Thursday, August 29, 2013

Another Passing Thought

I have recently watched a considerable number of British programs and I am quite amused at the hatred they feel toward Thatcher. First, it is strange to hear about Thatcher harming the poor, wen the post-war socialism of 30, almost 40, years had hardly made the poor well-off. After all, part of the reason Thatcher won was how horrible a mess British economics were in the 70's. So, how is Thatcher to blame for what she inherited? It is akin to Blaming Reagan for the economic crises he inherited from Nixon and Carter. Even more amusing is how shows conceived and written in the late 70's are so often hailed as "showing the horrors of Thatcherite Britain" when they were written, even filmed, before her election.

There is one thing this Thatcher hatred does teach me, our left is remarkably restrained in their Reagan hatred. At least they let it largely die off in the late 90's, and even tried to pretend they had liked him after he died.

Well, just a passing thought. Nothing particularly profound to say about it, just something that caught my fancy.

Wednesday, August 28, 2013

Won't Get Fooled Again

Apparently Rove, Cheney and Bush have tricked the Democrats again, convincing them Syria used chemical weapons. Probably just putting down insecticide the way Saddam was (that he stored in military bunkers... where everyone keeps insecticide!), or deploying some of those ice making trucks, or whatever they were.

Seriously, if the left supports Obama in military action against Syria while claiming Iraq was unjustified, we have some pretty clear evidence of absurdly partisan pleading. (Unfortunately, I think some on the right may be guilty of the reverse, so I am going to have some bipartisan mockery to undertake.)

Then again, the left already proved this, when they called Afghanistan the "next Vietnam" and a "quagmire" until we attacked Iraq, at which time Afghanistan became "where we should be concentrating" and Iraq became the q-word. But this Syria thing may provide yet more evidence.

Well, I might mock the Ron Paul boosters and the neo-anarchists and libertarian left and the rest, and with good reason, but I have to give the Devil his due, at least they are consistent in their foreign policy. It may be wrong-headed to a suicidal degree, but they are consistent, which, sadly, I cannot say about many others, on both ends of the spectrum.


Sunday, August 25, 2013

Contracts and Freedom

Contracts are one of the most misunderstood elements of our legal system, perhaps of our entire society. To give but one example, how many popular tales exist of some evil being -- be it Satan, a witch or a genie -- using the "letter of the contract" to bedevil some poor innocent? Not that the distaste for contracts is limited to popular culture. Governments, state and federal, have undertaken countless actions to limit or invalidate specific elements of contracts, and court rulings have modified or eliminated many more. There are numerous laws that tell us what can be included, what cannot, what must and must not be included, what meaning specific phrases must be given, what is implied, what can and cannot be waived and so on1. And beyond the laws there is an even larger body of legal precedent, though the most activist elements appear only in the last half century.

What makes this so interesting is that the contract, once viewed in a relatively neutral light, has come to be seen as the tool of oppression, as the means by which "big business" exploits the common man2. And thus every exception made, every piece of legislation eroding the power to contract, is seen as a blow for freedom and the "little guy".

The problem with this perspective is that it misses a crucial point. A contract is not a tool of oppression, it is not a means for chaining the buyer or borrower. A contract is a means for creating private law to fill a gap where public law is inadequate or nonexistent. And thus, when contract law is eroded, it does not create freedom, but rather simply changes who makes these decisions3, it moves the law out of the private sphere and into the public. In short, it takes the choice from the contracting parties and gives it to the government and courts.

Which is, of course, why so many different authoritarian movements have attacked the right to contract. Whatever their orientation, whatever their goals, any political movement which intends to give the government a greater say in private decisions must recognize that the contract is an impediment to that objective, as contracts are entirely private, a means of making private law, limited only to those who agreed to the contract, and excluding all others, even the government. As most interventionist movements seek to prevent the government from being excluded from any decision, this is anathema to these ideologies, and thus the contract comes under fire from liberals, socialists, communists, fascists, nazis, protectionists, social conservatives, environmental activists and everyone else who thinks the state needs to have more of a hand in individual decisions.

There are any number of ways this attack can be undertaken. Contracts can be portrayed as the tools of the rich and powerful, who force the poor into "contracts of adhesion" about which they have no choice. Or perhaps the poor and middle class can, as with most liberal ideologies, be portrayed as poor hapless naifs, who know no better and thus willingly enter into exploitative contracts4. Or maybe the attack will mirror the assaults upon the gold standard and other concepts that have stood the test of time, and contracts will be portrayed as primitive, antiquated, relics of a bygone era, unable to adapt and in need of government adjustment, such as the death of caveat emptor5. But, whatever the assault, however the attack is worded, the end result is always the same, contracts are reduced in standing, no longer an absolute right of agreement between two people, they are reduced to a limited right, with the ever present possibility of alteration or negation by the state.

Sadly, very few people seem to recognize that such assaults are attacks upon liberty, and that the supposed gains can never replace what is taken away.

Actually, if we want to be honest, in most cases, even the supposed gains are not realized. Or if they are, they are offset by losses of an even greater degree. For example, as was discussed before6, the courts have been quite active in the movement to deny us the right to waive liability in contracts, making manufacturers and sellers subject to liability suits even when they have signed waivers, explicit exemptions in contracts and a host of other protections. In the mind of the courts, this is for our own good, to protect us against dangerous and exploitative manufacturers. However, in truth, having removed all of these freedoms, denying manufacturers and sellers any protection, the courts often drive them to exercise the one freedom they have left, the freedom not to sell, and so goods and services disappear from the market, leaving us with fewer, and usually inferior, choices7. That is how supposed protective law ends up helping us.

But all of this is material I have written so many times before. I have told endlessly how government efforts end up producing paradoxical results8, how eliminating private decisions leave everyone less satisfied9 and so on. Perhaps a much more useful approach would be to cut short all the examples, all the case by case arguments and instead look at how contracts should operate, the role they should play, and why that role makes them such a popular target.

