Archives for category: Public Policy

What made the Great Depression different from the depression of 1893-97?

as answered on Quora:

Much of what I was taught in school about the Great Depression was wrong, or at the very least proved to be extremely skewed. Not a few accepted truths are little more than red herrings. Public schools in America do us all a great disservice, but regarding boom and bust cycles, you can usually count on them to have it backwards. The truth is more complex than commonly admitted, and will likely startle students of history.

But hey, instead of a long, scholarly explanation, I would like merely to mention a handful of issues:

  1. No one in government attempted, in the earlier debacle, what Herbert Hoover did to “heroically” save the country from the difficulties associated with the bust part of the boom-bust cycle. For examples of what he managed to “accomplish” — which included trying to prop up wage rates — consult Murray N. Rothbard, America’s Great Depression. And yes, you read that right, Hoover was no advocate for laissez faire. He was, instead, a celebrated progressive who lived up to his reputation by doing his damnedest to prevent the deepening of the depression — and for humanitarian reasons (and Hoover was indeed a great humanitarian). But instead of improving matters and steering the nation away from crisis, he made the situation far, far worse.
  2. Franklin Delano Roosevelt ran for the presidency in part on what we would now call (idiotically) an “austerity” program. But when he took the reins he doubled down on Hoover’s progressivist interventionism, offering These Benighted States* a great number of massive interventions into market adjustment processes, most famously the National Recovery Act. There are a lot of sources for this; I needn’t list any. Just recognize that FDR extended the depression well beyond his second term in office. The U.S. was, in effect, in a depression all the way through World War II (see the work of Robert Higgs on this, especially the concept of regime uncertainty). Nothing like any of this happened under President Grover Cleveland’s watch. And when World War II ended, the Keynesians were panicky: “another Depression!” was their cry. To their horror, a Keynesian stimulus was not delivered, yet the recovery was fairly swift, even with all those soldiers coming home and flooding the labor markets.
  3. The Great Depression was part of a worldwide, post-Great War trend, the precipitating element of which was Britain’s going back to the gold standard at parity after the wartime inflation. This daring policy might have worked out just dandy, but unions were strong, and downward price adjustments were thus disallowed in the industrial sector. Massive unemployment was the result — the obvious and predictable result. This was a known thing, yet Keynes was scraping together his “theory” to work around what amounted to a political logjam. (See W. H. Hutt’s The Keynesian Episode for a great analysis of this, including some great stories, like Sidney Webb calling the unionists “pigs.”) And in America? Well, enter a new institution, the Federal Reserve, which inflated the money supply in part to help the Brits, thus setting the stage for the crash of 1929. Though the late 19th century had huge monetary issues — America’s gold/silver bimetallism question was quite the mess, and was not resolved properly — at least old Grover did not have to out up with a central bank! This is the biggest issue. See Philips, McManus, and Nelson, Banking and the Business Cycle, for a thorough investigation of the monetary causes of the Great Depression, and the nagging disequibrium aspects to what has been called “the secondary depression.” It is also worth mentioning that the United States has always been plagued by goofy money and banking policy. See Calomiris and Haber, Fragile by Design, for the best discussion of this I have encountered.
  4. And then there is Smoot-Hawley. What can I say about this that has not been said? Well, that is not the point. Let me merely hint at a summary. The tariff bill hampered not only American trade, it hurt the very farmers it was meant to help (the agricultural sector being the one sector that never quite bounced back from the post-Great War bust). But there is more: it also inflicted a series of huge stressors to the banking system. And it did worse, its protectionism ushered in a global trade “war.” Thus setting the stage for World War II. It was devastating, and made the Great Depression far worse — which, after Hoover, FDR, and the Federal Reserve, did not need more such “help.”

The Great Depression was a perfect storm of bad government policy.

And note: I did not quite get to the thesis of “The Great Contraction” (Friedman and Schwartz, A Monetary History of the United States) or Irving Fisher’s brilliant debt-deflation theory. And I have skimped (but not ignored) the Austrian Theory of the Business Cycle.

There were structural problems at play in the depression during Grover Cleveland’s second presidency, sure. But they did not dovetail to work woe as happened later, under progressive politicians and that great, unwieldy, and quite dangerous progressive program, the Fed.


* I am especially fond of this manner of referring to our increasingly disunited (but nevertheless nationalistic) hodgepodge, the United States. My coinage. The people and its governments are such disappointments, having turned back on the original promise and persisting in an astounding cluelessness.

To believe that “deficits don’t matter” and “public debt is no problem” requires one to believe that government, and government alone, has solved the problem of scarcity.

Furthermore, governments have mastered this magic by doing the one thing that politicians most like doing: bestowing benefits on some constituents without immediately raising taxes on others.

Suspicious. Stretches the credulity, if you ask me. I have never been shown the mechanism how this could possibly work.

