Tag: public choice

If You Did Vote, Don’t Complain

Sometimes people say, “If you didn’t vote, don’t complain.”  Nonsense.  Everyone can complain.  Complaining about pompous politicians and oppressive regulations doesn’t require participation in popularity lotteries.  In fact, if one were to stipulate who has less reason to complain, it would be those who do vote, not those who ignore the charade.

To the extent that voting is a kind of ascent to the political process, those who do it are implicitly agreeing to abide by the outcome.  I don’t really think voters can’t complain or that voting means you submit to any outcome of politics, but for many who believe in the process, the ritual is an attempt to cleanse oneself of guilt.  Your show of support for thug A means you can feel self-righteous when nearly identical thug B advocates bad things.  Yet it’s the process, the institutional setting itself not those elected within it, that creates the bad things.

Voting is not the way to cleanse yourself from guilt or attempt to achieve social objectives.  Many people argue that voting shows you are civic-minded and highly engaged.  This is a lot of horse manure.  Voting makes you less engaged, less humane, less civic-minded, and less effective at creating the kind of world you want to live in.  There are three primary reasons voting is problematic:

1) Sometimes it works.  If your candidate wins and implements the policy you like, you might feel good because now people will be told to do things the way you prefer.  But consider what this really means.  It means violence.  It means your preferred social change is being generated by force.  That’s an ugly reality any decent person should want to distance themselves from.  If you can’t get there peacefully, maybe you shouldn’t try to get there at all.

2) Whether or not it works, it has side-effects.  If your person or policy wins or loses, whatever political ploys are put into practice have myriad deleterious effects on the world.  Well-meaning minimum wage laws make the poor less employable.  Well-meaning environmental laws encourage waste, fraud, abuse, and price the poor out of many markets.  The list goes on.  You probably don’t know enough about the complex world to know the unintended consequences of top-down enforcement of any policy.  Let the more dynamic, adaptable, open social process figure out the trade-offs instead of a zero-sum either/or ballot box.

3) It reduces the incentive to engage in civil society.  When you vote for something you relieve the pressure to do something more meaningful.  Voting offers just enough satiation for your heart and mind so you can return to your regularly scheduled programming.  It makes people self-righteous and annoying.  It incentivizes signalling you care instead of figuring out how to really care enough to bring about change.  It turns friends into enemies.  It saps creativity by offering a brute, ham-fisted quick-fix.  If you get a bunch of kids together and they disagree about toys or rules of a game they’re less likely to find a creative solution if you also give them a magic authority hat that anyone who wins a vote can wear, thereby conferring the power to dictate all rules and dole out punishments and favors.  Voting makes us little barbarians.

Don’t let people tell you a good citizen must vote.  Quite the opposite.  Abstain, and get busy building your own life and world in a positive, productive, cooperative, and civilized manner.

Science Doesn’t Exist

I sometimes hear people say things like, “If science supports X policy, it should be enacted.”  Hiding behind the word science for your moral or political beliefs is a bad idea, because science doesn’t exist as something that can be accountable or take responsibility.

Of course there is a method of inquiry called the scientific method.  It is particularly useful in the study of physical objects, forces, and relationships – what we call the physical sciences.  But science doesn’t say anything, and it certainly can’t do or enforce anything.  Science isn’t a person with positions on issues or an ability to clearly articulate and act on them.  It’s a tool and a way of thinking.  It’s a process that helps people test and falsify and eliminate possibilities and make better theories.

Even if smart people using the scientific process arrive at a theory about the physical world and say they believe certain policies should be enacted, it’s not a trump card to then say that science demands legal action.  Science can’t demand anything.  Scientists can demand legal action, but they almost always do so based on a romanticized view of the political process.

Putting aside the fact that there is no such thing as “settled” science – indeed, it is an open and ongoing process, not a body of accumulating, unchanging facts – even when research reveals certain relationships it does not follow that policies imagined by scientists should be enacted.  Political-made law is not like the laws of science.  People with incentives having nothing to do with the facts or the outcome must posture and pontificate and make deals before passage.  The end result only passes if it sates the appetites of enough rent-seeking interests, regardless of whether it resembles what high-minded scientists imagined.  Enforcement is even worse.  Carried out by unaccountable armies of bureaucrats (some armed, all dangerous), laws are a cudgel used selectively by those in power to further cement it.

When you hear people loudly demanding political action based on ‘settled science’ don’t give them a pass.  If a theory about the physical world is really sound, there’s a built-in incentive to adapt to it without resorting to force.  It may happen imperfectly and slower than some experts would like, but ten times out of ten I’d trust the market process more than the political one to discover the best trade-offs.

Markets in Everything and not Just in Theory

The main arguments for government intervention center around public goods and collective action problems.  These arguments are weakening.  Far from being the sole domain of bureaucracies, these are the areas with the most opportunity for innovation.  We see more of it every day, and there is more to come.