I have discussed the fact that my ideal government is not the one I would initial fight to establish10. I know that many may find that odd, but I find it odd that so many who call themselves libertarians would seek to establish freedom by a top down decree. To me that seems more of a contradiction than any political concept I could name. No, my ideal may be an absolutely minimal government, but in practice, I would like to see a simple return to true federalism. Under that system the federal government would have a very limited role. Besides ensuring the flow of interstate trade, negotiating with foreign powers, providing a national military for matters that go beyond the scope of state militias and a very few other simple matters, it would leave everything to the states. And equally important, to the people.

The states, for their part, would do much as the federal government, but on a different level. They would provide some judicial functions, a state police force for matters that reach beyond the counties, incorporated cities and so on, a state militia, enact criminal laws, and much of the rest would be left to counties and cities, which would handle much of the day to day.

However, in a true federalist system, and even more, in a more libertarian one, there are a lot of matters where there is no law, where people are left to their own devices. And that is a good thing. Except for one problem. Private citizens have limited means to make one another comply with past promises. It is all fine and well to leave people to their own devices, but they need some assurance that what is agreed will be done. One could always ask for some sort of bond for performance,  but then, what is to prevent the bond holder from absconding? Or one party or the other falsely claiming non-performance and demanding the bond? In the end, we need some way to create enforceable agreements, and that is where contracts come in.

However, that is also what makes contracts a danger to many schools of government. Because, when people have a means of enforcing private law, they will also make private law, they will think they can form private agreements, without the state being involved, or even informed. And nothing more infuriates interventionist government officials than the idea that something is outside of their power, or, even worse, outside of their knowledge.

And thus, for reasons both practical and philosophical, contracts remain the top target of almost every political theory that would see the state exercise more control. But, sadly, the importance of contracts seems to elude their opposite numbers, leaving contracts, arguably one of the most important tools for erecting a free and stable society, without friends.

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1. See "In Praise of Contracts".

2. Oddly, there was a movement for a time (I am not sure if it persists) to use contracts to regulate dating behaviors in college. Apparently, the political left can recognize the power of mutual consent in dating, but not in business. Not that such inconsistent beliefs surprise me. See "Economic Versus Social", "A Question for Artists of the Left", "Cognitive Dissonance Part 2", "Liberal Bait and Switch", "Private Versus Public Racism", "The Danger Inherent in Banning "Bad Ideas"", "Public Funding is Government Control ", "Private and Public Coexisting", "Volunteer Fireman, Barn Raisings and Government",  ""...Then Who Would Do it?" ", "Collective Action and Government", "Why Must The Government Do It? Part I", "In Loco Parentis" and "Inconsistent Understanding". 

3. In a way, this is very similar to the change from private medical insurance or private payment to "universal health care." As I entitled one essay on that topic, the question is simple "Who Will Decide", will it be the private individuals with an interest in the transaction, or the state?

4. See "Another Look At Exploitation".

5. See "Consumer Protection" and "Caveat Emptor".

6. See  "Oven Mitts and Safety Regulation", "Inspections, Regulations and Bans", "Perverting Self Interest""The "Right To Sue" As Our Only Right" and "Real Life and Regulation".

7. See "The Virute of Novelty and the Value of Tradition".

8 See "When Help Hurts",  "When Help Hurts II" and "Help and Harm"

9 See  "Competition" and "The Basics" .

10. See "Reforms, Ideal and Real", "Minimal Reforms""The Benefits of Federalism", "Consolidation and Diffusion", "Redundancy as a Protective Measure", "Why I Am Not A Libertarian", "Learning From Crows", "A Rational Approach to Punishment", "Symmetry and Asymmetry in Government", "The Tragedy of the Creative Commons" and "The State of Nature and Man's Rights".

Saturday, August 24, 2013

Imperfect Competition, Abstraction and Anti-Trust

This should be brief, it is simply an idea that struck me while writing a reply to CW, and I thought I would mention it here, perhaps to use a bit later in a more detailed essay.

One of the situations found in real life markets that terribly vexes those who worry about monopolies is the fact that a given good, while supposedly monopolized, has one or more substitutes, and so despite the supposed monopoly or cartel, prices still remain at market level. In fact, I would argue, except for labor itself, there is no good in the market for which there really is no substitute. Of course, some are better and some worse alternatives, but that is not all that important, the fact remains that, unless one company completely controls the entire market, there is always a competitor out there maybe an  imperfect replacement, but still a competitor.

Of course, the advocates of anti-trust will argue that this is absurd, that those are imperfect replacements, and thus this is not "true" competition, but I would reply that there is no such thing as "true" competition. For example, though there may be a market for "labor", I hold a monopoly on the labor of Andrew S.. Similarly, while there may be a market for "housing" or even "housing in state X", you have a monopoly on your own home, no one else can own that house at that address.

Now, this shows exactly the problem with any model of competition, it involves an inevitable amount of abstraction. In some cases, it may seem justified, for example one potato may seem much like another, or a given shirt from a specific factory much like another, but the fact remains that each specific item is not completely interchangeable with another. At least in one sense. On the other hand, it is a perfect substitute for someone who just wants "a potato" or "a white long-sleeve shirt". So, it seems, the degree to which competition is "perfect" is a matter of context, which makes the belief in an absolute, legally definable and prosecutable type of monopoly absurd. A "monopoly" would assume there was some clearly define "market" which could be controlled, but if all competition is to a degree "imperfect" competition, and all goods are, in some sense just near substitutes, then by what definition can we say a market is monopolized, if we can't define with precision what a market is?

Well, it is, as I said, just a passing thought, but one I may want to develop later. If is interesting to think that what the text books and rabble-rousing politicians claim with such certainty is, in truth, itself nothing but a near approximation. Frightening as well, given the political influence one can gain through such approximations, and the legal trouble they can cause, but interesting.


Thursday, August 22, 2013

Non-Governmental Communal Solutions

I know, it is a dreadful title. I apologize, but it does have the virtue of telling right up front what I intend to discuss. And, if the title is bad, at least I promise the essay shall be as short as can make it. I intend, as briefly as possible, to look at two simple questions. First, whether a communal solution must be governmental in some sense. Second, why there are differences in outcomes if a solution is kept private or made governmental, even if both involve the exact same community.

