TGIF: Separating Powers

We may be sure that the "separation of powers" doctrine is of no interest to the vulgar egotist currently residing in the White House, which happens to be undergoing the most glorious renovation the world has ever known. Or so we hear. But it stands to reason that the doctrine is vital to personal liberty. No imagination is needed to understand what concentrated political power is likely to mean for the individual and society.

The name most closely associated with the separation of powers is Charles Louis de Secondat, baron de La Brède et de Montesquieu (1689-1755), a judge, philosopher, and historian whose 1748 book, The Spirit of Law, sometimes called The Spirit of the Law[s], heavily influenced the founders of the United States and the framers of the U.S. Constitution. Living in a censorial regime, Montesquieu originally published the work anonymously.

I won't attempt to divine what Montesquieu really thought about the doctrine. A glance indicates that this is no simple matter, as indicated by his several seemingly conflicting statements and competing scholarly interpretations. I will only venture to say that the doctrine is essential to limiting government, if government we must have. (I'm not convinced.) Any principle or taboo that would inhibit the growth of the state and leave room for individual freedom is to be desired. As Thomas Jefferson wrote, "The natural progress of things is for liberty to yeild [sic], and government to gain ground." Thus, he also said, the proper attitude toward government is not confidence but vigilance.

At any rate, it doesn't really matter how committed Montesquieu was to the doctrine. We can make up our own minds. Quoting Montesquieu on behalf of the doctrine should be useful to liberty-minded people. So let's do it. The passage is from Chapter VI: Of the Constitution of England. Montesquieu wrote:

The political liberty of the subject is a tranquillity of mind arising from the opinion each person has of his safety. In order to have this liberty, it is requisite the government be so constituted as one man need not be afraid of another.

When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner.

Again, there is no liberty if the judiciary power be not separated from the legislative and executive. Were it joined with the legislative, the life and liberty of the subject would be exposed to arbitrary controul; for the judge would be then the legislator. Were it joined to the executive power, the judge might behave with violence and oppression.

There would be an end of every thing, were the same man, or the same body, whether of the nobles or of the people, to exercise those three powers, that of enacting laws, that of executing the public resolutions, and of trying the causes of individuals....

Here, then, is the fundamental constitution of the government we are treating of. The legislative body being composed of two parts, they check one another by the mutual privilege of rejecting. They are both restrained by the executive power, as the executive is by the legislative.

To say the least, this is out of step with today's chief executive, who presses for autocratic power on virtually every front—from redesigning the White House to "emergency" tariffs to detention and deportation without due process to extrajudicial murder on the high seas and in Somalia. His attempt to control speech and generally dictate the terms of our economic relations betrays a failure to appreciate an even more important separation: of the government and our private lives. He didn't begin the erosion of those separations; that happened long ago. But he certainly has accelerated it.

If political power must exist, it must be contained, and the way to do that is dispersion among branches and levels. To be sure, the separation of powers and the related checks and balances could impede efforts to roll back power, but preventing new expansions of power seems the higher priority now. No one said that establishing full liberty would be easy.

Mr. Trump no doubt regards the separation-of-powers doctrine as a mere petty annoyance, something his enemies only recently concocted to thwart his grand ambition to be adored a thousand years from now. With barely any exception, the legislative branch of the central government has had no stomach to challenge him. Fortunately, some courts have pushed back. How The Maestro takes a major setback at the Supreme Court, if one should occur, will be instructive.

TGIF: The Libertarian Apostle of Peace

With Donald Trump furiously, ineptly, and fraudulently campaigning for the Nobel Peace Prize, it may interest liberals—the classical variety, libertarians—to know that the first Nobel Peace Prize, awarded in 1901, was shared by one of their own. This was a man who espoused the same political-economic philosophy as his fellow Frenchman Frédéric Bastiat and Englishman Richard Cobden. Its pillars were freedom, unrestricted trade, and peace.

That man was Frédéric Passy (1822-1912). Passy shared the prize with Henry Dunant, founder of the International Committee of the Red Cross and originator of the Geneva Convention. That was no small honor. Passy was cited “for his lifelong work for international peace conferences, diplomacy and arbitration."