Scholars in the classical liberal tradition have argued on ethical and efficiency grounds for markets in everything.  Odd as it may at first strike us the commodification of everything from vital organs to votes allows for freer, fairer allocation and coordination and reduces waste.  Many people will debate the desirability and possibility of markets in everything.  These are interesting discussions but the great thing is no one needs to win them.  We can create markets in everything right now.

Consider AirBnB or Uber as a first step.  People have unused resources like a spare room or a car.  Technology reduces transaction costs associated with simultaneous coordination among thousands of people.  We can turn our unused resources into valuable commodities to buy and sell.  Take it a step further and consider what else we could do.  Why not solve collective action problems that plague community projects with Kickstarter or Groupon like mechanisms?  Want a new park in the neighborhood, setup the campaign and don’t break ground until enough people have voluntarily pledged.  Those who don’t will be easily seen and neighbors can try to convince them to join.  No one’s taxes or HOA dues go up across the board or against their will.  No simple majority can force everyone to their preferred allocation of resources.

There is nothing inherently noble about the political means of allocating resources and addressing collective action problems.  In fact, it comes with a whole heap of unique problems.  Opportunity exists all around us to move more and more processes out of arbitrary first-come-first-serve and political machinations and into the dynamic, voluntary marketplace.

In fact, the less of a market you see in a good, service, or industry, the greater the opportunity.  I launched Praxis because higher education had become more and more cartelized.  There’s not enough of a market.  I want to bring higher ed back into a more competitive market.  Health care, transportation, and finance are top candidates for major disruption.  They’ve become stagnant and further and further removed from the open market process.  That creates wedges of opportunity.  From the major to the mundane, technology allows us instant, decentralized communication and reduces transaction costs associated with large groups with diverse desires.  These means we can bring just about anything into the world of free exchange and enjoy all the advantages and flexibility of the price mechanism.

What can you bring to the market?  I’m excited to see what’s next.

If Steve Jobs Had Been President

Some thoughts on the movie Jobs, recorded while driving to the office this morning.  Summary: institutions matter…a lot.  A guy like Steve Jobs in a political system is going to be either ineffective or destructive.  In the market, he was both effective and productive.  (Sorry about the noise from the McDonald’s drive thru.  I had to get some oatmeal and coffee!)

Milton Friedman on Risk, Choice, and Regulation

A while back I came across one of many video clips in which Milton Friedman insightfully responds to a tough question.  The question is about Ford making a car with a part that saved 13 dollars, when studies showed that using the more expensive part could reduce harm in the case of collision and potentially save 200 lives.  The questioner feels this is a clear example of the callous, money-grubbing nature of the free market, the implication being that some regulatory body should prevent Ford from making such calculations.

Friedman asks how much Ford should be willing to spend to reduce the risk of a single death.  The student refuses to answer.  Friedman’s point is that the question was not over any principle, but over what amount of money Ford should be willing to pay for a single life.  It’s about costs, benefits, and trade-offs.  The student doesn’t seem to follow, but Friedman is dead-on.

Let’s say Ford decides to install the more expensive part.  Their profit margin goes down, maybe some shareholders start selling shares.  How do they make-up the difference?  Maybe they lay off a few low-wage workers.  Maybe they raise the price of their cars, putting them out of the reach of a few low-wage consumers.  Is it worth it?  Maybe these consumers would have been happy to buy the cheaper car, even if it was less safe.  Aye, there’s the rub.

Friedman mentioned this, but in the short Q&A there wasn’t sufficient time to really hammer it home. This real discussion is not about what Ford should make and sell, or how much risk is too much. It’s about who should decide how much risk is acceptable.  That’s the principle worth debating.

Advocates of free-markets like Friedman believe that each individual is in the best position to decide how much risk they are willing to incur.  In every action, every purchase, and every sale, there are costs, benefits and risk involved.  You are the best person to decide whether you should buy a motorcycle, or not buy the most expensive dead-bolt, or produce and sell an extremely sharp cooking knife.  The principle Friedman was referring to is that of freedom to choose what decisions to make and what is in your own interest.

Those who favor regulatory intervention want such choices made once for all by bureaucratic bodies.  They want a set standard of tolerable risk to apply to every human in every situation, no matter how costly abiding by it may be, or how much poverty or even death may be the unintended result.  These regulatory bodies are in the perfect situation to be captured by the largest, most connected businesses who will get them to pass regulations that help them and hinder smaller competitors, with no concern for what it does to consumers.  These bureaucracies are also most attractive to the very kind of unscrupulous, greedy sociopaths that interventionists worry about in the marketplace.

