Exceptionalism

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The current crisis in the Ukraine, where a Western-prompted coup of the pro-Russian government has led to Russian occupation of the Crimean peninsula and “protection” for its naval interests in the Black Sea has highlighted the attitude of the West, and of the United States in particular, to what may be regarded as their “exceptionalism”. Whatever standards other countries and governments are held to, the US believes that it is permitted to deviate from (nay, obliterate) those standards, labelling their own actions with some other, innocuous term while utilising some half-baked moral justification in order to promote its acceptability. What is, for other countries, an illegal invasion of a sovereign state is, when the US does it, an act of “liberation”. When someone else organises a rebellion against a sovereign government it’s a violation of international law; but the US only “spreads democracy”. When other states commit horrendous acts of torture or indiscriminate murder they are “war crimes”; for the US, these are tactics that are necessary in the just and noble “war on terror”. Indeed Washington’s leaders have become so blinded by their sense of exceptionalism that they fail to realise that the case of the Ukraine, more than most others, has drawn stark attention to this unrelenting hypocrisy. Russia’s interests in the Ukraine are far more pressing than any interest that the US has either there or in any of its previous catastrophes such Iraq, Afghanistan, Syria, and wherever else into which it has poked its heavily armed nose. The Crimean population, according to a referendum held on March 16th, is overwhelmingly in favour of not only Russian intervention but of outright annexation of the region by Russia. Furthermore, Russia’s response, thus far at least, has not been to steam roller in, guns blazing, but has, rather, been more measured. So not only is the US protesting Russia’s actions, actions which the US happily takes everywhere around the world – it is doing so while Russia has stronger interests, is heavily supported by the indigenous population, and has taken weaker action than the US has in any of its self-invented skirmishes.

The concept of exceptionalism, however, is not something that is restricted to the US or is somehow born out of the US psyche. Rather, exceptionalism traces its roots to the very heart of how government operates domestically. If people steal from each other, it is called “theft” and is criminalised, yet when government steals it is permitted and is called “taxation”. If a company dominates an industry it is called a “monopoly” and must be broken up; if government does it, it is called “nationalisation” (probably with some other seductive sound bite such as the industry is being run “for the people”). If Bernie Madoff takes cash from customers to pay returns to previous investors, it is called a pyramid scheme and he is locked up; when government does precisely the same thing it is called Social Security. If the mafia forces you to pay tribute in return for security it is called a “protection racket”; when the government forces you to contribute to its armies, navies and air forces it is called “national defence”. Government necessarily conditions its operatives to believe that they are excepted from the common morality to which all other human beings must adhere. It is only because the US is the de facto most powerful government on Earth (although it is encouraging to see Obama’s belligerent efforts coming to nought in both the current crisis and the crisis in Syria) that this exceptionalism becomes magnified onto the international scene.  So in just the same way as government does not have to behave in the same way as its citizens, neither does the most powerful government have to behave like any other government. The US is not alone in this regard and has been preceded by other wealthy and heavily armed states – Ancient Rome, and the British for instance – who, coupled with a hubristic belief that they represent the pinnacle of “civilisation” in an otherwise barbarous world, have ploughed their way over everyone else whom they expect to be held to other standards. Indeed, when a pirate was brought before Alexander the Great and asked to explain his actions, the pirate is believed to have replied that what he, the pirate, was doing, was exactly the same as that which Alexander was doing. The only difference was that Alexander terrorised the seas with a “navy” and was styled an “emperor”, while the pirate did so with a “petty ship” and was thus brandished a “robber”1.

The conquest, therefore, of the exceptionalism of the most powerful nation can only be achieved by eradicating that exceptionalism at home – in domestic government and domestic policies. All human beings, whether they work for the government, the civil service, or are private citizens, must adhere to the same common morality and must be held to the same moral standards. Better, still eradicate government completely and the political caste – together with the divisions it creates between itself and those of us less exalted – will disappear entirely. Only then can we hope for a peaceful world in which all humans are equal before the law – both nationally and internationally.

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1See St Augustine, City of God, Book IV, Chapter 4.

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Spying and Security

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The US government’s recent embarrassment over revelations of its surveillance program by Edward Snowden, a former NSA contractor/CIA employee, and their subsequent frustration in trying to apprehend him, has led to all of the usual outcry from libertarians about government spying, invasion of privacy and so on. However, a further interesting question is whether such acts are a necessary part of the deliverance of security. Would, for example, private security agencies have the need to spy on people’s private communications and, if so, how would this be regulated in a free society?