I write this partly in response to a comment by CW to my essay "The Magic Bureaucrat". She argued that when I spoke about communities feeling a pressing need for roads and thus making efforts to build them or have them built by others, that the "community" I mentioned would be a form of government.

Now, I imagine when she first reads this, CW will imagine I am engaged in the same sort of sophistry as some neo-anarchists who talk about doing away with governments, but having some sort of enforced community standards, thus bringing in government while calling it something else. However, in this case I would argue I am doing nothing of the kind, I am making a very clear distinction, unlike the neo-anarchists who speak vaguely of "enforcing standards", while denying their "communities" have the ability to punish (but how else can enforcement be carried out?), my communities are precisely that, voluntary associations without the essential attributes of government.

Since this is the answer to my first point, let me spell it out quickly. The one essential attribute of government, as opposed to any other form of collective action, is that it can use force against members (and non-members) of the community. For the moment, we will ignore peculiar situations, such as groups which allow for punishment of members by force and so on. Governments, to be governments, are organizations which can apply force, without the consent of the subject of that use of force, and without allowing the subject to renounce membership. I am not sure all of those added qualifiers are needed, basically the use of force is more than enough to decide in almost all cases whether or not it is a government activity.

Having said that, then it must be equally clear that community actions can easily be non-governmental. For example, in Baltimore, when Charles Village felt they were not receiving adequate policing from Baltimore City, they formed a community group which took collections from residents and hired private security. This group could not use force against those who violated their rules, nor could they force anyone to join. That is a community activity without governmental powers. Or one could look at homeowners' associations, which are also groups without the ability to use force. In some cases, through covenants, they have gained the ability to assess fines, but that is a contractual obligation, not a use of force, and at some point, the person consented to the situation, either when he signed the covenant, or when he purchased the home with covenant, and so it is a voluntary obligation, and thus quite different from government.

Which brings me to my second point, and the more important one, why does it make a difference if, say, a small town establishes a private committee to run its school instead of having the government establish formal public education? Why would I prefer true volunteer fire departments to government run ones? Why, in general, should an activity be kept private if possible, rather than run by state or local government, even if it is in the interest of every member of that government body, and a list of every member of the private venture would be identical to the list of those subject to the government in question?

It is not a question to which the answer is immediately obvious. In fact, at an earlier time, I conceded that it was arguable that the state could be used for "collective action" such as vaccination or flood abatement or similar. At the time, I argued, wrongly, that it was a matter of indifference whether such activities were private, or managed by the state, and so could be done either way. ("My Vision of Government Part II")

Since then, I have reflected upon the matter, and come up with a fairly strong argument against entrusting such activities to the state. And, for once, not one involves arguments about creating justifications for future state encroachments. No, in this case, there are some very strong, concrete arguments, against state involvement, arguments which demonstrate clearly the superiority of private control in every conceivable venture, outside of the bare minimum of government activities. ("My Vision of Government", "My Vision of Government Part II",  "A True Conservative Platform", "Minimal Reforms", "Reforms, Ideal and Real""The Case for Small Government")

The basic argument offered in favor of government is that government already exists, and thus why bother duplicating efforts by creating a private group with the same membership, determining leaders, and so on? If the venture is kept as an essentially private enterprise, with funds collected specifically for this task and administered independent of other government activities, then what is the harm in allowing it to be a government activity? (A few others make additional arguments about the benefit of being able to force support from those reluctant to contribute, but as I find those negatives rather than positives, I will ignore them for the moment, and refer those wondering why to my earlier essay, cited at the beginning.)

The problem is twofold. First, that government management, for better or worse, is different from for profit management, or even private management of charities, and no matter how serious state officials are about running a venture as if it were private, they simply cannot prevent government concerns from entering into their management procedures. ("The Inevitability of Bureaucratic Management in Government Enterprises") Second, the state does have powers no private venture does, and are also free of much oversight a private effort would have, and thus, in the end, it is absurd to think it could be kept separate from the government for any length of time. Again,  this often comes about from the best of intentions, and for reasons no one could fault, or at least that seem understandable, but the outcome is still contrary to what one would desire. (  "In The Most Favorable Light", "With Good Intentions", "Grow or Die, The Inevitable Expansion of Everything", "The Right People, The Wrong People and "Just Plain Folks"", "The Inherent Disappointment of Authoritarianism" , "Tyranny Without Tyrants", "Consumer Protection" ) 

And then there is a third issue, one that private ventures either do not experience, or have means for readily resolving. That is that government actions tend to become battlegrounds for conflicting opinions on all manner of issues, from how various activities are managed to the way they relate to various "hot button" social and political issues. (Cf "Asking the Wrong Question", "Some Thoughts on "Summerhill"" as well as some of the early parts of "In Defense of Zero Tolerance, or, And Examination of Law, Common Sense and Consistency") As such, many activities, when handed tot he state, create conflicts and tensions that would not exist if these were private actions. I will not discuss that issue directly, but we will consider how such hard feelings decrease efficiency and increase cost.

Allow me to clarify those three points, and then, as promised, draw this to a hasty close, before I follow my natural inclinations and run on and on about matters tangential tot he main topic.

The first problem is very simple. For profit firms run to make a profit. Individual divisions re judged, for the most part, on how much profit they make, or, if they make components used internally, how much they save over outsourcing the same task. Charities are a bit different, they do not seek to make a profit. However, private charities still run by very similar principles, individual divisions and staff are judged on how well they raise funds, or how efficiently they use the funds raised. They have no profit, per se, but can still apply some manner of modified cost accounting to judge success or failure.

The state has no way to do the same. In businesses that would be for profit in the private sector, the state lacks the one essential motive, that of turning a profit. And in terms of activities similar to charities, the government likewise has no need for fund raising, and often has incentives that argue against using money efficiently. (Eg. Money left unspent at the end of the year is taken as a sign that funding can be cut in years to come.) Because of these differing circumstances, the cost accounting style of management that makes private ventures maintain a degree of efficiency is not present in government, and instead other pressures come to drive the activities in question. ("Bureaucratic Management", "The Bureaucratic Mind", "Bureaucratic Management and Self-Policing", "Bureaucracy and Arbitrary Power", "Fear Driven Enterprises", "Inflexibility and Bureaucracy", "Adaptability and Government", "Best Practices and Resistance to Change, Bureaucracy and the Free Market".)