If Ford sells a risky product it may be a bad move on a variety of counts, but no one has to buy it.  Government decisions are the only ones that every single person is forced to abide by, no matter how bad they may be.  Regulatory intervention not only falls far short of free-markets on moral grounds – coercing everyone to make choices set by elites – it dramatically reduces the benefits to all.  It destroys wealth and the incentive and space to innovate.  It rewards political gamesmanship over consumer service.  It interferes with valuable signals sent by and to all market participants about what level of risk people want, and what makes them happy.

There are trade-offs all around us.  The question is not which decisions are correct for other people – we have a hard enough time figuring out which are correct for ourselves.  The question is, where should these decisions be made, and by whom?

Regulation Schmegulation

The number of hurdles to jump before you can legally create value is astounding.  There’s a law at every corner, working to impede the peaceful pursuit of profit.

Highly resourceful or talented people simply find ways around it.  They pivot, contort, or even work to alter the law to achieve their goal.  They devote entire divisions of their companies to overcoming these arbitrary obstacles.  But eventually, they can overcome them.  Some entrepreneurs have an amazingly high risk tolerance, and choose to ignore the laws entirely and provide their products illegally.  Others aren’t willing to risk prison but have the smarts, connections, or wealth to navigate and comply with the labyrinthine legal system.

So what’s the problem with state intervention in the market?  Visionaries can find a way to achieve their vision, laws or not.  The problem isn’t for them.  It’s for everyone else.

People with limited means and average ability suffer.  The barriers are often too much for them to overcome and too risky to ignore.  Their ideas languish.  Each new obstacle sucks away too many resources and leaves them unable to move forward.

Even those who with no particular entrepreneurial vision suffer.  The immense dead-weight loss of all the creators devoting resources to fighting, influencing, or complying with the regulatory state destroys value for all.  I’ve met business owners who devote ten or twenty percent of company resources to state created problems, meaning ten or twenty percent fewer resources are available to solve customer problems and make everyone better off.

People think economic regulations hamper big businesses and rich people.  The opposite is true.  If an idea is big enough and an entrepreneur driven and resourceful enough, it can come to fruition, despite the state.  But there’s no way to comprehend just how many smaller ventures never got started, or how much more wealth would be created for all if the ham-fist of regulation were entirely replaced by the invisible hand of the market.

Crowd Funding vs.Taxation

The main justification given for taxation is that it solves a collective action problem.  Everyone would be better off, we are told, with the construction of a road or a park, but no individual has the incentive to pay for it, and if a collection were taken up, everyone would shirk and expect the next guy to pay.  If you know your few bucks won’t make or break the project and you’ll get the benefit either way, why pay?

There are many flaws in this analysis, but even if we accept it, consider the emergence of crowdfunding as an alternative.  You can share the details of a project and the cost, and offer specific access or benefits to those who contribute a certain levels.  The project does not move forward until full funding is committed.  This is an amazingly powerful tool that is just starting to reach its potential.

If what is funded benefits the whole world, great!  They needn’t be labelled free-riders, because everyone who pledged to support it knew ahead of time this would be the result, and indeed welcomed it.  If it’s a project that can’t sustainably benefit everyone, crowdfunding allows the ability to restrict access to those who pay.  It also utilizes the power of transparency and shame.  If you claim to really want a project to succeed, yet you pledge no money yourself, you’ll incur the wrath of your peers.  Crowdfunding harnesses people’s public spiritedness.  It lets you openly demonstrate what you’ve pledged.  It creates competition to cooperate.

I’m not just talking about bake sales for summer camp.  There have been startups that raised ten million dollars on sites like Kickstarter.  There have been massive research projects and prescription drug advances utilizing crowdsourcing (harnessing dispersed knowledge) as well as crowdfunding; not just the supply of capital, but the supply of human and intellectual capital can be done without central control.

The very projects that people worry wouldn’t happen without government funding are those most suited for crowdfunding.  Works of art that won’t generate tons of popular sales through traditional channels.  Highly speculative research.  Space travel.  Charity and welfare enhancing programs.  Helping a single person pay for a costly medical procedure.  Why couldn’t bridges or buildings be financed in the same way?

We live in an amazing world.  Every day, more people voluntarily coordinate and co-create and make the functions the state tries to monopolize less and less relevant.  Humans have always created free institutions that, under no compulsion and with no clear designer, enhance our individual and collective well-being.  Technology just puts it in high relief and speeds the process.

Term Limits as Humanitarianism

I don’t think term limits reduce government corruption or largesse. I don’t think they stop bad legislation or promote good. I’ve seen them in action, and they do alter the interests, but things quickly adjust and the average Joe and his freedom are no safer. Ultimately, no rule changes or tweaks can stop government oppression. The only real solution is for markets, not states, to provide social solutions.

Yet I’m a big fan of term limits nonetheless.

