and geeky. Libertarians do enjoy their badboy reputation, especially among conservative ranks, for taking this personal liberty thing as far as it can go. As an old movement joke goes, “you libertarians are the types that would allow fornication in public parks!” “What do you mean, public parks?”

But this hypothetical young libertarian may think that certain regulatory agencies, such as the FDA and the Justice Department’s antitrust division, ought to exist, even if they are overly active and not always overly smart. Just as those who remained true to liberal principles of the nineteenth century had to change their name to adjust to changing fashions in the meaning of the term “liberal,” so might libertarians of the Rothbard variety have to reconstitute themselves as “classical libertarians” in the twentieth century.

(i)

Excuse the lengthy quotation, but this hypothetical young libertarian is our target audience, and yes these people exist, even in the UK. This is not a libertarian who will be persuaded immediately (though eventually, I hope) of the virtues of anarcho-capitalism. Launching into immediate accounts of how all taxes should be abolished and how police, courts, and laws can be provided, like any other service, better by the free market will simply put them off. These anarchist views are views you and I may hold, but will just turn our target off. This is not a fellow who may be turned on to libertarianism when given a copy of Rothbard’s For a New Liberty, but may be inspired by watching or reading Rose and Milton Friedman’s Free to Choose. And, of course, a proposal to enact Free to Choose may not turn you and I on as much as a proposal to enact For a New Liberty… but Free to Choose stands a far better chance of being enacted, and would it really be that bad? (ii)

But does this constitute selling out? No, it does not. I am a Rothbardian, and would like to see the complete abolition of the state, in all its forms. But Rothbard himself advised (iii) against letting the perfect become the enemy of the good. He differentiated between two positions that would harm the cause of liberty - left wing deviancy, and right wing deviancy. The right wing deviants are those that hold to an extreme gradualism. They have their program for destatisation, and want it accomplished in that order. In clinging to that particular order - first abolish X, then Y, then Z, the right wing deviant ends up becoming an apologist for Y and Z until after X has been abolished - a statist, as it were. In the end, they also, in trying to play the pragmatist, in actual fact fail to be the realist. Pessimism for libertarians in today’s climate is realistic - chances at reducing the size of government will be few and far between. Therefore any chance should be seized at reducing government. Frankly someone who rejects any of these few and far between chances at reducing government simply because abolishing that program or department doesn’t fit with his preferred schedule is, frankly, a traitor to the cause.

But, on the other hand, we have the left wing deviants. These are the guys that reject a five percent tax cut because it is not a one hundred percent tax cut. They are the guys that let the better become the enemy of the good. Rothbard suggested that there is a better strategy for us: Remind everybody that what we want is the total abolition of the state, complete security for person and property, and that any reduction offered us just doesn’t go far enough, damnit… but accept the reduction anyway. Never turn down a tax cut, but never let people think that it is enough. Anarcho-capitalism serves a purpose. A Canadian individualist anarchist, Larry Gambone, once suggested that we could look at the issue using the analogy of a labour dispute. You are a union rep, going to the bosses. You want a ten percent pay rise. So you demand a twenty percent pay rise. You then, appearing to struggle, let the bosses bargain you down to the rise that you were perfectly happy accepting in the first place. This doesn’t mean that you would not have preferred a twenty percent rise, but acknowledges that you are happy with a ten percent rise. Likewise, demand anarchy, and we can let the statists bargain us down to a night-watchmen state - and we have won a victory.

Radicalism still has its place, then. But talk of anarcho-capitalism will turn our libertarian looking for a home away. No state is better than less state, but less state is better than what we have now - so radicals would be betraying the cause if they turn down less state.

So, in conclusion, I think that there is a case for saying that Britain needs a Libertarian Party. Having a Libertarian Party would provide publicity for libertarian ideas. It would bring to wider attention libertarian critiques of the status quo, and libertarian alternatives. The argument that libertarians don’t stand a chance of electoral success falls flat, because the primary purpose of such a party would be to use the electoral process to promote libertarianism, not to win power. The complaint that libertarianism is too radical to be a realistic alternative fails because, and the argument that libertarians must abandon radicalism if they hope to win power, both fail, because a radical vision can be sustained whilst moderate achievements are called for and achieved. And there is hope for a Libertarian Party because there is a disenfranchised constituency for moderate attempts to reduce state power.

Bibliography

James Bartholomew, The Welfare State We’re In, 2004, Politico’s Publishing, Great Britain

Brian Doherty, Radicals for Capitalism: A freewheeling history of the modern American libertarian movement, 2007, Public Affairs/Perseus books Group, USA

Murray N. Rothbard, For a new Liberty: The Libertarian Manifesto, 1996, Fox and Wilkes,
________________________________________________________________________________
(i) Doherty, 2007 p574, and pp585-586

(ii) I even have a policy recommendation. Our moderate libertarian without a home is likely, like Friedman, not to want to end complete assistance to the poor by the state, out of tax revenue. But does that put him beyond hope? Of course not. We just face him with this question: Why have state hospitals or state health care? Ignoring the important and valid question of whether taxation is theft or not, crucial to talk of "socialised health care" is the question of nationalisation of providers, and having the state build and fund hospitals, and allow their use, free at the point of access? Why is this needed, if at all?

The most obvious answer that people would tend to come out with is "well, how could poor people afford hospital stays and treatment if the state didn't fund hospitals and allow free treatment?" However, this means that providing hospitals is a form of redistribution, taxing the rich and giving to the poor, only giving to the poor in the form of available hospital coverage if they need it. If this is the case, then, the actual redistributionist answer is no answer at all - since state provision of hospitals is not necessary for such redistribution to occur. The state could simply tax the rich and either give the poor hospital vouchers backed by the tax revenues, or divide the revenue and pass it out in cash form on the basis of how poor the recipient is. The redistribution would be accomplished without the need for state run free hospitals - they could be commercial enterprises, competing with each other, and the poor would simply back their own funds up with the vouchers or the cash given to them by the state, spending it at the hospital of their choice, or on the insurance policy by the insurance company of their choice.

So why have state hospitals?

The advantage of the above scenario is that you can have a complete free market in health care, with just about any method of provision, from for profit corporations, to consumer’s co-ops, friendly societies, even some Kropotkinist communal system, providing health care. Consumers of health care can chose the service they prefer, orthodox or holistic, whatever. There could be a functioning price system, responding to changes in supply and demand, to co-ordinate provision, and competition to keep quality up and prices down - and yet the rich are still taxed to pay for the poor. Such a policy may even be politically attractive. How many people would prefer to use some other institution than that provided by the state if they could afford to do so? An answer to that may be shown from simply looking at how many people presently pay twice for their health care and add private services to their consumption. In 1955 only 1.2 percent of the population went to the expense of buying private medical insurance. Five years later 1.9 percent did. For every five years interval, the proportion of the population 'paying twice' significantly increased until 1990, when it reached 11.6. It did not increase over the next decade may lead people to assume that a plateau had been reached, but that isn't true: There were other ways that people were resorting to private-sector health care. Company health insurance plans kept increasing the numbers covered in the 1990s. James Bartholomew writes,

Some people have more than one plan so we must be careful of double counting. But the Family Resources Survey of 1989/90 showed that the proportion of the population with insurance or a cash plan or both had reached 19 per cent. If the trend has continued to the present, one in five of the population now finds the service offered by the NHS so 'incomplete' that they feel must take out some form of private insurance.

On top of that, as insurance has become more expensive, partly due to unfavourable tax treatment, people have turned instead to direct payment - or 'self-pay' - for medical services. Between 1992 and 2002 the proportion of self-pay treatments in independent hospitals jumped from 13 percent to between 22.5 and 25%.

If that is a good indication, it means as much as 5 per cent of the population self-pay and a full quarter now use private medical care for some or all of hospital treatment.

Considering how expensive it is to 'pay twice', this is a damning indictment - by the customers themselves - of the NHS.

