Tag: public choice

Capitalism is Peaceful

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

Free markets are probably the greatest force for peace in history. There are three distinct ways in which capitalism promotes peace.

A negative system

The simplest way in which capitalism is peaceful is by its abstention from direct acts of violence. Free markets offer no positive prescription for what market participants must do. A genuine capitalist system is one of free trade and voluntary association. People are free to do, in the words of Leonard Read, “Anything that’s peaceful.” There are no “do’s,” and the only real “don’t” at bottom is, “don’t use force.” All else is permitted, but there is no guarantee the market will sustain or reward it.

Capitalism is not a master plan or a system created ahead of time by planners. It is really just the result of peaceful interactions. It is what emerges if force is only used in defense against force. The absence of violence results in secure property rights, contracts and all of the other institutional trappings that are commonly associated with capitalism.

Every other economic system requires a direct application of violence. Any regulation, fee, tax, trade barrier, licensing regime or mandate offered in any kind of “mixed” or corporatist or socialist or fascist regime is backed by the threat of violence.

Raising the cost of violence

Beyond the absence of force in individual actions, capitalism promotes a much broader peace between people groups from different regions and of different cultures and backgrounds. Self-interest begets trade; trade begets specialization; specialization begets cooperation. Ricardo’s law of association demonstrates how much more productive we are when we specialize and trade, which means that over time we come to rely on a vast network of trading partners for our own well-being. Some people find this state of affairs troubling and you hear things like, “What if X country decides to withhold good Y from us? We rely too heavily on imports!” There are plenty of natural and man-made things to fear in the world if you wish to worry, but the cutting off of trade in a truly free market ought not to be one of them. If a person genuinely wants to avoid all reliance on other people (not sure how this would work for a newborn), they are free to live as long as they can only eat what they can find or grow on their own. It’s not hard to see that that kind of “independence” is far more risky than being part of an interdependent trade network.

The more people rely on trade with others, the greater the cost to all parties of a conflict. If I grow apples and trade them to you for chickens, the last thing I want to do is tick you off and lose my chicken supply and vice versa. On the flip side, if you have a lot of chickens and I have none, and there is no trade between us, I will be tempted to try stealing some. Lack of trade builds enmity. There is a famous saying, attributed to Frederic Bastiat, “If goods don’t cross borders, armies will.”

In a free market, the cost of belligerence is very high. When governments come in and restrict trade or subsidize violence by building up large militaries, the cost of belligerence is lowered, and the benefits of peace are reduced. It is the state, not trade, which creates conflict.

Friends, not enemies

Pretend you live in a free-market economy. You are friends with your neighbor, who works at a small grocer in town. You find the selection to be limited and the prices high. A new supermarket chain is coming in to town, and you’re excited about it because the lower prices and better selection mean you’ll have better meals and money left over for leisure activities with your family. Your neighbor is unhappy about the new store because it may cost him his job. The store comes in. You shop there and save while also expressing your heartfelt empathy to your neighbor whose store may soon shut down. You maintain your friendship, even though in the economic sphere you cease to be trading partners.

Now pretend you live in a heavily regulated economic system much like ours today. You and your neighbor the grocer are still friends. This time the chain store is not free to sell in your town without a government permission slip. It goes up for a vote. Your neighbor actively campaigns to restrain the store from opening up, which will prevent you from buying better products for less money. He urges you to join his efforts and put a “No chain stores!” sign in your yard. You tell him that you won’t because you wouldn’t mind the chain store. It turns in to a bitter, possibly friendship-ending disagreement.

Politics makes enemies out of friends. In a market, you are free to express your varied preferences with your own actions and the expenditure of your own resources. If someone sells something you don’t like, you don’t have to buy. But the very anonymity and absence of compulsion in markets allows you to form community bonds quite separate from your trading choices. You can maintain friendships with all kinds of people whose goods and services you do not necessarily value. You can befriend an orchestral violinist without being a patron of the symphony. But when resources are allocated politically rather than in a free market, that friendship is hard to maintain when you would vote against a tax to fund the symphony hall, which she supports.

Capitalism allows our diverse tastes to be explored and expressed in a way that doesn’t restrict choices to zero-sum contests of your preferences over others. A cornucopia of choice exists in the market, and this not only means better products, but also the removal of artificially created conflict between choices A and B, such as those that inevitably spring from government management.

Three kinds of peace

Capitalism relies on voluntarism rather than violence in individual interactions. It also creates cooperative networks that dramatically increase the incentive to get along and raise the cost of conflict, while government intervention does just the opposite. Finally, capitalism allows us to live in harmony despite our different tastes and sometimes conflicting demands for limited resources, while political allocation always forces us to take sides and go to battle against each other. If you want a more peaceful world, promote capitalism.

A Few Quotes

On politics and government

“Aristotle said that some people were only fit to be slaves. I do not contradict him. But I reject slavery because I see no men fit to be masters.” – C.S. Lewis

“I am really sorry to see my Countrymen trouble themselves about Politics. If Men were Wise the Most arbitrary Princes could not hurt them. If they are not Wise the Freest Government is compelled to be a Tyranny. Princes appear to me to be Fools. Houses of Commons & Houses of Lords appear to me to be fools, they seem to me to be something Else besides Human Life.” – William Blake

“Politics is a dirty business, a ruse, an ideological cul-de-sac, a vast looter of intellectual and financial resources, a lie that corrupts, a deceiver, a means of unleashing vast evil in the world of the most unexpected and undetected sort and the greatest diverter of human productivity ever concocted by those who do not believe in authentic social and economic progress.” – Jeffrey Tucker

“Sed quis custodiet ipsos custodes?” – Juvenal

On tyranny

“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive.[…] those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth.” – C. S. Lewis

“The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion.” – Ludwig von Mises

“As long as the public identifies order with law, it will believe that an orderly society is impossible without the law the state provides. And as long as the public believes this, it will continue to support the state almost without regard to how oppressive it may become.” – John Hasnas

“I have sworn upon the altar of God, eternal hostility against every form of tyranny over the mind of man” – Thomas Jefferson

On freedom

“And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.” – Frederic Bastiat

“Every man must have freedom, must have the scope to form, test, and act upon his own choices, for any sort of development of his own personality to take place. He must, in short, be free in order that he may be fully human.” – Murray Rothbard

“I freed thousands of slaves. I could have freed thousands more, if they had known they were slaves” – Harriet Tubman

“The only way to deal with an unfree world is to become so absolutely free that your very existence is an act of rebellion” – Albert Camus

Life Inside the Bubble

I used to work in the state legislature.  There was an insider political newspaper that all the lawmakers, lobbyists, journalists, and staff read every day.  Among other tidbits, it included a “quote of the day” from the goings on the day before.  Every morning, the first thing every member of the political class did was look to see who got quote of the day – or more accurately, if they got quote of the day.  It was a big deal.  Except that it was not a big deal at all to anyone outside the political bubble.

Tons of other gossip and updates filled the newsletter, and every bit was important to the weirdly sheltered state political circuit.  All the buzz in this world was about this world.  “Can you believe the committee chair held all the members there until midnight?”.  “Do you think she’ll have a primary challenger after those comments about teachers unions?”  The fate of the state hinged on every detail according to the people involved.

Of course nothing of the sort was true.  The petty bickering, posturing, and drama had almost no bearing on the world outside the bubble.  It was like a reality TV show, where every little alliance is a big deal in the context of the show, but meaningless to the world outside the artificial construct of the set.  Occasionally, politicos would get crude reminders of this fact.  They would proudly set up meet and greet hours in their districts so the people could come before them and present their troubles.  They assumed this kind of access was demanded by their constituents, and would be greatly appreciated.  But no one came, save for a few rather senile members of society with too much time on their hands.  Part of the reason was that no one knew who their state representative was – most didn’t even know they had one.

The shock of reality was severe for lawmakers who had been in the bubble for many a week and emerged to find that no one knew their name or what bills they introduced.  No one even knew that they had made quote of the day last week!  In the bubble, they were important.  Every lobbyist, journalist and staffer knew their name and their favorite drink.  They were called “Honorable”.  But outside the bubble, they were just some guy wearing a bad suit and talking about boring things.