As much as I hate to admit it, politicians are people too. As a fellow human, I do not wish ill upon them. Probably the worst thing that can happen to a person is the loss of their soul; their dignity; there very humanity. This is worse than death or injury, and it is precisely what the political system does to politicians.

No matter how well intentioned, they face rigged choices every day that force them to be a backstabbing jerk to all their peers, or fudge a little on their principles. No one can resist this forever. To cope, they create elaborate justificatory narratives, and separate their political actions from their sense of morality or self. Even when you’ve seen the evil of Mordor, it’s hard to throw the ring in the fire.

The first few years in office, newly minted politicians are mostly being used, or patted on the head like kids at their first ball game. After three or four, they start to learn how to get stuff. Five or six and they’re almost gone for good – barely recognizable as the people they once were. Always “on”, and not even knowing what real people behave like. At this stage, a few years out of the system and they may still regain most of their former humanity. The detox is tough, but possible. Six or more years and all hope is lost.

Term limits save souls.

We Already Have the Solution: It’s Called Freedom

Milton Friedman once said of the political system,

“I do not believe that the solution to our problem is simply to elect the right people. The important thing is to establish a political climate of opinion which will make it politically profitable for the wrong people to do the right thing.”

There already exists an institution that ensures people, be they right or wrong, do the right thing.  It’s called the market.

Any wish to constrain government, or keep political interests behaving in the interest of the general public, is a wish that government behave more like a market; and that the political class behave more like individuals must behave to succeed in a market.  All reform efforts aimed at making the state smaller, less oppressive, more accountable, more efficient in it’s various activities, and less arbitrary are efforts to make it completely unlike itself, and completely like the market.

What I mean by the market is the entire realm of voluntary exchange and coordination.  Politics, like all institutions, is a type of market, but not the type I mean.  It has two unique feature that no other institution has, it produces a host of things unthinkable under other institutions.

The first unique feature is coercion.  The transactions in the political system are not voluntary.  This dramatically alters the incentives and signals in all the exchanges.  “Customers” tolerate what they hate, because it’s not worth being jailed for.  The second unique feature is near universal moral approval.  Though the coercion is real and known by all, it is not only accepted, but praised and condoned.  No other institution enjoys this kind of unskeptical reception and sanction.  Without these two features, there is no state.

It is easy to see why governments produce so much of what we hate, and destroy so much value.  Any market entity that attempted to engage in a single activity the way government does would cease to become profitable and receive universal scorn.  On the market, people think it immoral and tasteless to say you’ll provide a free soft drink with a sandwich and not make good.  That kind of behavior from a corner deli wouldn’t last a week.  On the political market, people think little of a politician who promises to stop sending young people to kill others across the globe, but then sends more instead.  That kind of behavior might get you another four years.

If we wish for the wrong people to do the right things, we can engage in the monumental task of altering public belief and preferences enough that they are willing to pay the price for resisting the state.  We can work to continually alter the incentives faced by politicians on every single issue, fighting back against every incentive built into government.  Of course, the state itself resists this by its very nature, and always will.

The real solution is not the state at all, but the market.  It’s not changing the state, it’s letting it fade into irrelevancy as markets grow up around it, carrying out all the activities states try so jealously to monopolize.  Markets don’t require perfect consumers or producers.  They put bad people in the position where they must do good to succeed.

Friedman was right.  The easiest way to do it is to force political entrepreneurs out of government, and into the realm where they’ll have to be market entrepreneurs.

Private Charity Isn’t Enough

Originally posted here.

“The idea that churches can tackle national poverty, take care of those who are ill, and rebuild communities after natural disasters requires a spoonful of bad moral theology and a cup of dishonesty.” – Robert Parham

In this blog post, EthicsDaily.com editor and Executive Director of Baptist Center for Ethics Robert Parham claimed that churches and charities could never do enough to alleviate poverty. I agree.

Poverty will never be “tackled” because it is a relative term; a moving target. If you could describe the plight of America’s poor today to a poor person in another country, or an American 100 years ago, they would conclude that poverty had been eliminated. The standard of living among the poorest Americans today is incredible by world and historical standards. Yet we still wage the war on poverty, even in America. This is not a bad thing – helping the down and out can be wonderful. But when we aim at targets like the “end” of poverty, there is no end to what we can justify in order to reach this impossible goal. “The poor will always be with you.” The question is how best to reach them, spiritually and materially.

The second reason I agree with Parham’s claim is that, to the extent that poverty can be reduced, private charity alone is simply too small to do it. The incredible gains in social and material welfare of the poor in America have not primarily resulted from charity, churches or governments. They have resulted from (mostly) free-market economies.