Most defenses of deficit spending are Keynesian, and Keynesian fiscal prescriptions only make sense on their own terms when counter-cyclical, that is, when deficit spending is parlayed in bad times to be offset by budget surpluses used to pay off debt in good times. But that no longer ever happens. If it ever did.

Politicians just get too few rewards from paying down debt.

So, as near as I can make out, the modern State’s “solving” of the “problem of scarcity” is not a solution at all, but is, instead, a con job. It depends wholly upon misdirection. As is so often the case, we come back to Bastiat’s “the seen and the unseen.”

The populace? Blind to it. But politicians and their pet economists? They squeak and take their politic soundings for mastery of flight.

Batty.

Mind your business

Why should we care about freedom of the press when most media companies are already owned by billionaires with their own political agendas?

As Answered on Quora

The freedom of the press is not just for big media companies. It is for you and me, with our blogs and videos and the like. A “press” is just a means to distribute “speech” beyond the sound of our voices in distinct places.

The American Revolution was the background of the founders’ understanding of “the press.” It was a period of pamphleteers. Think tracts, one-sheets, booklets, etc.

All recent judicial perspectives and decision that treat “journalists” and “newspapers” as different from you with your printer and me with my blog are without foundation. Let us get these silly, corporatist notions out of our heads. We are “the press.”

So, it doesn’t matter much, for constitutional interpretation, who owns the major media outlets. The fact that they are owned by billionaires, and all of them technocrats and most left of center, is irrelevant in terms of principle.

Why would anyone think differently? What part of the rule of law is confusing?

As Answered on Quora

The classical liberal theory of the state expects citizens to defend themselves while ceding to the state the right to retaliate after the fact of any conflict, or to seek recompense for any rights violently and criminally violated. The point of police and courts is not to protect you, but to protect everyone from those seeking vigilante justice after instances of perceived harms.

So classical liberals will, by their very nature, support an armed citizenry. Anyone who wishes to disarm citizens is not a classical liberal. I would argue, further, that the anti-armament advocate is not any kind of liberal. This and the rights of free speech, conscience, press, and assembly, constitute the demarcation between liberals and non-liberals.

A person who may not arm and defend him- or herself is not free. A state that fears its armed populace is not a republic.

Contrariwise, a people that routinely extracts private justice in secret is not free, either. It is, instead, well on its way to tyranny or chaos. A state that exacts retribution or redress in secret is also tyrannical, just as is a state that prevents its people from self-defense.

Now, this does not mean that a free society cannot support private law justice. We still have elements of that now, especially in civil law. But secretive, hidden retaliation leads to vendetta and civil warfare, a sort of Hobbesian war of all against all. The key to justice, in republican theory, depends upon the public, open adjudication of potentially violent disputes. And that is the basic idea of a republic, according to classical liberal theory. You can find this theory in the writings of John Locke, early theorists of the American Constitution like John Taylor of Caroline, and in the work of J. S. Mill and Herbert Spencer.

So, some form of armament must be ready in the hands of the citizenry of a republic. Some kinds of armaments might be disallowed (no nuclear warheads in basements!) but I think the basic rule should be — and would be among all informed, honest liberals — that the citizenry must not be prohibited from owning and carrying any weapons that the state, in its policing, owns and carries.

Yes, classical liberals would be, almost certainly and by definition, “pro-gun.”

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Congress is back in session next Tuesday. The days in session? Twelve. If Republicans don’t rush through cannabis legalization, they will have missed the biggest opportunity for political success — on the order of Democrats’ huge error in opposing the Tea Party (for the stupid, tribal reasons they did).

Missed opportunities are hard to track. But this opportunity, still open, is pretty easy to see. Trump would sign such legislation. He has said as much. And Republicans could (a) express solidarity with the majority opinion on the subject and (b) gain traction with young people, who are especially likely to be against sending marijuana users to jail and ruin their lives by interdiction and prosecution and dispossession.

But, being the Stupid Party, the GOP will not do it. Right?

(Facebook, yesterday)

“Conservatives” and “progressives” are perhaps best seen for what they are on the issue of drugs. For it is here that these two brands of progressivism — socially conservative and socialist/technocratic — come head to head for a kind of weird bipartisanship.

It was the socially conservative progressives (SCP) who needed the illiberal, anti-Constitutional method of the socialist/technocratic progressives (STP), for the old federalism stood in the way of prohibiting alcohol. To get this, the SCPs pushed women’s suffrage and the income tax. These two allowed Prohibition to go national, which was the SCP flagship policy. It was a disaster, of course. And was later repealed in Progressives’ even greater debacle, The Great Depression (yes, it was caused by their policies).