According to the Nobel Foundation’s website:

 In both age and prominence, he was the dean of the international peace movement. Both as an economist and as a politician, he maintained that free trade between independent nations promoted peace. Passy founded the first French Peace Society, which held a congress in Paris during the 1878 World Exhibition. As an independent leftist republican in the French Chamber of Deputies, he opposed France's colonial policy because it did not accord with the ideals of free trade.

Passy was also one of the founders of the Inter-Parliamentary Union, an organization for cooperation between the elected representatives of different countries. Despite his age, Passy kept up his work for peace after 1901.

Don't let the word leftist in the first paragraph throw you. Since the French Revolution, members of the national legislature who opposed the monarchical ancien regime sat on the left side of the chamber; defenders sat on the right. Thus the "left' included socialists like Proudhon and individualist free-market radicals like Bastiat. It was a historical quirk.

Passy's more in-depth biography at the Nobel site states:

An admirer of Richard Cobden, he became an ardent free trader, believing that free trade would draw nations together as partners in a common enterprise, result in disarmament, and lead to the abandonment of war. Passy lectured on economic subjects in virtually every city and university of any consequence in France and continued a stream of publications on economic subjects.

If Trump wants the prize badly enough, maybe he should embrace free trade. The free-trade movement routinely linked peace, liberty (including property), and unrestricted global commerce as an integrated program. "If goods don't cross borders, soldiers will," a liberal once said. The connection should require no explanation. Cobden, who with John Bright brought an end to Britain's hunger-imposing grain tariffs, eloquently pointed out that trade and violence were opposites.

The Nobel biographical essay notes that, like Cobden, Passy worked to substitute arbitration for war and old-fashioned balance-of-power diplomacy. In those days, that was a standard liberal principle. As a member of France's Chamber of Deputies from 1881-89, he staunchly opposed colonization.

Passy was also a friend of the Belgian libertarian economist Gustave de Molinari (1819-1912), author of "The Production of Security" (1849), apparently the first explicitly anarchocapitalist essay, which applied competitive market principles to rights protection. In 1904 Passy wrote a prefatory letter to the English edition of Molinari’s book The Society of the Future (sometimes translated as The Society of To-morrow, first published in French in 1899). Passy praised Molinari as

the doyen of our economists—I should say of our liberal economists—of the men with whom, though, alas! few in number, I have been happy to stand side by side during more than half a century. Their principles were proclaimed and defended in England through the mouths of Adam Smith, Fox, Cobden, Gladstone, and Bright. In France they were championed by Quesnay, Turgot, Say, Michel Chevalier, Laboulaye, and Bastiat. And my belief grows yearly stronger that, but for these principles, the societies of the present would be without wealth, peace, material greatness, or moral dignity.

The Nobel website essay concludes:

Passy’s thought and action had unity. International peace was the goal, arbitration of disputes in international politics and free trade in goods the means, the national units making up the Interparliamentary Union the initiating agents, the people the sovereign constituency. Through his prodigious labors over a period of half a century in the peace movement, Passy became known as the apostle of peace.

Freedom's advocates should rejoice at Monsieur Passy's deserved recognition as a leading peace-mongering free-trader.

TGIF: The Absurdity of Democracy

If the continuing incompetence of Congress over passing a budget and reopening the U.S. government doesn't show the absurdity of unlimited representative republicanism, what could do so? Whether or not to extend COVID-era special subsidies for medical insurance appears to be the main issue, but other issues are undoubtedly involved. If it isn't one thing, it's another. That's politics.

The problem is that the government has its hands in everything. That means a constituency exists for each thing the government does. If you want to upset and mobilize a group of people, call for an end to some privilege or restriction, which must come at the expense of the freedom and wealth of everyone but the favored beneficiaries. That's how "democratic" government works, after all. This sets off a mad quest for favor, which some contenders will be more capable of securing than others. Don't fall for the canard that the bureaucrats and politicians rationally produce useful things. If something looks, quacks, and waddles like a canard, you can be sure it's a canard. "Who rules" is a secondary question. The first should be: what are the rules?

Rejecting democracy—representative republicanism, more precisely—does not entail accepting authoritarianism in any form. Quite the contrary. It entails full acceptance of the protection of individual liberty and property rights—the rights to life, liberty, and the pursuit of happiness, as Thomas Jefferson, inspired by John Locke, put it in the Declaration of Independence. If we cannot have market-ordered, individualist, anarchism, then at least let's keep the government strictly limited to barring physical force. If it ventures beyond that boundary, it sets off a civil war over the people's private wealth and liberty. If you seek the consequences, look around. They are blindingly evident.