One particularly poignant reminder of the contrast between life in and out of the bubble took place at a basketball game.  I was in a luxury box with my boss who was a then well-connected lawmaker.  Food and drinks were free, and the lobbyists who’d provided the tickets were cheerfully chatting us up and flattering us.  I looked across the court to the other side of the stadium.  There in the cheap seats, all by himself, was a rather dejected looking fellow.  It was the former governor.  My boss noticed him too, and seemed a little troubled.  He leaned over and said, “That’s good for me to see.  I sometimes forget that, when I’m term-limited out next year, that will be me, not this.”  A rare moment of foresight for someone in the bubble.

It’s easy (and quite fun!) to point out the absurdities and perversions of the artifice of politics.  But there’s a broader lesson as well.  We all have bubbles.  We have them for good reason and they serve a purpose.  We find people and places we identify with and invest ourselves there.  In these bubbles, we are interesting to our friends, and our shared goals are the most important thing in the world.  In these bubbles, we belong.  That’s a good thing.  It’s good to have a social circle that cares about you and shares your worldview.  It can also create problems if you never step out.

It’s good to move beyond the bubble from time to time.  You gain perspective.  You stay humble.  You realize that all the debates you had in the bubble about various interpretations of that world-changing idea don’t matter to the outside world.  They don’t even know the idea exists in the first place.  You can be famous in your bubble, but it doesn’t mean you’re famous anywhere else.  You need to be reminded of this.

Find your niches, make your friends, dive in, get connected.  You need it.  But step out of your circles as well, into the great unknown where you are just another person.  You need it.  It’s useful to maintain a firm belief and a tacit understanding of two facts at the same time: you are a really big deal, and you are nothing.

Five Assumptions About Fire Codes (why laws are less important than we think)

Originally posted here.

A friend and I were discussing the provision of fire services, and he made a comment in passing about how, thanks to government fire codes, fires have dramatically declined. It is true that fires have declined over the last 35 years (at least), but is it true that government fire codes are the reason?

There are at least five untested assumptions behind the idea that fire codes are the cause of a safer world.

Assumption 1: Cause and Effect

The most obvious assumption is that fire codes cause a reduction in fires. It is easy to see how unlikely this is when you perform a simple mental exercise: Imagine enacting US fire codes in, say, India. In India it is not uncommon for electricity to arc between two buildings or for people to pirate electricity by tapping in to an existing power line with a makeshift wire draped across the ground. Surely fire codes would prevent the dangerous electrical fires that sometimes result. The problem is, fire codes already exist in India, but nobody follows them. Why not? Because no one can afford to follow them.

Before government regulations can be broadly followed, they first have to be of limited consequence. Child labor laws only take effect once there are very few children in the work force, due to economic growth. It is well documented that OSHA regulations only came into effect after workplace accidents dramatically declined on their own. If you tried to impose the U.S. minimum wage on a very poor country, no one would follow it because if they did many would die for lack of work, income and food. You cannot wave a magic wand and demand that people take on major costs if the majority of people are not already able to bear the cost. Government regulations have a damaging effect to be sure, but it is primarily on people at the fringes of the economy—the poorest.

Government fire codes receive the credit for reducing fires, when in reality it is economic growth that makes people wealthy enough to spend money on safer construction. The codes come after the fact and claim the credit.

Assumption 2: Irrational Consumers

The idea that government fire codes reduce fires also assumes that, absent such codes, people would not protect themselves from fire. Are people so short-sighted that they would not think to protect their own property if the government didn’t force them to?

It is in everyone’s interest to protect their property from catastrophe like fire, and as such the vast majority of people do. Insurance is a common way to do so, but people also seek safe construction and other assurances against disaster. In fact, insurance companies have a tremendous incentive to only insure buildings with good fire prevention techniques in the first place (except when, as is not uncommon, the government interferes and prohibits insurers from placing stipulations on policies).

It can hardly be granted that people are too foolish to protect their own property from fire damage at all, so maybe it is assumed that people will merely protect their property at a minimum level and not “enough” without being forced to. But what is “enough?”

Assumption 3: Less Fire is Better

Fires are on the decline, and this is universally good, right? Not necessarily. Economist Steve Horwitz gives a question to his students that goes something like this: If a massive earthquake hit a city, what would be the economically optimal number of buildings destroyed? The answer: greater than zero.

How could that be? We all know destruction is not good for the economy (everyone, perhaps, except Paul Krugman). Consider that the cost of making the least valuable shanty in town entirely earthquake-proof is probably more than the value of the building itself. The same goes for fires. Not all structures are of equal value, and not all structures have equal risk of burning down. Because of this, it makes sense that people will have different risk preferences when it comes to protecting their property.

If I own a pole barn full of ice far away from any other buildings or woods, I am unlikely to invest in sophisticated fire prevention or suppression technology (unless compelled by the state), whereas a fancy condo owner in a downtown location is far more likely to pay for the best of the best. It’s easy to see how silly it would be to mandate that every single structure be built to withstand F5 tornadoes, category five hurricanes, massive floods and epic earthquakes. The same principle applies to lesser degrees of protection. For many structures, government fire codes are not worth it and the risk of a fire is lower than the cost of prevention. For others, government codes are not nearly sufficient and much more stringent precautions are in order.

The problem with government codes is that they are blunt and uniform and force everyone into the same mold, squelching innovation and disallowing the kind of marginal risk assessment that conserves resources. Not only are less valuable structures forced to overprotect, but often government codes are so widely accepted that more valuable structures are perceived to be sufficiently protected if they meet government standards, when in fact they may be better off with more.

Assumption 4: Irrational Politicians and All-knowing Bureaucrats

For fire codes to be the cause of enhanced safety it would require irrational political actors. Elected officials and bureaucrats would have to act not in their own rational self-interest, but on behalf of the public at large. To choose just the right amount of fire protection and just the right technologies to supply it requires not only a denial of potential individual profit (by cozy deals with some companies, etc.), but also a superhuman knowledge of what kind of construction everyone needs in every situation.

In reality we see that “rent-seeking” is prevalent everywhere the government intervenes—indeed, it could not be otherwise. How is a politician to choose the physical properties that must be present in caulk used between drywall and copper piping in a commercial building? Without the expertise they—or a wide array of public agencies—must rely on the information provided by competing companies. If it all sounds the same, do you think the company that donates to the right political campaigns might get an advantage? It is a fairy tale to imagine political actors wise and selfless enough to pick exactly the right amount and type of fire protection for every application. Every time they do pick, it reduces the options available to consumers and stunts the discovery procedures of the market in finding the best methods.

Assumption 5: The Government Did It

A final assumption is that the codes and norms of fire safety are, in fact, created by the government. In our discussion my friend mentioned government fire codes but also added a, “Thanks to UL.” UL is Underwriters Laboratory, a non-government organization that certifies goods for safety. They have built up quite a reputation in the marketplace and are highly trusted. (So much so that one professor has taken to chewing on UL certified power cords to prove how safe they are!)

It is often assumed that the order we see around us is the result of a government mandate—after all, mandates do exist for almost everything. But more often than people realize there are private entities and institutions doing the heavy lifting—UL is just one of them. There is a market demand for fire codes, and the market supply is far more complex, subtle, efficient and diverse than a government could ever be.

Conclusion

It is easy to assume government ought to get the credit for a great many life improvements. After all, government agents are constantly taking any opportunity to claim credit for everything under the sun, and to pass laws and regulations that demand certain improvements, whether or not they already exist. The existence of indecent exposure laws is not what keeps me from running naked through the shopping mall, and such laws shouldn’t be credited with my propriety. It’s naïve to assume that fire codes are the cause of a safer society, not merely a reflection of it.

Laws are less powerful than we think they are.