Because of a lack of cost accounting benchmarks, government tends to set up promotion schedules based upon two factors, tests and time served. There are some other factors, such as assessments by superiors and the like, but for the most part, assuming one can pass the tests, most bureaucratic organizations tend to promote on seniority. Thus, one has little incentive to show initiative, or to go out on a limb to make improvements, as the reward for success is small, while the risk attending failure is very great. Similarly, as drawing the attention of politicians or anyone politically connected can be career ending*. Thus, bureaucracies tend to be, using a term I invented, "fear driven", that is, most members of bureaucracies, excluding a few at the very top, tend to develop a belief they should keep their heads down, make no waves, serve their time and slowly advance, any extra effort, any exceptional performance, is more likely to do harm than good.

Nor is this the only reason bureaucracies tend to be less efficient than private ventures. Bureaucracy, thanks to being more easily subject to lawsuit, and also because of this fear centered management principle, tends to establish rigid rules, and follow them in all cases. Not only does this stifle initiative, it tends to make them inflexible and unresponsive, unable to respond to circumstances as private firms do.

Combining these two factors, it is easy to see that a private venture will inevitably be more efficient, more responsive, and less hidebound than a public governmental effort.

Which brings me to our second point, the tendency for the lines between groups to become blurred. For example, though we said above we would keep the funds raised for our venture separate from general funds, is it likely, should funding fall short,t he state would not include general funds in the venture's budget? Or, should the general funds fall short,t hat the state may not borrow from the venture in question? And once this common sharing of funds takes place, is it hard to imagine that the state might start to use whatever our venture might be to help reinforce other political agendas? For example, using public schools to promote other youth agendas. Though the state may want to keep things separate, those who run the government usually do really believe in what they promote, and so they think they are doing the right thing. Thus, they tend to see such blurring of lines as a small technical violation in pursuit of the greater good, and in the end it is almost impossible to keep any activity separate from the government in general once the government comes to manage it.

And that helps to explain the final point, that being the way many government undertakings, even some that seem innocuous and apolitical, come to be sources of contention.

For example, educating children seems an innocent and apolitical goal. However, when we then ask what will be taught, whether we will include evolution, creationism or intelligent design, whether we will teach sex ed and how, what particular perspectives will be included in sanctioned history texts and so on, this seemingly near universally supported goal becomes a source of much strife. And, as it is difficult to satisfy all sides, this tends to result in needless waste of funds, either in offering solutions for all and sundry positions, or in fending off suits by the dissatisfied, while spending even more on PR to stave off more suits.

Some may argue that this is hardly unique to government, private schools, for example, also face arguments over what to teach. Which is true, as far as it goes, but it ignores a very significant different. When it comes to private schools, there are many, many schools, each with its own agenda, and with parents free to choose the one they find best, paying only for the views they most closely resemble. On the other hand, public schools are funded with money taken forcibly from each of us, used to support ideas some of us may not endorse, and often imposing "one size fits all" government solutions. ("Nonsensical Beliefs", "The Other 99%""Bureaucracy and Arbitrary Power", "A Question for Artists of the Left", "Misunderstanding the Market", "An On Demand World", "Competition", "The Basics", "The Inherent Disappointment of Authoritarianism", "A Perfect Example (And an Unintentional Example of Blindness on a Simple Issue)",  "Moral For Me, But Not For Thee", "My Censorship Is Your Discretion"  and "Patronage" )  And, when it comes to private schools, even if parents don't completely agree, as they are paying for the classes, and are but one of, say, a few hundred, they feel (rightly) they have much more chance of being heard than they do being one voice in tens or hundreds of thousands, trying to convince politicians to force the hand of a massive bureaucracy. And thus, though private may produce no more of a perfect fit, the customers generally feel better understood at the private alternative, and thus the related costs are either non-existent or much, much smaller at worst.

I know I have raced through this topic very quickly, many places leaving citations and terse outlines rather than my usual detailed explanation. However, I do not have a lot of time tonight, but wanted to post a completed essay. So, for the moment, I hope this will be enough to at least make my case in a very basic way. Time allowing, I may examine some or all of these matters again in a different essay. But at the moment, I hope this brief survey is interesting and somewhat informative, if nothing else.

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* A bit of full disclosure. My father was a police captain, who near retirement had the misfortune to  upset an aide to a congressman. He was soon reduced to patrolman. He managed to climb back to lieutenant before retiring, but the lesson is clear, drawing the attention of the politically connected can do much to end one's career in bureaucratic organizations. (Though I developed my theories independent of this situation. Much more of my thoughts on the matter came from my time working in Social Services and as a military contractor.)

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ADDENDUM 2013.08.24 

When I read this again, I realized that by using so many examples and jumping between them I might have muddied the waters myself, and, as I said in my response to CW's comments, the waters were additionally muddied by the problem of trying to make a demonstration of a principle while mainly addressing the attempt to revert to that principle after decades of violating it, which means I am not just discussing the principle and its effects, but also the negative consequences of trying to clean up the mess of government involvement, and thus things seem less clear than they need to. So, let me add two small points that may help.

First, when I discuss roads or schools or fire departments or other already existing institutions, it is difficult to discuss in the abstract, as the questions arises of how to handle already existing institutions. And this is not a short coming of the theory, but a consequence of undoing the damage done by government intervention. In an ideal world, where we start from scratch, roads would be built when someone would fund them and ownership and maintenance and the like would be fully voluntary and clearly established. Trying to figure out who will maintain and own existing roads is akin to deciding who would own all the industries in post-Soviet Russia, a total mess destined to cause a lot of pain, all because of a history of failing to follow principles. And so, when discussing this topic, it is probably best, at least for understanding the general concepts, to think of newly built communities or newly created highways and roads, as otherwise there is confusion that is not related to the free market but rather the prior lack of a free market.