If we look at poverty in a vacuum as Parham does and ask how private charity compares to government efforts, we could conclude that private efforts are too small. But if we look at government and private efforts combined compared to the power of the market, they would be dwarfed so as to make them hardly important in the big scheme. Charity is a targeted and short-term salve for the wounded; its value is far more in its spiritual nourishment and encouragement than any material progress it brings. A vibrant free-market is the only institution powerful enough to bring about the kind of dramatic increases in standard of living that most of us wish to see.

Public Choice

Jumping from the premise that private charity is not enough to the conclusion that government must do something places a blind, sometimes idolatrous faith in government that counters logic and experience. The incentive structure in government departments is to perpetuate and grow regardless of their effectiveness or the need for their services. There is no check on whether or not they are effective. In fact, the less effective a bureau of poverty relief is, the more they are rewarded with bigger budgets. If poverty is on the rise, and they will always claim it is so as to increase their importance, the last thing to do is cut the department of poverty relief!

Government programs are also subject to “capture” by interest groups and politicians. Scratch the surface of any government program and you will find that it is not the “general welfare” being promoted, but the welfare of a very small and politically connected group at the expense of the general welfare.

To examine private efforts and claim they cannot tackle a problem is only half the analysis needed. We must also examine government efforts and ask if they can tackle the same problem before we charge them to do it. The field of Public Choice Economics does just this, and you would be hard-pressed to find a case where the market is not providing something and getting government involved makes it better. If Christians have a duty to help the poor, they also have a duty to use their brains to discover ways that actually work. Intentions and actions are not enough, we need to understand how to be effective. This requires some knowledge of economic and political systems.

Wrong about Rights

The most damning and least supported claim in Parham’s article was that it is wrong for a Christian to value other people’s property rights:

“[L]ibertarian morality values property rights over human rights. For a Christian, that’s bad moral theology.”

I beg to differ. What Parham leaves unexplained is how human rights are to exist absent property rights. Private property is not some sacred dogma for its own sake; it is important because there is no other method of peacefully settling competing demands for limited resources. Such resources include food, water, shelter and other necessities of life. Common definitions or human rights include the right to be free from hunger. How can you have this right if you have no right to the very food you need to survive?

If Parham means by human rights the right to food, shelter, health care and other positive rights, this poses an incurable conundrum. Positive rights are a logical and practical impossibility. They cannot coexist with negative rights, or even with other positive rights.

A positive right is a right to something. A negative right is a right from something. A positive right obligates another person to take action. A negative right prohibits another person from taking action. A right to life, liberty or property is a negative right. You are free to live and act and justly acquire property, and no one can prohibit that so long as you are not violating their rights. A right to health care is a positive right. If you have the right to receive health care, someone else has an obligation to give it to you. If I am a doctor and you say you need my services, I am obligated to assist you in a world of positive rights. But what if at the same time I am hungry and need to eat rather than assist you in order to maintain good health? Our positive rights to health care cannot both be fulfilled, and in order for one of us to fulfill them we’d have to violate the other’s negative right to liberty and property.

Indeed, it is not possible to have any moral theology whatsoever without an acceptance of private property. One cannot give generously what one does not own, and one cannot help another by stealing from him.

Means and Ends

To sum up the argument, the author couldn’t imagine church and charity doing a task to his satisfaction, so his response was to ask men with guns to take money from people who presumably wouldn’t part with it voluntarily, and give it to causes he valued. Everything government does is backed by threat of force. Indeed, that is the only thing that distinguishes government from all other institutions. Let’s remove the intermediary agents (IRS, law enforcement) and revisit the argument with the author as the principal actor:

Churches and charities can’t or won’t do as much to help the poor as Parham wants, so he threatens, “donate or else.”

That’s clearly a barbaric and inhumane way to a more civilized and humane world. Yet voting for people, who will appoint people, who will hire people, who will send threatening to extort money to give to some bureaucrats to spend on social causes is no different in moral terms.

Appealing to Christian ethics is an odd tactic to justify a redistributive state.  Jesus made it pretty clear that the methods of the kingdom of God are service, sacrifice, grace and love. The means of all earthy kingdoms are brute force and the threat of it.

When the rich man refused to sell all his possessions and give the proceeds to the poor, Jesus did not send the disciples after him to extract a percentage on threat of imprisonment. He let him walk away. Christians are supposed to do the same.

Individuals Act in Own Self Interest!

BREAKING: Individual’s, when given a range of choices, do things they see as most beneficial to themselves. Surprisingly, giving them titles like “public servant”, paying them with a percent of earnings taken by force from others, providing a lot of power and public trust, and offering little scrutiny do not reduce the tendency towards self-interest.

First, Do No Harm

Last summer I had a trip to the emergency room that highlighted one of the perversities of the medical industry in the United States: Health practitioners are prevented from helping patients because of regulatory hurdles erected by the state at the behest of vested interests.