Voters are Liars

I recently heard a political commentator bemoan the results of surveys and elections.  He said the sad truth, whether libertarians wanted to hear it or not, is that Americans want big government.  They want handouts, high taxes, regulatory interference, and on and on.  They vote for people who talk about it.  They re-elect them when they deliver it.  On opinion surveys they favor entitlement programs and broad intervention.  I couldn’t help but laugh.

A person who studies only quarterbacks is likely to interpret an NFL game as the result of QB play.  A person who immerses themselves in politics is likely to interpret society as the result of political opinion and activity.  In the former case, there is at least plausible evidence that QB’s are a major factor.  In the latter, it is almost entirely an illusion that politics and political sentiment reveal the broader health of liberty.

Voters are liars.  They tell the truth about their opinion in the abstract, free from trade-offs and constraints, but this has little to no meaning when translated into the real world.  If I asked you to vote between a person who offered a better world, and one who offered a less bad world, and promised that your vote was guaranteed to not change the outcome either way, what would you do?  What could I conclude about your preferences from your vote?

If I polled you and asked whether or not you like the idea of someone giving you something for free, again promising that how you answered had no bearing on the real world, what would you say?  What could I learn from that about your values?

Voting and surveys are free ways to express a sentiment or indulge in a real or desired preference.  Not only that, the sentiments expressed are not about the real world.  Politics is a zero sum game, completely unlike nearly every other arena of life.  Imagine how different your preferences would be if everything were zero-sum like politics.  What if you had to choose once for all between brands of coffee, cars or clothing?  What if you could not go back, at least not for several years, and try another?  What if whatever a majority in your area voted on would be applied to everyone else?  Under this scenario we could poll people and ask which of three or four brands they prefer.  We’d get some data, but it would reveal nothing whatsoever about what people actually value if they were choosing in the non-zero-sum marketplace and bearing the full costs and benefits of their choices.

Back to society today.  Do people really favor less liberty and more government?  Elections and polls are a very poor measure.  Let’s not look at stated preferences about the artificial political world, but revealed preferences in the real world of win-wins, marginal decision making, internalized costs and benefits, and trade-offs.  If you examine the market, what would you say people are “voting” for?  Radically individualistic technology.  More and more choice.  Freedom from being lumped in with groups.  The ability to choose everything.  Private alternatives to government dominated services like transportation, information transmission, education, protection, rule-making  social norms and values, health maintenance, and on and on.

Don’t listen so much to what people say, look at what they reveal by their actions.  Nobody admits to loving Barry Manilow, but the guy sells a ton of records.  No one says they want to abolish public education, but they keep putting their resources into alternatives to it.

Frankly, I don’t care what people say in polls or who they vote for in the fairyland of politics.  What I see around me – the revealed preferences of billions of earth’s citizens – is a vote, indeed a mandate, for more freedom.

The Myth of Self-Regulation

No business, product, service or industry can self-regulate. All must and will be regulated by some external entity. The question is who or what?

In a market, regulation is inescapable. Firms are regulated by wholesalers, retailers, capitalists, workers, packagers, shippers, competitors, consumers, shareholders and public opinion. These myriad regulators are exacting. They apply pressure from every angle, on every aspect of business. Get sloppy with your purchasing practices and wholesalers make better deals with your competitors. Overlook product safety and consumers and public opinion slap you down. Make frivolous expenditures and your source of capital and shareholders head for the hills. Drive too hard a bargain with employees and productivity declines or they leave you for another firm.

Firms have room for experimentation and risk-taking, but they have full responsibility to all of these market regulators for the outcome. No firm is a “price-maker” in a market. No firm is a compensation, safety, or policy-maker in the market either. All the parties to which they answer set the terms. Oh sure, firms can do what they want; unless they seek profit. Profit demands that they obey the regulators that fill the market across the whole production chain. It’s not easy.

Firms that have become successful and large tend to get tired of the constant regulation. They want a reprieve from the demands of stakeholders. To gain freedom from the regulating market, firms seek the comfort and stability of government regulation.

Government regulation is nothing like market regulation. It’s yoke is easy for the well-connected and deep pocketed, but often unbearable for the shoestring upstart. Market regulation is blind to size, wealth, political affiliation, slickness, religion or creed. Government regulation is built upon them.

Market regulation keeps an open invitation to anyone who wants to join the ranks of regulators; though promises no one their opinions will have a final say unless they prove worthy across the market. Government regulation is strictly closed off to anyone except those long-loyal to the party in power, and promises that the elite cadre of regulators’ opinion is final and binding. Market regulation is nimble, swift, constantly adapting, inescapable and unrelenting. Government regulation is ham-handed, slow, hidebound, avoided with a little craftiness, and backs off for a favored few with the right mix of political moves.

Market regulation is created and enforced by parties that stand to gain or lose by the actions of the regulated; parties who gain real-world expertise on the regulations effects. Government regulation is created and enforced by parties with no connection to the regulated actions or items, except the few politically connected firms that agitate for it. Market regulation draws on the dispersed knowledge of millions across the globe, from experts to anonymous users. Government regulation pretends a handful of elites can outthink the millions.

Market regulation seeks only the betterment of all market participants, regardless of which firms offer it. Government regulation seeks to destroy some firms for the benefit of others, regardless of what they offer market participants. Market regulation is by the many, for the many. Government regulation is by the few, for the few.

Self-regulation is not an option. The question is who’s a better regulator, markets or government?

There’s No Such Thing as a ‘Public-Private Partnership’

It’s long been a trend for local and state governments to create agencies and entities that are supposed to enhance commercial activity in their area.  There are myriad legal and logistical arrangements, but they all have some common features.  They’re all reliant on government in structure and law, they all use taxpayer funds to accomplish their projects, and they all love to use newspeak phrases like, “public-private partnership” to describe their activities.

An online dictionary definition of partnership is useful:

“A legal contract entered into by two or more persons in which each agrees to furnish a part of the capital and labor for a business enterprise, and by which each shares a fixed proportion of profits and losses.”

And,

“A relationship between individuals or groups that is characterized by mutual cooperation and responsibility, as for the achievement of a specified goal.”

Clearly, government economic meddling projects do not fit either of these definitions.  How can “the public” enter into a partnership?  How can “the public” share in profit or loss?  In reality, governments take money from people in their vicinity by force, then they give some of it to suits in an agency who give it to favored businesses and investors.  “The Public” never agrees to anything.  There is no mutual cooperation and certainly no responsibility or profit/loss sharing.

The absurdity of calling it a partnership can be illustrated with the following thought experiment.  Imagine your friend took some money from your wallet, deposited it in his checking account, kept most of it for himself and gave the rest to another guy to start a business.  No strings attached, just a gift of start-up capital.  Then your friend started publicly talking about how this was a partnership between you and startup guy.  After getting over your initial anger that he took your money and didn’t even consult with you before throwing it after some business venture, you try to consider the possible upsides of this unjust act.  You ask him if that means you will own shares in the company.  No.  Does it mean you get some percentage of any profit?  No.  Do you get an interest payment on your stolen and loaned money?  No.  He assures you it’s OK though, because neither are you on the hook for any losses (besides of course the loss of the money he already took, which you’ll never see again.)  In other words, this is nothing like a partnership.

What you get is money taken from you, spent on middle-men who are paid to give the rest to whatever business they want to.  You are not a partner, you are a victim.  Partnership implies consent.  Partnership implies shared benefit and responsibility   Partnership implies choice.  There is no such thing as a public-private partnership.

Institutions Can Improve Even If People Don’t

Originally posted here.

Airlines are loaded with passengers who surf the Internet while soaring through the air, chatting in real-time to anyone else on the globe, posting in social media, shopping, and downloading and reading books on a wide variety of readers. Such a scene would have astonished a person living 50 years ago, to say nothing of a person living 500 years ago.

How do we account for this? A person born five centuries ago is probably just as smart as someone born today. The raw material of the human brain has not changed much during this span of time. Yet people are today infinitely more capable of accomplishing almost any task imaginable than people in 1512.