Second, when I discussed how government involvement politicizes things, I used only schools as an example, but that is hardly the limit of this problem. For example, government funding of research has a tendency to create orthodoxies, which makes it very easy to get ahead if you agree with prevailing beliefs, and hard to get money if you do not. Obviously, this is true of any source of funding, but, when the government gets involved, it tends to become the largest source of funds, and other institutions also tend to follow its lead, so its biases become almost universal, while no private source of funds has anything like that scope. So, if we fund privately, we might still have bias, but we have an array of competing biases, while the government gives us but one, and thus tends to narrow the scope of science.

But even that is too close to academia, and politicization can occur anywhere. Just think of how highway funds, intended only to promote travel and commerce and provide for defense needs, were instead used to enforce nationwide drinking ages and motorcycle helmet laws, among others. Once the federal government becomes a source of funding for anything, that funding can become a tool with which it can enforce its beliefs on states, whether or not the funding has anything to do with the issue at hand. Of course, we have moved so far away from true federalism many will not find this a matter with which they would feel concerned, but for those of us who believe decentralized government is a good thing and wish for a return to federalism, then politicization of funding is dangerous. (See "Minimal Reforms", "The Glory of Eisenhower?")

Nor does this mean only federal funding is dangerous. Think of all the fights over whether town squares could have mangers, or whether you could have Boy Scout meetings in public buildings. Even something as innocent as local government supporting parks, which many think harmless, can have quite serious political ramifications. Again, I agree that private owners of parks could do the same, but a private owner would be doing it on his own dime, and if he relied on park use for income (and private parks do exist and profit, though the state and federal tendency to build parks does clearly cut into the market here), would see his funds dry up if he did something unpopular. On the other hand, the state, or city or county, is doing it on our dime, and they don't have to worry about income, and so, as long as they manage to not get voted out, they really don't have to worry about whether or not anyone likes what they do. Which may be as good a demonstration of the difference between public and private as I could offer.

Wednesday, August 21, 2013

The Magic Bureaucrat

In replying to a comment this evening, it struck me that there is a very peculiar mindset which we have developed, both liberal and conservative, which, while very pleasing to the government and the supporters of unlimited power, is troubling to those of us arguing for keeping as much power in private hands as possible. It is something I have mentioned before, but not really examined in great detail. (See "Volunteer Fireman, Barn Raisings and Government",  ""...Then Who Would Do it?" ", "Collective Action and Government", "Why Must The Government Do It? Part I", "In Loco Parentis", and "Inconsistent Understanding", among others.) This is the mindset that sees an activity being performed by the state and decides that, no matter how hard we tried, private enterprise could not replicate the government in providing the same service, that there is something magical about the state that makes it the sole means for providing a given service.

Before I go on, and to prevent a few rather silly arguments, I need to make two points. First,  while I was going to write "there are a few services that only the government can provide", I realized that such a statement is not accurate. In fact, what I say is precisely what I mean, we can all provide for ourselves everything currently provided by government. Second, that when I say "can privately provide the same services", I do not mean to imply the free market would provide the same thing in the same way, but rather that private enterprise could, through various means, produce a similar result, provided it was the desire of a sufficient number.

Let me address the second point first, as it is the easier of the two to explain.

Let us take as an example, say, education. If we look at our present circumstances, I doubt anyone would want to see private enterprise replicate our present educational fiasco, so that at least is not an issue. However, I need to add a second point. When I discuss making education entirely private, people often bemoan the fact that only the rich will be educated. I would argue that actually, given our level of wealth and the amount taken to fund our present dismal educational system, most middle class families, and even some relatively poor ones, could also afford an education. However, there doubtless would still be some who could not afford education, and some others unwilling to pay for it, and that is what I reference above when I say "provided it was the desire of a sufficient number". Currently, we have no choice, we are forced to fund universal education. If the system were private, that would not be the case. But nothing would stop anyone from trying to provide for others. And so, if there truly is a general desire for universal education, it seems clear the free market could provide it through various charitable means. There is nothing magical about state funding, nothing the state can do private enterprise cannot. And, in most cases, do it quite a bit more efficiently.

Which brings me to another argument, that while I suggest private enterprise could provide everything the state can, what about welfare? Social security? Medicare? And so on. And again, my response is quite simple. If the people truly believe in the goals of those programs, there is nothing to stop them from creating private charity to achieve those results. And even better, as private charities are not going to be bound by rigid rules as is the case on the dole, allowing individuals to game the system and live on welfare for life. With private charity less certain, there is more incentive for those who can do so to find a means to be self-sufficient. And thus, provided the people truly want to provide for these programs (though social security is actually better replaced by free market alternatives, many of which already exist int he form of various investments and annuities), they can clearly do so through free market options.

To which the reply is inevitably "but what is no one wants to pay?" A question which actually shows the one great benefit of the free market. If no one wants to pay, then by what right do we force them to do so now? If we truly want to support the poor, then the free market lets us do so with our own money, which is the only just way to do so. It does not give us the option of big government, which is to pay for our charitable impulses with the money of others. In short, int he free market, we must actually pay for our own desires, rather than making others do so, whether they want to or not. And that makes me think the free market is far superior to the state.

Now, to address our other point, one which changed rather dramatically even as I was writing this essay.

Initially, I was inclined to explain that police, armies, perhaps some civil court, maybe even all, were activities which could be provided only by the state. But, even as I wrote it, I began to realize I would have to add an exception for self-defense, as I have often stated we do not surrender our rights, but just deputize the state. (See  "A Right Is A Right", "The Problem of Pornography", "Free Speech, Absolute Rights and the Absurdity of "Balancing Tests"", "Consolidation and Diffusion", "In Defense of Discrimination", "A Statute of Limitations for Race", "How to Handle Idiots", "Back Again", "The Danger Inherent in Banning "Bad Ideas"", "Smaller Government , Fair Weather Friends and Special Casesand "Best of the Web gets It Very, Very Wrong") But that though made me think about the second point, the argument that the free market might provide the same outcomes, but not always by the same means, and as I thought about that I realized there are also free market analogues to all government powers. For example, if we include civil courts, there is the alternative of arbitration, perhaps with a posted bond to ensure performance. Or, in terms of police, one can always provide private security, bodyguards and others to defend his person and property. Likewise, companies overseas often employ mercenaries of one form or another to provide the personal security the army often provides. Thus, there is very little the government does which cannot also be provided, not only for oneself, but also through a free market alternative.

