Available Now!

Available Now!
What Social Animals Owe to Each Other

Saturday, April 29, 2006

Immigration and Citizenship

In a comment on an earlier post on immigration, Larry Ruane said:
Given the current welfare state, would you oppose citizenship, including and especially voting rights, for at least some immigrants (approximately those that are called illegal immigrants today)?
I've been thinking about a proper answer, and here's what I've come up with:

Obviously, no one should, in defiance of justice, be able to get anything from anyone by force, even if the booty passes through the state first. The citizenship issue is complicated by the welfare state. If the state were minimized (and kept that way -- a pipe dream in my view), citizenship wouldn't matter much. But today voting means being able to vote for legal plunder and warmongers. (I'm reminded of what Lysander Spooner said about women's suffrage: Women should have the same right to vote as men have: none.)

So I guess I have no problem with conditions for citizenship, such as a residency requirement and no criminal record (meaning real crimes with victims). I have to laugh at requirements about speaking English and taking a history and civics test. Could most natural-born Americans pass such a test? (A recent survey found that more people can name the Simpsons than the freedoms specified in the First Amendment.) The state of their English literacy isn't too good either. I do see a problem with saying that immigrants can't partake of the welfare state: schools, hospitals, Medicaid, etc. They do pay taxes. As long as the system exists and immigrants are taxed, it can't be proper to exclude them. I once proposed that if they are going to be excluded, then in fairness they shouldn't be taxed.

In which case I will renounce my citizenship and apply for immigrant status.

My President Invaded Iraq and I Didn't Even Get Any Oil to Show for It

From the Associated Press:
With the global economy carrying the weight of $70-a-barrel oil, dismay among many economists is focusing on Iraq, whose exports have slipped to their lowest levels since the 2003 invasion.

Iraq, a founding member of the Organization of Petroleum Exporting Countries, sits atop the world’s third-highest proven reserves. The estimated 115 billion barrels under Iraqi soil is more than any known reserve of any other OPEC member except Saudi Arabia and Iran.

But contrary to optimistic prewar expectations, Iraq’s oil production has slipped since the U.S.-led invasion, to an average of 2 million barrels a day. Iraq has never regained even the reduced production levels that prevailed in the 1990s, when Iraq lived under U.N. sanctions.
Cross-posted at Liberty & Power.

Friday, April 28, 2006

Burma and Forced Factory Labor: No Evidence, No Allegations

In a recent post I recommended an article in the Journal of Libertarian Studies (Summer 2005) on forced labor in Third World sweatshops run by multinational corporations. After checking the sources on the central part of the article, and other investigation, I now must offer a caution about the article.

The article makes the entirely valid point that where forced labor is used to staff sweatshops owned by multinational corporations, free-market advocates should not scoff at leftist protests about the poor conditions by saying, "It must be the workers' best option." But that opens the question: are there countries where this happens? The author, Ellennita Muetze Hellmer, says there are. The centerpiece of her article is Burma, ruled by an oppressive military junta (which renamed the country Myanmar). She writes, "The truth is that the military regime of Burma abducts its own citizens and forces them to work in factories owned by multinational corporations" (38-39). In the next paragraph, she writes, "[T]he government is often paid by the multinational firms in order to utilize the labor of the prisoners" (emphasis in the original).

I had intended to write an article on this subject, favorably citing and quoting Hellmer's article. While drafting it, I decided to go to her referenced sources to look for quotations. I was disappointed. The sources are "Drugs and Slavery in Myanmar" in The Economist (subscription site), June 22, 2000 (the article erroneously has the date as June 24, 2000), and "Myanmar: The Administration of Justice - Grave and Abiding Concerns," a report by Amnesty International.

The problem is that neither of these sources contains allegations that multinational companies use forced labor provided by the government in their factories. In both cases, forced labor is discussed but only in reference to military infrastructure projects, such as roads and military camps, and other such government projects. (Unfortunately, this seems to be a practice inherited from the former British colonial administration.)

The Economist states:
The regime, which ten years ago ignored an unambiguous election victory by the opposition National League for Democracy, has arranged ceasefires with most of the rebel ethnic groups, but keeps control only by using slaves to build defences, roads and bridges. Locals are forced to clear land, act as porters for the army and provide food and housing. Refugees claim that forced labourers are even made to march along roads that have been mined by rebels.
Amnesty International writes:
Other ongoing concerns in Myanmar [aside from political imprisonment] include forced labour of civilians by the military....
There is nothing in the report about multinational corporation factories or other private-sector use of forced labor. Not satisfied with this, I Googled several combinations of terms designed to find any article whatsoever about Hellmer's allegation. Nothing came up. Nothing.

The article is highly misleading. For example, this:
The truth is that the military regime of Burma abducts its own citizens and forces them to work in factories owned by multinational corporations. Often, the laborers are political dissidents or petty thieves, but the criminality requirement is a mere formality. Many innocent people, as well, are forced to work in the factories as well, bringing the number of slaves to a total of 800,000 (The Economist 2000). [Emphasis added.]
If you go to The Economist article, the only thing you'll find substantiated is the 800,000 figure. As already pointed out, it says nothing about compulsory factory work.

Another Hellmer source, the Clean Clothes Campaign, states on its website:
In July 1998, the ILO [International Labor Office] produced an authoritative report on forced labor in Burma, calling the system "a saga of untold misery and suffering, oppression and exploitation of large sections of the population inhabiting Myanmar [Burma] by the Government, military and other public officers."
A check of the ILO site turned up no allegations that people were forced to work in factories operated by multinational corporations.

I took this a step further: I e-mailed the Free Burma Coalition (FBC) to see what it knew about the issue. I received responses from FBC's founder, Zarni; Derek Tonkin, a retired British diplomat who held posts in Southeast Asia; and Robert Taylor, visiting senior research fellow at the Institute of South East Asian Studies, Singapore, and former professor of politics at the School of Orient and African Studies, University of London. Zarni had referred Tonkin and Taylor to me. Their responses are interesting.