But the STPs had what they needed, the foundations to develop the welfare state and the therapeutic state. That is, the welfare state and the therapeutic state were built, both, on the basis of the female vote and the income tax, and the cultural excuse that Prohibition gave — though Prohibition was ended by constitutional amendment, the general policy was secured at every level, including federal; there would be no real pushback from SCPs (who came to call themselves, with some but not much justification, “conservatives”). And the general progressive mindset allowed them two world wars, and the two wars allowed experiments in “war socialism,” which in turn paved the way for federal regulation and the full panoply of the Administrative State, plus vast programs of redistribution, including Social Security and much more.

And, with all these programs that pleased the STPs so much, there remained the psychoactive drug prohibitions, as a sop to the SCPs. And, of course, the STPs let the states regulate alcohol, in a pretense form of federalism, as a vestige of Prohibition.

I could go on and on, but you see the general tenor. The Republican Party is the SCP party, and the Democrats make up the STP party. Progressivism has triumphed, and Republicans are so ineffective because they do not realize that they embraced the progressive meme long ago, and that it corrupted their souls. And their politics.

(from LocoFoco.us on Facebook, yesterday)

A bill is in play. But it is bipartisan. Republicans should have made it partisan. Or must it be bipartisan because there are enough Prohibitionist in the GOP? What an idiotic coalition the Republican Party is. Even social conservatives and religious Christians have reason to support decriminalization (I prefer full legalization at the federal level). But this group of people are the second least politically astute group in the country.

A friend responds:

You underestimate the buy-in they have on the drug war. Two-thirds of the Republican voters have a Jeff Sessions level religious anti-pot mindset (shared by 1/2 of the democratic voters). Polling will have shown them that any caving on the drug war is going to result in more blow back from their base.

There are certain things each political party cannot do no matter how much political sense it makes. An outsider can come in with these issues and run as an R or D and get independent voter support, but someone who has come through the ranks can’t.

I volley back:

For the same reason the Democrats “had” to attack the Tea Party — not because it was ideologically required or good politics in the long run, but because it was a culture war thing. This is why I hate the two parties.

(Facebook, yesterday)

twv

Why rob banks? Cuz that’s where the money is!

This principle, er, old joke, helps explain a recent Republican brainstorm: how to secure for Americans that very European subsidy, paid “parental leave.”*

The new idea is to pay for the desired time off with Social Security funds.

Social Security is, after all, a ginormous funnel through which a huge percentage of nearly every worker’s wealth gets “redistributed”: from young workers to retirees, from today to a distant tomorrow.

So, siphoning some largesse off for this wish-list item strikes some folks as natural.

Who are these geniuses?

Well, The Hill reports that “Sen. Marco Rubio (R-Fla.) is working with Ivanka Trump to craft a paid family leave plan that will appeal to fellow Republicans,” and cites Sen. Mike Lee (R.-Ut.) as with Rubio in that endeavor.

“Such a proposal,” The Hill elaborates, “would address concerns of Republicans who don’t want to raise taxes to pay for family leave.”

Shikha Dalmia, writing at Reason, expresses the obvious concern: “it isn’t like Social Security has a ton of spare cash lying around to dole out to people other than retirees.”

But, not so fast: Republicans have given the notion a tincture of plausibility: they’ve pitched the program as a way to “take control of one’s Social Security account.” The “paid leave” would be treated as early withdrawals from Social Security, offset by postponing retirement.

Unfortunately, we don’t have real accounts. Each participant has a list of tax payments and a schedule of promised benefits — legally changable at any time. The proposed offset would itself be offset by the bringing forward of Social Security insolvency.

The willingness of politicians to rob the Social Security “kitty” is, apparently, something we can always count on.

Which makes Social Security itself something we can count on even less.

twv

* Remember when the idea was just half as big? That is, when it was mere “maternity leave”?

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I have friends who are entirely dependent upon the State for their livelihood — and I am not just referring to elderly retirees. Most of these aid recipients have received disability retirement pensions from the Social Security system. These folks are not in any way anomalous in American life. You might be surprised to learn how many disability recipients there are.

More interesting, however, is this fact: no small number of these folks — indeed, most of my friends on state aid — are not die-hard Democrats demanding vast increases in the size and scope of the welfare state.

Not a few are conservatives — one of my closest friends is an authoritarian conservative of the Bill O’Reilly sort — and they rail against lazy people and welfare queens and all the rest.

Yes, they think and vote this way even though they are mostly or entirely dependent upon the taxpayers.

What is going on here? This strikes many people as paradoxical. Many are the Democrats who think that “being a Democrat” is precisely what these state aid recipients should be: grateful, die-hard supporters of the welfare state, devoted to its expansion.

After all, the Democratic Party is the party most enthusiastic about state aid programs like this. And Democrats expect fealty.

What is the matter with Kansas? asked one prominent leftist scrivener. So many Kansans would be so much better off if they voted Democratic and siphoned more special favors off the state — ultimately, off of producing Americans — and “as a matter of right.”