(Bartholomew2004, pp114-5)

We could scrap the NHS, give back half the money spent on it in tax cuts, and use the other half to hand out regular cash payments, maybe proportional to income, maybe not (concessions to egalitarians are politically attractive). The sheer number of people abandoning the NHS or supplementing it with private services proves that there are likely to be huge numbers of people out there who would prefer to go private if they could afford, it, and so giving them their taxes back to spend on health care they prefer would afford them the chance.

Moderate, realistic, and reduces government. That is how libertarian policies could be.

(iii) Rothbard, 1996 (1978, 1973), chapter 15 “A Strategy for Liberty.”

Confirmation?

2007-09-16T19:00:00.000Z

It looks like I was right.

There is a run on the Northern Rock bank. The wave of ressession is cresting.

THE NATIVES ARE GETTING RESTLESS

2007-08-16T22:11:00.000Z

The Daily Mail has taken the opportunity to bash immigrants again, as "Foreigners commit 20 per cent of crime in London, say police," they report. Naturally, their "solution," is implicit in the quote from the torty immigration minister Damien Green, "This is a fairly shocking side effect of the lack of control of our borders and the sheer numbers of people coming to Britain." In other words, restrict the freedom of innocent people trying to immigrate, rather than provide better policing to protect us against criminals, wherever they may come from.

To get a view of how biased this article is, try it from the other angle. "Foreigners commit 20 per cent of crime in London, say police," is another way of saying "Natives commit 80 per cent of crime in London, imply police." Thats a different spin, is it not?! Or better, "you are four times as likely to be a victim of a criminal who is a native British citizen than a foreigner in London." How's that? The figures are precisely the same, but now who does it suggest we should be afraid of? Not immigrants!

THE "NIGHTMARE REALITY OF GLOBAL CAPITALISM"

2007-08-16T21:38:00.000Z

The World Socialist Web Site has an article reporting a recall of goods by the enormous multinational toy manufacturer, Mattel. This publication has caused discussion over at Liberty Forum, largely to my take on the issue. The WSWS announced that the recall represented "The nightmarish reality of global capitalism." I begged to differ:

The world’s largest toy maker, Mattel Corporation, announced August 14 that it was recalling nearly 19 million toys worldwide, half of them in the US, because of the dangers they pose to children. Some 436,000 toy cars made in China were withdrawn because they are covered in lead paint, while more than 18,000,000 other toys, also made in China, are being recalled because they contain small, powerful magnets that could do great damage if swallowed.

So Mattel identified dangerous products and withdrew them from sale. And this is a bad thing? Surely it would have been bad if it had gone on supplying? Did this company decide not to make a profit, to lose billions of dollars worth of sales by recalling the toys out of its own altruistic interests? Or is it really the case that the need to make a profit means safeguarding the safety of consumers - self-interest in a free market leading to protecting consumers?

Certain vinyl baby bibs made in China are apparently contaminated with lead. Wal-Mart removed the bibs from its stores earlier this year,

Ah, another company puts consumer safety before short term profit. Tell me, where is this "nightmarish reality of global capitalism"?

but they are still on sale at Toys R Us.

So one company does not withdraw the dangerous product and so safeguard consumer safety. May be that explains the facts in this next quote:

Cutthroat global competition prevails in the toy business as in every other. The $50 billion industry has faced a serious challenge in recent years from video games and consumer electronics. At the retail end, numerous specialty chains—Toys R Us and FAO, for example—have suffered losses and closed stores in the face of discount outfits such as Wal-Mart and Target.

Ta dahhhh!!! Thanks to the very presence of "cut throat competition," the firm that does not withdraw the dangerous goods, does not put consumer safety before short term profit, loses out to the company that does.

This article is surely about capitalism working, not failing?

Someone responded to my post by raising the concerns for Chinese in Mattel's factories, rather than the issue of poisonous or hazardous goods, quoting extensively from the article:

However, China Labor Watch in September 2005 presented the results of an investigation into conditions at the Kai Long factory in Dongguan, which produces toys for Mattel, among other companies. “Among the report’s findings are work schedules that surpass the legal limit by at least 36.5 hours per week,” said the group, “pay rates as low as only 59 percent of the local minimum wage, unsanitary cafeterias, dorm rooms housing 22 people each, and employees forced to foot the entire cost of their work-injury insurance and, in some instances, lack of insurance of any kind.”

The hourly wage rate is 1.9 yuan, or 23 cents, for both regular and overtime work hours, well below the legal minimum wage. There is no concept of paid overtime in this factory. “Overtime on Saturdays and Sundays is considered regular work time without any additional compensation.”

...

The weekly pay of a worker at the Kai Long factory in Dongguan, which produces toys for Mattel and other firms, is $18.50, or less than $1,000 a year. In 2006, Mattel paid $160,095 alone for Eckert’s use of its company airplanes.

Now, personally I don't get any more money for working "overtime" or Saturdays and Sundays either, so, big deal. But beyond this, the claims about paying less than the minimum wage (even if such a thing were bad) are quite simply false. As I responded to this detractor:

"The hourly wage rate is 1.9 yuan, or 23 cents, for both regular and overtime work hours, well below the legal minimum wage"? Excuse me if I am a little suspicious about these figures.

The legal minimum wage in Shenyang, capital city of northeast China's Liaoning Province, is "320 yuan (about US$38.6) per month, an increase of about 30 percent from the former 240 yuan (almost US$29)." source. So workers there would have to work 167.82609 hours a month to earn the minimum wage in that province. Assuming a month is 30 days, there are 720 hours in a month. Thats over four times as many hours as workers need to work to raise the monthly minimum wage. The workers would earn their monthly minimum wage in seven 24 hour days.

Elsewhere in China, "Three cities in China's booming south have already introduced a minimum monthly wage. In Shenzhen and Zhuhai, it is $61, while in Guangzhou, it is $43." Source. $23 an hour is almost $25, an easier figure to deal with, since it is about a quarter of a dollar. That means four times 43 are the number of hours a month needed to work to earn the minimum wage in Guangzhou. Hell, I work only slightly fewer hours than 43 a week (I do about 38), and am paid on a four weekly basis.

However, my opponent quite correctly pointed out that my figures were dated, as opposed to his own:

Yes, the source of those numbers seems to be a group called Chinese Labor Watch based on a 2005 study:

[url=http://www.chinalaborwatch.org/The%20Toy%20Industry%20in%20China.htm]http://www.chinalaborwatch.org/The%20Toy%20Industry%20in%20China.htm[/url]

By contrast, the source you offered was published in September 1993, and was a short article about several provinces adopting laws for State employees.

Chinese Minimum Wage

Published: September 23, 1993

China is drafting a nationwide minimum wage law for state employees, the official China Daily reported today. The move comes as private enterprises have been giving urban workers increasingly higher wages to meet inflation. Three cities in China's booming south have already introduced a minimum monthly wage. In Shenzhen and Zhuhai, it is $61, while in Guangzhou, it is $43.

He asked,

Do you think that in a place that has experienced the kind of growth that China has experienced, it's possible the minimum wage has increased in 14 years?

Monthly minimum wage in the relevant place is $40 a month, so far as I can tell from this. That means that at 23 cents an hour, it takes 182.6087 hours to earn the monthly minimum. Thats about 42 hours a week. Still not that bad. If you took the monthly minimum wage and divided it by the number of hours in a month, then the result is 0.055555556 cents, nearly a fifth of what these Mattell factory worker gets an hour.

Somebody else, in another debate, voiced another popular concern against global capitalism. They said,

Worldwide free markets will lead to a lower standard of living in the west, while raising standards of living in poorer countries.

I'd rather keep my standard of living, and block imports from countries that produce their products using very cheap labour (and thus shrink their market). I would rather pay a bit more for locally made products, than support foreign industries which will end up killing industries in my country that can't compete with the cheap producer nations.