Tonkin writes:
I know of no reports of forced labour in manufacturing enterprises in Burma, whether locally or internationally owned. The manufacturing sector is not all that significant in Burma, and there has never been any difficulty in recruiting labour at local market rates, which are admittedly low. . . . Forced labour in Central Burma has generally been connected with road-building and clearance schemes for which heavy machinery is not available. This compulsory labour is not all that different from what I have seen in Vietnam, but in Burma it is run by the Army, who tend to be heartless and autocratic, whereas in Vietnam it is run by the local authorities and Party organisations as communal schemes. On the whole, there is little or no forced labour on construction sites (hotels, factory buildings, schools, hospitals etc) because unskilled labour is not generally required and could be more trouble than it is worth. Forced labour in the border areas is much more widespread and involves portering for the army and compulsory provision of food supplies - to be frank, anything which the local army commander feels he needs to survive, as he is expected to live off the land and has no budget for local expenses.
Tonkin sent a link to the latest ILO Governing Council report (March 2006). It says nothing about forced factory labor or other work for private-sector interests.

In a second e-mail Tonkin said:
I have no evidence to support the allegation in the [Hellmer] report at reference that: "The truth is that the military regime of Burma abducts its own citizens and forces them to work in factories owned by multinational corporations". I believe this allegation to be totally without foundation.
Zarni's e-mail was similar to Tonkin's:
There were - and still are - news reports about the use of forced labor in the country, especially in military operations and infrastructure projects, to our concern, to the best of our knowledge, there have been no single report or allegation about the use of forced labor in [manufacturing] sector run by multinationals.
I should note that due to a boycott campaign conducted by FBC and others concerned about forced labor, many western companies stopped buying products, such as apparel, from Burma. FBC has since changed its strategy from isolation of Burma to engagement. See its website for details.

Taylor's e-mail states:
I have never heard the allegation that multi-nationals used forced labour in Myanmar. The allegation is normally made that the army uses forced labour as porters and as free labour for its camps. This may be true to some extent but then in 1916 the United States Supreme Court said that such practices were constitutional in lieu of taxation. Until 1999 the law in Myanmar, inherited from the British via the 1907 Village Act, made such practices legal. However, I do not believe, based on conversations with foreign investors in Myanmar, that forced labour was used by any foreign firm in any of their construction projects.
Let me add a couple of points in conclusion. First, I wish in no way to go easy on the Burmese military junta. It forbids workers from organizing and jails its political opponents, forcing them to work. Second, forced labor on the government's civil and military infrastructure is abominable. But, third, this is not the same issue as forced labor in multinational corporation sweatshops. Were that to occur, the companies involved would deserve the harshest criticism and recriminations such as boycotts. But there seems to be no evidence that it occurs in Burma. Finally, forced labor in factories is a separate issue from a government's closing off virtually all opportunities to people but factory work. I have not seen this alleged in Burma, but we know it has happened in the past through land expropriation and tax policy elsewhere. (See the British colonial record in Africa, for example.) Here the issue is forced work in western-owned factories. Not only is there no reported evidence that it occurs, there aren't even allegations it has occurred.

(Burma is not the only case discussed in the paper. The other examples of forced labor are Indonesia gold mining in recent times and the Central American coffee-growing industry in the nineteenth century. I have not looked into those cases.)

Thursday, April 27, 2006

The Price of Empire

Empire — sorry, benevolent hegemony — has its price. Terrorism is one. Every empire in history probably had terrorism directed at it, because it’s one of the few weapons available to relatively weak nonstate adversaries. Another, less dramatic price is the determination of other countries’ rulers to go their separate ways. This can range from major moves to establish spheres of influence to sticking a thumb in the empire’s eye.

In the latter category comes word that the likely president of Peru, Ollanta Humala, has promised to end the U.S.-financed program to destroy the coca crop in his country. Coca is used to make cocaine, but also tea and herbal medicines. There’s only one proper response to Humala: Good for him!
Read the rest at The Future of Freedom Foundation website.

Cross-posted at Liberty & Power.

Wednesday, April 26, 2006

Jane Jacobs (1916-2006)

Jane Jacobs, champion of the spontaneous life of cities and radical critic of government urban planning, died yesterday at age 89. Through her many books and the conduct of her life, no one did more to describe the nature of the city as a free unplanned order in the Hayekian sense or to expose the pretensions of social engineers. Among her books are The Death and Life of Great American Cities, The Economy of Cities, Cities and the Wealth of Nations, Systems of Survival, and The Nature of Economies. The New York Times and Washington Post obits are here and here.

From the Times obit:
Ms. Jacobs did not limit her impact to words. In 1961, she and other screaming protesters were removed by the police from a City Planning Commission hearing after they had leapt from their seats and rushed the podium. In 1968, she was arrested on charges of second-degree riot and criminal mischief in disrupting a public meeting on the construction of an expressway, which would have sliced across Lower Manhattan and displaced hundreds of families and businesses. The police said she had tried to tear up the stenographer's transcript tape....

Ms. Jacobs moved to Toronto in 1968 out of opposition to the Vietnam War and to shield her two draft-age sons from military duty. But she quickly enlisted in Toronto's urban battles. No sooner had she arrived than she led a battle to stop a freeway there.

Monday, April 24, 2006

On Immigrants and Sweatshops

Jesse Walker of Reason magazine has an excellent article on the problem of sweatshops and immigrants in the United States. A sample:
There's a whole genre of free-market literature that defends sweatshops and the like on the grounds that they're the best available option for their workers—jobs they've freely chosen because the immediate alternatives are all worse. I don't reject that argument outright, but I've never found it entirely satisfying either. That's partly because some of those sweatshop titans don't just give their charges low wages and long hours; they engage in direct coercion or fraud. It's one thing to choose a job because the other alternatives look worse. It's quite another to find yourself cheated out of your pay at the end of the day or, worse yet, held captive on a citrus farm with hundreds of other workers and threatened with death if you try to leave.
Good stuff!

And by the way, for a refreshing libertarian perspective on sweatshops in the Third World, check out this article by Ellennita Muetze Hellmer in the Summer 2005 issue of the Journal of Libertarian Studies. It's refreshing because it debunks the "it's their best option" argument that free-market advocates start and stop with on this issue.

Hat tip: Kevin Carson.

Sunday, April 23, 2006

Against Monopoly -- New Blog

A new blog devoted to the case against "intellectual monopoly" (a.k.a. intellectual property) is now in operation. Against Monopoly is a group blog that includes, among others, David K. Levine and Michele Boldrin, authors of the forthcoming book Against Intellectual Monopoly (see draft here). I'll be posting there as well. See you there!