Vladimir Gimpelson and Daniel Treisman, writing in the Washington Post a few years ago, expressed their wonder as to why the very poorest of the poor in our country are so lax in their demands for more redistribution — for programs and handouts that (our querists think) would be “in their interest.” The two professors’ think piece (a summary of an allegedly scholarly study) is entitled “Why don’t democracies take from the rich and give to the poor?” and it presses the question, seeking answers:

Since the time of ancient Greece, political theorists and observers have feared that inequality leads to instability. The greater the income gap, the more the poor have to gain by taking from the rich. In democracies, the thinking goes, inequality should predispose voters to demand government redistribution. In dictatorships, the rich, fearing Robin Hood policies, should resist democratization. And the poor, locked out of power and wealth, should be more tempted by revolution.

Though these arguments have been around since Aristotle, it’s hard to find evidence for them in the real world.

And they cite some recent scholarship on this. Democracies do not turn revolutionary.

Why? Scholars have suggested a variety of things that might derail political unrest. Belief that the economic system is fair, or the hope of being rich someday, or even organized religion might reconcile people to the gap between rich and poor. Or it could be that, with their assets hidden in Swiss bank accounts, the rich these days have just become too hard to expropriate.

But there’s a simpler possibility: Maybe inequality fails to trigger the expected political consequences because most people just don’t know how large the gap is between the wealthy and the rest of us.

“If people don’t know how much they stand to gain and at what cost,“ they conjecture, “why would they take political action?”

Amusingly, that “if” premise is only half-interrogated:

We looked at eight cross-national surveys to see what people believe about inequality. Time and again, large numbers of respondents had no clue what the income distribution looked like in their country, how it had been changing recently, and where in that distribution they personally fit.

The authors conclude that while “Americans still seem relatively relaxed about income inequality,” that may very well “be changing.”

Right. But though the subject of the (in)elasticity of demand for redistribution is interesting for several reasons, my concern is different. Indeed, I wish to begin by interrogating the part of the premise the professors take for granted: do the poor really have anything to gain by increased redistribution of wealth?

As present, after all, the fifth and lowest quintile of market income earners in America do not pay federal income taxes. They are, in fact, net tax consumers. Maybe the poor do not demand more because they have an inkling about how much they get now.

Actually, I suspect that the poorest grossly underestimate the levels of their subsidy. Indeed, I suspect that Professors Gimpelson and Treisman — economist and political scientist, respectively — would underestimate the current levels of subsidy. You see, our professors at the Post are only interested in “income inequality” and how it is perceived, and how these two things stack up against the demand for further redistribution that they have somehow measured. (Maybe I will carefully read their paper, but I haven’t yet, and nothing they write suggests to me that they are onto something very important.)

So, what is the level of subsidy in America? Well, after-tax, after-subsidy incomes show that the lowest income quintile in these United States have an effective (net) negative tax rate of over 200 percent:

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That is, they do not pay taxes, net of the full panoply of state benefits (SNAP, SSI, Section 8 housing, etc.). They get subsidized to the tune of 213 percent.

This is a huge amount of handouts. Sure, too many businesses receive subsidies in America — far too many — and some rich folk make a lot of money off the government, but, evened out, it is the poor who right now do get the lions’ (or pigs’) share of redistributed wealth.

And it is rather astounding that our two professors of egalitarian studies (for that seems to be their real profession, here) nowhere indicate that the poor right now are living off of the rich. Our professors just assume that “the poor” should demand even more.

Now, I could spend many paragraphs explaining the complexities of income statistics, the slippery nature of the “increasing inequality” meme. Because it tracks statisticians’ artifacts — a five-fold division of society by incomes — and the amount of wealth that changes in these quintiles, and not the majority of individuals who do indeed move from one quintile to another and then back again as they navigate the arcs of their lives, all this inequality talk is mostly confusion and error. But I am going to let others handle those niceties. I am going back, doggedly, to that basic query: why don’t the poor demand more?

Yesterday, on the YouTube show Right Angle, Steve Green, Scott Ott, and Bill Whittle offered some possible answers — responding to the Post piece:

  1. “There aren’t enough poor people” in our country to actually vote themselves more — America is richer than you think, says Steve Green. While the professors think the poor overestimate their wealth levels, Green in effect says that the professors overestimate the number of the poor — and in a democracy, numbers count.
  2. And Green offers another reason for lack of egalitarian envy: “even our poor people are kick-ass Americans.”
  3. Bill Whittle suggests that our poor Americans have more than a hunch that, by world standards, they are rich — and yes, our poor are richer than many another country’s poor. It would be ungrateful to demand more. And perhaps (Whittle moves on quickly) our poor have a broader perspective — and more “moral fiber” — than our professors.
  4. Whittle also wanders into the point hinted at above: this talk of income quintiles obscures the truths of income mobility. The American system of merit “allows people to move up and allows people to move down.” Given this reality, it would be stupid for the poor to scuttle their best way out.
  5. Scott Ott notes that, as a general rule, the folks most exercised by income inequality are people far above the gutter. The suggestion here is that maybe talk of income inequality does not really serve the poor. Maybe it serves a class or classes of the better-off. Alas, Ott does not explore this latent idea in his answer, but goes on to speculate that America’s low-income earners just do not buy into the solution as a workable feature to rise out of their ruts.