We were on vacation in a small town on the shore of Lake Michigan, and I experienced some intense stomach pains. When the pain persisted, I wondered if it might be my appendix and decided to hazard a trip to the ER to get it checked out. Fortunately, my appendix was fine and the pain subsided not long after I arrived at the hospital. Unfortunately, my experience in the ER was painful for other reasons.

I arrived late at night to a small but clean new building. There were only two other people in the ER waiting room and there were several nurses and hospital personnel on hand to take my information. I was in the system and seated in no time.

Then I waited for an hour and a half.

Given that effective pricing mechanisms are not available to the hospital, the long wait actually makes sense as a way to weed out the more frivolous ER visitors. Hospitals are required to see everyone who comes in, and virtually no one pays directly for their health services, so the incentive is to abuse the ER with visits of low importance. Making patients wait a long time is one of the only means available to the hospital for reducing low value visits. Indeed, one of the two patients there before me left during this time.

Finally I was admitted. A very energetic 30-something nurse took my vitals and inquired to the nature of my visit. I discussed my abdominal issues at length, and he looked very thoughtful and excited, like an engineer relishing the challenge of a puzzle he knows can be solved. He asked a slew of good questions, some of them unexpected to me. He looked pleased in a Sherlock Holmes kind of way.

Now I was excited. I could tell he had several ideas about my condition. He said, “Well, you have to wait for the doctor.” He paused and lowered his voice a bit, “but I can tell you that I don’t think you’re in serious trouble … I’ve got some really good ideas on what’s going on and what you can do about it. I’ve seen and experienced what I think you’re dealing with.”

This was great news! I’ve had on and off unexplained stomach issues for a number of years, so I was eager to hear his thoughts. I asked him to elaborate and he looked a little dismayed. “I’m not a doctor. It would be outside of my professional boundaries if I told you more. The doctor will be in soon.” Then he left.

I was irritated, but glad at least that he seemed so energized and full of ideas. I was hopeful he’d talk to the doctor—and the doc could share his thoughts. I waited.

I waited some more.

After 45 minutes, I wandered into the hall (revealing hospital gown and all) looking for signs of life. I rounded a corner and came to a room where six or seven nurses were hanging around chatting. I asked if the doctor had forgotten about me. They casually said he’d come soon and returned to their chit chat. I went back to the room. At this point the pain had subsided quite a bit, and after my vague conversation with the nurse, I was convinced I was not in danger. Still, I wanted his thoughts. The nurse poked his head in again, seeming to feel sorry for me and, showing signs of frustration said, “Sorry, the doctor will be here soon. Hang tight.”

I waited another 45 minutes. Nothing.

I was tired, feeling better and getting grumpy. I had no cell signal, and I knew my wife was worried. I wandered the hall one last time with no result, so I decided to leave.

As I drove back to the cottage, I couldn’t help thinking of the frustrated nurse who seemed to have some helpful information he was dying to share with me but couldn’t. Why couldn’t he? Because he’s not a state-licensed doctor, and state-licensed doctors have made sure they are the only ones allowed to provide certain information.

The public justification for medical licensing laws is that they protect patients from bad service. The idea that state bureaucracies are the best way to guarantee good service is laughable. Just visit the DMV. The laws do offer protection, but not to patients. They protect doctors’ economic interests from the competition of other health practitioners with less training who might offer services at lower cost. This is an ethical problem for the medical profession.

The famous medical creed, “First, do no harm,” means that doctors ought not intervene with a patient if the intervention might cause more harm than doing nothing. But what about legal intervention? Left alone, I would have happily paid the nurse for his insight into my discomfort. He would have happily offered it. The doctor’s cartel, far from doing nothing, intervened with the long, blunt arm of the law and prohibited this interaction from taking place. In doing so, they caused harm to me by denying me information that could prove valuable to my health. In this case, it was not an emergency, but it very well could have been. There are instances of medical services prohibited by regulations that cause severe illness or death.

In South Carolina, where I now live, a law was recently passed banning midwives from assisting in home births if the mother has previously had a C-section or is otherwise considered a “high-risk” birth. The nurses and doctors advocated this law. It reduces the growing competition from the more personal, convenient and far less expensive home birth practitioners. Of course you can’t reasonably make it illegal for so called high-risk mothers to have home births across the board, because sometimes it just happens. So the law only makes it illegal for a midwife to assist. The result has been an increase in unassisted high-risk home births and an increase in medical problems as a result.

In both cases, the doctors’ lobby violates the creed to do no harm. Rather than letting people follow their planned course of action, professional associations concerned with the economic interests of their members run to the state and demand intervention that prohibits voluntary exchanges and does harm to the patients.

Milton Friedman argued long ago against medical licensing because it raises the cost and reduces the accessibility of medical services. Not only is it a bad practice for these economic reasons, but it is unethical as well. If doctors have an ethical obligation not to interfere with a patient when it might do harm, they should start by opposing state licensing regimes that do just that.