The real world, however contradicts his claims,

Between 1965 and 1998, the average world citizen's income practically doubled, from 2,497 to 4,839 dollars, corrected for purchasing power and in fixed money terms. This has [i]not[/i] come about through the industrialised nations multiplying their incomes. During this period the richest one-fifth of the world's population increased their average income from 8,315 to 14,623 dollars, i.e. by roughly 75 per cent. For the poorest one-fifth of the world's population, the increase has been faster still, with average income rising during the same period from 551 to 1,137 dollars, i.e., more than doubling. World consumption is more than twice what it was in 1960

Johann Norberg, [i]In Defense of Global Capitalism[/i] emphasis mine.

So, whilst the poorer people of the world have got better off, the richer have too - contrary to my opponent's claim that the poor could only get better off at the expense of the latter.

One comprehensive and frequently quoted study of the effects of trade is that by Harvard economists Jeffrey Sachs and Andrew Warner. They examine the trade policies of 117 countries between 1970 an 1989. After checking for other factors, the study reveals a statistically significant connect between free trade and growth which they are unable to find, for example, between education and growth. Growth was between 3 and 6 times higher in free trade countries than in protectionist ones. Open developing countries had on average an annual growth rate of 4.49 percent these two decades, while closed developing countries had only 0.69 per cent. Open industrialised countries had an annual growth of 2.29 per cent, while closed ones had only 0.74 per cent.

It has to be emphasised that this is not a matter of how much countries earn by others being open tot heir exports, but how much they earn by keeping their markets open. The results show that the open economies had a faster growth rate than the closed ones every year between 1965 and 1989. No free trade country in the study had an average growth rate of less than 1.2 per cent per annum, and no developing country had a growth rate of less than 2.3 per cent! in all regions, a country's free trade policy led to an acceleration of growth after a short time, even in Africa. The positive results of free trade were also apparent in the short term. Countries which opened up their economies temporarily and then closed them again showed faster growth during the open period than otherwise.

Now were slower growth and reduced investments a way for the protectionist economies to purchase more stability. On the contrary, Sachs and Warner showed that closed economies were far more liable than free trade economies to be affected by financial crises and hyperinflation. Barely 8 per cent of the developing countries judged open from the 70s onwards suffered crises of this kind during the 80s, whereas more than 80 per cent of the closed economies did so.

Same source, pp122-3

So why care about growth?

It is sometimes argued that growth only benefits the rich, while the poor of society lag behind. This is a curious notion. Why should poor people benefit less than others from society growing richer? Two World Bank economists, David Dollar and Aart Kraay, studied 40 years' income statistics from 80 countries to see whether this was really true. Their studies show that growth benefits the poor just as much as the rich. With 1 per cent growth the poor increase their income on average by 1 per cent, with 10 per cent growth they raise it, on average, by 10 per cent. Not always and not everywhere, there are exceptions and variations - but on average. This finding tallies with a long line of other surveys [quote from a footnote: "Report corroborating these findings include Gallup, Radelet & Warner 1998, suggesting that in proportional terms the poor actually benefit more from growth than other groups], whereas studies suggesting the contrary are very hard to find.

This makes growth the best cure for poverty.

So, open markets mean higher growth, and higher growth means higher incomes for all. That means that, contrary to my opponent's claim that accepting imports allows others to grow rich at our expense, growth would increase if we allowed them, and, because growth would increase, incomes would.

SMOKING IN A PUB IS A VICTIMLESS CRIME

2007-08-04T20:35:00.000Z

The first prosecution has occurred under the new smoking ban. More over, it is a political arrest. The BBC report that "Mr Howitt has been a vocal critic of the smoking ban and has been openly defying the legislation since it came into force on 1 July." And now, for letting people use his property on his terms,

Hamish Howitt faces a fine of up to £2,500 for defying the new laws and allowing his customers to light up inside his Happy Scots Bar.

Officers from Blackpool Council handed out three £50 fixed penalty notices to smokers over the weekend.

My claim that Smoking in "public places" (private places, really) is a victimless crime will not be accepted by what the BBC claim are the 80% of people in this country that support the ban. They have almost all been convinced that passive smoking is a killer, and think that fact justifies the ban. Of course, the way the media reports these things doesn't help. I saw a TV news broadcast, on ITV, on July the first when the reporter went into some cafe and said, "so and so who works here is 25% more at risk of catching lung cancer." Presumably this was because people smoked in the cafe.

I remember thinking "25% more" than what? 25% more than anybody else? Including smokers? How much is 25% more? If I have a one in a million chance of catching lung cancer, and that risk increases by 25% I still don't really have a high chance of catching lung cancer, do I?! A writer on Liberty Forum flagged me to an article in the American Journal of Epidemiology, that said,

We found a rather remarkably low SMR (standardized mortality ratios) for lung cancer among female cabin attendants and no increase for male cabin attendants, indicating that smoking and exposure to passive smoking may not play an important role in mortality in this group. Smoking during airplane flights was permitted in Germany until the mid-1990s, and smoking is still not banned on all charter flights.

So, to what extent one can be a victim of public smoking is questioned in this way.

However, the normal definition of a victimless crime doesn't require that actual physical or mental harm come to those that perpetrate in them. The normal approach is whether there has been a rights violation, or whether the harm is consented to.

Imagine that I set up a cafe. I posted on the doors, "smoking is tolerated in this cafe. Beware, passive smoking may cause cancer. Patrons enter at their own risk." Imagine I put a similar notice on application forms and contracts for employment.

In this case, everybody has been warned that smoking goes on there. Nobody that goes in doesn't know smoking goes on. Nobody that works there doesn't know that smoking goes on. Everybody knows there is smoking, and knows the risk. If they choose to go in, surely they subject themselves to the smoke voluntarily, with fully informed consent.

If so, then how does the this fact change from pubs in the real world? There quite simply are no people who did not know that pubs were smoking environments. Everybody made informed consent upon entering. They chose to passively smoke.

Therefore smoking, actively and passively, is a peaceful activity between consenting adults, and like all such acts, should be legal.

MORE ON MONEY

2007-07-08T11:16:00.000Z

Current interest in the nature of money, and its benefits, have lead me to be certainly concerned about the state of the economy. As I said, one advantage of moving away from barter and adopting a medium of exchange is that many of the goods we produce and so would barter with decompose and go mouldy over time. Hence there is an incentive to trade them for a good that allows us to preserve value, so that we can trade it later without making much loss. Gold is such a commodity.

This, however, is undermined by inflation, since increasing the supply of money, the medium of exchange, in relation to the supply of goods it can be bought with steadily floods the market with money, and so reduces its value steadily over time. Due to this, the role of money as a preserve of value is damaged.

Perhaps illustrating this, by looking at inflation in the US, Lew Rockwell wrote,

Since 1990, we've heard about what a low rate of inflation we've experienced. In some ways, it might appear low compared with what we experienced in the late 1970s. The dollar of 1976 was worth only 63 cents by 1981, once the Nixon-Carter inflation had done its work.

The cultural and economic consequences were devastating. A generation was punished for having saved and accumulated capital. Debtors were rewarded, with the government being biggest debtor, of course.

This period of our financial history was called the Age of Inflation. But did it really come to an end? The problem is that we've continued to live through the late 1970s, just stretched out over a greater period of time. The dollar of 1990 is today worth 64 cents. And yet we call this a low rate of inflation, though the same level of devaluation was accomplished.

But what has been happening in the UK? Jan Lester reported:

M4 has accelerated to 14.4% for the year since October 2005[i] (price inflation is always cited instead by the state because that is masked by increased production; but discussing only price inflation is like discussing only the visible part of an iceberg).

So the money supply in the UK has been increasing.