Saturday, April 22, 2006

China, Oil, Sudan, Scorched Earth, Genocide

Revised, Sunday April 23
When George II welcomed Chinese President Hu Jintao to the White House this week, the smiles were on ostentatious display. Many people worry about China, and the Chinese have indeed been engaged in some abominable things, but not the things that American protectionists are concerned about. For instance, a few years ago China bankrolled the Sudan Arab Muslim elite's killing spree against African Christians in the south of the country. Tribes there had the misfortune to live on the oil fields that China has its eyes on. The Chinese government supplied Khartoum with lots of cash and weapons so its forces could run the occupants off their lands, slaughtering the people in the process. It was a nasty campaign, and the Chinese were in the thick of it. The background is here in this Washington Post story from 2004. Some excerpts:
Sudan is China's largest overseas oil project. China is Sudan's largest supplier of arms, according to a former Sudan government minister. Chinese-made tanks, fighter planes, bombers, helicopters, machine guns and rocket-propelled grenades have intensified Sudan's two-decade-old north-south civil war....

In the case of Sudan, Africa's largest country, China is in a lucrative partnership that delivers billions of dollars in investment, oil revenue and weapons -- as well as diplomatic protection -- to a government accused by the United States of genocide in Darfur and cited by human rights groups for systematically massacring civilians and chasing them off ancestral lands to clear oil-producing areas....

Part of a broader push by China to expand trade and influence across the African continent, its relationship with Sudan also demonstrates the intensity of China's quest for energy security and its willingness to do business wherever it must to lock up oil....

The pressure to find new sources of oil has grown as China has swelled into the world's second-largest consumer and as production at the largest of its domestic fields is declining. According to government statistics, China's imports have grown from about 6 percent of its oil needs a decade ago to roughly one-third today and are forecast to rise to rise to 60 percent by 2020.

"China confronts foreign competition," said Chen Fengying, an expert at the China Contemporary International Relations Institute, which is based in Beijing and affiliated with the state security system. "Chinese companies must go places for oil where American [and] European companies are not present. Sudan represents this strategy put into practice." ...

Sudan's bloody north-south conflict began long before China arrived, but oil has dramatically increased the stakes as well as the government's ability to pursue the battle. The war is a struggle over the resources of the south, pitting the mostly Muslim, Arab elite that runs the government in Khartoum against the largely Christian and animist African tribes who live in the lower half of the country....

As the oil began to flow, Sudan relied on Chinese assistance to set up three weapons factories near Khartoum, Ryle said. Human rights groups say oil receipts have helped pay for a government-led scorched-earth campaign to remove mostly ethnic Nuer and Dinka tribes from around the oil installations. The goal is to deprive the rebels of a base of support in their bid to attack the industry and undermine the government's oil revenue.
As an earlier commenter here pointed out, last year the Sudanese government entered into a treaty with the Sudanese People's Liberation Army/Movement, leading, according to Wikipedia, to "the formal recognition of Southern Sudanese autonomy."

Government genocidal violence continues in Darfur in the west, and China remains an ally of Sudan. According to Human Rights Watch (HRW) (Jan. 21, 2005), "Most of China's [oil] holdings are in southern Sudan, but some are in the western region of Darfur." HRW adds, "As an emerging power increasingly seeking a global role, Beijing should recognize that its economic concerns must give way to the imperative of stopping the slaughter of the people of Darfur. The alternative—quenching China's thirst for oil with the blood of the people of Darfur—is too awful to contemplate."

Oil from the beginning has been a government-business partnership, not an authentic free-market industry. Much of the modern history of the Middle East is a saga of Britain and the U.S. teaming up with evil local governments, to the prejudice of regular people, in pursuit of oil and money. China carries on this time-honored tradition without the free-enterprise facade. Mercantilism, once again, can be blamed for something horrible.

Postscript: From Sunday's Washington Post:
The China National Petroleum Co. is a big investor in Sudan's oil fields and owns most of an oil field in southern Darfur. CNPC and the Sinopec Corp., another Chinese state-owned firm, helped build a newly opened pipeline from the south -- where much of Sudan's oil is located -- to Port Sudan. China also is a major arms supplier to Sudan and has used its U.N. Security Council clout to protect Sudan from global pressure and weaken threats of oil sanctions.

Friday, April 21, 2006

Corporate State or Laissez Faire?

This picks up on a running theme of Kevin Carson's: Vulgar Libertarianism. We free-market folks can sometimes be confusing to the rest of the world. One moment we complain (properly) about all the deep-seated government intervention, but the next moment we act like we live under laissez faire. Almost in knee-jerk fashion we scoff at reports that income is not growing at all levels, or that income mobility is not what it ought to be, or that CEO pay, severance deals, or retirement packages are ominously high. But if we really live in such an interventionist economy , then shouldn't we expect some undesirable consequences to show up in the data? E.g., if the market for corporate management -- i.e., the hostile takeover -- is stifled by protectionist intervention, as Henry Manne shows, then can't we conclude that CEO compensation might be higher than it would be in a free market? There might be some measure of freedom inside the corral, but let's not forget that there's a corral! In this connection, I refer readers to my latest column in The Freeman: "Full Context" (pdf).

Cross-posted at Liberty & Power.

Thursday, April 20, 2006

It's Not Easy Being a Benevolent Hegemon

In an editorial about China today the Wall Street Journal says, "Managing the rise of any great power is an enormous foreign policy challenge that can easily go awry, as the world learned with Germany and Japan."

I tell ya, a world policeman's work is never done. You have to change regimes, watch out for weapons of mass destruction (while developing one's own killer "conventional" weapons), and manage the rise of great powers (so that they don't actually compete with you where it matters). That's a full plate by any standard. No doubt the busy president feels harried by all the criticism. Everyone's a critic.

Cross-posted at Liberty & Power.

Wednesday, April 19, 2006

What Do You Mean "We"?

To say the least, there is tension between the ideas that we live in a free society and that government may determine whom we may sell to, rent to, and hire. This is the real heart of the immigration debate. Who should decide such things, free individuals or the state?