The only real differences are to be found in three rather narrow differences, and even those make relatively little difference. First, the state services interest themselves in the rights of everyone, while private alternatives tend to be limited to a single, or small group, of individuals' rights. Second, the state has the alternative of stopping short of the use of physical force, and instead imposing imprisonment, while individual self defense requires force, unless they call in government officials at some point. Finally, if we assume courts are government agencies, then there is the fact that civil courts, unlike arbitrators, can impose judgments upon perfect strangers who have some sort of tortious encounter, which private arbitration cannot. But, though these are all relatively trivial differences, let us examine them briefly, so we won't need to bring them up again when discussing the main subject, replacing government ventures with private efforts.

First, let us look at courts, as this is an issue I have mentioned many times, promised several times to examine in an essay of its own, and never quite gotten around to exploring. Basically, there is no need for civil courts to be government agencies. We could easily establish private fora for arbitrating contractual disputes, funded by filing fees, court costs or some other mechanism, which would adjudicate contractual disputes. Initially performance could be enforced through requiring a bond, but as the system matured, and settled down to a few more reputable firms, the threat of being excluded from them for failing to follow a ruling would likely be more than enough incentive for all but the most reprobate.

The only area in which this falls apart, and the area where government has a special advantage, is in disputes arising from injuries of a non-criminal nature between strangers, that is, the traditional realm of torts (before liability law made torts of many cases that would have been contractual in the past). In some areas, such as car accidents, we could make contractual disputes of torts, in a theoretical free market. We could have the owner of a roadway require all users arbitrate disputes in a specific forum, or perhaps could set up some other system of indemnification. However, that only covers some cases. In many others, the injuries between absolute strangers meeting at random, there is simply no way to provide a means of settlement in advance. (It is not surprising that early common law treated torts as akin to crimes, making them a variety of trespass, as they are much more like criminal than civil law.) And in truth, torts are the one reason I cannot see entirely doing away with civil courts as a government function. Of course, without modern liability laws turning contracts into torts, the caseload of tort-only civil courts would be rather small, even including all the auto related cases, so if we made contractual matters private, the remnant left for government would be rather small, but it would still need government involvement*.

The other two issues relate to the defense of rights, and are more swiftly dismissed, as they are relatively small differences. First, the police, unlike private efforts, have an interest in protecting rights universally, while an individual, or his agents, generally have an interest in specific rights. However, even in this case, the difference is smaller than it seems. As individuals have a legal right to act in defense of the rights of others, at least when they observe a crime, they differ from the police only in a few trivial regards, such as what actions the law allows to prevent misdemeanor crimes, or what can be done with regard to crimes one did not observe. But those are more questions of legal process than of general principle, so, in truth, this difference might be safely excluded from the list, though I will keep it as the fact remains that in overall focus the state and the individual do have somewhat different interests.

The second difference is much more significant. In terms of protecting their own rights, individuals have a very limited range of actions they can take to protect themselves (provided they do not involve the state). They can threaten the use of force, and they can apply force. Thus, in the end, private self-defense amounts to the application of deadly force, or, to be more blunt, in killing those who violate their rights. Because we as a society do not believe in applying such a draconian punishment for all violations, we have created imprisonment (and fines for very trivial violations), and agreed to waive the more lethal punishment if the criminal will accept the lesser penalty. (At least this is my interpretation of imprisonment as a punishment -- see "Reconsidering My Earlier Justifications of the Death Penalty", "The Absurdity of Gun Control", "The Illogic of Sex Offender Registries and Preventive Detention Continues, With a Technocrat Twist", "Symmetry and Asymmetry in Government" and "The State of Nature and Man's Rights" for a discussion of imprisonment, alienation of specific rights, and so on.) Individuals do not have this option. They can threaten violence unless a criminal desists, and they can use force if a criminal is violating their rights or those of others, but that is the limit of their abilities. As a society, we have agreed that imprisonment is a punishment which cannot be easily applied individually (except in very short term situations, such as security guards holding someone until the police arrive), being so easily prone to abuse. And thus, this punishment has been limited to the state. And, as a logistical matter, that seems a sound decision. Imprisonment is not easily handled on an individual basis, and thus it is best left a government response.

Thus, I suppose I have to revise my position yet again. While in the big picture there is nothing the government can do that is not possible through individual action, there are a few specific cases where government can engage in actions that would not be suitable for private individuals, such as arbitrating true tort cases or imprisoning for the violation of rights.

Having addressed those two points -- that similar outcomes may come from differing approaches, and that there are but a handful of trivial cases where government actions lack a private analog -- let us look at our main subject, the public belief that the government has a unique ability to provide certain services, the arguments against such a belief, and the consequences of so many holding this belief to be true.

I suppose the best starting point is to state the obvious, anything government does is done by private individuals. They may be acting as government officials, or on behalf of the government, but government itself is nothing but private individuals who currently hold government posts. Thus, in a very strict sense, anything done by government CAN be done by private individuals. Of course, there is a question of whether such actions are appropriate for private individuals to undertake, as well as a related question of whether private or government action is more efficient, but in the end, in a very minimalist sense, government actions clearly can be replicated by private groups of individuals. Thus, we can at least remove the question of whether or not such actions are possible, as clearly what one group of individuals can do, another can as well. It may seem a trivial point, but given the implications of some arguments I have heard, it is worth establishing.