The harm to our ability to save is not the only, and possibly not even the worst aspect of government intervention in the money supply, however. Consider the current apparent consumption/saving ratios:

We Brits have all but given up on saving for the future. That's what emerges from the latest data from the Office of National Statistics (ONS). Indeed the savings ratio (which measures the proportion of our take-home pay that we save) has collapsed to a level not seen in almost fifty years.

For the record, the savings ratio now stands at 2.1%, which is its lowest level since the beginning of 1960. In other words, of every £50 that we receive in take-home pay, we're saving only a quid, which is, quite frankly, a national disgrace!

Add to this the level of debt, and so expansion of credit in the UK.

PERSONAL debt in Britain has reached £1.38trillion because of soaring loan rates, senior Tories warned last night.

That is the equivalent of nearly £55,000 for every household in the country, and twice the level of most European nations.

Up to nine million Britons now confess to having a serious debt problem.

The spiralling level of household debt – which has trebled in real terms over the last 30 years – was revealed by research from the Conservatives’ Social Justice Policy Group, set up to advise leader David Cameron on tackling poverty and social breakdown.

It is plain that as the money supply has been increasing, British people have been borrowing and spending more, and saving less. What will be the consequence of this? Well, I happened to find, in David Conway's Farewell to Marx, a neat summary of the Austrian Business Cycle Theory:

The possibility remains that capitalism need not be subject to the business cycle. This would be so were business cycles due to wholly avoidable, externally produced interferences with the workings of the market. This is the contention of the Monetary or Circulation Credit Theory of the Trade Cycle first propounded by Ludwig von Mises in the twentieth century. According to this theory, cyclical crises and the depressions that follow in their wake are the inevitable result of preceeding booms. These booms, however, are not inevitable. They are produced by wholely avoidable periods of credit expansion. (Banks expand credit as a result of governments and their central banks purchasing assets and thereby increasing bank reserves.) Banks expand credit by lowering the rate of interest below what is called the natural rate of interest. This is the rate of interest that is determined by the time-preferences of members of society. The time-preference of an individual is the degree to which the indivdiual prefers a good in the present to the prospect of that good in the future. It is supposed that all individuals have some degree of time-preference in that they prefer present goods to the prospect of those goods in the future. The degree to which individuals prefer present to future goods determines the rate of interest which is charged for the use of money in society.

The expansion of bank credit artificially reduces the rate of interest below the natural rate. As a result, it sends misleading signals to business men. Business ventures appear to become profitable that would only be so were members of society to have genuinely reduced their degree of time-preferences. As a result of the artificial reduction of interest rates, businessmen behave as if more had genuinely been saved and become available for investment. Production is expanded in the capital-goods industries. The money invested eventually finds its way through to consumers. Because there has been no reduction in time-preferences on their part, they rush to spend this money in accordance with their unchanged consumption/savings ratios. There is an increase in demand for consumer goods. The capital goods industries find themselves without purchasers of their products. These firms are only able to stay in business by means of the supply of further credit. Banks may continue to extend credit and thereby prolong the boom. But eventually credit expansion must stop, as there are limits to the ability of banks to expand credit. When the expansion stops, interest rates go up and the over-extended capital-goods industries become insolvent. Bankruptcies follow and there are firm closures. This marks the period of depression during which the malinvestments are liquidated. After the structure of production has readjusted itself to the time-preferences of members of society, growth may begin again.

According to this theory, it is credit expansion by the banks that is responsible for the business cycle. By their nature, banks favour expansion of credit since they make profits by making loans. However, there are limits to their ability to extend credit since they must be able to to meet all demands for withdrawals. The business cycle would be eliminated, so the theory says, if either fractional reserve banking were prohibited and there was a restoration of the gold standard or free-banking was established. this is a system of banking in which banks are free to make loans beyond their reserves but are not protected by a central bank from inslovency. To date, governments have been in favour of bank credit expansion since this is a politically expedient way of obtaining revenue other than by the unpopular method of taxation.

It seems to me that everything Conway describes is occurring, and we should expect an oncoming recession. And, of course, capitalism will be blamed. Marxists will talk about the inherent instability of capitalism, of the cyclical "crises of capitalism," whilst more moderate statists will talk about how the collapse just proves the need for the state to intervene to prevent the cycles of boom and bust "inherent to capitalism." But we will know that it is the state, always the state, and its control over our money supply, and that the solution is to get the state out.

Further to this, there is a great documentary related to this at the Mises Institute that I recommend checking out.

MONEY IS GREAT!!!

2007-06-11T20:49:00.000Z

A chap at Liberty Forum, calling himself McCayrow, raised a question that I have found asked fairly often, especially in anarchist and punk circles, about the abolition of money and a return to barter. McCayrow asked,

What do you guys think about the Barter system; can it help to resolve Africa's poverty problems? ps:Your answers will be much appreciated.

Clearly his postscript was false, since he did not appreciate my succinct answer:

No.

He responded, "Could you please be more specific?" So I gave him an explainations about why a barter economy is likely to revert to a money economy to overcome obvious deficiencies in the former. I quite pleased with the response:

OK. Suppose we have a barter economy and I grow potatos. Now suppose that you make wooden furniture. If I want furniture and you want potatos, then well and good, we trade. However, there are a number of problems.

a) What happens if I want furniture but you don't want potatos? Or more likely, I have all the furniture I need, but you need potatos? Barter requires a double coincidence of wants.

b) What happens if you don't just want potatos for your chair, but want meat, some beer, to see a film this month, and to take your girlfriend out on the town. You can't get all these things by just trading with me, or with a beer seller, or with a the cinema owner, etc.

c) What happens if I want you chair now and you suspect you will need potatos in the future, but not yet. If we trade, then your potatos could have gone off by the time you need them.

d) You will not be able to get a decent working prices system: You will be able to tell how many potatos a chair will buy, but not how many beers, or how many trips to the cinema, etc. Without a developed price system it would be impossible for producers to plan production rationally because they wouldn't be able to tell if the demand for their goods relative to other ones would be rising or falling. You could tell, if at one stage a chair gets you fewer potatos, that the value of your chair relative to my potatos is falling, and so it would be better to allocate more of your resources to potato farming, but what of other goods?

Adopting money solves all these problems. In order to solve a) it would make sense for you to trade your chair not for something you want, but for something somebody else wants. In short, you trade your chair for my potatos solely for the purpose of using my potatos to get what you want from somebody else. This means that you would be adopting a commodity to use it as a medium of exchange.

In order to solve b) however, it is undesirable to adopt potatos as the commodity you trade for solely to use that commodity to buy things you want. This is because potatos go mouldy. They fail to serve as a store of value. You need, instead, to be able to transfer for something durable. Hence, so, to avoid a) a medium of exchange is likely to be adopted. In order to avoid b) the medium of exchange will be a durable commidity, so as to preserve value over time.

To avoid c) it is likely that you will trade your chair for a commodity to trade for those of others, and this commodity will not only be durable, but it will be easily divisible (potatos may be good for this, actually). This way you can divide the return you get for your chair between different ends. So, to avoid a) a medium of exchange will tend to be adopted; to avoid b) it will tend to be a commodity that is durable; and to avoid c) it will be tend to be a commodity that is easily divisible.

And lastly, by adopting a common medium of exchange, it is easier to tell what the exchange rate for different commodities is. If everybody bought potatos not just to eat but to trade with, you could tell how many beers your chairs would buy by comparing how many potatos your chair would buy with how many potatos a beer would buy.

Gold is a commodity that has use value, as an ornament. It can thus be used to solve a) since you could use your chair to buy gold, and gold to buy things that those who want gold but not chairs make. It can solve b) because gold does not go mouldy or decay, and so preserves value. Another important feature of gold in this regard is that there is not much of it, and it is difficult and costly to increase the amount of it. This makes it hard to flood the market with gold, which would cause all prices measured in gold to shoot up - inflation. Gold is a safeguard against inflation, to a degree, in this respect. (This is not always true - Gold from the Spanish main flooded from America into Europe and was immediately minted, causing hyper-inflation for centuries). Gold avoids c) because it is easily divisible, and because the supply of it is naturally so low, you don't need to carry around huge amounts of it to buy huge amounts with it.