The greatest navigator of centuries past would have found it a monumental task to leave from one destination and arrive at a precise latitude and longitude halfway across the globe, and it would have taken months. Today, a half-witted teenager can use Google Maps and modern transportation to accomplish the same feat in a single day.

The greatest communicators in the past were unlikely to reach 1 million people with their ideas in a lifetime. Today, the most-incoherent celebrities can reach millions in minutes on Twitter. Conversely, if the greatest scientists today were sent back in time, they would be able to achieve almost nothing absent computers and modern lab equipment.

A weak and feeble worker today can move more tons of earth than the strongest shovel-wielding excavator of the past. Given the inherited technological progress of humanity, even an average Joe can do amazing things with ease. It does not take a superior human to achieve superior results.

Economically speaking, the marginal productivity of workers increases with the capital and technology available to them.

But let’s broaden the point to issues of morality. How can we become better people — more peaceful, cooperative, and creative — in the same spirit in which we have become more effective and productive with better technology? We need better moral “capital” and moral “technology” that enables morally superior outcomes even without morally superior people.

The moral technology I am speaking of is social and political institutions. A person born today is no more or less likely to be moral than a person born 500 years ago, but they can be more or less likely to act morally based on the institutions around them.

Moral institutions change and evolve just like technology. They can reduce or expand not only the morality of individuals on the inside, but the harm or good caused by their actions on the outside. The most saintly person born into a world where slavery was the norm would have very limited ability to stop the practice, though she could abstain from participating in it at great personal cost.

A horrendously evil person born into a world where slavery is considered abhorrent would be unable to lord over slaves, without tremendous personal cost. It is entirely possible that many people living today have it in them to be on par with the worst slave masters in history — only the opportunity for their evil does not present itself, given the progress in this area of our social and political institutions.

This does not mean that individual choices are meaningless. Far from it. A moral person can always do good within their institutional framework, and a good framework can exponentially enhance the good one can do. Individual choices are vastly important.

But in order for the world to be free of oppression by states, for example, it does not require that every individual be an angel or that the average morality of the population be better than it currently is.

How can institutions improve if morality does not? Institutions are ultimately the result of our beliefs. Better beliefs will result in better institutions, but better beliefs do not require morally superior people any more than beliefs in a heliocentric solar system require more-intelligent people.

Many people believe the Earth revolves around the sun not because they are smarter than ancient peoples, but because they grew up in a world where that was accepted. Many people believe slavery is wrong not because they are morally superior to all people from ages past, but because they grew up in a world where slavery was condemned.

The broader social narrative creates the institution. But where does this narrative come from? Here’s where individuals come in again.

Progress typically begins with iconoclasts and radicals espousing and experimenting with ideas that challenge the status quo. This is true of technological, intellectual and moral progress. The few who advance these radical ideas attract small, but influential followers, and some minds are changed by argument alone. But the real change comes when discussion turns into demonstration.

When the Wright brothers got off the ground, when slavery ended in some countries and the economy did not collapse — these occasions did more to change the prevailing beliefs about manned flight and slavery than did the necessary intellectual work that preceded them.

People do not have to possess superpowers to learn and adapt. All humans do it. Learning even to reject foundational and dearly held beliefs is possible and frequent in history, especially because the change typically takes place over several generations, so that each generation has to learn to give up only a part of the cherished belief. When it is understood that a new belief will result in better outcomes, it can be adopted with relative speed and ease, sometimes without any conscious “a ha!” moment at all.

Neither technological nor institutional progress is inevitable. History is replete with times of retrogression and collapse. When there are no radicals challenging the status quo, innovating and demonstrating new and better beliefs, it is not long before the prevailing institutions stagnate or advocates of a romanticized past win the day and drag humanity backward.

Progress is not inevitable, but progress is entirely possible even with flawed humans like us. Our beliefs can change as we learn better ways of doing things, and with our beliefs will change our institutions. Better institutions — free institutions, rather than coercive ones — will result in a better world.

We ought to continue to discuss and demonstrate the fact that states — their oppressions, confiscations, impositions, kidnapping, counterfeiting, and war — are not necessary or beneficial. Better morality is always better, but if we change the prevailing narrative about states, we can live in a stateless world even without a saintly populace.

It is a false and arrogant belief that only angelic geniuses are capable of believing that statelessness is possible and desirable. If a bunch of idiots can live in a world of technological wonder, so too can a bunch of jerks live in a world of freedom.

But Who Would Bilk the Roads?

But who would create the long lines in which to wait to be told you have the wrong documents?  Who would build the bridges to nowhere?  Who would pay $300 for a toilet seat?  Who would lose your important items in the mail?  Who would force you to turn off your cell phone while taxiing on the runway?  Who would pay a horseshoer to not shoe horses?  Who would pay a farmer to not grow crops?

Who would encourage the poor to buy education and housing they can’t afford?  Who would encourage workers not to work?  Who would encourage the generous not to give?  Who would encourage the productive to stop producing?

Who would punish the innocent for doing what makes them happy?  Who would subsidize some chemicals and plants and ban others?  Who would perpetuate gang wars across the globe?  Who would encourage and prop up organized crime?  Who would jail sickly grandmothers for seeking natural pain-relief remedies?

Who would incentivise healers not to heal?  Who would force entrepreneurs to become legal experts rather than creators?  Who would create laws sufficient to make everyone a criminal?  Who would artificially raise the price of health care?  Who would artificially lower the price of waste?

Who would prevent people from seeking damages when another pollutes the water?  Who would fail to maintain the forests?  Who would squander the resources?

Who would help well-heeled businesses crush their competition with laws and regulations?  Who would steal half of the production and spend it on stifling the other half?  Who would pay thousands of agents to create thousand of rules to penalize millions of people for making a living and not properly filling out paperwork to classify and justify it all?

Who would force the children into factory schools?  Who would cram bad ideas into their heads?  Who would drive them to near madness with tedium and tyranny controlling their every waking minute?  Who would call it bullying or a disorder when they reacted?  Who would cram pills down their throats when they thought divergently?  Who would lie to them about the value of schooling?  Who would teach them to obey arbitrary authority instead of their own consciences?

Who would force the peaceful to pay for war?  Who would encourage the violent to aggress and call it honorable?  Who would give sanction to racist, hateful tendencies and call it security?  Who would attack the innocent?  Who would build the drones?  Who would man the concentration camps?

Indeed, who would carry out the genocide?  Who would massacre the millions?  Who would force famines?  Who would torture?

Protect Us From ‘Consumer Protection’

Back in 2007, I wrote a short piece for the Mackinac Center that showed, through a hypothetical story, how occupational licensing laws come about. It was published in a few local newspapers, and elicited its fair share of responses – primarily because shortly after I wrote it interior designers, who I chose for my example, began lobbying for exactly the kind of thing I discussed. Good timing I guess.

I responded to several angry emails, and I recently rediscovered one of my responses. I probably would say a few things differently today, but I still thought it was a fun exchange and I was reminded of it after discussing a current effort afoot in Minnesota to require interior designers to be licensed. The idea is as stupid now as it was then, no matter what state it’s in.

Below is the original article, followed by the response letter and my reply. The names have been changed to protect the innocent interested.

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Article originally posted here.

Michigan ranks sixth in the nation when it comes to occupational licensing, with 116 different occupations requiring state approval, according to a recent Reason Foundation report.

Michigan even has a license for reptile catchers. You’d think with only one native venomous snake, the Massasauga Rattlesnake — and a relatively benign one at that — we might not need to rank so highly in this area of policy. Apparently not.

So, why do we have all of these licenses? Who comes up with them? Here’s a hypothetical example of how such policies come about:

A lawmaker meets with lobbyists representing an association of interior designers. The lobbyists say interior designers contribute $10 million annually to the state economy and provide more than 10,000 good paying jobs. Interior designers work hard to have a good reputation, say the lobbyists, but all of that is in danger. Rogue designers who are not members of the association have been undercutting prices and providing shoddy workmanship that damages all designers’ reputations. The lobbyists tell of one such designer who made a cheap shelving unit that collapsed, injuring the customer.