Originally posted here.

Interview with a Rabble-Rouser: Leon Drolet

Some of the most fascinating people and ideas are in our immediate circle of acquaintances.  I have enjoyed interviewing some of my friends for the blog, and I’ve learned interesting things by asking questions I don’t typically ask of people I already know.

Today’s interview is with my good friend Leon Drolet.  I worked for Leon many years ago in the state legislature, and it was, in part, his influence that helped turn me away from politics and to what I think is the more productive world of ideas.

Leon is one of the most honest, entertaining, and sometimes shocking individuals I know.  The last thing his self-proclaimed giant ego needs is more praise, but I’d be lying if I didn’t say he has influenced me in important ways.  He likes to joke that he takes credit for everything, but in my case, he is due some credit for some successes I’ve had.  Of course, I reserve the right to blame him for all of my failures as well.

IMM: I’ve described you as a rabble-rouser because, frankly, I don’t really know what else to call you. What do you say when people ask what you do?

LD: I usually tell people that I’m not sure what I do, but “it has something to do with ‘liberty’, I think”. My goal is to advance liberty in all ways I can be effective at it. Those ways are varied: often political, sometimes educational. Sometimes I write op-eds and engage in media interviews, sometimes I run for political office (I’ve been elected six times to state and local office). Sometimes I create public events like rallies and grassroots groups, sometimes I work to change laws and state constitutions through petition campaigns and elections. Sometimes I assist college students who want to learn more about libertarian ideas, sometimes I organize forums for libertarian networking. Sometimes I work on projects that engage the public on a specific libertarian concept – like civil rights being for individuals instead of for identity groups.  How can I describe all of the above in a simple sentence? So, I don’t – it is more fun to tell people that I do not know what I do.

IMM: Are you doing what you want to do?

LD: I try to avoid things I don’t want to do.

IMM: What is the theme that runs through your various activities and employments?  What is your goal?

LD: My goal is to find and implement ways for libertarian concepts to gain wider recognition and appreciation in society. And to have fun doing it. I’m not interested in drudgery, so I pursue that which I love in fun and interesting ways. Ideally, I would create and strategize and showboat and laugh through each liberty-advancing venture, but I have to do some less-interesting logistical and bureaucratic execution work. It would be nice to have staff to do the boring stuff.

IMM: You’ve been in and around the political game quite a bit, yet I know few people as dismissive of the importance of politicians and ready to downplay the role of politics in changing the world.  Is this a contradiction?

LD: I hope so. Oscar Wilde said, “The well bred contradict other people. The wise contradict themselves.” and I need all the advice about appearing wise that I can get. I do political work because I lack skills more useful to society. Before I learned how social change really happens, I thought political change was key. So I invested in learning political campaign skills: how to best utilize resources in election campaigns, how to target voters and hone messages, how to engage others in the political process, etc. Those are among my skills now, for better or for worse.

IMM: What are some common misconceptions about politics?  What would people be surprised to know?

LD: People think politicians matter – and to prove it, they point to one or two politicians they think have mattered. While there are exceptions, 95% of elected officials don’t matter and the world would hardly change had they never been elected. Politicians’ decisions are molded by many factors around them. If you learn to see the forces that create a politician, you can predict what they will do 95% of the time. If you learn to affect the factors influencing politicians, you can steer a great many politicians. This is far more effective than trying to elect “good” politicians one at a time. “Good” politicians will still do bad things if the incentives aren’t right. Change the incentives.

IMM: You have a habit of making light of everything. There never seems a bad time to joke for you. Is this a conscious approach to life, or just the way you’re wired?

LD: Life is too precious to be bored and humor, especially the absolute worst cringe-inducing humor, is rarely boring.

IMM: Most public figures work hard to keep up an unoffensive image. You love being in the public eye, yet you don’t really sugar coat your radical ideas and sometimes unserious approach to life. How have you been able to get away with it?

LD: Tell people what you really believe and, if it is unorthodox, use humor. Especially self-deprecating humor. People appreciate humility and the ability to recognize (and to put into approachable context or ‘frame’) one’s own relatively less popular positions on issues or ideas. People respect someone, and engage them on their ideas, if the person is consistent and fun and humble. Of course, I am the most humble person the world has ever seen…

IMM: Can you sum up your philosophy?

LD: Customize life to fit your values to the maximum extent possible. Love and exalt that which is truly beautiful. Die proud of the life you led.

IMM: Have you always seen the world this way, or was it a journey?  Did you come by your beliefs easily, or with some difficulty?

LD: Like everyone, I evolved. The most important step in that evolution was recognizing that discovering truth is the highest value, and that logic and reason are the most reliable avenues to discover truth. Being able to recognize my biases and accept responsibility and be aware of my many deep flaws are the most difficult parts of my journey.