So money makes us better off. It allows a wider division of labour and allows clearer economic co-ordination.

MINIMUM WAGE REDUX

2007-06-11T20:29:00.000Z

In my last attack on the minimum wage I neglected what I consider to be an interesting argument. It is interesting since I haven't seen it made before, surprisingly, since it is a rather "Austrian" take on the minimum wage. The argument is short and simple:

Wages are a price for labour services. The purpose of prices, in a market economy, is as a means of communication: Consumers can signal to producers when more of something is needed, because high demand relative to supply means high prices; and they can signal to producers that less of something is needed, because low demand relative to supply means low prices. Likewise, producers can signal to consumers that there is a shortage of some good, because low supply relative to demand means high prices.

So, prices are a means of signalling, and wages are prices, meaning wages are a means of signalling. Putting a price floor on labour services, therefore, prevents consumers of labour from signalling that less labour is needed in one sector.

Minimum wages, therefore, cause a misallocation of labour.

TAKING AN INTEREST IN POLITICS

2007-05-17T23:28:00.000Z

I honestly don't care who in Britain wins the next general election. All options would be equally bad. I despise New Labour, and yet the alternatives from within the Labour Party would be worse. The Tories are sickening, absolutely awful. Liberal democrats? Sorry, who...?

So, British politics is not worth dabbling in.

But the US? Well there is always this guy:

Republican Congressman for Texas, and Presidential candidate Ron Paul. And the great thing is that he is running in a party that hates him! The GOP is more scared of Paul than they are of the Democrats! Maybe this is why:

Rudy Giuliani is the leading Republican hopeful, and see how he reacts to Paul's justification for opposing the war! It is hilarious that Giuliani thinks that it is "extraordinary" and "absurd" to think that ten years of bombing Iraq and decades longer of US occupation and intervention in the Middle east could explain why 9/11 happens, when his own explaination is the party line "they hate our freedom"!!!

The Republican party is lashing back, with senior Republicans trying to silence Ron Paul by calling for him to be barred from future debates.

Thankfully Paul refuses to back down:

I doubt he will win, and I doubt that if he does Congress will let him do much. But Ron Paul is stil very inspring!

UPDATE: Nice commentary on the Conservative TV Network Fox's spinning of the second GOP debate and the Paul Giuliani divide:

The Most Evil Policy

2007-05-04T21:56:00.000Z

The minimum wage is one of the most evil policies of the New labour government that I can think of. This is for the simple reason that it harms the poorest, most vulnerable workers in society.

And it is true. The minimum wage causes unemployment. Anybody that denies this should quickly write down why so that they can win the Nobel prize for economics by disproving the most basic concepts of economics. They should also rewrite all the economics curriculums for schools, to stop them teaching all that supply and demand crap.

Simple economics, the laws of supply and demand, tells us that more of a given good will be purchased at a lower price than at a higher price, whilst more of that given good will be produced at a higher price than at a lower price. Raising prices artificially, that is, not in response to an increase in the demand for that good, will cause people to buy less of it. It will also encourage people to sell more of it. Consequently, supply exceeds demand and the market does not clear. As Rothbard explains the following chart:

DD and SS are the demand and supply curves respectively. 0C is the control price and FP the market equilibrium price. At 0C, the quantity demanded is less than the quantity supplied, by the amount AB. Thus, while the effect of a maximum price is to create an artificial shortage, a minimum price creates an artificial unsold surplus. AB is the unsold surplus. The unsold surplus exists even if the SS line is vertical, but a more elastic supply will, ceteris paribus, aggravate the surplus. Once again, the market is not cleared. The artificially high price attracts resources into the field, while, at the same time, it discourages buyer demand. Under selective price control, resources will leave other fields where they serve their owners and the consumers better, and transfer to this field, where they overproduce and suffer losses as a result.

My emphasis. This is basic economics, and yet people deny that minimum wages cause unemployment. If minimum wages do not cause unemployment, then it must follow that it it not the case that people will buy more of a good at a lower price than at a higher one, and the laws of supply and demand are false. Defenders of the minimum wage should publish immediately and expel the nonsense taught in schools.

Of course, they are wrong, minimum wages do cause unemployment. The only way it could not, and the laws of supply and demand be true, is if the national minimum wage is below the level that employers would offer any way - that is, if it is set below the market price. It is possible that such a minimum wage be introduced as a token gesture, but not likely. If I saw you gathering books and old clothes and stuff for a jumble sale, and I said, "I forbid you from selling any of those things for less than £10 each" you would be outraged. You would know that my preventing you offering the jumble at a lower price would mean you not selling it at all. So why defend the same policy when it comes to workers selling their labour?

Among those that defend the proposition that the national minimum wage (NMW) has not been not increasing unemployment is the analyst organisation IDS. In their survey they claim that,

... despite NMW increases running ahead of both inflation and average earnings over the past three years, there has been no negative employment effect. Employment in lower paying sectors such as retail, restaurants, hospitality and leisure has been growing.

Estimates by economists in the mid-1990s that up to 1.7 million jobs would be lost if a minimum wage were to be introduced now look very wide of the mark

One thing well worth commenting on here, is that there are two ways that the argument is confused. Firstly, the minimum wage can cause unemployment without altering net employment, by causing unemployment amongst certain sectors, or classes of employees. That will be examined later. Here I will just note the second objection, though, that the minimum wage can cause less employment, possibly, without anybody losing work or failing to find it as a result. This will be because an employer once able to hire a worker for thirty hours at £4.90 an hour may now only be able to hire the same worker at a hire wage for twenty hours at £5.10 an hour, for instance. Or an employer willing to offer thirty hours of work to a new worker at £4.90 may now only be willing to offer the same worker twenty hours at £5.10. This new worker will be taken out of "unemployment," will not figure in all the government statistics on employment rates, and yet will be employed at lower levels than they would have been had the wage not been artificially hiked by the government.

The IDS survey is directly contradicted by the retail industry itself. The Yorkshire Forward article linked to above, itself reports,

Earlier this month, the British Retail Consortium (BRC) called for a 'fundamental review' of the aims of the NMW, claiming that the proposed increase in October 2006 could lead to around 35,000 job losses in the retail sector and costing businesses an additional £1.13 billion.

The British Retail Consortium itself reports job losses and pins the blame on the minimum wage. Kevin Hawkins, director general of the BRC, says,

Retailers tell us they are being expected to find 2.7 billion pounds extra for wages over just two years. With other costs, including energy prices, rent, rates and service charges shooting up, it's no surprise so many retailers are cutting staffing costs by employing fewer people.

from 2005 to 2006 the BRC reports that "78,000 retail jobs were lost as minimum wage increases added £1.2 billion to retailers' wage bills." On top of these losses in already existing jobs, the number of people being employed also fell, as

...between 2005 and 2006, the number of people employed by multiple retailers fell by 61,000 (3 per cent) with one in five multiples having reduced headcount. Numbers employed by small and medium sized retailers fell by 17,000 (2 per cent)... Multiple retailers said wage costs per shop floor employee rose by an average 14 per cent between 2005 and 2006. Nineteen per cent of multiple retailers had reduced their total headcount. On average those that reduced jobs cut one post in 20.

Now, returning to that previous point, that the minimum wage can reduce employment without effecting net employment, by harming particular sectors worse than others. This is obvious, because the minimum wage will not effect those for whom's labour the market price is already above the minimum wage. It will only effect those who's market price is below the minimu wage. In other words, it will effect the poorest workers, those that earn the least. Defenders of the minimum wage do not deny this, of course, since effecting the incomes of the poorest earners is precisely why they defend the laws in the first place. They think that the laws will lift the incomes of those lowest earners.