This question is obscured by the democratic myth. People often say, “We as a nation have the right to decide who comes here and who doesn’t. So we must get control of our borders.” The problem with this is that “we as a nation” don’t do anything. Individuals act, sometimes in concert with other individuals, but collectives do nothing. When we say “the nation does such and such,” we mean a group of politicians calling themselves “the government” and claiming to act for the nation do such and such. It’s true that in a society such as ours people vote for officeholders. But the connection between punching out a chad in a polling station and politicians’ making immigration policy is, shall we say, roundabout. It is so roundabout that it makes no sense at all to say that punching out a chad is the same as determining immigration policy. That’s a fairy tale. It’s time we became men and women and put away childish things.
The rest of my op-ed, "What Do You Mean 'We'?," is here at The Future of Freedom Foundation website.

Cross-posted at Liberty & Power.

Tuesday, April 18, 2006

U.S. Holds Acknowledged Noncombatants at Gitmo

Here's a story to raise your blood pressure. From the Christian Science Monitor:
Compared with most other detainees at the US Naval Base at Guantánamo Bay, Cuba, Abu Bakker Qassim and Adel Abdu al-Hakim have a strong argument for why they should be immediately released from the terrorism prison camp. According to the United States military, they are neither terrorists nor "enemy combatants."

So why are they being held at the camp nearly a year after a military panel ruled that they pose no threat to the US? They have no place else to go. Their appeal for freedom suffered a setback Monday.

The US government says that if the two men are sent home to the semi-autonomous western region of China they might face human rights abuses, and even torture, at the hands of Chinese authorities. Both men are members of the Uighur minority religious and ethnic group which has been the target of a Chinese government crackdown in recent years. They were captured after being trained with the Taliban in Afghanistan.

No other country has been willing to take them. And the Bush administration refuses to allow them to enter the US, even temporarily, out of fear of establishing a legal precedent that might be used by lawyers for other Guantánamo detainees.

On Monday, the US Supreme Court declined to take up the case. Instead, the matter will be argued on May 8 before a federal appeals court panel in Washington, D.C. At issue is what power, if any, federal judges have in the matter....
A federal judge says the men are being held illegaly, but he also says he can't do anything about it. So the Bush administration is imprisoning people it concedes are not terrorists, or combatants, or even criminals. In other words, we know who the real criminals are.

Cross-posted at Liberty & Power.

Eradicating Crops: Who Do They Think They Are?

The news has me fuming today.

The Washington Post reports that the likely next president of Peru, Ollanta Humala, has promised to end the U.S.-financed program to eradicate the coca crop in that country. That's not what makes me mad. It's the program that does that. I can hardly imagine anything more arrogant and presumptuous than for a government to destroy crops in another country because that government doesn't want "its" people to have access to them. Nor can I imagine a program better suited to create hatred for Americans. And we wonder why figures like Chavez get into power. Are the people in Washington crazy? No, of course not. Somehow this fits their agenda of "benevolent hegemony." But it makes farmers in the Andes hate us and creates sympathy for Marxist guerrillas and terrorists. This is how our government protects us. What a joke.

The Post says the U.S. government has spent $5 billion since 2000 on crop eradication. Where are the spending hawks (an endangered species) when it comes to such budget items? I love this paragraph from the article:
But if Humala wins the decisive second-round election, to be held in May or early June, the United States' main ally in its eradication efforts -- Colombia -- will stand as a virtual island in the Andes, surrounded by countries with governments critical of Washington's policies. If continued breakdowns in cooperation occur in Venezuela, Peru, Bolivia or Ecuador, some U.S. officials say they fear that progress made to fight coca cultivation in Colombia could be undermined as production migrates across its borders.
Some production has already moved: "Despite record eradication hauls in Colombia, coca production has been on the rise in Bolivia for each of the past four years. In Peru, U.S. government analysts detected a 23 percent increase in the traditional cultivation zones between 2004 and 2005; when including data from new zones of cultivation, Peru's annual increase was 38 percent."

We can only hope cooperation will break down in Colombia too, but I guess that's too much to hope for. Obviously, this matter calls into question the entire war on drug makers, sellers, and consumers. People in Latin America can't understand why they are scapegoated for the American demand for drugs. It's a fair question. And contrary to the brainiacs in Washington, eradicating coca crops has not made cocaine more expensive. The market is amazingly resilient, and as a result, the price of cocaine is historically low. The U.S. government is undeterred. It makes the spraying of poisons possible, showing little regard for the resulting environmental damage and social disruption. How typical. It should be pointed out that coca has uses other than producing cocaine. The Post says that Humala promises "to strengthen the legal marketplace for coca by promoting such products as coca teas and herbal medicines."

Cross-posted at Liberty & Power.

Monday, April 17, 2006

Patents and Other Privileges

The New York Times had an enlightening story yesterday on the background to the BlackBerry patent miscarriage of justice. It turns out that a computer pioneer and entrepreneur who hates the idea of patents wrote about wireless e-mail a decade before the idea was patented, and this fact was overlooked or withheld when Thomas Campana patented the idea and when Campana's patent-holding company, NTP, sued Research in Motion (BlackBerry's maker) for patent infringement. In fact, NTP's lawyers consulted with Geoff Goodfellow in order to "neutralize" him in their suit against R.I.M. Goodfellow says he made it clear to the lawyers that he had published his idea about wireless e-mail long before any patents were issued, but the lawyers now play innocent. Goodfellow remembers one of the lawyers introducing him to someone by saying, "Geoff's the inventor of wireless e-mail." The lawyer disputes this. But according to the Times: "At one meeting in Washington, when Mr. Goodfellow described his technology at a white board in a conference room, [NTP lawyer] Mr. Wallace insisted that the other lawyers not take handwritten notes for fear of leaving a paper trail, Mr. Goodfellow says."

All this is revealing because it casts doubt on whether Campana, who died a few years ago, ever should have gotten his patents even under existing law. It used to be harder to patent ideas that were "in the air." Campana's patents have been premilinarily invalidated by the U.S. Patent Office. Nevertheless, R.I.M entered into a $612.5 million settlement with NTP rather than risk being closed down by a judge's injunction.