Security, like any other good, is an end that consumes scarce resources and its provision must therefore be valued like any other. Because a state is as an institution that enforces a territorial monopoly of the provision of law, order and defence funded by compulsory levies (taxes), it needs to provide a blanket security service and need never worry about “customers” leaving it for a competing service. As a result it is cut off from any communication, through the profit and loss system, of whether it has correctly allocated resources efficiently to provide for security needs and so it, alone, needs to judge the urgency of a particular security threat. This would not be the case on the free market, however, as private, competing, security agencies would not be able to apportion more resources towards the production of security than its customers were willing to pay for. In times, therefore, of relatively light or transient threats and normal, one-off acts of crime by individuals then security will not be a high priority and intelligence, which is linked almost wholly to such crime would have little purpose as there would simply be no data to gather. Indeed this would normally be the case in a free society. Most “organised” crime consists of the underground provision of peaceful and voluntary services that the government has outlawed and “terrorist” threats are political backlashes against the government. Even if there was the threat of invasion of a free society by, say, a neighbouring state, this would be much harder for that state to accomplish when defence provision is scattered and heterogeneous rather than concentrated and homogenous in the form of the government’s army, navy and air force. The closest you might get to any kind of organisation in crime in a free society is various forms of human trafficking, such as paedophile rings and kidnap for forced labour. It is therefore very unlikely that there would be the need for systematic intelligence gathering in a world free of the state. However, for arguments sake, let’s say that there is a genuinely serious and imminent threat of organised crime which commands a pressing need for intelligence of this threat by a private security agency in order to defend its customers. What could it do?

A security agency could certainly not invade the servers and networks of private providers of communication services. It could, however, negotiate contracts to monitor information that passes over these networks, with the specific nature of such monitoring subject to the corresponding nature of the threat. But the major difference between this and between government intelligence gathering is that it could never be secret and, if it was, it would be unlikely to last for long. From the point of view of the security providers’ customers, in an environment where there is a genuine threat then such monitoring is likely to be a selling point; while it may not be advertised quite as explicitly as “we will read other people’s emails to keep you safe”, if people, on balance, estimate any threat as being worth the while of this kind of action then they will be eager to provide custom to those security services that can offer it. On the other hand, if a threat is deemed not to be quite so serious to the extent that customers either do not care if other people’s communications are monitored or they would actively leave for an alternative provider to avoid it, could a security firm carry on the practice in secret? The answer is almost certainly no because this would cause the firm to incur costs that customers are not willing to pay for. Hence it would have to raise its prices. Such a firm would therefore see its customer base shrink to the advantage of suppliers who do not incur these deadweight costs. The practice would therefore be self-liquidating at the point when threats are no longer deemed to be worthy of the expense of intelligence gathering.

Furthermore, the monitoring of communications would need to have the consent of the customers of telecoms and internet providers. Again, the permissibility of this would be judged by these customers in the light the urgency of a threat. In the absence of such threats providers that do not invade the privacy of communications would receive custom and those that do would not. Moreover, in this environment, people themselves may be unwilling to deal with parties whose communications were not filtered through a monitored channel. But these services would also be tailored to specific regions that may be under threat or levels of monitoring could be targeted at specific groups based on their vulnerability or their propensity to commit an atrocity. There would not be the blanket monitoring of absolutely everybody and the provision of the same service to everybody regardless of who they are and where they are.

Would consent make intelligence gathering useless? Not necessarily. Between themselves, of course, criminals can use channels that are not subject to monitoring. But when the fear of a threat is perceived to be high channels offering absolute privacy would be difficult to come by and it is arguably the case that government is much easier to circumvent than private agencies. However, all criminal organisations must at some point communicate with the outside world (for purposes of supply, for example) and these latter communications would be subject to monitoring. While not perfect, therefore, it would not be impossible to piece together the movements and intentions of organised criminals.

The above is just a basic outline of what might happen in a free society and no doubt many more considerations could be added. But it is worth emphasising again the main point – that most of the need for intelligence gathering is generated by the government’s own avoidable acts and so, why it could conceivably be accomplished in a free society, it would almost certainly be unnecessary. The proper way forward, then, to end the world of spying, surveillance and secrets is to decriminalise victimless crimes and to stop the government from invading and bombing other countries and nurturing blowback. And we have of course assumed above that government is genuinely trying to protect its citizens; of great import also is the very convincing argument that government merely invents and exaggerates bogeymen for the very purpose of intruding into people’s lives and we need to consider the extent to which surveillance is the end rather than the means.