The opposite, however, is what really happens. Why, in a free market, would somebody tend to be a low earner? Because they are not worth a higher wage to the employers. This may be because they are low skilled, for instance. Well, as Milton and Rose Friedman note, "The minimum wage law requires employers to discriminate against persons with low skills. No one describes it that way, but that is in fact what it is."

The Friedmans suppose that we imagine a poorly educated teenager with little skills, worth only, say, $2 (1979) an hour. The teenage could be eager to work at that income to get the the skills to earn a better income. However, the law says that this teenager can be hired only if the employer is willing to pay (in 1979) $2.90 an hour. If the teenager is only worth $2, then the 90c more is purely charity, and it is unlikely that the employer will pay it.

A lengthier argument is provided by Mary Ruwart. She writes,

For example, in the chair factory where George works, employees are paid at different levels ($4 or $5 per hour) depending on their experience. If the minimum wage is raised to $5 per hour, several things could happen.

If the employer pays the least experienced people $5 per hour, he will have to raise the price of the chairs. The people who were earning $5 will probably complain because they are being paid the same wage as the novices. The employer will have to give them a raise too. The price of the chairs goes even higher. Fewer people can now afford to buy the chairs, so the factory will cut back production. Workers will be laid off; the least experienced will be the first to go. Instead of earning $4 per hour, some of the inexperienced workers will be unemployed, while others will be making $5 per hour.

Some employers will be able to replace the unskilled workers with machines that cost $4.50 per hour instead of the $5 now mandated by law. The workers from the factory that makes the new machines are very skilled and already make well above the minimum wage. They now have extra orders for machines, so their factory must hire more skilled labor. At the chair factory, some of the more experienced workers make $5 per hour, while some of the unskilled workers are unemployed and make nothing. The machine factory hires more skilled labor.

Other employers might simply eliminate part or all of the job that the people earning $4 per hour once did. Maybe their job was to paint the chairs; now finishing is left to the buyer. More unskilled employees are laid off.

Some employers will not be able to use any of these options. There may be no substitute for the unskilled labor and no way to raise prices without losing too many customers. To comply with the law, these employers may cut back on other employee benefits, such as health insurance, vacation time, etc. The unskilled workers make $5 per hour, but lose some benefits that may have been worth more to them than the wage increase.

If none of these options are available, employers may have to forgo some of their profits. To avoid cutting their profits, these employers may close their factories and either retire or switch to a business that needs only skilled workers. In either case, the employees will be laid off. The skilled workers will have an easier time becoming employed again, because they are needed in places such as the machine factory that is expanding because of the demand for labor-saving devices. The unskilled workers will find themselves in less demand and will have more difficulty.

Each employer will react differently to the minimum wage increase, but the result is always the same. Fewer inexperienced employees will have a job. Instead of making $4 per hour, some will make $5 per hour, and others will make nothing. The best of the low-paid workers get a raise, but the most disadvantaged are forbidden to create what wealth they can.

Another argument as to why the minimum wage will harm the low skilled most is this: Imagine that Julie runs a gardening firm. She knew the teenagers next door, students, not professional gardeners, were looking for work over the summer. She also knows that hiring a professional gardener for a few hours a week would cost her £7 an hour. The two teenagers won't have the gardener's skill, but between them, they could get the same work done. So she offers them £3 an hour each do a few hours a week to tend her customers gardens over the summer... Then the government raises the minimum wage to $3.50. Hiring two unskilled workers would now cost no less than hiring a skilled professional. Julie has no more incentive to keep the students on.

That is the theory. Of course critics will say, "ah, but that is only the theory - the facts do not bear it out. Unemployment has not risen, so your little theories are wrong, and are the pure nonsense we should expect from thinkers in ivory towers who don't come down and live in the real world and have to do proper work for a living" (believe me, people do respond in this way!). However, the theory is born out. The BRC claims above show that jobs are being destroyed amongst lowest paid workers. There is further evidence. The Friedman's report that at the end of the Second World War, the minimum wage was 40c an hour, and that war time inflation had made that so low as to be unimportant. However, in 1950 the minimum wage was raise sharply, to 75, and then to $1 in 1956. In the early 1950s the unemployment rate for teenagers averaged at ten percent, compared to about 4 percent for all workers - a moderately higher rate of unemployment, then, as we would expect for a group of workers just entering the labour force. The unemployment rates for white and black teenagers were roughly equal. After the minimum wage rates were sharply increased, the unemployment rates for white and black teenagers shot up, too. At the same time an unemployment gap grew between the white teenagers and the blacks. By 1979 the unemployment rate ran around 15 to 20 percent for white teenagers, and 35 to 45 for blacks.

Even more conclusive evidence comes from this country, and this time. Introducing the national minimum wage was one of the first things that the Labour Party did when it came to power in May 1997. It is also held up as one of the few successes of that regime now that it is crumbling. However, unemployment amongst young people is now worse than it was when Labour came in. "According to the Office for National Statistics there are now 37,000 more unemployed people aged 16 to 24 than in May 1997, with the total rising from 665,000 to 702,000." The number of long term young unemployed people by 2006 was "178,000 — 78 per cent higher than it was five years ago." The unemployment rate has risen to 14.5 percent among young people, over taking the 14.4 percent that Labour inherited from the Tories. One in four 16 to 17-year-olds are now unemployed, and that is worse in London, where the proportion of 16 and 17-year-olds who are officially unemployed is 42.9 percent, according to the Government's labour force survey.

One should not always focus on the practical and forget the moral. The moral fact is that the minimum wage is an attack on the liberty of workers. It makes it illegal for them to sell their labour, their services to those offering a particular price. So-called liberal democratic defenders of the minimum wage should take not of that fact. In a society where minimum wage is £5.35, no worker is free to sell their labour for less, and if it is their labour, and not the state's, they should be. "Ah," some may respond, "we want them to be free to sell their labour for more than £2." Aside, however, from not showing how a minimum wage suddenly increases this likelihood, that ignores the point that it means that workers are not free to sell for less. They are either free to sell it for £5.35 of more, or not at all - their range of choices as to what they can do with their labour is reduced by the coercive intervention of the state.

Is It paternalism? The Freidmans wrote, "It has always been a mystery to us why a young person is better off unemployed from a job that would pay $2.90 than employed at a job that does pay $2.00 an hour," which would suggest not.

And, needless to say, having made it illegal for employers to offer to employ young workers at wages the employers think the workers are worth, Labour's own efforts to "solve" unemployment have failed miserably. In 1997 Gordon Brown declared that the youth unemployment he had inherited from the Tories was a "human tragedy" and pledged to get 250,000 young unemployed off benefit and into work, by levying a one off windfall tax on utilities to be spent on the New deal for Young People (NDYP). Since then Brown has spent billions on the New Deal, ostensibly to tackle youth unemployment. At the latest count, there have been more than 20 schemes since 1997, targeted at adults, young people and lone parents.

But the New Deal has failed. Not only has youth unemployment risen, as we have seen, but the New Deal has failed to lead to people finding long term gainful employment. In 1998 60.8 percent of youngsters leaving the scheme found work. By 2006 this was down to 34.6 percent. And further than this, half of all New Deal for Young People leavers are back on to benefits in a year, the proportion leaving the scheme to go back on to the Jobseeker's Allowance in 2006 was six times higher than it was in 1998.

Of course many of those that defend the minimum wage have no interest in helping the poor. It makes sense - those shut out of the economy by minimum wage laws are the poorest, least skilled workers. The workers that are hardest to unionise, and so compete with unions, are unskilled workers. Minimum wage laws, therefore, drive out competition against unionised labour. The minimum wage, then, is used to protect establishment jobs and monopoly wages. As Milton Friedman points out

The source of pressure for them [Minimum Wage laws] is demonstrated by the people who testify before Congress in favor of a higher minimum wage. They are not representatives of the poor people. They are mostly representatives of organized labor, of the AFL-CIO and other labor organisations. No member of their unions works for a wage anywhere close to the legal minimum. Despite all the rhetoric about helping the poor, they favor an even higher minimum wage as a way to protect the members of their unions from competition.