As Adam Smith wrote in The Wealth of Nations:

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions.

But isn't pervasive government necessary to engineer a decent society? No, it is not. Thomas Paine, no anarchist he, understood this. As he wrote in The Rights of Man:

Great part of that order which reigns among mankind is not the effect of government. It has its origin in the principles of society and the natural constitution of man. It existed prior to government, and would exist if the formality of government was abolished. The mutual dependence and reciprocal interest which man has upon man, and all the parts of civilised community upon each other, create that great chain of connection which holds it together.

 

 

TGIF: Hooked on the State

Since the government partial shutdown began, we've been seeing panicked headlines about states being denied federal money for promised or already-started energy and infrastructure projects. Other sorts of subsidies are also in jeopardy. You'd think that not getting money from Washington was the worst thing that could happen. Oh my goodness, federalism might be breaking out!

Unfortunately, we can be sure that no restoration is in the works. We are not about to return to the long-gone world in which the national government had few powers and the people of the 50 states grappled with governments that were nearby as well as competitive with one another, thanks to their residents' freedom to exit an oppressive jurisdiction for a freer one. This occurs today to a degree, but that ultimate safeguard of liberty—exit—diminishes when Washington imposes or strongly incentivizes uniformity nationwide—when it sets a coercive baseline. Revenue that looks like free money has been an effective way to accomplish that end. So much the worse for liberty, considering that a major factor leading to original free-market, small-government liberalism in Western Europe was the relatively low cost of fleeing tyranny. In practice, the more centralized the power, the less free we are.

The panic to which I refer did not begin with the recent so-called shutdown. We saw it when Trump cut back on tax money to universities and other organizations earlier this year. It was as if a divine right had been abolished. For decades before that, presidents have threatened to withhold federal funds if states didn't do things like impose a 55-mph speed limit or raise the drinking age to 21.

How was that not a violation of the spirit, if not the letter, of federalism and decentralization, which, at least theoretically, was the distinctive American system? (Market-ordered anarchism would be even better, but it's not on the menu today.)

It's a good time to remember, or realize for the first time, that throughout the 20th century, American classical liberals, or libertarians, warned of the dangers of national funding for every sort of thing. There was the New Deal, of course, the beginning of the national welfare state, which included Washington-run relief and pensions systems. Many people might have been willing to forgive that because of the Great Depression, but centralization didn't end after that crisis and World War II. The programs were accepted and thus became permanent. We later saw national funding for highways, education, and housing, often tied to imagined crises, such as the Soviet presence.

A few politicians (such as Robert Taft and Barry Goldwater) and writers (such as Leonard Read, Felix Morley, and Henry Hazlitt) warned that money from Washington jeopardized liberty. They foresaw that people would get hooked on the money, that the government slope was slippery, that each program would be a precedent for the next, that mission creep was to be expected, that even a reduction in an anticipated spending increase would be seen as a heartless cutback, and that with money comes strings. For their troubles, they were smeared as paranoid, reactionary, and extremist. What they really were was libertarian.

But the Cassandras were right! They said people would become habituated to money from the national government—and they did! For many, no alternative exists to Washington. Even the possibility of a delay of one dime prompts street demonstrations demanding that the government "keep its hands" off some government program. How absurd!

The champions of centralized government have been winning for over a century. That the relatively free parts of the private sector keep enriching us is a tribute to capitalism, not to the politicians and bureaucrats. No doubt, many, if not all, of the architects of centralization intended that once they got the ball rolling, there would be no going back. Their opponents certainly knew it, but they were shunned, disparaged as old-fashioned, and shut up.

Is there a way back? That is the question. If we cherish freedom, we must find it.

TGIF: Free Movement Increases Wealth

In a recent interview with Nathan Goodman of the Mercatus Center at George Mason University, Professor Michael Clemens, a GMU specialist in migration economics, put forth "a strange and striking fact about the world economy." A lower-skilled person's location in the world can make a significant difference in how much wealth he creates, not just for himself but for society in general.