To explore the notion that Ott skips over too quickly, you might best turn to netizen-philosopher Stefan Molyneux, who talks about “languasites.” In a world of Makers and Takers, these “language parasites” find tricky ways to assuage the fears (and other anxieties and insecurities) of the Makers and thus leech off of them. A grand example can be found in Lucian of Samosata’s Hermotimus, or The Rival Philosophies, in which we encounter an earnest student of Stoicism milked of his wealth and diverted from his youth in the vain pursuit of . . . enlightenment . . . which is translated as “Happiness” in the edition I own, Marcus Aurelius and His Times: The Transition from Paganism to Christianity (1945), Irwin Edman (introduction), p. 172.

This idea of the linguasite (“tongue parasite,” with some loose construction — but surely better than “languasite”) is awfully pregnant, and it might be useful to prod Molyneux further on just who does and does not fall into that category. But the idea is fairly clear. And in the context of the income inequality obsession, what we have here are the second-hand dealers in ideas who F. A. Hayek wrote about. More importantly, we have a class idea, here. Many members of the cognitive elite somehow find themselves ensconced in key positions in the welfare state. Might not they develop a natural class interest in promoting the idea no matter its effects on the poor themselves? College professors, for instance, are consulted by bureaucracies and legislators, and teach many future government functionaries, lobbyists, lawyers and journalists who make their livings transforming society away from the ugliness of consumer-determined merit and into “rationally-determined” social justice.

And here we come to the interesting aspect of the welfare state: the establishment of classes based on state redistribution.

Now, we have to forget Marxian analysis, for his simple oppression/exploitation theory of class was based on a misconstrued of the nature of trade and productivity in a market economy. And we can glide right over the classical liberal class theory (very interesting, and not entirely irrelevant) that Marx pilfered to concoct his grand farrago. We should turn to Joseph Schumpeter, instead.

imageClasses form around perceptions of success, wrote the great economist in an under-appreciated study. “What makes a subgroup of society,” I wrote in the Laissez Faire Books edition a few years ago, “‘organically’ related enough to qualify as special, as constituting a class?” The answer can be found in “social factors like honor, which was, after all, the basis of the first major governance system of civilization. And honor depends on — is, indeed, obsessive about — success. It is not failure but success that ‘exerts a continuing effect’” that forms a class. But let us turn to Schumpeter for a fuller picture:

[S]uccess brings in its wake important functional positions and other powers over material resources. The position of the physical individual becomes entrenched, and with it that of the family. This opens up further opportunities to the family, often to an even greater degree than to the successful individual himself, though these positive factors are to some extent offset by the deadening effect on the original impetus of exalted position and security, by the diversion and complication of interests, and perhaps also by the sheer exhaustion of energies which everyday experience shows to be not uncommon. Coordinate families then merge into a social class, welded together by a bond, the substance and effect of which we now understand. This relationship assumes a life of its own and is then able to grant protection and confer prestige.

I speculate that one of the great triumphs of the modern welfare state has been to reroute the mechanisms of class away from natural groupings like family and clan and into the artificial, state-bounded and -funded institutions like the Academy.

And maybe one reason professors promote redistribution, in their writings and lectures, more enthusiastically than the poor do, with their votes, is that the subsidized poor serve as trophies of the cognitive elites. Perhaps increasing state redistribution is not advocated by the elites because it really helps the poor, but because it is emblematic of class success, and thus class cohesion and prestige. The poor do not gain prestige by sucking up more taxpayer-funded resources. But boy, members of the cognitive elite do!

But is that all there is to it? Class interest?

I think not. I suspect, anyway, a bit of economic rationality going on here. I suspect that not a few normal people look at the demographics of redistribution and become alarmed. My wards-of-the-state friends are dependent upon continued support. Increasing the ranks of the recipients, or even the amounts generally redistributed, does not make the system they depend upon more secure.

Do you see the incentive here? No small number of state aid recipients oppose expansion of the programs that support them. And while socialist ideologues might think that these clients of the State are somehow naturally beholden to a robust welfare state ideology, and that by voting Republican (or worse, Libertarian) they are “voting against their interests,” this is simply not the case. People “on welfare” have a very compelling interest to not support the increase in the size and scope of the programs that supports them.

Let me restate why: increasing the number of recipients of such aid programs could very well jeopardize the financial stability of those very programs, endangering the livelihood of current recipients.