Its time we abolished these evil laws.

THE FACTS ABOUT GUNS AND VIOLENCE

2007-05-04T19:46:00.000Z

One of the more widely read newspapers in the UK is the Metro. Widely read because it is free and given out to commuters on their ways to work. Anyway, in the letters page of the Metro Monday, April 23rd H. Goodeve questions Americans' disbelief that their high rate of gun crimes is due to their more liberal gun laws. He claims that there are 30,000 gun related deaths in the US last year compared to the UK’s 60, and points to this as self-evident proof that gun controls, which are stronger in the UK than in the US, reduce gun crime. The sad thing is that this is a widely held assumption in the UK: The UK has fewer guns and fewer gun crimes, therefore gun crime occurs because the laws are not strong enough and guns are too easy to get hold of. However the connection between liberal gun laws and a high gun crime rate is very questionable.

The US does have a high murder rate, that is true. There are 5.9 murders per 100,000 people a year in the US. What Mr (or Mrs) Goodeve neglects is the fact that this number varies widely throughout the US, as do gun laws and the percentage of the people who own guns. The five states with the highest murder rates are Washington D.C. 35.8, Louisiana 12.7, Maryland 9.4, New Mexico 8.9., Missouri 7.8. This gives an average murder rate in the worst five states as 14.92. The five best states are North Dakota 1.4, New Hampshire 1.4, Iowa 1.6, Utah 1.9, Wyoming 2.2, yielding an average murder rate in in these five best states of 1.7.

The percentage of the population owning guns in the five states with the worst murder rates are Washington D.C. 3.8%, Louisiana 44.1%, Maryland 21.3%, New Mexico 34.8%., Missouri 41.7%. The first thing to note is that these figures vary wildly, from the state with the worst murder rate, DC, having only 3.8% owning guns to the second worst having as many as 44.1%, This in itself serves to cast doubt on the correlation of lots of guns to lots of murders. However, the average percentage of the population owning guns in these five states with the worst murder rates is 29.4%. The percentage of the population owning guns in the states with the lowest murder rates is North Dakota 50.7%, New Hampshire 30% , Iowa 42.8%, Utah 43.9% , Wyoming 59.7%. This yields an average percentage population of the five states with the lowest murder rates in the US as 40.2. In other words the States of the US that have the lowest murder rates have a higher percentage of the population owning guns than the states with the highest murder rates. There is definitely no correlation between high murder rates and lax gun laws or high numbers of guns from the American evidence, then.

In fact, these five states with the lowest murder rates, in which, on average 40.2% of the population own a gun or guns, have an average murder rate of 1.7 per 100,000 people. The average murder rate in England and Wales is 1.5 per 100,000, scarcely lower. In Scotland it is 2.2 per 100,000, much worse than in these five gun toting states. Meanwhile the US suffers, on average, half as many burglaries than the UK, and in the US 12% of burglaries occur whilst the victim is at home, whilst 53% of burglaries in the UK occur whilst the victim is home.

Take a look at what percentage of the population owns guns in the five most heavily armed states. That’s Wyoming, at 59.7%, Alaska, at 57.8%, Montana 57.7%, South Dakota 56.6% West Virginia 55.4%. That’s an average of 57.44% of the population in these five most heavily armed states owning guns. The murder rates per 100,000 people in these states are, Wyoming 2.2, Alaska 5.6, Montana 3.2, South Dakota 2.3, West Virginia 3.7. That’s an average murder rate in these most heavily armed states of 3.4 people per 100,000. Violent crimes per 100,000 in these states are, Wyoming 229.6, Alaska 634.5 (Alaska suffers from a shockingly high number of rapes compared to other states), Montana 293.8, South Dakota 171.5, West Virginia 271.2. The average total of all violent crimes in these states, then, is 320.12.

Now compare this with the least heavily armed state’s and districts. The percentage of the population who own guns in Washington DC is 3.8%, in Hawaii its 8.7%, New Jersey 12.3%, Massachusetts 12.6%, Rhode Island 12.8%. So the average percentage of the population owning guns is 10.04%. Murder rates per 100,000 in these least heavily armed states are: Washington DC 35.8, Hawaii 2.6, New Jersey 4.5, Massachusetts 2.6, Rhode Island 2.4. That’s an average of 9.58. If we exclude Washington DC’s supernormal level of murders (which perhaps we shouldn’t, but since it is so far above the average it may not be representative), that’s an average of 3.025. Violent crimes per 100,000 people is Washington DC 1,371.2, Hawaii 254.4, New Jersey 355.7, Massachusetts 458.8, Rhode Island 247.4. That’s an average of 537.5. Excluding Washington DC, that’s an average of 329.075.

So, lets summarise. The five with the largest percentage of the population owning guns average at 57.44%. The average percentage of the population owning guns in the least heavily armed states is 10.04%. However, the average murder rate per 100,000 people in the most heavily armed states is 3.4. The average murder rate in the least heavily armed states is 9.58, nearly three times as high. Even if we adjust for Washington DC’s supernormal murder rate, and exclude it, that’s 3.025, fairly comparable. The average rate of violent crimes per 100,000 in the most heavily armed states is 320.12. In the least heavily armed states, it is 537.5. In short, the five most heavily armed states have a lower average murder rate than the five least heavily armed states. Even on the more favourable measure it is comparable. And the five most heavily armed states have less violent crime and the five least heavily armed states.

Further support for American skepticism that high gun related deaths correlate with high rates of gun ownership can be derived from Europe. In Switzerland 27% of homes contain at least one gun. Yet the rate of homicides in Switzerland is only 1.1 per 100,000 people which is lower than in Britain. A third of homes in Norway have a gun. And the murder rate is fewer than one per 100,000, far lower than in Britain.

In fact, just look at what has occurred since the handgun ban in the UK. The BBC reports that the number of recorded gun crimes in the UK rose to more than 21,500 last year compared to just under 14,000 in 1998. Thats a more than fifty percent increase. Meanwhile the number of gun related homicides has barely altered at all from the year in which the handgun ban was introduced. The number of people injured by firearms in England and Wales has more than doubled since 1998. The number of recorded firearm crimes in 2005/2006 was 11,084 - up 0.12% on previous year. Likewise, in 1976 Washington DC introduced some of the strictest gun controls in the US, and now only 3.8% of the population own guns. The murder rate rose 134% whilst the murder rate for the whole US fell 2%.

There is, therefore, little evidence from the US supporting a correlation between high rates of gun ownership and high murder rates. In fact, a greater percentage of the population in the states with the lowest murder rates own guns than in the states with the worst murder rates. Moreover, those states which have the best murder rates, where on average 40.% of the population own at least one gun, have a murder rate comparable to that of the UK and about three quarters that of Scotland. Norway and Switzerland have similar rates of gun ownership as the US and a lower murder rate than the UK. And gun crime has got worse as gun laws have got stricter in the UK. There is no evidence of a positive correlation between the rate of gun ownership and the rate of murder, on the contrary, it seems negative; and there is no evidence that stricter gun laws either reduce the supply of guns or reduce the number of gun crimes.