According to Clemens, few people appreciate that, say, a poor shoeshiner in Haiti could earn far more money doing the same work in a wealthy American city because his customers, who are rich by world and historical standards, have much to gain by paying the Haitian to free up their time. By the law of comparative advantage, even a CEO who can shine shoes better than anyone would benefit from paying the shoeshiner.

That principle applies to any kind of work. The free movement of people from impoverished to affluent places increases wealth overall. That's why Clemens titled one of his scholarly papers "Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?" (Journal of Economic Perspectives, Summer 2011).

As Clemens told Goodman:

It's not just taking a fixed quantity away from one person or group of people and giving it to another, a reallocation of resources; it creates value. It adds to aggregate prosperity. And when you have a world in which ... the exact same Haitian worker in Cap-Haitien can [perform] labor whose value is about $10 a day at home, but has a value of $10 an hour in the United States, that means that the same person over the course of a year could go from adding value that is valued by the world market at $3,000 a year to $30,000 a year.

Immigration restrictions leave money on the sidewalk. Clemens said that "those kinds of large changes add up quickly with even modest movements of people. It doesn't take a large movement of people across borders to add quite a lot to the world economy."

He described his scholarly paper this way:

 I just did a back-of-the-envelope calculation that was ... just a scenario to illustrate how large those gains are at the global level. And the bottom line is that even the movement of one in 20 people from poorest countries to much richer countries would add more value in aggregate to the world economy than the total elimination of ... all remaining barriers to goods trade and all remaining barriers to cross-border capital movement put together.... That was a ... calculation to suggest what is the impact of a marginal change in border regulations, and that impact is just vast.

Note well: the new increment of wealth from only one in 20 people in the poorest countries moving to rich countries would be greater than the increment produced by abolishing all restrictions on the global movement of products and capital. How can we afford to keep people out?

Immigration policy favors highly skilled workers, although Trump inexplicably proposes to charge $100,000 for H-1B visas. Unfortunately, the contributions of lower-skilled workers go largely unnoticed. Clemens has some interesting things to say about how such workers benefit us all. The reason is the complementarity of labor in a market economy. Workers in one line of production compete against similar workers, but they also complement the efforts of other workers. They add crucial value. Regarding the disparagement of lower-skilled immigrants, Clemens said:

[T]his is another area where there's just a lot of magical thinking.... Sure, Silicon Valley runs on programmers and highly educated entrepreneurs. What I wish people understood more is that Silicon Valley runs crucially on farm workers. It runs crucially on delivery workers and security workers and construction workers and childcare workers and many other essential inputs to that production process.

In other words, to produce great value, the highest-skilled people require a huge array of supporting goods and services produced by lower-skilled people. Without them the high-skilled workers' productive efforts would suffer or disappear. Here's how Clemens explained it:

The example I often give to students is a surgeon and a cleaner. There are zero people who want to have surgery in a dirty surgery room. There are essentially zero surgeons who are going to clean the surgery room. So there needs to be somebody to clean that surgery room if there's going to be any surgery, and it's not going to be the surgeon. That doesn't mean that the surgeon isn't essential to surgery, but the cleaner is equally essential to the surgery because my demand is zero for surgery in a dirty, bloody surgery room. And the necessity for workers at all levels of formal education and tacitly acquired skill[s] to complement each other is something that I wish were a greater part of the public discussion of immigration.

When you look at the wages of migrants, which reflect their marginal productivity relative to their best option, the surgeon earns more and the cleaner earns less. That doesn't mean that at the margin the economy only benefits from admitting marginal surgeons and never marginal cleaners. They are inputs to a joint production function that complement each other.

Someone is bound to respond that without immigrants, Americans would gain jobs. But, Clemens noted, research earlier in this century indicates that, perhaps counterintuitively, a crackdown on immigrant labor "eliminate[d] employment of native workers....  [T]he net effect was strongly negative." How so? "[B]y deterring business activity, by deterring the formation of new businesses and by encouraging the exit of existing businesses."

In other words, "small landscaping firms that just never get founded, and all of the US jobs that would be associated with that within the firm or outside the firm—to do the books for that landscaping firm, to deliver fuel or supplies to that landscaping firm—and all the ripple effects that would generate US employment in both inside and outside that firm are gone."

Markets are marvelous. Interference eventually harms us all.