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The “Bedroom Tax”

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The furore over the UK Government’s latest changes to Housing Benefit appear to be bearing witness to what we might say is a “revolution within the form” – the neutralisation of a word or concept by changing its definition rather than challenging it directly. In this case, whereas once upon a time you were taxed if the Government took the money you had earned, it now appears that you are taxed if the Government finds a reason to give you less of everybody else’s money.

The announcement of the changes were followed by marches and demonstrations all over the UK, showing just how many people seem to be dependent upon the welfare state and how sensitive any reduction to its size may be.

Let us briefly reiterate and emphasise a few truths from the perspective of ethics and economics:

  • The welfare state is funded by taxation. Taxation is theft, the violent confiscation of other people’s property. If you are in receipt of welfare payments you are the recipient of stolen property. If people believe that taxation is not theft then it is incumbent upon these people to define it in such a way as to distinguish it from theft. Such a definition has never been forthcoming and any attempts have involved a twisted, distorted meaning of words that practically end up saying that theft is really voluntary. In particular it would be fitting to see the churches try to make this attempt before it starts wading into the debate;
  • That to pay people the fruits of productivity without having to produce lowers the value of productivity and increases the value of non-productivity. There will therefore be less societal wealth.

Merely arguing that benefits recipients are lazy and idle on the one hand and answering this charge with the claim that benefits cuts encourages selfishness on the other hand is of no relevance to these points we have made. What people should and should not do with their own money voluntarily is entirely up for debate. But there is no justification at all for one set of persons to violently wrestle money from another of persons. And yes, that includes everyone who has benefited from such methods – the bankers who received bailouts and welfare recipients. Ethics and economics are universal and apply to everyone and their laws should be applied to judge all situations whether they involve either the rich or the poor.

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Poverty and the Pope

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The newly elected Pope Francis has celebrated his inaugural mass by placing the poor at the centre of his papacy, presaged earlier by the inspiration of St Francis of Assisi when choosing his regnal name and the urging of a fellow cardinal to “remember the poor” immediately upon his “victory” in the Sistine Chapel.

There are three questions one is tempted to ask any public person who bleats on incessantly about the poor:

1. What is the definition of poverty?

2. What is its cause?

3. What can be done about it?

Let us be charitable and ignore the fact that many measures of poverty are determined relatively (and hence are really a disguised measurement of “inequality” rather than of poverty) and proceed to answer the second two questions firmly and starkly. Poverty, to the extent that it exists, only does so because of a relative lack of production per capita of the population that is poor. This, in turn, is because there is a low amount of capital invested per person. The only way to resolve poverty is to encourage private saving, private investment in capital and an increase in production per head of the population, all of which must in turn be based upon strong rights to private property. There is absolutely no other way. Taxation, redistribution, borrowing, wasting, Government boondoggles will in no way help the poor. And yet precisely what is it that is always called for? Always the latter. Nor will the poor be helped by “showing loving concern for each and every person, especially children, the elderly, those in need, who are often the last we think about”, to quote the Pope’s inaugural homily. As economics teaches us you do not need to love your fellow human in order to increase his well-being, merely to serve him and engage in trade with him.

It would be an inspiration indeed if the Pope was to call for private property, free trade and free enterprise to lift the poor out of the slums. But I, for one, do not remain particularly hopeful that he will follow this path.

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Free Choices or Coerced Choices?

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The Academy of Medical Royal Colleges, which apparently is a “united front” of the medical profession, says its doctors are seeing the consequences of unhealthy diets every day and that it has never come together on such an issue before. Needless to say a whole raft of interventionist measures are recommended to curb this apparent problem:

  • A ban on advertising foods high in saturated fat, sugar and salt before 9pm;
  • Further taxes on sugary drinks to increase prices by at least 20%;
  • A reduction in fast food outlets near schools and leisure centres;
  • A £100m budget for interventions such as weight-loss surgery;
  • No junk food or vending machines in hospitals, where all food must meet the same nutritional standards as in schools;
  • Food labels to include calorie information for children.