Sources
Crime rate by State
Gun Ownership rates by State
James Bartholemew, "Banning guns is not the obvious answer it seems"
BBC, "PM's warning over gangs and guns"

THE CONTEMPOTARY USA IS MORE VIOLENT THAN THE WILD WEST

2006-11-27T22:47:00.000Z

There are many historical examples of functioning anarchist or near anarchist societies. One of the most well known is that of Medieval Iceland. However, one of my favourites is that of the "Old West," that is the Western frontier in the USA. Its drawback compared to Iceland is that the Icelandic commonwealth lasted for 300 years, whilst the Old West was effectively anarchic for some 70 odd years. Its advantage of Iceland, however, is that it is more legitimately anarchic. The Icelandic commonwealth had, first of all, a limit on the number of courts there could be at a time, meaning that, whilst there was a competitive judiciary of sorts, there being competition between what courts there are, it was anti-competitive in the sense that there was no free entry to the industry for new competitors. Moreover, whilst Godi, those that have the right to set up a court, have an incentive to increase the number of the followers, and so an incentive to create pressure for the sorts of laws their followers want to live under, Iceland did not have a complete example of a "market for law." It had a legislature, made up of the Godi, reputedly the world's first parliament. So, Iceland had publicly produced law, enforced privately, under which disputes were settled in limitedly competitive courts.

The Old West, however, had privately produced law, private enforcement, and private dispute resolution. As Anderson and Hill wrote, in their classic article, "American Example of Anarcho-capitalism: The Not so Wild, Wild West,"

Although the early west was not completely anarchistic, we believe that government as a legitimate agency of coercion was absent for a long enough period to provide insights into the operation and viability of property rights in the absence of a formal state. The nature of contracts for the provision of 'public goods' and the evolution of western 'laws' for the period from 1830 to 1900 will provide the data for this case study.

The West during this time often is perceived as a place of great chaos, with little respect for property or life. Our research indicates that this was not the case; property rights were protected and civil order prevailed. Private agencies provided the necessary basis for an orderly society in which property was protected and conflicts were resolved. These agencies often did not qualify as governments because they did not have a legal monopoly on 'keeping order'. They soon discovered that 'warfare' was a costly way of resolving disputes and lower cost methods of settlement (arbitration, courts, etc.) resulted.

Moreover, this was successful: Society was largely peaceful with this anarchist arrangement. It was this fact that I emphasised in a debate on the plausability of anarchism, when I posted on Liberty Forum the following quote from Anderson and Hill. Anderson and Hill were pointing out the prevalence in film and literature of portrails of the Old West as violent:

Recently, however, more careful examinations of the conditions that existed cause one to doubt the accuracy of this perception. In his book, Frontier Violence: Another Look, W. Eugene Hollon stated that he believed 'that the Western frontier was a far more civilised, more peaceful, and safer place than American society is today.' The legend of the 'wild, wild west' lives on despite Robert Dykstra's finding that in five of the major cattle-towns (Abilene, Ellsworth, Wichita, Dodge City, and Caldwell) for the years from 1870 to 1885, only 45 homicides were reported - an average of 1.5 per-cattle trading season. In Abilene, supposedly one of the wildest of the cow towns, 'nobody was killed in 1869 or 1870. In fact, nobody was killed until the advent of officers of the law, employed to prevent killings.' Only two towns, Ellsworth in 1873 and Dodge City in 1876, ever had five kilings in more than one year. Frank Prassel sates in his book subtitled A legacy of Law and Order,' that 'if any conclusion can be drawn from recent crime statistics, it must be that this last frontier left no significant heritage of offences against the person, relative to other sections of the country.' Moreover, even if crime rates were higher, it should be remembered that the preference for order can differ across time and people. To show that the West was more 'lawless' than our present day society tells one very little unless some measure of the 'demand for law and order' is available. 'While the frontier society may appear to have functioned with many violations of formal law, it sometimes more truly reflected community customs in conflict with superficial and at times alien standards.' The vigilance committees which sprang up in many of the mining towns of the West provide excellent examples of this conflict. In most instances these committees arose after civil government was organised. They proved that competition was useful in cases where government was ineffective, as in the case of San Francisco in the 1850s, or where government became the province of criminals who used the legal monopoly on coercion to further their own ends, as in Virginia City, Montana Territory in the 1860's. Even in these cases, however, violence was not the standard modus operandi. When the San Francisco vigilance committee was reconstituted in 1856, 'the group remained in action for three months, swelling its membership to more than eight thousand. During this period, San Francisco had only two murders, compared with more than a hundred in the six months before the committee was formed'.

A chap calling himself Anthem (and sporting an avatar of Tennyson) made the following response to my post:

Your one example of criminal law is badly flawed. 5 murders in one year out of a population of at most 1000 is like 7500 murders a year in a metropolitan area of 1.5 million people. I noticed your quote contained a throwaway line about "crime rates", and then continued on with a constructed fantasy that doesn't go into syndicate behavior. Relying on people to realize that conflict is less productive ignores those who use conflict purposefully to gain advantage. Until anarchists address this substantively, it remains a hollow theory.

I'm not sure what he meant by "syndicate behaviour," and the rest of the debate centred over his first sentence related to the figures I gave him. I actually responded by pointing out this was not a representation of my example:

Which example was that? The example I gave of the Old West was not in a population of one thousand, nor did it involve five murders a year. It was in five major cattle towns, Abilene, Ellsworth, Wichita, Dodge City and Caldwell, and was 45 murders in fifteen years. That works out at three a year. Abilene was supposedly one of the wildest towns, and yet there was not a single murder in 1869 and 1870. It was only in two specific years, 1873 and 1876, that the murder rate went up to five a year - the average was lower.

Anthem's response was strange, since it seemed to ignore the fact that I was not talking about the population of one town but the combined populations of five towns:

OK, Dodge's population was 1200. Hardly worth quibbling about given that your author dismisses crime rates as a relative social construct.

As a sideline, I did ask Anthem what he meant by "relative social construct," and what he had against relative comparisons anyway, but he gave no coherent answer. He did, however, accuse me of "poor reasoning based on distortions of fact." I had to come back on that issue, by highlighting the fact that I was not talking about the population of one town but of five combined towns:

Like your previous statement, "Your one example of criminal law is badly flawed. 5 murders in one year out of a population of at most 1000 is like 7500 murders a year in a metropolitan area of 1.5 million people," which is a blatant distortion of the facts? The average murder rate in the five busiest cattle towns was closer to three a year, sometimes less than one, sometimes as much as five. Three, as a percentage of a population of 1200, is 0.25%. 0.25% of a metropolitan area of 1.5 million is 3750, which is almost half the figure you gave.

I closed the debate with this longer post:

I forgot another detail. The original quote from my source was,

The legend of the 'wild, wild west' lives on despite Robert Dykstra's finding that in five of the major cattle-towns (Abilene, Ellsworth, Wichita, Dodge City, and Caldwell) for the years from 1870 to 1885, only 45 homicides were reported - an average of 1.5 per-cattle trading season. In Abilene, supposedly one of the wildest of the cow towns, 'nobody was killed in 1869 or 1870. In fact, nobody was killed until the advent of officers of the law, employed to prevent killings.' Only two towns, Ellsworth in 1873 and Dodge City in 1876, ever had five kilings in more than one year.

That's 45 murders in five towns, not in one, and over fifteen years. So when you said that "Dodge's population was 1200," I actually need the average population for fifteen years of all those cities. Dodge city did not have a stable population, since the west was undergoing mass immigration from the East, or course. From this source,

Population in 1870, 427; population in 1875, 813; increase in five years, 386; population in 1878, 2,160; increase in eight years, 1,733. Rural population, 1,512; city or town population, 648; per cent. of rural to city or town population, 70.

That is a massive rate of increase! Hard to work out an average population for that period. Note that my source says that five murders in one year was a high number in the later years covered by this, though. I think that the mean for those first eight years, though, works out close to your 1200 figure.

Now, assume that Dodge was much the same size as the other towns, that is 45 murders over fifteen years in a population five times the mean of Dodge's, which means 6,000. 45 murders over fifteen years is three a year, average. I think that means the average murder as percentage of the population is 0.05. That is less than the murder rate for contemporary Washington DC.

Anthem stopped posting on that thread. I got no, "Oh, OK; Jeese, I guess you are right," but I never expected one. I'm just content with the knowledge that I won. Oh, and the figures for the murder rates in modern US cities is here.