The story demonstrates the problems with patents per se. Given the nature of ideas, when the state gets into the business of granting property rights in them, there is bound to be trouble. The story also shows that within the hardcore computer community there is an aversion to patents. Goodfellow says, "You don't patent the obvious. The way you compete is to build something that is faster, better, cheaper. You don't lock your ideas up in a patent and rest on your laurels."

Hat tip: William Stepp.

Sunday, April 16, 2006

Good Quote

Browsing Chomsky on Anarchism at Barnes & Noble today, I came across this quotation from Daniel Bell:
It has been war rather than peace that has been largely responsible for the acceptance of planning and technocratic modes in government.
Conservatives who sincerely dislike big government might think about that one.

Cross-posted at Liberty & Power.

Saturday, April 15, 2006

Capitalism versus Capitalism, continued

In my previous post about the Journal of Libertarian Studies symposium on Kevin Carson's Studies in Mutualist Political Economy, I said that the harsh reaction to Carson's use of the word "capitalism" was striking. I did not intend to take up every point made against Carson in the critiques. As I said before, valid criticisms can be and have been made of his 400-page book covering political-economic theory and history. Nevertheless, I have learned much from the book. Overall it is a valuable contribution to political economy and a timely reminder (if that is the right word) to libertarians of how radical their creed actually is. In my view, one cannot overstate the importance of Carson's asking libertarians: what are you defending, the free market or the political-economic system we currently live in? He is right that many libertarians are ambivalent, one day criticizing the pervasive state intervention and privilege, the next day defending particular companies and individuals as though their gains were purely the outcome of effort in a laissez-faire environment. It is fair to ask, as Carson does, which is it?

This challenge need not imply that everything that goes on in the economy is illegitimate. That would be nonsense. Even a government as powerful as the U.S. government would find it impossible to fully squelch independent market activity -- although it can make it costly. At the same time, we must not forget that all economic activity is against a neomercantilist backdrop.

George Reisman's critical review of Carson's book is worth close reading. He stimulates thought and debate on several points, such as: does the long record of state intervention and theft (what Carson calls the "subsidy of history") have important consequences in the present, and would the separation of wage labor and ownership have occurred to the extent it did in the absence of state intervention? Reisman's "no" to the first and "yes" to the second are unpersuasive to me. I have much reading and thinking to do on these matters, but it's hard to believe that there is no lasting legacy of mercantilism, which has never been fully dislodged. As Roderick Long suggests (see below), pro-business intervention and its consequences are largely invisible to defenders of "capitalism." Moreover, Carson seems correct in faulting Reisman for thinking that the only alternative to humongous hierarchical corporate production is single-proprietor home-bound enterprises. Carson suggests there is something in between -- larger worker-owned enterprises -- and I can find no reason to dispute that. My hunch is that we'd see a variety of organizations under free, unprivileged competition. To think we can foresee the future is to forget the serendipity produced by entrepreneurship. This is a matter to be decided empirically. Let's get rid of all taxation, regulation, subsidy, patents, licensing, and other legal barriers to entry and find out.

As promised, I will concentrate on issues surrounding Carson's use of the word "capitalism." This is not just semantics. As Roderick Long said in his recent Rothbard Memorial Lecture,
[Murray Rothbard] contends that the new [postwar] left-right spectrum persistently misleads libertarian-minded thinkers into viewing governmental regulation as anti-big-business; and if our opponents are anti-business, what must we libertarians be but pro-big-business. . . . The result is that governmental intervention on behalf of big business tends to become invisible, or at least unimportant, because our ideological blinders make it hard to take seriously. Who would want to restrict the free market on behalf of business interests? Not those left-wingers, because they're anti-business; and not us right-wingers, because we're pro-free-market. It's hard to recognize the significance of pro-business legislation even when one officially sees and acknowledges it, if one has internalized a worldview that excludes such legislation from the list of major dangers.
Dr. Reisman invites examination along these lines by the very title of his paper: "Freedom is Slavery: Laissez-Faire Capitalism is Government Intervention." His opening paragraph begins, "Kevin Carson's new book . . . centers on the incredible claim, self-contradictory on its face, that capitalism, including laissez-faire capitalism, is a system based on state intervention, in violation of the free market." Yet Reisman immediately follows this with quotations to the contrary from Carson himself: "It is state intervention that distinguishes capitalism from the free market." Capitalism is "a system of privilege in which the State enable[s] the owners of capital to draw monopoly returns on it . . . ." (Here he is summarizing the definition of Thomas Hodgskin, the radical liberal and mentor of Herbert Spencer.)

Reading Carson's words, one might have expected Dr. Reisman not to have launched his paper this way. Clearly, Carson is not saying that laissez faire equals government intervention. He equates laissez faire with the free market, and capitalism with intervention on behalf of capital owners. That being the case, he would reject as incoherent the phrase "laissez-faire capitalism." As I said in my earlier post, given his definitions, the phrase would be as contradictory as free-market Bolshevism (before the NEP, at least).

Indeed, I can do no better than quote Carson here. Recall Reisman's words: "Kevin Carson's new book . . . centers on the incredible claim, self-contradictory on its face, that capitalism, including laissez-faire capitalism, is a system based on state intervention, in violation of the free market." To which Carson replies with impeccable logic: "[I]f Reisman's subordinate clause, 'including laissez-faire capitalism,' has any meaning at all, it implies that Reisman regards claims of state intervention even in non-laissez-faire capitalism as incredible and self-contradictory." He does seem committed to that position.

Considering that Carson uses "laissez faire" and "the free market," which he favors, to mean the absence of government intervention, Reisman's title and thesis must be wrong. He must also be wrong -- unfairly so -- in repeatedly calling Carson a Marxist. Carson does accept Marx's description of the mechanism by which workers are exploited, but he makes clear that this can only occur with state assistance. Obviously, he rejects Marx's solution. Even Carson's labor theory of value can't be used against him here. He uses that theory to predict what would happen under free competition. He does not call for interference in any voluntary association between employers and employees. If Carson is wrong about the precise mechanism of exploitation under state intervention, that hardly qualifies him as a Marxist. I don't see how one can be both a (Benjamin) Tuckerite and a Marxist, seeing as how Tucker was anti-Marx.