This is a very basic point. To not notice this point is to miss something about the nature of economic redistribution: that it depends on a larger population of contributors putting wealth into the system than taking out of it. The more recipients of taxed funds we add puts a strain on those taxed, especially if the ratio gets out of hand. On pure economic grounds, it makes sense to be a member of a small group gaining at the expense of the majority than a large group gaining at the expense of a minority.

We cannot all live at the non-reciprocal expense of others.

One might call this perspective common sense. But it is not “folk economics” — it is theoretically sound; the rationale works out in extended analysis. Indeed, one of the problems with the sustainability of Social Security in the United States — and of similar programs throughout the West — is that the ratio of contributors to recipients is getting smaller. The trend line is foreboding. It is the reason we are at last taking Social Security off the proverbial “third rail” and contemplating reforms such as raising the retirement age and raising the income ceiling for FICA contributions, er, taxes.*

What is astounding to me is that this elementary fact of redistribution — that it cannot be complete, that socialism itself is a fantasy never capable of delivering on its promises, for we cannot all be Takers. There must be Makers. And there should be a reasonable ratio between them to make the programs sustainable.

That this notion of redistribution has seemingly evaporated from the public conversation strikes me as odd. I do not even hear libertarians, the strongest critics of government redistribution of wealth, bring it up very often, and cannot now think of an instance where it became part of a general theory of redistribution. But the more I think about this, the more basic it seems.

Indeed, it applies to criminology, too: the more theft going on in society — and remember, theft is merely the illegal redistribution of wealth — the more crime would drag society down. It is in the interest even of criminals to discourage crime generally. Perhaps for this reason (if not this reason alone) criminals rarely oppose laws against theft and murder and the like. They realize social systems cannot be stable where everyone plays criminal. They simply make an exception for themselves. They try to bet against the house, hoping to squeak through the cracks of the system and gain “rents” that would evaporate if too many criminals tried to game the system. It is instructive to recognize the fact that criminals themselves rarely even try to take up the pretense that theft and murder are good ideas to spread around. It is as exceptions to the rule that criminals’ livelihoods make any sense at all.

That is perhaps one reason why, when crime becomes “organized,” territory and limitation of criminal acts according to “honor” and other codes, become common. It is also one reason why police often are deferential to organized crime: a monopoly of a service limits the supply of the service, and criminal monopoly is better than no such monopoly, which would mean more crime. And thus greater the threat of unsustainability. Yes, crime can serve as an excellent example of “market failure” — that is, for situations where the criminals, acting in their separate self-interests, yield themselves a net detriment, not benefit.

All of this reiterates one basic thesis: leftism is parasitic upon the system it despises. Nearly all leftists I have ever met abhor the idea of “profit.” They consider business activity necessarily “dirty.” They are distrustful of markets, and see in markets only internecine competition and, in fact, predation and parasitism.

This view of social life I regard as obviously and completely at odds with reality, the inverse of the truth. Redistribution is parasitism. Leftism is the philosophy that parasitism via State redistribution is good in and of itself — perhaps better than production in the market. And socialism is the bizarre notion that “we can all be parasites” — though of course socialists do not state their doctrine in such a bald, unvarnished way. Instead, socialists cook up shaky theories purporting to show that market distribution is not productive, that the rich who gain so much by trade are in fact “exploiters” of the poor, and that the poor would be better off without the rich . . . or at least better off were the rich sucked dry.

It used to be understood among old-fashioned Progressives and FDR/LBJ-style “liberals” that one could go too far in redistributing wealth. But by earnestly grinding through their rationales for taking from some to give to others, modern progressives have lost sight of the basic realities inherent in the system they propose. And so they cannot see — or at least countenance talking about at any length — any point in emphasizing those limits.

This can be clearly seen in the cultural divide between The Tea Party and the Occupy Movement. The Occupiers characteristically demanded more redistribution and more regulation and generally derided the evils of big business. The Tea Party, on the other hand, was concerned with curbing government spending and aiming to balance budgets. Democrats mocked those “tea baggers” who seemed to misunderstand basic realities, such as when signs were held aloft saying “Keep the Government Out of My Medicare.” And that sort of thing is indeed hilarious. But the idea still remains that adding people onto Medicare rolls and under-funding the system does not help people who have come to rely upon Medicare.

So the signs really meant “Keep Progressives Out of My Medicare.”

But Democrats — who now seem almost uniformly “progressive” — have missed the point. They cannot see sustainability as a legitimate issue. Politicians like Sen. Elizabeth Warren have gone so far as to call the conscientious Tea Party activists “anarchists.” It is hard to imagine a more absurd charge. But, when you hold to the crazy idea that more government is always better government, you will tend to say absurd things.