We will set aside for the moment the issue of whether it can be said that there are “right” choices for people to make when it comes to what they want to do with their own bodies (why, for example, should people prefer a longer life to the enjoyment provided by a burger and fries washed down with a pint of coca-cola?). Instead, the problem here is rather more grievous which is that, whenever members of the public make choices about how they want to live their lives there is the ever present assumption that, as these choices are made with apparent freedom, that it is the free market that has failed in preventing the emergence of the “undesired” outcome. What is never discussed or even raised is the possibility that people’s choices are already constrained or influenced by existing Government interference to the extent that, not only is it impossible to say that the choices made would be the same as those that would be made on a genuine free market, but that Government intervention is itself causing the undesirable choices to be made. And, lo and behold, blinded by such ignorance, the call is always for more Government intervention to augment that which we already have to put up with.

The present author has examined in detail why socialising healthcare will lead to greater ill health. There is little need to repeat all of this here except to say that people prefer doing that which comes at a lower cost, all else being equal. So that if you lower or remove the cost of becoming ill then, relatively, you will have more people who lead lifestyles that will result in ill health.

But the same fallacy is advanced in all cases where the proximate cause of a problem is people’s apparent free choices. Let’s examine some of the most popular:

“There is not enough food in the world! If the free market has brought such widespread hunger then Governments much intervene!”

The allegation here is usually some variant of the rich world refusing to share its wealth with the poor world. Leaving aside the fallacious belief that one person having means that another must not have, just why is it that we have widespread poverty in the age of the iPad? The plight of poor nations has nothing to do with being unable to understand technological development, nor are they in anyway lacking a rich diversity of raw materials. Rather it stems from the lack of capital investment per head of the population compared to the West. In the West, we have more machines and better tools that can churn out more and better goods per person than they can in poor nations. So yes, investors and capitalists have not invested in poor countries. The free market has not reached these nations, it must have failed! But the precise reason why the West has benefited from the free market is that it has long cherished institutions that have allowed to the free market to flourish, in particular strong legal rights to private property and relative political freedom. These are precisely the conditions that are lacking in poor nations, conditions that cause entrepreneurs to seek other havens for their investments. At the back of their minds, no doubt, is also the mass expropriation of foreign investment in the post-colonial era. Why should anyone bother investing in a poor nation if their wealth will just be pinched by the Government? To make matters worse, poorer nations began to model themselves on their Western role models just at the point when the latter started to turn away from a social order based on private property towards interventionism and social democracy with the result that the wrong lessons are being learnt. A product of this tide has been that Western governments now heavily interfere in world food markets, whether it be through such wicked and wasteful outfits as the Common Agricultural Policy, subsidies for farmers to devote farmland to ethanol production, or the vast regulatory network that impedes food production at the behest of a few powerful lobbyists. The recent scandal of horse meat appearing in processed beef products sold in UK supermarkets should be viewed in this context.

Poverty and hunger are therefore a failure of Government, not of the free market.

“The forests are disappearing! The free market, seeking ever greater profits, is decimating our natural resources! The Government must stop it”

Let’s go even further: add to the list fish stocks, elephants, whales, and any other of the countless number of “endangered” species that you like. Yes, there is a great problem, and yes, looking at the issue at face value, it appears that capitalists are running down these resources.

But this raises the question of why has the free market not produced similar shortages of other things? The dairy industry, for instance, exploits cows for profit but we never hear of a shortage of cows. Nor do we seem to be in short supply of chickens to supply us with eggs on our breakfast plates. So why is it only some resources that seem to be in danger of depletion? What is the difference between the endangered group and all the others?

The reason is that people are not permitted to own the capital value of forests, parts of the sea, elephants, tigers, etc. If one is able to own the capital value of the resource then exploiting it for present revenue has to be balanced against the loss of capital value in doing so (a full explanation of this is available here). But if one does not own the capital value then the only concern is for present revenue – there is no cost to exploiting resources to their fullest now. In fact the only cost is that someone will get there before you. So instead of all the myriad of Government restrictions and regulations concerning these depleted resources in order to “cure” the alleged free market ravaging all that is needed is to extend full private property rights to these resources and they will be conserved. Once again the problem is not too much free choice but the fact that people have been prevented by the strong arm of the Government from having a reason to make the “right” choices.

And let us conclude with the most pertinent of all alleged market failures, the phenomenon of “boom and bust”:

“Free market greed has caused capitalists to invest in wasteful projects! Clearly they need the Government to give them speed limits!”