As Long notes in his Rothbard lecture, the word "capitalism" today contains implicit contradictory market and interventionist elements. Much of the world, and perhaps most Americans, think of it as something other than laissez faire. Quoting Long:
Now I think the word "capitalism," if used with the meaning most people give it, is a package-deal term. By "capitalism" most people mean neither the free market simpliciter nor the prevailing neomercantilist system simpliciter. Rather, what most people mean by "capitalism" is this free-market system that currently prevails in the western world. In short, the term "capitalism" as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business.
Carson doesn't object to the use of the word in the libertarian sense, as long as it is clearly defined. But he is not wrong to use it in the neomercantilist sense. "Hodgskin was one of the earliest writers to use the term 'capitalism,' and may indeed have been the first to coin it," he writes in his book. We saw above how Hodgskin used it. In his rejoinder Carson adds, "Like Benjamin Tucker in 'State Socialism and Anarchism,' I advocate an end to capitalism by means of laissez-faire and free markets." There is a long history behind the use of "capitalism" in an non-free-market sense.

Language and definitions surely evolve. But it is just as surely not the case that "capitalism" has come to mean laissez faire, no matter how hard Ayn Rand and we libertarians have tried to make that happen. The fact is, "capitalism" means, at best, the privilege-laden mixed economy we see all around us. We will fail to communicate if we ignore that fact.

Friday, April 14, 2006

"Failure to File" Says It All

“Willful failure to file a tax return is a misdemeanor per IRC Section 7203. In egregious cases, willful failure to file may be elevated to a felony under IRC 7201 Tax Evasion. In addition, a civil penalty for fraudulent failure to file may be applicable per IRC Section 6651(f).”

That passage in the Internal Revenue Manual, Part 25 (Special Topics), Chapter 1 (Fraud Handbook), Section 7 (Failure to File) is enough to sober up a drunk. (See it for yourself at the IRS website.) All who buy the fable that what we labor under today is self-government should meditate on that quotation. You must account for yourself to the government each year. If you don’t, you’ll be visiting a federal penitentiary.
Read the rest of my op-ed at The Future of Freedom Foundation website.

Thursday, April 13, 2006

Gotta Love 'Em

I love those conservatives and Republicans who say that the key to ending the illegal immigration "problem" is to crack down on the employers who hire the "aliens." Whatever happened to free enterprise? It's okay as long as businesses hire the right people.

But the illegals broke the law, they say. There's no duty to obey an unjust law. I thought that was established long ago.

Wednesday, April 12, 2006

Capitalism versus Capitalism

While reading the symposium on Kevin Carson's book, Studies in Mutualist Political Economy, in the latest Journal of Libertarian Studies, I was struck by how upset people can get when someone uses a term differently from how they use it -- even if he makes his usage perfectly clear and explicitly draws on legitimate historical precedent. This comes up on at least two occasions in the commentary on Carson. I've read Carson's book, and I had no trouble seeing how he uses the word "capitalism." Much of the book is devoted to showing that historical capitalism -- the real-life mercantilist political-economic system that most people attach that word to -- bears only superficial resemblance to the laissez-faire free market, which he favors. Indeed anyone who does not quickly see this in Carson's work is not paying attention. It is not some obscure point buried under other material. It is the point! Moreover, Carson shows the historical precedent -- in the work of Thomas Hodgskin and Benjamin Tucker, for example -- for such usage. It shouldn't be hard to grasp.

Yet two critics can't or won't see it. Drs. Walter Block and George Reisman go for Carson's jugular in retaliation for his alleged confusion of laissez faire with (state) capitalism. Carson handily disposes of the criticism and needs no help from me, but I can't restrain myself from jumping into the fray.

Let's start with Professor Block. Missing Carson's point, Block lectures the author on the difference between corporate state monopoly capitalism, or economic fascism, and laissez-faire capitalism. "The point is, these two systems are as different as night and day. They have nothing in common except for this highly unfortunate terminology that labels both 'capitalism.' . . . As might be expected by now, this author does all he possibly can to bring about confusion in this regard." This is astounding in its sheer obliviousness to what Carson has written. In fact, Carson could have written this about Block.

Block continues, "He [Carson] thinks that there can be such as thing as 'free market socialism,' not realizing this is a contradiction in terms, if the latter is used, as per usual, as employed by this author, to strip capitalists, entrepreneurs, landowners, etc., of their due." But it's not a contradiction in terms to anyone who carefully reads Carson's book. Carson is making the point that the historical system called capitalism consists in state intervention on behalf of owners of capital, a system that exploits workers-consumers. That is also how nineteenth-century free-market individualist anarchists used the term. "Socialism" for these folks meant the alternative to a system that exploits workers, thus a system of pure laissez faire, or "consistent Manchesterism." (Carson notes that Benjamin Tucker proudly embraced that description.) In light of historical definitions and real-world systems, there is nothing incoherent about free-market socialism or free-market anti-capitalism (as long as one defines one's terms). Indeed, in historical terms, free-market, or laissez-faire, capitalism makes as much sense as free-market Bolshevism.

The missing of the obvious continues. Carson is concerned with history as well as political economy. He judges the industrial revolution and such things in terms of what actually happened, not rationalistically or in an a prior manner. Block has problems with this. He points out that Carson takes issue with Ludwig von Mises's favorable view of the industrial revolution and the factory owners. Writes Block, Carson "does so on grounds that these employers were guilty of various and sundry crimes. Maybe they were. But this is all beside the point."

Beside what point? Block asserts that Carson condemns industrialization per se. But he does not. He condemns it as it actually developed, which is to say largely on the backs of people dispossessed of their historical property rights. (See my earlier post on this subject.) Considering how sensitive Murray Rothbard was to feudalistic land theft and land monopoly, and the case for land reform, Block's criticism is odd, considering he's a promoter of Rothbard's "plumb line."

Strangely, Block writes this: "Of course there has been land theft, as Carson charges. But it should not be necessary to remind this author that this is part and parcel of state monopoly corporate capitalism, not the laissez-faire variety." Who said it was part of the laissez-faire variety? Block's bulletin will hardly be news to Carson. It almost sounds as though Block is arguing Carson's case for him.

It gets funnier. Block chides Carson for putting the development of the "world market" into historical context. Carson writes, "The modern 'world market' was not created by free market forces . . . . [I]t was an artificial creation of the state, imposed by a revolution from above." This is hardly controversial for a libertarian.