So we exist now at this strange point in history when the Democratic Party has lost its grip on power even though it is the party of special interest promises and Potlatch “generosity.” The last moment of possible turnaround for the Democrats was, I think, when they turned on the Tea Party. Had they embraced the Tea Party, and made a public effort to rein in spending, they would now be dominant and their hold on power unassailble. But that was not to be. They had become so blind to the realities of redistribution and its parasitism upon productive capitalism that they lost savvy people even amongst the recipient cohorts. Sure, leftism has always been parasitic on the system it hankers to destroy. But parasitism only works on a principle of hormesis. It is the hygiene theory of immunity as applied to the body politic. The hookworm is the parasitic drain. Too many, and the host dies.

The idea that progressives now regard contemplation and discussion of this principle utterly verboten says a lot about their divorce from reality. Their fantasy now runs their policy prescriptions. And it may very well be a function of class prestige that is one of the drivers for this. Sure, there are other factors — like the socialist soteriology, or the entelechy at the heart of the left’s other-obsession memeplex — but we should not overestimate the wisdom of the elites or the folly of the poorest among us.

twv

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N.B.  There is, of course, another very basic reason for state aid recipients not to support increasing the register of aid recipients: they may want to think of themselves as deserving recipients, and fear that others placed on the rolls for laxer standards might be seen as unworthy, or as being dangerously discouraged from finding alternate means of support. And the more folks going onto the rolls for comparatively trivial reasons might poison the well politically, and tar all recipients as unworthy of help. To what extent this fear is a rational, moral or merely a petty rationalization, I will consider at another time.

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This is the golden age of clever analogies. Short “memes” get shared online, and many of them are quite good. And then there are the ones that fall apart.

Consider this effort in the Ban The Guns Sweepstakes:

I assume this “phil h” fellow invented it. And the first time I saw it, I thought, “not bad.” But the second and third and fourth time I saw it? I saw the problems.

A lot of my friends immediately objected to the condescension in the example: statists treat us like kids. Children.

But it’s worse than just that. The condescension is double: he talks of “giving” out sticks. As if what people possess were a matter of what they “receive” rather than what they work for, earn. Have by right.

But the most deceptive aspect of the meme comes in Option C: it uses a singular construction, not the plural that would parallel current debate. The gun grabbers mean to take away “all the sticks.” Not just the malefactor’s stick. But by leaving this in the singular, we are subliminally cued to understand this in a more reasonable light. Adults do take away sticks from irresponsible kids. And perhaps use the stick to swat the little malefactor on the behind. That’s nothing like what leftists really are up to. They want all the sticks taken away.

And think again about that “give” and “take away” — this language completely distorts how kids actually acquire sticks. A realistic scenario would reformulate it as “let kids find sticks and play with them” in contrast to “take away all sticks and denude the trees and parks of branches and. . . .”

The authoritarian attitude is just a part of the paternalist/maternalist Family Model of the State. It’s the wrong model, as should be obvious in this debate. And especially in this really pathetic attempt at persuasion.

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The more diverse a people are — the greater the variety of ethnicities, languages, cultures, folkways — the less extensive a government they can peacefully share. Real diversity requires limited government. Only in monocultural societies can robust, Leviathan government remain sustainable for long.

The reasons for this are not hard to fathom. The chief of these is the tragedy of the commons.

A government in the form of a republican State (a “liberal democracy” as it is sometimes called) is conceived of by most of its proponents as a shared resource, established for the good of all — a “commonwealth.” But common resources require regulation to prevent individuals and groups from abusing and over-using the resources — that is, adapting to the common resource opportunities by gobbling up more for themselves than for others. And by “adaptation” I mean altering their behavior and their way of life to enable them to secure more common resources. And, as anyone with a lick of sense knows, self-regulation would be ideal. It’s the least expensive way to maintain the institutions, secure their long-term viability. Hence the importance of a monoculture.

enjoy-capitalismAristotle wrote about this. But I haven’t read Politics in 40 years, so I forget if the great philosopher applied the commons problem idea to the form of government itself. (I will let someone else look it up, or just tell me.) Economist W.F. Lloyd wrote about this in the 1830s, and ecologist Garrett Hardin made it famous in the “tragedy of commons” phrasing in our time. Hardin applied it to environmental resources, but it also applies to State-marshaled resources of any kind, including wealth obtained from taxes. Public Choice economists have been working on these problems for about the period of my lifetime, though Vilfredo Pareto clearly understood it in his critique of socialism at the beginning of the 20th century.

It was this idea that helped lead me to prefer limited government as a general policy in the first place. It should be easy to see that the more similar people are, the more likely they are to forgo overusing public resources. Why? Out of kinship altruism. But this sort of forbearance is harder to generally maintain in diverse populations, so there is a tendency for welfare states to turn into “churning states,” where the web of “everybody trying to live at the expense of everybody else” becomes so complicated that no one really knows who the net benefactors and net beneficiaries are. This leads to poltical strife, and … our present situation.

IMG_2027The Scandinavian states have been moderately successful with a robust redistributive state in large part because they have been so genetically and culturally uniform. And yet, over time, the moral probity that prevented overuse of common resources has waned, and permanent dependent classes have formed. Oddly, these countries have been importing these dependent classes, too, mainly from Muslim countries, so I expect these states to fall or undergo some significant kind of revolution in a generation or two.