To remedy this, the association proposes requiring all interior designers to be registered with the state. They propose a course of study (provided by the association, to members only) and a test administered by a state panel of design experts (largely representatives of the association). Applicants must pay a $500 fee to cover the cost of the course, the test, the panel and all other related activities. Fee money would also be used to investigate and prosecute any unlicensed designers — including levying a $500 fine for first time offenders and $1,000 for repeats.

The lawmaker likes the idea of “protecting” his constituents and introduces a package of bills, mostly drafted by design association lawyers. The legislation passes the Legislature and is signed by the governor with little fanfare, as the association lines up members to testify in favor of it and the media reprints their supportive statements on this “consumer protection” package.

That’s the side of the story that is easy for everyone to see. Here’s another side:

Jane Citizen works 40-plus hours per week to sustain her family, and because of her interest in it, started her own interior design business. She has no formal training in design, and neither time nor money to pay for it. Her customers are happy, and her business has been steadily growing by word-of-mouth. Jane has never been a member of any design associations and doesn’t have time to attend conferences or read their publications, nor does she have extra cash to pay their dues.

The new “consumer protection” act goes into effect without Jane’s knowledge. She is soon approached on the job by a bureaucrat asking to see her registration. He informs her that she is violating the law and must pay a $500 fine and cease plying her trade immediately. She must become registered or face additional fines and/or legal action. Jane doesn’t have the extra $500, nor does she have the time to take the state-required course or the money to pay for it. She has unknowingly violated the law and must cease earning her living.

Lawmakers received short-lived but positive press for “protecting consumers.” But who was protected? Jane and those depending on her income were not protected by the new law. Her happy customers who lost her skills and competitive prices were not protected. The design association was the only party protected. They eliminated competitors who drove down prices. They protected their monopoly and damaged the marketplace.

Under such a law Jane and her willing customers are “protected” from an honest and mutually satisfactory transaction. Free exchange ceases to be a natural right protected by government; instead it becomes a privilege bestowed by government. No longer can market competition ensure the best services at the best price; instead a trade monopoly, using the force of government, ensures the highest price for their service. No longer do free people choose what constitutes a fair price, a fair wage and good design; instead a government panel decides for them.

The next time you hear about “consumer protection” legislation that requires yet more licensing, check to see who it really protects. When government uses force to create and protect industry monopolies for “public safety,” it subverts our natural rights. That’s more dangerous than a room full of collapsing shelves.

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Dear Mr. Morehouse,

I am writing in reference to your Thursday, December 13, 2007 article “Consumer protection often isn’t”. It seems to me you have on [sic] idea what a [sic] educated Interior Designer has to learn before they should be able to call themselves a professional. I have a Bachelor of Science Degree from Michigan State University and almost a second degree in Art History. All of these I paid for myself working two or three jobs while taking a full load of course. I have no sympathy for your Jane Citizen!

There are university extension classes and night sessions available. She obviously wants a free ride. Thank God she didn’t want to be a BRAIN SURGEON!!!! I believe you should visit two or three of the fifteen colleges or universities in our state with Interior Design programs before you ridicule a profession. May I suggest M.S.U., Wayne State, Eastern Michigan or Kendall. All have excellent programs. If the educational aspects of a profession do not concern you why haven’t you gone after Attorneys, Architects, Doctors, Plumbers, Etc? They are all licensees.

All Interior Designers want is the recognition of time spent getting the proper credentials for practicing their profession so they can serve their clients properly thus protecting their safety and welfare.

Mr. Doe

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Dear Mr. Doe,

Thank you for your comments on my article. It seems, however, that you have misunderstood its very simple point. I made no attempt to single out any one profession in occupational licensing (I could’ve used anything as an example), nor was I attempting to besmirch the hard work and training many interior designers go through.

I have no doubt that you have worked hard, and are very talented at your profession as a result; and I have absolutely no problem with occupational licensing or certification that is voluntary. What my article warned against is licensure by force. Whenever the state acts, it backs up its laws with force.

I do not believe anyone should be forced or threatened with the use of force for choosing to not get a certain amount of training in a profession. If Jane citizen wants to offer her services, that is her business. Consumers should be free to hire whomever they choose. I have no doubt that voluntary certifications would (and do in some professions) abound, and many consumers would choose only to hire those with a consumer report stamp of approval (for example). However, the choice should be up to the individual, not for the state to impose upon individuals by force.

All state-forced occupational licensing is in effect a barrier to entry for entry-level workers and a protection for well-entrenched industry lobbies. I have no doubt that your design skills can stand on their own in a free-market, and I do not believe you need the blunt force of government to coerce customers into hiring you over a less qualified competitor. I wish you had as much confidence.

Sincerely,

Isaac M. Morehouse

Review: Madmen, Intellectuals, and Academic Scribblers

Any book that uses an Oxford comma in the title is immediately in my good graces. Add the nicely designed cover, the slim size, and the intriguing topic, and Edward Lopez and Wayne Leighton would have had to commit heinous rhetorical or logical crimes to turn me off of their new book, Madmen, Intellectuals, and Academic Scribblers. Fortunately, they commit no such crimes but present a sweeping and readable examination of the forces that generate social change.

I have long been obsessed with the question of how to change the world. In my personal life, this question took me from humanitarian mission trips, to politics, to policy advocacy, to education, to developing educators, to raising support to develop educators. To borrow the old adage, I found I could do more in teaching a man to fish than giving a man a fish…then I took it further: Now I raise the capital to build the factories to make the rope to produce the nets to give the teachers to teach people to catch millions of fish.

This doesn’t mean I’ve discovered once for all the secret of changing the world; far from it. Every day my approach changes as I gain experience and learn new ideas. Madmen is, in many ways, a clear articulation of many of the ideas I’ve come to hold about social change. It details how Public Choice Theory reveals that governments have all the wrong incentives for positive change. It discusses the role of ideas, and how they are able to overcome the vested interests that Public Choice makes seem so insurmountable. It lays out Hayek’s description of social change coming from intellectuals, and spreading through the general public. But Madmen adds a new dimension, one I have not been able to integrate into my worldview until recently: the bottom-up role of culture, and the circumstance of time and place.

It is not only coherent, conscious ideology that determines what institutions will be tolerated, and therefore what incentives exist and what outcomes result. The conscious beliefs of individuals in society do play a major role, and are something we focus on perhaps because we feel capable of altering them through education and persuasion. But there is also a role for bottom-up, experiential, subconscious or tacit knowledge. The kind of knowledge that culture carries from generation to generation, passing on when it produces better outcomes.

Often no one is aware the valuable function of such cultural trends or norms. Economist Peter Leeson has done research on a variety of bizarre superstitions and practices embedded in various cultures; memes that seem to have no value. If you asked the members of that culture what the purpose was, they would likely provide an answer steeped in their religion or mythology. Yet time and again, the practices have proven efficient means of achieving desirable ends, at least compared with the known alternatives. Such cultural norms needn’t be recognized for what they are even by the people that benefit from them in order to have influence over institutions, incentives, and outcomes – good or bad.

I’ve come to believe that, when it comes to bringing about a better world, valuing freedom because we’ve experienced it and consider it normal is just as important as valuing freedom because it makes sense in the moral or utilitarian abstract. A generation that believes in the power of voluntary cooperation because they take part in it every day is no less valuable than one that reads libertarian theory.

Madmen integrates the top-down flow of ideas from intellectuals to the general public with the bottom up influence of learned cultural memes, and uses the combined forces to explain where the ideas come from that shape the institutions in which (as Public Choice reveals) incentives will lead to predictable outcomes. To create this integrated view of social change, Leighton and Lopez ask and answer three questions:

1. Why do democracies generate policies that are wasteful and unjust?

2. Why do failed policies persist over long periods, even when they are known to be socially wasteful and even when better alternatives exist?

3. Why do some wasteful policies get repealed (airline and telephone regulations) while others endure (sugar subsidies, tariffs)?