The second point becomes a bit more abstract, but still needs to be made. That is that individuals grant authority to the state. The state does not have any inherent authority**, we give it the powers it has. More, I would argue, as our rights are inalienable and absolute, we do not grant our rights to the government, or make it our agent in the sense that we have it act instead of us. No, what we do is deputize the state, allow it to act on our behalf, while retaining the same rights for ourselves. And thus, as I have argued before, any rights the state possesses must also be possessed by every citizen. While on the surface, this would seem to make much of my case for me, at least in terms of justification, I concede that, though we possess the same rights as the agents of the state, there are certain actions -- such as the aforementioned use of imprisonment as a punishment -- which cannot be easily translated from state to private activity. Thus, while in the abstract we have rights identical to the state, as a practical matter, there might be areas where the state is the better vehicle for solving problems. (Eg. Protecting rights using police forces rather than private bodyguards.)

However, this does not mean it is a complete waste of time to establish these two initial premises. While they do not establish whether or not it is practical to provide various services privately, they do at least eliminate all arguments about various activities being solely the role of government, or in some way being impossible to provide privately. That is, by making these points, we have limited the argument to questions of practicability and efficiency, and that does manage to reduce the number of arguments we need to resolve quite a bit.

So, let us look at the most basic question, why would I think private ventures would be better than government? And the answer is, quite simply, profit management. Yes, there are a few areas -- police, military and the like -- that need to be managed in a bureaucratic fashion (See "Bureaucratic Management and Self-Policing", "Bureaucracy and Arbitrary Power", "Fear Driven Enterprises", "Killing the Railroads", "Adaptability and Government", "Inflexibility and Bureaucracy", "Bureaucratic Management", "The Bureaucratic Mind", "Bureaucracy Revisited", "The Wrong Solution to Bureaucracy", "Inflexibility and Bureaucracy", "Adaptability and Government", "Best Practices and Resistance to Change, Bureaucracy and the Free Market") but the rest of the world can be run by a profit bases system, and more, can be run most efficiently in that way. And I have shown before ("The Inevitability of Bureaucratic Management in Government Enterprises") that the government simply cannot maintain a profit based management. Its ventures will always end up being bureaucratic in nature and thus less efficient. In the end, fro a purely economic point of view, the state cannot run things as efficiently as a private venture.

So, what arguments exist against moving all those things we currently rely upon the state to supply, into the private sector? Or, to be more precise, what argument is there against shutting down much of the state and relying upon the private sector supplying substitutes, at least to the degree we desire one?

Well, there is the one mentioned above, that being that some fear private individuals will not provide the funding they now do under government coercion. But we have dealt with that already, and as I argued above, if we do not want to pay for a specific charitable service, then why should we provide it?

A second argument often made, usually in terms of government funding of various types of research, or government sponsorship of the arts, is that there is not enough profit, or is no profit at all, and thus the private sector would not wish to undertake the same activity. And this is a valid observation, at least to a degree. After all, if a given activity does not have any potential to produce a profit, then it is unlikely a profit seeking business would undertake it.

However, this misses two points. First, if there is enough public interest in something, then likely there is a potential for profit. What government funding of the arts does, is not keep alive popular but unprofitable art, but instead it keeps unprofitable, unpopular art going thanks to good political connections. ("Canada, Subsidies, The Free Market and Intractible Reality",  "The Other 99%""A Question for Artists of the Left", "A Perfect Example (And an Unintentional Example of Blindness on a Simple Issue)", "Moral For Me, But Not For Thee", "My Censorship Is Your Discretion", "Culture and Government", "The Inherent Disappointment of Authoritarianism"  and "Missionary Zeal and Human Discord") The question I would ask is, by what possible reasoning is it efficient to keep paying someone to produce something which is desirable only to a coterie of political patrons? (And, if they do desire to keep it going, why should they not have to pay for it themselves?) Even more significant, why should we be dunned to pay for some artists and researchers to have an advantage over others thanks to political connections? In what way does this advance science and art? (Nor is it a valid argument to point to, say, renaissance Florence as an example of something similar. The diMedicis may have run the state, but in essence, they were acting as private patrons, nothing like today's all-consuming, all-inclusive government sponsorship. See "Patronage".)

The second problem with this position is that science has long been undertaken without an immediately profitable application. Many businesses, as well as private individuals and charitable ventures, have undertaken "pure research" for centuries. It is only today, because of the huge amount of money spent by the state, that we imagine "pure research" must be state funded. Many firms have long recognized the possibility of profitable discoveries coming from pure research and continued to sponsor it. So why would we assume there would be less, not more, when the state stopped taking money to fund research for the politically connected?

Which brings me to the final two arguments, or at least the only remaining arguments which seem somewhat valid. First, the argument often made for great "public works" efforts such as dams, rural electrification, transcontinental railroads and the like, that some activities are so inherently complex and require such a degree of cooperation before they can function that the free market could not produce them. Second, the one often advanced for government funding of highways and the like, that these are essential services, and yet are insufficiently profitable and thus would not exist without the state.  I believe that neither argument is a valid one, but I will take a moment to explain why.

The argument from complexity always strikes me as amusing, as some of our largest and most complicated products as a culture were the result of private enterprise. I will grant, that there are very few large scale enterprises that do not have government involvement, but that does not mean the government built them., much more often it means that, once private enterprise had built it, government could not resist involving itself.  For example, much of our early transportation infrastructure, from roads to canals to railways before the Civil War to ferry lines to international freight and passenger ships, all were organized privately, producing a massive interconnected web of transportation supporting commerce, production and travel throughout our nation, the western world, and even many other lands as well. Yet all of that massively complex system grew up independent of government or central planning, bits and pieces being added as needed, with the end result being an incredibly complex system that government planning could probably not replicate, very likely never improve upon, and certainly not build at anything close to the original cost.

Likewise, though we forget it in these very regulated times, early airlines were all entirely private, at least in the US, and grew up in a "haphazard" and "uncoordinated" manner, and yet provided quite adequate service, as well as establishing the foundation upon which our modern routes are built. Thus, in another case, we can see that a complex and expensive system can be developed without any government involvement or central planning.