Block replies, ". . . [B]ut so what?[!] Yes, there was an admixture of the two types of capitalism in the development of world trade. Does this mean we toss it [the world market] out. . . ?" No, and Carson doesn't say we should. For him it means we should end (state) capitalism and embrace laissez faire. Anyone got a problem with that?

Again, Block goes after Carson for condemning actual historical monopoly for its abuse of workers and consumers. "This," writes Block, "is quite reasonable in the monopoly that emanates in state monopoly corporate capitalism; here, some firms are forbidden entry, and the privileged others can certainly exploit consumers. But how in bloody blue blazes can this take place under laissez-faire capitalism . . . ?" (Emphasis added.)

Words fail me at this point.

Finally, he savages Carson for criticizing corporate bigness, pointing out that only the free market can determine when big is too big. Fine -- except that's Carson's point! What he objects to is the mercantilist corporate state, which destroys the free market's mechanism for keeping firms from growing beyond what is economically justified.

To Carson's well-documented Nockian contention that deep and pervasive pro-business intervention stretches back more than 200 years and has serious anti-competitive consequences in the present, Block responds, "Nor is it easy to see how the government currently props them [corporations] up." It's not easy if you don't look, or read. But that is not the Rothbardian plumb line as I understand it.

Block makes the same faulty point over and over. He takes issue with no factual statements. Instead he asks why Carson is so critical of world trade, sweatshops, the employer-employee relationship, the industrial revolution. Sure, he says, each of these things was nurtured in an environment, not of freedom, but of monopolistic state coercion, sure each exploited workers and consumers on behalf of business -- but none of them had to develop that way. No, none had to. But each did. Block is caught in a hopelessly rationalistic loop. As Carson points out, Block, like other libertarians, can't make up his mind if he is defending the concept of the free market or what exists now. You can't do both.

Read Block's review and Carson's rejoinder. They're great fun. Before closing, I must quote one line from Carson because it sums things up perfectly:
[U]nlike Block, I think a description of the functioning of a free market calls for the subjunctive case, not the indicative.
Who said Carson isn't a subjunctivist?

I've gone on too long. I'll take up Dr. Reisman's critique in the next day or so.

Letter to the Editor

My letter to the Arkansas Democrat-Gazette appeared this morning:
The Democrat-Gazette shamefully “reports” that, in passing the minimum wage increase, the Legislature showed that it was “ready to give the state’s lowest-paid workers a raise.” Actually, it showed that it’s ready to force other people to give them a raise. Except that’s not accurate, either.

Raising the minimum wage by law will cause people who do not produce that much per hour to lose their jobs or to have additional burdens piled on them. Some low-skilled people won’t get jobs in the first place. But the legislators don’t care about that. They will tell themselves and their constituents they did good, and the unemployed will be safely out of sight and on the dole. If the legislators are so generous, why not raise the minimum to $50? Because even a politician knows that this would destroy jobs. How do the legislators know their increase won’t destroy jobs? They don’t.

Considering this harebrained action along with the violation of property rights and freedom of contract entailed by the workplace smoking ban, the old New York judge was right: “No man’s life, liberty or property are safe while the Legislature is in session.”

Monday, April 10, 2006

Scott Adams, Political Philosopher?

Over the last two days I've come to the conclusion that a good way to deepen one's appreciation and understanding of anarchism is to study the "Dilbert" comic strip. I am a latecomer to the strip, for which I could kick myself. If this is how people are in "voluntary" organizations, imagine what they are like in coercive organizations. (The sneer-quotes indicate that corporations are sheltered from the full force of the winds of competition. Things would be otherwise -- slightly, at least -- if they weren't.)

Hat tip: free-market anti-capitalist Kevin Carson, Mutualist Blog, for his repeated references to "Dilbert."

Sunday, April 09, 2006

Already There

After the Arkansas legislature over three days last week raised the minimum wage, banned smoking in workplaces, then outlawed it in cars when children are present, it occurred to me that we already live in a totalitarian state. If it can do those things, what can't it do? Yes, the state doesn't regulate everything, but that's only because it hasn't gotten around to it yet. There's no legal barrier to its doing so. It's only a matter of time.

Friday, April 07, 2006


As a follow up to this, you might want to read this article by Edward Peck, former deputy director of the Cabinet Task Force on Terrorism in the Reagan White House and former chief of mission in Iraq. It was published by the Independent Institute. A sample:
All democracies have lobbies. Shrill insistence that no groups promote Israel is ludicrous. Opinions differ on the long-term costs and benefits for both nations, but the lobby's views of Israel's interests have become the basis of U.S. Middle East policies. That this influence largely results from the efforts of people determined to exercise their democratic prerogatives is not open to question—or to challenge.

The dangerous, unacceptable result of that lobbying, however, is the stifling of public debate.

JLS and Kevin Carson

I enthusiastically recommend the latest issue of the Journal of Libertarian Studies, which contains a symposium on Kevin Carson's excellent book, Studies in Mutualist Political Economy. The papers therein were written by Roderick Long, Walter Block, Robert Murphy, and George Reisman, with a rejoinder by Carson. As a bonus the issue reprints Murray Rothbard's old critique of the economics of Lysander Spooner and Benjamin Tucker.

Read Carson's important book, then read the JLS. Together they are virtually required reading for the deepest possible understanding of libertarianism and its place on the political-economic landscape.

More Campaign-Finance Reform

I see that the Republicans in the House stuck it to the Democrats by passing a new campaign-finance reform bill to limit contributions to nonprofit organizations (so-called 527s) such as America Coming Together, which worked so hard for Kerry in 2004. I guess this is the Get-Soros legislation. It's good to see the GOP standing up for free speech and limited government. How can limits on people's political spending possibly be justified?

Cross-posted at Liberty & Power.

Thursday, April 06, 2006

The Israel Lobby and U.S. Policy in the Middle East

Anyone interested in the Middle East -- or just peace, for that matter -- should read John Mearsheimer and Stephen Walt's excellent article in the London Review of Books, "The Israel Lobby." (The full unedited article with footnotes is here.) While it contains little that is not already on the record somewhere and nothing that would even raise an eyebrow in Israel, it has the merit of laying out the tremendous influence American partisans of Israel have over policymakers in Washington. I have been studying the Middle East, and in particular the Israel-Palestine dispute, for a long time, and I can highly recommend this article.