They offer answers in less than 200 pages, yet somehow manage to work in an expansive history of economic and political thought, beginning with the earliest philosophers and ending with the most current economists. This is an excellent tour of political economy as a discipline: what questions it asks, what personalities populate the field, and what competing and complimentary theories they present. There is enough detail to satisfy the wannabe economist in me, and enough colorful storytelling to sate my inner layman.

The book opens with a story of the shot-clock that saved basketball, and closes with a story of hybrid wheat that saved millions of lives. It is full of examples of social change, both good and bad, and the authors’ thoughts on why it happened when and how it did. If you are interested in how the world works from a ten thousand foot vantage point, I cannot recommend Madmen, Intellectuals, and Academic Scribblers enough.

How the World Will Change

(Originally posted here.)

When the world becomes free it will not be by the creation of new laws, or the removal of old, or new political leaders or any election result. It will not be because of a change in government, but because of a change in attitude toward government. It will not be because of legislation, but because of disregard for legislation.

Genuine change will come when the state is ignored, not reformed. It will come not when politicians are better, but when they are irrelevant.

When state-made law is no longer deemed necessary or important it will not be respected. When it is not respected it will not be enforced because it will not be enforceable.

This is how the world will change.

Evidence in the Face of Disbelief

The world can become free of the barbarous relic called the state. The state is a dangerous fiction whose power rests entirely on people’s belief in its necessity, or inevitability. Belief in the state is not insurmountable. It is not hard-wired into the human mind. It is not a given that a state must or will always exist. The state, like so many other superstitions now thought to be outrageous, inhumane and inefficient, can be left in the ash heap of history.

Many once laughed at the notion that an institution as old as humanity itself, the institution of slavery, would or could ever be removed. The prevailing wisdom for centuries, even among those who had discovered the moral repugnance of slavery, was that it was just a part of human nature. Reformers argued the best thing was to work for a more humane version of slavery.

Slavery was an institution that, however evil it may sometimes be and however utopians might imagine a more perfect world without it, was here to stay. Some embarked on efforts to improve the institution, to teach masters to be “good” to their slaves. Some setup rules and mores designed to limit the nastiest outcomes of the institution. But the institution itself was as unavoidable as scarcity and death.

The fatal flaw in this thinking is that slavery and government, unlike scarcity and death, are human institutions. They are, above all, mental constructs. Their physical manifestations are not physical realities humans simply encounter in nature, but realities we create, and humans only create by first imagining. An idea does not become an action unless the individual actor believes that the idea is worth acting on. To subjugate another human being, or to condone or allow the subjugation of one by another, one must first have the idea of subjugation and must believe that acting on it is preferable to ignoring or condemning it. Scarcity and natural death need no such human consent. The old saying about death and taxes turns out to be only half true.

If the state, like slavery, is the result of the ideas held by people it is not inevitable. Some day humanity could look back on the institution called the state with the same sense of shame and wonder that we now have about slavery. How could so many people – many of them good people – live their lives day in and day out surrounded by an institution so inhumane, so nakedly violent and demeaning? Did they really think it was necessary? Did they not understand how degrading it was? It will be hard to understand how so many humans thought the state was inevitable, tolerable and even good. As sure as slavery became a hated relic, so can the state.

How It Happens

When slavery ended it was not by changes in rules or laws or political leaders. Such changes often quickly follow changes in belief and mistakenly receive the credit, but they are never the cause. Slavery ended as people’s ideas about it changed. People began to believe it was not only an evil, but an unnecessary one. People began to believe it so evil that they were willing to tolerate the short-term sacrifices of ending it in order to reap the long-term improvement in the human condition.

The calculation of cost and benefit changed as people’s sense of morality trumped their sense of conservative institutional stability. The unknown outcome of ending slavery became an acceptable risk when considered against the known evil of the institution, which became an unacceptable reality.

Political Reform

Political reform can never bring about liberty. It can on rare occasion expand a bit of liberty for a few, but as long as that expansion occurs via political methods, it means bargaining that often takes away freedom in some other arena, or the long-term furtherance of trust in the state. The political game is about reshuffling and re-enforcing the necessity of the state.

The political game attracts great attention, and as such many suggest using it as a means of educating people about the power of liberty. Politics as education is only valuable in the long term to the extent that it educates people that politics is at bottom bad and government cannot ever be good. If it merely inspires people to advocate that the state do to things better, it is not, in the end, going to make society more free. It is disbelief in politics and in the state that leads to freedom.

The Chinese army fired on their fellow citizens in Tiananmen Square. This massacre was not caused by political leaders and generals saying, “Shoot”; but by men in the Chinese army deciding to shoot. It was not caused ultimately by bad leadership, but by a belief in the necessity of obeying orders. There will always be people with a will to power; a desire to control. Only when the rest don’t believe that power to be necessary and therefore do not obey does freedom reign.

Shift Focus

Humans want to solve problems in the most immediate and direct way possible. We want to know where the problem of restricted liberty begins. We discover the source in a gradual progression. First the focus is on people – the wrong political leaders. This quickly generalizes to political parties or groups, then to policies or laws, then to agencies and institutions, and finally to the state itself.

Here it seems we’re at the core of the problem: the state itself. Not any of the personalities or parties or bureaus or laws under its aegis. But a further shift in focus is required. The state is not the root of the problem. The real problem is not an institution, but an idea. It is the idea that government is necessary. That’s the culprit and final basis for every bad thing the state has ever done.

To a small degree, a shift in focus is happening now. A great many people don’t believe that a particular politician will solve the problems created by the state. An increasing number don’t believe one party is more likely than another to do so. It is more common to hear institutions or the incentives built into the system of government blamed. This is progress. It is, however, still rare to hear the existence of the state itself blamed, and rarer still to hear blame placed on the idea that a state is necessary.

The belief in its necessity gives rise to the state, which by definition is full of bad incentives that attract and nurture bad people in bad parties. To say the people, parties, or policies are the problem would be like blaming the sidewalk for breaking your leg after you walked off a tall building because you were ignorant of the staircase and elevator. Frustration with the sidewalk is useless and ignorant. The proper response would be to question the necessity of walking off the building; perhaps in so doing you would discover other less painful methods of achieving your goal and reaching the ground floor.

There is no form or arrangement of a state that can guarantee liberty. The answer is always peace, markets, and voluntarism. The ring of power cannot be wielded for good, but must be thrown into the fire before it uses good for evil.

Changing Lives and Changing Life

I do not wish to downplay the possible outcomes of attempts to reform the state. By such efforts lives can be changed. A court decision can save an individual or a whole neighborhood from being bulldozed by the state. The removal of a regulation can change the life of an entrepreneur and allow her to pursue her dream. These activities are analogous to disaster relief or soup kitchens; they can genuinely change lives and offer welcome relief. They can change lives, but they cannot change life.

Disasters will still come and go. The conditions that brought about hunger are not ameliorated with the appetite of the person receiving soup. The liberty-crushing actions of the state do not cease when it ceases to crush one neighborhood or regulate one industry for some period of time. The state will – must – continue to seek its own expansion, and it will push at every weak point it finds to do so, ensuring that an endless stream of lives will remain to be helped, but that the conditions of life itself will not be fundamentally altered. Treating disease is noble, but it is different than eradicating disease.

Changing lives is good and fulfilling work. But for those courageous enough to dream, changing life itself is bliss, and can only be done by undermining, not improving the state.

What to Do?

The only tactic worth pursuing is enlightenment. Enlightenment of self and of others, and both continuously. This does not mean telling people what to believe or what to do. It is more akin to discovery than education. A teacher may help you discover truth by providing information, but the discoverer has to have curiosity and openness. It is the discoverer himself who chooses to discover.

Become a free person, and your freedom will be a beacon to others who are searching. Create liberty in your own life, exchange ideas, be open to the power of human creativity. Free your own mind and you will begin to help others to free theirs not by telling them what to believe, but by demonstration and discussion.

The market does not produce new innovations and technologies because smart people tell others what to design; instead it is a constant dynamic give and take, show and tell, creation and imitation, trial and error, the greatest ongoing play of economic exchange.