Actually, that may be the problem with this theory, the idea that complexity requires centralized authority. I call it the "ant fallacy". When viewed from above, in the abstract, it seems ants are quite organized, and the assumption many make is that they are organized, that there is some central authority, probably the queen, who tells them what to do. However, in truth, ants are not being ordered about at all. Each ant follows a relatively simple set of actions, and provides a very basic set of messages to others. Yet, thanks to a very few possible chemical markers and a remarkably small number of deterministic responses, ants can produce what appears to be a very complex system

In a similar way, the free market often provides means for many uncoordinated individuals to each add a small part, acting only in their own self interest, which, in the end, builds up a tremendous and apparently complex system which gives the appearance of planning. We need only think of the massive set of interconnected private system which grew up (almost entirely) independently to form the modern internet and we can see how such things happen. And thus, despite the assumption made in many cases, it is quite possible for even very complex systems to be spontaneously created, without any central authority or central planning, which makes this argument, at least in many cases, quite invalid.

Of course, there are a few cases where a single complicated venture really does need central planning. A nuclear reactor, an assembly line, a transatlantic cruise line, opening a new mine or oil well, creating an international mail and package delivery service, starting a new sports franchise and so on, all are tremendously complex and require planning and coordination. However, as most of these examples, if not all, show, the free market and private enterprise is quite capable of undertaking such actions, even those (such as mail and parcel delivery) that were once thought to be the proper role of government. And so I see no indication in the world about me that the state has any special capability for planning that private firms lack. Nor is there any logical reason to believe so. After all, mere mortals make such plans for the state, and the same mortals make those plans for private ventures. I will grant, our expansive view of government power means it can coerce others and thus easily remove some obstacles, but that seems more akin to abuse of power than the proper role of the state. ("Kelo, Home Schooling and Drug Laws - Inconsistent Theories of "Social Costs""), and other than the coercive use of power to eliminate objections, I see no advantage the state has over private enterprise.

Which brings us tot he final objection, that some unprofitable, bu essential, services would not exist but for the state.

At one time, the most common example was that of highways built in less populous areas, such as the Dakotas, connecting relatively under-populated areas with multi-lane highways. However, since the notoriety of make-work highways programs such various roads and bridges "to nowhere", people have begun to question the wisdom of building eight lane strips of blacktop between townships which hold a combined population barely reaching three digits. And so, as the welfare nature of many of our highway projects becomes more obvious ("The Glory of Eisenhower?"), we begin to hear more about modest corollaries, such as simple two lane blacktop to small towns.

However, that is where these arguments fall down.

Let us look at one thing that make this argument problematic. First, that the more strongly felt a need might be, the more likely it will be profitable to address, or, if not addressed for profit, the more likely charitable funds can be solicited. For example, a community of hundreds or thousands that lacks roadways would obviously be quite willing, either to raise funds to build its own roadway, as well as create some sort of covenant, or community association, to pay for its maintenance, or else would be willing to pay a for profit firm to build a roadway paid either through the aforementioned covenant/homeowners' association, or else through some sort of fee, be it a simple toll, or some sort of sticker renewed periodically. Of course, it is unlikely such a small community could afford to support an elaborate highway, but then again, they really don't need one. Which is, again, one of the strengths of the free market, since you have to pay for what you want, you tend to economize and really only pay for what you need.

And that, in a nutshell is the argument against such positions. If there truly is a strongly felt need, the money will be found to address it. What will not be found is money for make-work programs, for vote buying, for favors to politically connected individuals or important voting blocks, but that is not the point of government.

I suppose we could go on, as there are doubtless a host of other, less significant objections, but,f or the most part, I think I have made at least the basic case for freeing most activities from government involvement. I grant, those who truly believe in the state will not be convinced. And, given our societal commitment to the belief in the government's special role in so many things ("Of Wheat and Doctors") maybe even the majority of ordinary individuals will not be convinced either. Still, I hope at least a few who read this will, if not being convinced, at least begin to question that faith in the special role and special abilities of the state. If that happens, then I achieved my goal.

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* I have wracked my brains trying to come up with a non-government alternative for handling injuries between strangers, and have had no success. As I said above, it is the similarity to real crimes that makes it so hard to eliminate the state. We can even see it in the way that some torts are named after crimes, such as assault. So, unless I have some sudden insight into this question, or our society agrees to disregard injurious interactions between strangers, I believe at least some sort of civil court functions will remain with the government.

** Obviously some theories of government would disagree, and grant the state inherent powers, but I think, for the most part, modern western individuals believe in some form of social contract, even if they do not use that specific term. Whatever their political persuasion, I believe, except for certain fringe groups, that most of us in the west believe government is granted power by the governed. Obviously, if you disagree with this premise, then a fair part of my argument will fall flat. (I won't bother actually arguing here about the practical arguments for government respecting individual rights, they can be found in "Negative and Positive Rights""Power and Disorder""Why Freedom Is Essential", "Hard Cases Make Bad Law", "Symmetry and Asymmetry in Government", "A Rational Approach to Punishment", "The Single Greatest Weakness", "Misunderstanding Democracy" and "Consolidation and Diffusion".)

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POSTSCRIPT

One of the more sensible arguments offered for highway building, and one of the few justifications which seems close to constitutional, was the need for transportation for national defense. However, viewed skeptically, we must ask if the amount of highways we built were truly needed for national defense. After all, most, though not all, bases are built near population centers, and those that are not soon accumulate a "base town" around them, and such towns regularly have well developed road systems. Thus, we must ask if there was much of a lack of road for moving units between bases, and where there was a lack, if rail or ship could not have provided an adequate substitute.

If we go beyond that, and imagine that the highway exist for rapid deployment of troops in case of invasion, then we have additional problems. First, because many highways simply replaced existing roads, was there truly a defense need there? Or was it simply make work and patronage? Second, do the highways we now have serve a defensive purpose? That is, do they cover the borders and coasts were invasion is most likely? Or do they seem to have little relation to likely defensive needs? Lastly, even if these highways might speed transportation, is it in our interest to provide quality thoroughfares inside our nation to invaders? Do not most invaded nations not destroy roads and bridges? So, how would highways benefit us in defending out nation?

All of the above makes me wonder how much of the defense argument was valid (perhaps some connection between military bases in remote areas I might concede, but that is about it) and how much was a justification to make a patronage system seem constitutional. I tend to come down squarely in favor of the latter.