Predictably, the authors, a political science professor at the University of Chicago and an international affairs professor at the Kennedy School, Harvard, have been accused openly or subtly of anti-Semitism. Even Christopher Hitchens, who himself has been the victim of this calumny for his previous writings on Israel-Palestine, has joined the attempt to smear these men. It is truly shameful. But it demonstrates what the authors have tried to show: that the relationship between the U.S. government and the Israeli government is unique in a very bad sense. If you oppose the alliance with South Korea, no one will accuse you of hating Koreans. If you oppose the alliance with Israel, it will be suggested that you side with David Duke, if not Adolf Hitler. (If the critic happens to be Jewish, he will be psychoanalyzed.)

Anyone who engages in this illegitimate and disgusting tactic should be ignored. Having drawn a line between himself and civil discourse, he deserves no reply.

Read the article, for your own sake.

Cross-posted at Liberty & Power.

Tuesday, April 04, 2006

French Labor-Law Update

Two correspondents in France have provided me information vital to understanding what is happening in France with the change in the labor laws. My friend the liberal economist Pierre Garello says, contrary to my previous belief, that the French government does not impose a single standard labor contract on everyone. The recently enacted CPE is one among many options. "This does not mean, however, that there is a total freedom of contract," he writes. The state still manages labor relations, even if in this instance it sought to introduce some flexibility with respect to younger workers.

The press reported that France President Jacques Chirac signed the law while promising to "moderate" it to placate the protesting students and union activists. But Anthony de Jasay tells me that in fact Chirac gutted the law before signing it. Things are thus back to where they were before the the ruckus started. See de Jasay's article at The Foundation for Economic Education.

Monday, April 03, 2006


A hearty Bravo! to Charles Johnson for his post on the immigration debate. See it at Rad Geek People's Daily, here. A sampling:
Neither you nor the government has any right to force people off of property onto which they have been invited, even if you think that their presence is a looming danger to the future of liberty in America, unless they have actually done or threatened real violence to somebody else. Vices are not crimes, and only crimes can justly be resisted by force....

What legitimate reason has the United States government to care whether or not Latin@s assimilate or don’t assimilate? What legitimate reason have we got to make the decision whether or not to use force to stop immigrants (or to exile them from their current homes) on the basis of whether or not they are willing to assimilate to the surrounding culture? Maybe they will and maybe they won’t; but whatever the virtues or vices of declining to assimilate, it’s not a hanging crime, and neither you nor anybody else has the person to destroy a person’s livelihood, clap them into irons, and force them back out of the country over it....

[Timothy] Sandefur would have The People decide whether or not to allow others in, but in a way that systematically denies individual people the right to decide whether or not to allow others in to their own property. Of course, there is no natural right to enter another person’s land against the will of that person (that’s just trespassing). But I take it we’re not talking about trespassing law here. We’re talking about an immigrant who’s made arrangements for a place to stay with a willing landlord — through the hospitality of people she knows, or by paying rent for the space, or by buying it for herself from the previous owner. Who is, therefore, welcomed by the owners of the property. The only people deciding not to allow her in are, ex hypothesi, people other than the owners, third parties — nativist voters, opportunistic legislators, La Migra, or whoever else — who think that force of numbers or the writ of The Law gives them some kind of right to impose their decisions on other people’s property.
Part of what Johnson is responding to is the "pro-immigration" argument that immigrants will inevitably assimilate. Johnson's riposte: That's irrelevant, because even if they don't, as long as they violate no other person's rights, the government has no valid reason to interfere with them.

Not War, But an Imperial Venture

President Bush, sticking to a script like a five-year-old clinging to a security blanket, insists that the United States can bring democracy to Iraq and other Middle East countries at the point of an American bayonet. So convinced is he of that, he has made death America’s best-known export.

Not everyone is convinced, however. A refreshing dissent was voiced during Secretary of State Condoleezza Rice’s recent visit to the United Kingdom. There Douglas Hurd, Margaret Thatcher’s former foreign secretary, said what has long needed to be said: “It is quite possible to believe ... that essentially the path [to democracy] must grow from the roots of its own society and that the killing of thousands of people, many of them innocent, is unacceptable, whether committed by a domestic tyrant or for a good cause upon being invaded.”
The rest of my op-ed is here at The Future of Freedom Foundation.

Cross-posted at Liberty & Power.

Sunday, April 02, 2006

More Cobden

"The peace party . . . will never rouse the conscience of the people so long as they allow them to induldge the comforting delusion that they have been a peace-loving people. We have been the most combative and aggressive community that has existed since the days of Roman dominion."

Hat tip: Ralph Raico (pdf).

"No Foreign Politics"

Richard Cobden, the great liberal promoter of peace and free trade, in 1835 wrote:
The middle and industrious classes of England can have no interest apart from the preservation of peace. The honours, the fame, the emoluments of war belong not to them; the battle-plain is the harvest-field of the aristocracy, watered with the blood of the people.

Rice on the Value of Democracy

Over in England Secrerary of State Condoleezza Rice has been met with antiwar demonstrations at each stop. This prompted her to say, "To a certain extent, the protesters make my point, that democracy is the only system where people's voices can be heard and heard peacefully and then safely ignored."

Okay, I made that last part up. But I bet that's what she was thinking.

Solid Middle East Analysis

Mark Brady at Liberty & Power brings to our attention this article on the Middle East by Tariq Ali in the New Left Review. As Brady notes, Ali is a Trotskyist, but he doesn't let it get in the way of his solid analysis of the Middle East.

Saturday, April 01, 2006

Rothbard Memorial Lecture

I'd like to commend to everyone Roderick T. Long's Rothbard Memorial Lecture, which he delivered recently at the Mises Institute. You can listen to the MP3 here. (Available also as a podcast for your iPod.) In his lecture Long revisits Murray Rothbard's classic essay "Left and Right: The Prospects for Liberty," which I also commend to anyone who hasn't read it, or read it recently. It is indispensable for understanding where libertarianism fits in the political landscape. (Hint: It ain't rightwing.) Enjoy!