The building of a free-society needn’t wait until the state is limited or absent; indeed the state will not wither until the free society is first built to replace it. The explosive power of ideas will destroy the foundations of the state as free people continue to live and breath those ideas and demonstrate the life, energy, fun, progress and fulfillment in freedom.

This does not mean everyone who wants liberty must do the same thing. Demonstrating and discussion the ideas of a free society is such a broad and evolutionary task that it opens endless doors. The differences we have in ability and interest lead to numerous efforts, and enlightenment leaves ample room for differentiation.

Our differences will manifest in which “others” we exchange with, and what methods and mediums we use. But it must be an exchange of ideas and the building of a free society. It cannot mean deceiving, cajoling, “nudging”, forcing, bribing, or dictating. These, in the end, will only lead to less freedom.

Liberty not inevitable, but it is possible. A state that does not trample liberty is not possible. So long as the state is deemed necessary it will exist, and the state will always grow beyond its originally desired limits. The state will prey upon society until it destroys it, and then destroys itself. But if the belief in the necessity of the state remains, the deposed state will soon be replaced by a new one and the process will begin again.

The only foundation that society can be built on without collapse is a belief in statelessness.

It must be belief. Consequential (practical) and deontological (moral) arguments against the state miss the point. People will accept an inefficient and immoral system if they believe it necessary. Once they find it unnecessary, they will abandon it and give moral or practical reasons for doing so, but the belief in the necessity of the state must go first.

Imagine Liberty

Ludwig von Mises described three preconditions to human action. An individual must have dissatisfaction with his current condition, a vision of something better, and a belief in the ability to achieve that vision.

Everyone has dissatisfaction with government. Almost no one has a vision of something better. People have visions of a differently structured “necessary evil”, but their lack of imagination makes them keep the modifier, “necessary”. The Proverb says that for lack of vision people perish.

If we open up our imagination there is abundant evidence of order without the state. Non-state norms and institutions produce the majority of the world we see around us. Historically, society precedes the state, and there is ample evidence of stateless solutions to problems we are taught to believe only the state can solve.

Beyond past or present evidence, an application of our knowledge of human potential can also help us envision what could be. Science fiction writers imagine unheard of technologies by looking at technological advances in the here and now. They extrapolate and predict where human ingenuity, if it continues on its present course, may go. The best social thinkers do the same with society.

Some advocates for liberty do have a vision of something better. They can imagine multifarious social arrangements without the state. But most still lack the third condition of human action; a belief in the ability to get there. After so many vein attempts at revolution and political activism it seems there is no answer. But in some ways, the second condition of action is the answer to the third. If enough people can imagine a better solution, they will cease to support an inferior one (even in the face of the unknown, if they believe it to hold promise) and cease to prohibit new experiments. People with imagination too small to envision an automobile may very well accept restrictions on road building. But people who can’t envision the specific manifestation of the automobile, but can imagine human progress and invention capable of surprising them will be reticent to restrict the construction of something with unknown promise.

This is why we needn’t all share the same, or even a very specific, vision of a stateless world. We must, however, be brave and broad-minded enough to see in human relations the potential of order without the state.

For those who can imagine such a world, the task is to open others up to the same possibility. Show them, intrigue them, inspire them. Where imagination is wanting, so is liberty.

When It Happens

Perhaps the beginning of the end of the state will be gradual. Maybe state efforts to restrict minor activities will be increasingly ignored. Bans on food and drink may be laughed at and become unenforceable. Perhaps it will slowly extend to ignoring bigger and bigger restrictions.
Perhaps it will start with a bang. The prohibition of drugs may simply come to an abrupt end, and sooner than anyone expects. Public schooling may suddenly become so little used and so uncompetitive in the face of educational innovation that it disappears.

It may happen without a big production. The visage of the state may not even die with its function. The royalty of England still exist, but they are longer relevant in regulating daily life. They exist as reflection or memory of what was once believed. Some Native American tribes perform rain dances not because they believe, as they once did, that they will bring rain, but as an homage to their past. The state may transform similarly. It may never “go away”, but it may cease to have meaning except as a tradition. Parades and pomp may remain while power over our lives withers.

Fast or slow, big or small, conscious or unconscious as it may be, the world will change. The state can be a relic of the past, harder to understand as time moves on, like slavery in America today. In so many ways the trend is well underway and we are already in a mostly stateless world, though it is little appreciated or understood. It may be a matter of merely realizing what is already true: the state is not, and never has been necessary.

Realistic and Radical

The dissolution of the state doesn’t rely on people to become better or morality to change, or for the next step in evolution. It is a fallacy that government is inevitable and necessary. It could wither away in no time. It is only a matter of us changing our beliefs, paradigms, and theories of world. It only requires that we realize that it is not necessary. I say only, but the power of imagination necessary to see that the state is not is no small thing. Opening our minds to this possibility is the greatest and most promising intellectual and practical adventure.

The Worst Protection

You feel safe in your neighborhood, but worry about the small chance of a break-in or act of vandalism. To protect yourself from these risks, you pay a security company to look after your house. It costs a little more than you’d like, but you determine it’s worth it.

They put an unarmed guard in front of your house at night, just to keep an eye out. It seems a bit unnecessary, but you rest easier knowing he might deter would be thieves. The guards start coming earlier and staying longer. It seems silly to have them there before sundown, but you ignore it. Soon, they’ve got someone there almost around the clock. Then they send you a bill with a new higher rate for their services. You suggest going back to night only guards, but they assure you this is necessary to protect you, and also tell you the neighborhood is getting a bit more dangerous. You pay.

The next week, not only do they have a guard around the clock, but he’s armed. Then there’s two or three patrolling at a time. Rates go up again. You’ve been hearing more stories about how dangerous the neighborhood is, so you pay. Before long, they have a constant cadre of armed guards patrolling not just your sidewalk, but the whole neighborhood. They start randomly knocking on your neighbors’ doors and searching their houses for anything they might use against you. They set up permanent stations throughout the area, manned 24/7. Guards constantly patrol and conduct random searches, without permission, and occasionally they cage or kill someone. They assure you; there was reason to believe these neighbors had it in for you. It’s a jungle out there. They raise their rates.

Some of your neighbors object. Some devise ways to protect from being searched or bullied. All become suspicious of you, and a little angry. After all, the guards are invoking your name when they do this. The more the neighbors resist or lash out at the guards, the more the company explains just how unsafe you are unless you purchase the latest upgrade. You do. They deploy more street walkers. They pre-emptively kill and cage more neighbors. It seems a fight breaks out every day. Bands of neighbors form for the sole purpose of combatting you and your security team. Their children grow up afraid of you and they hate you, and your children, for it.

The company says more is needed; threats can come from anywhere. Now guards are groping your guests and your children each day before they enter or exit your house. They search your house on occasion, just to be sure your conspiring neighbors don’t have an inside man. They treat you like a suspect on your own property. You pay the new fee with the only credit card you haven’t yet maxed out.

Every day you wake up scared of your neighbors, suspicious of your guests, leery of your own children, and irritated by the guards who may or may not rummage through your belongings. You juggle money around just to keep the lights on, meanwhile the guards roll around in tanks, thanks to your borrowed money. You remind yourself that they’re here to protect you from an increasingly dangerous neighborhood. It’s worth it. Sure, they could cut some costs, but it’s a struggle to convince them of anything, and it’s a little intimidating to try. Besides, what’s a few dollars overspent compared to the imminent danger you’d face if they scaled back too far?

One day it hits you: you’re not safer. You’re paying a lot of money, not to insure you against unlikely violence, but to stir it up. You’re paying to create enemies, not defend against vandalism. You’re paying to be treated not like a customer, but a criminal in your own home. You’ve been ripped off. You have fewer options when it comes to social circles, since you’ve made a lot of enemies. You can’t travel down certain streets, because there your name has become a byword. You’ve learned to fear your neighbors and you’re not really sure why, or what threat they pose except to the guards that harass them.

You fire the company and begin the long task of putting your life back together.