IMM: What kind of legacy do you want to leave?

LD: I want society to be a freer place because I have lived on Earth. My ego demands that my life have mattered – that people will be better off than had I not been born. I want to be proud of my life and to have enjoyed it greatly.

Capitalism or What?

Part seven in a series of eight on the morality of capitalism.

When analyzing any social or economic system, the three most important words are: “Compared to what?”

Capitalism has its shortcomings. It has shortcomings because life has shortcomings in our own subjective evaluations. That is, we can always imagine a state of affairs better than the one we experience. It is exactly this kind of imagination that has been the driver of human progress. However, when progress has been made it has been by a combination of imagination and an understanding of causal relationships that are unchangeable. The desire to fly, coupled with an understanding of physics, motivated people to create amazing contraptions from airplanes to rockets to parachutes. The desire to fly coupled with a denial of the force of gravity would lead to a much different experience.

When we feel frustrated with the morality of the free market, we should always ask what a better alternative might be. When you get down to it, there are few options. As explained in an earlier post, all government intervention is backed by the threat of violence. This is important to keep in mind when considering alternatives to capitalism.

If you think the price of a good is immoral, for example, ask yourself what you would do to address the problem. Price controls mean threatening violence to anyone who wants to sell above a certain price. Imagine storming to your neighbor’s garage sale with an armed thug and yelling, “Lower your prices or else!” Does that seem more moral than your neighbor peacefully putting an asking price on her old bowling shoes?

From a moral standpoint, since the alternatives to free markets mean coercion (whether partial intervention or complete control), it’s hard to imagine addressing the imperfections that can occur under capitalism with government action. Not to mention the fact that the interventionsdon’t work at achieving the desired results.

Most of the alternatives imagined by critics of capitalism either overlook the coercive nature of the state or rely on a superhuman, all-knowing, all-good state. But if people aren’t good enough to act justly in a market, how could they be good enough to wield government power over others? Sound social theory and historical evidence confirm that indeed, power tends to corrupt and absolute power corrupts absolutely. The difference between the power of a business tycoon in the market (assuming it’s a truly free market and he’s not in bed with government regulators) and the power of a government agent or politician is that the former can only woo while the latter can compel. Much as you mightn’t like the perceived power that people can get in the market, state power is far more dangerous. Businesspeople don’t conscript customers into war or kicked-down doors, except when in cahoots with the state.

There is a philosophical term for the tendency to compare one system to an imagined utopia, rather than to other possible alternatives. It’s called the Nirvana Fallacy. This is a prevalent form of argument against markets. A common example is, “Capitalism hurts the poor.” But compared to what? Look at the evidence of free economies vs. less free economies.

Minimum wage is example of how this fallacy can lead to bad outcomes for the intended beneficiaries. It is a result of the notion that some people don’t make enough money. But compared to what? What alternative is there to free-market wages that can improve the lot of the poor? Minimum wage laws only price the poor out of the labor market.

If we’re honest and use some economic thinking, it becomes clear that even the things we don’t like in a market system are better than the alternatives. (Of course, this is not true for the elites who have mastered the art of gaining political power and favors. For them, markets are worse than corporatism. But aren’t these just the kind of people we would like to see face the rigors of competition and put in an honest day’s work?)

It’s not a very fun argument nor is it the most compelling, but the worst that can be said of capitalism is that it is the “least bad” economic system.

Many accusations against capitalism turn out to be accusations against reality itself. We want to eat our cake and have it, too. We don’t like scarcity, which means trade-offs and choices. We don’t like that some people have no taste for high art (which is why Creed sold more records than Jimi Hendrix!), or that sometimes we enjoy cheap imported goods, or that fossil fuel allows us to do things that we find fulfilling. Capitalism is the wrong target in these cases; we’re frustrated at other people for being different, or ourselves for not being the way we wish we were, or at nature for the materials it yields. We’re upset at cause and effect. Certainly we are justified in feeling unease at failings of those around us or the difficulties nature presents, but we need to look for solutions in reality, not fantasy.

It might seem great if everyone in the world could have twice as much of everything right now. But that’s not possible, and capitalism shouldn’t take the blame for that any more than cement should take the blame for the fact that falling on cement can produce a skinned knee. We should continue to envision a better world and strive to create it, but we shouldn’t pursue a world that’s not possible. Let’s make progress through the peaceful coordination of the market, not the false hopes of a “new man” or the eradication of economic laws created by state centralization and coercion.

(I should add that it is extremely difficult in this country to know whether it is a fact of life or some government policy behind many of the problems we confront. This should make us especially cautious of blaming capitalism, since so often it is a lack of capitalism that makes reality seem harsher than it is. There are innumerable difficulties, both big and small, that entrepreneurs have solved but regulators have perpetuated.)