Once again, looking at only the proximate causes of boom and bust will reveal that entrepreneurs invested too heavily in a particular sector, inflating a bubble that eventually pops, causing widespread misery and unemployment. In the 2007-8 financial crisis, the effects of which are lingering with the current malaise, a summary of the charge is that greedy bankers had lent money to people who could not afford to pay it back. End of story. But what is not told by peddlers of this narrative such as Paul Krugman is the moral hazard created by the so-called “Greenspan put” which had the effect of financial institutions expecting their profits to be retained and their losses to be borne by an influx of monetary liquidity during any risk of collapsing asset prices (i.e. in short paid for by inflation). If one can keep one’s profits and socialise one’s losses is it any wonder that people took wild risks? If there is only ever an upside then wouldn’t you? This is before we consider the fact that credit expansion is the cause of the business cycle in the first place that will always lead, by falsifying the societal time preference rate, to the expansion of unsustainable investment projects that must be rendered wasteful as soon as the inflation stops.

Therefore, next time you read that the “free market” has caused this, that, or the other, stop and think as to precisely what the options of the free market participants were. More often than not you will trace the source of the bad decision to some kind of Government interference.

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Gun Control following Newtown

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The recent shootings in Newtown, Connecticut, has sparked a renewal of the debate on gun ownership by private individuals. A central issue within the debate is whether such ownership leads to more or less violent crime and/or, more specifically, gun crime. For example the Brady Campaign reports that in a single year the number of murders caused by private gun ownership was 39 in England and Wales (where gun control is apparently strict) and a whopping 9 484 in the Untied States. Even adjusting the figures for population size doesn’t make an overwhelming difference. The problem, though, is that the murder rate in England and Wales (or of the UK as a whole) has reportedly been lower than it is in the United States for at least two centuries; for much of that time laws on gun ownership in the United Kingdom were negligibly different from those in the United States. Witness also the controversy surrounding John Lott’s research on the subject.

It is not the purpose of this short essay to examine which claims on which side of the debate are true and which are not. But it does raise the question of whether murder rates, or more specifically, gun violence and violent crime in particular, are lower because of gun control laws or in spite of them. This demonstrates that evidence is only conclusive when it is carried out in a controlled environment, something which is simply not possible in human society. Before zealots on either side of the debate drown themselves in an orgy of evidence we should realise that such findings are, at best, illustrative of a theory rather than proof of it.

A purely theoretical treatment of the issue, however, poses great problems for any gun control advocacy, whether it be for certain types of firearm or guns outright. If there are to be Government-enforced restrictions on the private ownership of firearms then this must be premised on the notion that individual human beings cannot be trusted to own guns responsibly, or, more accurately, that voluntary action between buyers and sellers of firearms (say, for example, patronising only those outlets that behave according to an established code of sales conduct) is insufficient to prevent firearms from falling into the wrong hands. If voluntary action is insufficient it therefore requires force. And where is this force going to come from if not from the barrel of a gun? Here enters the tacit assumption that is present in all gun control advocacy – that it is OK for the Government and its agencies (such as the police) to own and carry firearms. But if we don’t trust the rest of the population with gun ownership then why should we trust these people? They are human beings just like anyone else so why should they be more responsible? What is to stop these people from committing criminally culpable behaviour with firearms? May be the answer is that the Government consists of wise overlords who are elected by the people to ensure that all firearm owners behave responsibly. But this argument is simply contradictory. The general public is not permitted to own firearms because its members cannot be trusted with them nor are they to be trusted through their voluntary buying and selling on the marketplace to restrict who can get hold of a gun; but somehow they are able to choose the people who will behave responsibly with guns and who will also behave responsibly in using these guns in choosing and enforcing who should and who should not also get them amongst the general public. Rather than breeding responsibility isn’t such a situation more likely to induce voters to choose representatives who wield guns to their (the voters’) own advantage? The whole argument, in short, is “we, the masses, are not to be trusted with guns but will permit our representatives to use guns to enforce who we think should have guns and under which circumstances”. So would they not also use them to enforce anything else that the “untrustworthy” voters want?

Indeed, that is precisely what happens in a democracy. People vote for the politicians who promise them the most bounty (“tax”) from other people’s productivity. This tax is collected at the point of a gun – don’t pay it or try to defend yourself from having to do so and the Government arrogates to itself the right to take what it wants by force – and how much easier it is to collect it when the taxed are not armed (perhaps this explains the origin of and the meaning behind the second amendment to the United States Constitution?).

May be a more fruitful empirical study would be one that compares the size of states with the extent of their gun laws.

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