Unfortunately, it’s not that easy in the real world. You can’t fire those that provide supposed security. You have to pay, and you have to obey, or else. Don’t be mistaken: just because it’s done on a grander scale and wrapped in a lot of fuzzy feelings and national myths, doesn’t make it different from the neighborhood story above. States are supposed to provide protection; instead they poke people with sticks and incite them to violence.

The United States has enemies. I do not have enemies. There is no one in a far flung place in the world looking at a map and saying, “Here, on the Atlantic coast where the Cooper and Wando rivers come together. The people who have chosen to live on this bit of land are terrible. Let’s invade them. Let’s kill them.” Every international threat to me is a threat to me because I am associated, whether I like it or not, with the United States government.

Acts of terrorism and war are strategic acts. They are intended to pressure the state into changing its policies, or to make it pay for previous policies. Attackers know that the state ultimately responds to the views of its people and the interests that form around it. They attack civilians because they believe it creates impetus for the state to do what they want. We are the pawns in the game of states. We are at risk because we are seen as leverage with which to manipulate the political class.

The state is often defended as necessary to secure individuals against foreign aggression. Yet foreign aggression has no target if there is no state. The state does not make us safer, it makes us less safe. It kills in our name, with our money. It harasses us in our own country in the name of protecting us. It makes us suspicious of people we’d otherwise never know, or know only through Tweets or peaceful commercial interactions. It makes us hated.

The sooner we can forge an identity separate from the states that claim to protect us, the safer we will be. If the state is a kind of security provider, or insurance against international aggression, it’s the worst form of protection I can imagine. You wouldn’t stand for a company that marauded through the neighborhood in your name; you shouldn’t stand for a nation that does either.

Why Corporations Don’t Support Freedom

There is a common assumption that advocacy of free-market ideas is funded in large part by big corporations.  As much as I wish the many great organizations and projects that are educating in liberty received financial support from large corporations, almost none of them do, and when they do it is in very small amounts when compared to the other things such firms support.

But why?  Businesses are constantly hampered and harassed by government regulation, taxation, and the uncertainty of the legal landscape one day to the next.  Don’t they stand to gain from laissez faire?  Well, yes, businesses stand to gain tremendously from market freedom.  Entrepreneurs, owners, employees, consumers, and every other market participant stands to gain.  Businesses of all sizes stand to gain, provided they can produce what consumers demand.

Aye, there’s the rub.

You see, while business stands to gain from free exchange, nobody knows which specific businesses will be most successful in a competitive environment.  Consumers are a tough bunch to please.  It takes a lot of work, and there’s a lot of uncertainty.  The creative destruction of the market is a little daunting to a businessperson who dwells on it for long.  It’s easier, for those who can afford it, to cozy up to the state and ensure that it’s restrictions and interventions hurt you a little less than they harm your competitors.  If you have resources enough and play your cards right, you might even be able to get policies that make you more profitable or put your competitors out of business entirely.

The result?  Bigger businesses tend to support state intervention, because they have the lawyers and money and can hire the guns of government.  It is entirely possible that some of these very businesses would fare better under economic freedom, but they don’t know for sure, so they go the somewhat safer route of state cronyism.  Smaller businesses typically aren’t organized enough and lack the resources to manipulate policy in their favor.  Worse still, the unimaginable number of new ventures that would have been created were it not for government impediments have no voice at all; we don’t even know who would have created them.

In short, freedom is good for business, but scary to businesses.

Democracy is Not Our Savior

(Originally posted here, but I remain bewildered by the religious devotion to democracy, so I’m reposting.)

Imagine if your local grocer used mass voting to determine what to stock on the shelves. Everyone in a 30-mile radius of the store would get a ballot every few years, and you could vote on what items they should sell. Think long and hard about what people would vote for. Do you think this would result in better selection and quality than the current system of letting markets decide?

Voting is an incredibly inefficient mode of social organization. It rewards irrationality, selfishness, ignorance and greed. It makes peaceful coordination and cooperation incredibly difficult. It is divisive and hopelessly, systemically flawed. All the incentives are wrong. We should not see voting or democracy as a solution to social or political problems, but one of the primary causes.

Perhaps my example of voting on groceries is unfair. In most political systems we don’t vote on each and every issue. Instead, imagine that residents within 30 miles of the grocer don’t vote on the store’s stock and policies, but rather vote on who should manage the store. Let’s go a little further and say they vote on the manager, CFO, board members and a handful of other middle-management roles. What would be the result?

For starters, those seeking to hold management positions at the grocery store should forget about any skills except the skill of convincing all the voters to vote for them. Marketing themselves as better than the other would-be managers would be the only thing that would get them the job; not their expertise at running a store or their knowledge of stocking procedures, management or the industry. Would people’s votes provide better and clearer information about who should manage the store than the profits, losses, operations and happiness of employees? Of course not.

At first glance, voting may seem similar to a market. After all, when people buy or don’t buy from the grocer, it sends price signals telling management what shoppers value. It’s like a vote, with a crucial difference: It costs the buyer. Market exchanges reveal what people want when they face trade-offs. Voting reveals what people want when it’s “free.” Lots of people might vote for the store manager who promises not to import anything from other countries because it makes them feel good to support local farmers. These same people, when faced with higher priced and lower quality local food in the open market might very well choose to purchase imported produce. Voters support candidates who promise to restrict cheap imported goods, then on the way home from the polls they stop and buy cheap, imported goods. Voting irrationally is costless, while shopping that way hurts your pocketbook.

Voting also turns friends into enemies. I have neighbors that support different products and services and businesses than I do, but this doesn’t cause any tension in our relationships. But if we were forced to vote on which products, services and businesses were available to us, how much they should cost and who would pay for it, in a zero-sum election, you’d better believe tension would arise.

The fact that no grocery stores select products or managers by popular vote should clue us in to something: Democracy is a far worse way of coordinating and managing complex processes than markets.

It’s easy to see how disastrously inferior democracy is to the market in providing groceries. The provision of food is the most fundamental and important service to any society; if the market can handle food provision so much better than democratic processes, why not the provision of less fundamental services like health care, education, protection and all kinds of lesser services? In truth, the incentives built in to the democratic process create massive inefficiencies in all these government services, as well as allow for corruption and all manner of moral transgression.Government failure is an inescapable part of government.

In civil society, voting is a rarely used mechanism. We vote on inconsequential things like where to eat or what movie to see with a small group of indecisive friends. Voting is used in religious or civic organizations to select board members or decide on some major issues. Not only are these relatively small, homogenous groups, but they are groups of people who have voluntarily come together around a shared vision. They can also freely enter and exit; shopping for a church or denomination may sound off-putting, but the freedom to do so is crucial to the health of individuals and churches.

Even in these smaller, voluntary institutions, voting has important incentive and information problems that most organizations try to curb in some way. The more populous the group, the more complex the decision—and the more costly or important the outcome, the worse voting is as a coordinating mechanism. When you’re dealing with hundreds of millions of people and a cross-section of highly complex policies with life-and-death consequences and millions in potential gains or losses, voting becomes an absurd mechanism of coordination. Governments may try to supplement voting with all kinds of irritating and invasive data collection like censuses, but these do not solve the problem in any way—and can make it worse. Does your grocery store need to conduct a census to supplement the anonymous information you provide them with your purchasing behavior?

Most advocates of limited government understand why tyranny and central planning are dangerous. But too often they assume more or better democracy will improve things. We hear about turning backward countries around by making them more democratic. We hear about turning our own country around by convincing people to vote for better candidates or policies. None of these will ultimately address the problem. The grocery store that is managed by vote would not be much better off if the residents selected a “better” manager; the manager would face the same lack of vital information, and the voters and manager would face the same bad incentives.

The way to make the world a freer, better and more prosperous place is not to enhance and expand democracy or to elect better people through the democratic process. It is instead to reduce to a minimum the number of things decided through the democratic process, and to allow more peaceful and emergent institutions for social and economic coordination to take its place. This can only happen when enough people understand and believe in the power of peaceful, voluntary interactions over the power of coercive political methods.