Note, then, how wrong today’s progressives are. Driven by liberal piety, they insist upon diversity. And yet their politics is one of class division combined with socialistic government growth, which undermines sustainability. It is inherently contradictory.

More contradictory yet is their internationalism. Nationalism — indeed, ethnonationalism — is the surest sustainable way to keep welfare states going in the long run. So progressives are wrong and the so-called “alt-right” is definitely correct. If you want extensive state action, you need to draw boundaries along ethnic or “racial” lines. And indeed we find that alt-right maven Richard Spencer, after scratching the surface of his poses, has proven to be an ardent supporter of the welfare state.

Now, there are several other ways (serving as alternatives to ethnonationalism) to counter-act this commons-overuse problem. The chief method, in our time, has been consumerism. Consumer culture has broken down ethnic divisions, and can indeed make populationsmore uniform the better to be ruled by — and encourage support for — an extensive “welfare state.” And once again we find progressives utterly on the wrong side, for they pretend to be against consumerism, and their hatred for big business works against the only cultural factor that could possibly make the politics of social democracy work in a diverse population.

For my part, I prefer actual diversity, and believe that a rule-of-law-based polity is the way to go, so I oppose both the pathetic alt-right and the contradictory mishmash philosophy of progressivism.

Yes, I’m a real liberal. I do not just spout liberal pieties, as does today’s left, but I embrace the liberal spirit of tolerance of diversity, which the left, today, does not (their class warfare version is faux-diverse, and in fact promotes commons overuse). And I also wish to establish long-term social institutions, not institutions subject to takeover by special interests and run along exploitation lines. Democracy in a welfare state is as contradictory as a welfare state in a diverse society.

So, you may have guessed it: diminishing the scope of democratic action is another way to control overuse of common resources. On the left this is done by seeking to limit lobbying of government (a basic right under our Constitution) and setting up of complex bureaucracies and guilds of power, immune to electoral shock. On the right we have . . .

Donald Trump.

IMG_1929Trump sure seems anti-democratic, and that is a possible solution to save the welfare state from its most hysterical advocates and its abuse from group interests at the public trough. And, let us admit, that is precisely what modern conservatism is all about: saving the welfare state from the progressives and their insane prodigality. (Conservatives do talk about building down the welfare state, but that’s just their piety; it does not seem to be a real goal. Demonstrated preference tells us this.)

Since I’m not a conservative, you see why I dislike both political parties and the major factions within them. And why I don’t get on board with Trumpism.

I can find Trumpism funny, however. Why? Because modern ideologies are so incoherent that Trump serves as the cutter of Gordian Knots; he’s the Mule (as I’ve said any times); he’s the Loki figure. Whether this will save the welfare state, or bring it down faster, I do not know. While we wait to see what happens, Trump’s bizarre antics entertain.

He and we fiddle as the Empire burns.

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Written for but not published on Facebook*:

I just learned that a few years ago Germany’s Merkel had asked Facebook’s Zuckerberg how he was working on suppressing dissent from her immigration policies.

This is the nature of government, and of “the left” today. Center-leftists are the new conservatives, suppressing and molding thought and discussion to bolster their policies in the name of their values, not the values of an open society, much less the principles of free speech.

F9A994CB-3822-4302-8BAB-32A6D15A8D4AAnd I know, I listen to my left-leaning friends here* on Facebook: on the whole, you folks (oh, ye of much faith … in government) don’t dissent from the suppression of free thought and the expression of ideas and values and policies you do not like. Indeed, you cannot imagine someone having a different thought from you on obviously controversial policies (such as what you think of as the obviously correct and quite simple implementation of anti-racist and anti-sexist agendas) and that they could possibly be valid.

This doesn’t make you “edgy,” it makes you conservative. Retro. Reactionary. Sure, your policies are not associated with “conservative” “principles,” but your methods are conservative. You are shoring up Progressive Era institutions, and trying to extend them. But you do not want to upset the establishment. You are the establishment.

4CD881E5-1B34-412D-9FB1-0E412F3C2E3BAnd believe me: you are just as overbearing as conservatives seemed when I was young.

For the record, I find your ideas, analyses and regular outbursts of moral umbrage to be, for the most part, ridiculous.

Sure, the nominal conservatives “on the right” are ridiculous, too. But they are obvious goofballs and cretins. You folks still pretend to yourselves — and manage to pull off in public — a farded-up public face that still almost passes for sophistication.

But your mascara is running, and your imperial clothing is being pointed out to be non-existent. Soon, three-quarters of the world will be laughing at you.

No wonder you are desperate. And no wonder your desperation is showing.

twv

* I chickened out. I did not see the point in insulting half of my friends and family. Though they deserve it, sure.