In 2018, just under 3% of all federal sentences were the outcome of a jury trial. An overwhelming amount were the consequence of plea deal. Does the current system of deals and agreements make us safer?

Mentions:

Throughout this episode Landry Ayres talked with; Clark Neily, Kevin Ring, Molly Gill, and Lucian Dervan

Music by Cellophane Sam

Image Credit: https://fordlawokc.com/plea-bargains-explained/

The cigarette is the most lethal consumer product in history, but how has smoking changed in the last 30 years? Smoking is banned from many restaurants, bars, parks, and places of work. The moral panic has ensued around smoking and the fear is only increasing. But, what if there is a better way for smokers to have what they want without burdening them with regulations?

Why did the cigarette take over the tobacco world? Should there be places that people should go to enjoy smoking tobacco together? How did second hand smoke become a property rights issue? Why is smoking so stigmatized? What is thirdhand smoke? Does anyone want a safer cigarette?

Further Reading:

The Rediscovery of Tobacco: Smoking, Vaping, and the Creative Destruction of the Cigarette, written by Jacob Grier

King James I, A Counterblaste to Tobacco, 1604

Christopher Hitchens on Audio, Cato At Liberty

Christopher Hitchens May Be Dying Of Cancer, But He Has No Regrets About Smoking And Boozing, written by Joe Pompeo

Barbara Ehrenreich Doesn’t Have Time for Self-Care, Isaac Chotiner

Related Content:

Chasing the Scream: The First and Last Days of the War on Drugs, Free Thoughts Podcast

Is the DEA Trippin’? (with Rick Doblin), Free Thoughts Podcast

The world is rapidly aging and, since people have fewer kids, that means we are facing an eldercare crisis. People will live longer, but have fewer family checking in on them, driving them to doctor’s appointments, and catching the early warning signs of serious illnesses. There is no perfect solution for that crisis, but new technology promises to take better care of us as we age. We have two interviews in today’s episode with startups that can passively track the health of elderly users to watch for Alzheimer’s, dementia, blood pressure, and heart attacks. These technologies can both save lives and improve the quality of life for many elderly people and, potentially, for the not so elderly as well, but that innovation will be delayed if the Food and Drug Administration fails to remove the regulatory barriers that inhibit medical device experimentation.

Are there innovative ways to spot the early stages of Alzheimer’s? As the global population ages, how are we able to create technologies that will help us take care of the elderly?

Further Reading:

Hanamura Mirror Concierge

Researchers use AI to detect early signs of Alzheimer’s

Related Content:

Health Care without Health Insurance, Building Tomorrow Podcast

Wearable Tech: Health Care of the Future, Building Tomorrow Podcast

On Innovation: Don’t Ask for Permission, Building Tomorrow Podcast

On August 23, 1927, Ferdinando Nicola Sacco and Bartolomeo Vanzetti were executed by the state of Massachusetts for murder.

Within days, Frank Knight, at the time professor of economics at the University of Iowa, wrote a reflection on what Sacco and Vanzetti’s trial and execution meant for his understanding of the ethic of the state. His conclusion was:

Neither the methods of the state nor its fundamental aim can be ethical, in any ideal sense that distinguishes the ethical from the merely expedient. The method of the state is force and fraud, and if any organization that uses any more ethical methods is called a state the word is used in a sense antithetical to any meaning it has ever had (or ever will have, either). The aim of the state is not to do “right,” but simply, as it has always been, to keep the peace. (Knight 2011)

Three years later, after his move to the University of Chicago, Harvard University came calling to see if he would move to Massachusetts. According to an interview with his wife (Nordquist 2011, 6), Knight refused Harvard’s offer in large part because “he wouldn’t shake hands with the people that were involved in the Sacco-Vanzetti case.” (Harvard’s President Abbott Lawrence Lowell chaired the post-trial committee set up by the state’s governor that decided the trial had been fair and the two men were guilty beyond any reasonable doubt). Knight had been a frequent contributor to the Harvard economics department Quarterly Journal of Economics before 1927; he published only one book review in the QJE after 1927, and that may have been in the queue anyway, because it was published in 1928. Knight retired from Chicago in 1950, but was given a distinguished professorship in the Committee on Social Thought, which he had helped to found. Thus, Knight and F. A. Hayek were both in the Committee during the period from 1950 to 1962.

At Chicago, of course, Knight is best known as one of the early founders of Chicago economics, a school which was especially important in the middle of the 20th century when Milton Friedman was joined by George Stigler, T. W. Schultz, Ronald Coase, Harold Demsetz, Al Harberger, Gary Becker, and other market-oriented economists. Many of those Nobel-winning (or -worthy!) economists had their first introduction to the benefits of market organization in Knight’s price theory course. And they in turn handed the tradition down to the many students who emerged from Chicago as we moved into the “Age of Milton Friedman,” as Andrei Schliefer called the period from 1980 to 2010. That tradition supported the various free-market-oriented policies that helped create three decades of economic growth around that world—growth that halved, and then halved again, and then halved again, the percentage of the world’s population living in extreme poverty.

But despite being Knight’s protégés, Chicago economists often ran afoul of their mentor’s view of the world. From the 1940s on, Knight’s attention turned from economic theory and market organization to thinking about markets in their broader institutional context. There were no sacred cows for Knight. When he wrote an early essay on the ethics of the competitive order (Knight 1923), Knight concluded that competition was ethically indefensible except as a game. While his students were turning his economics into a toolkit for applied policy science, Knight was decrying the rise of “scientism” (it’s not clear whether he or Hayek used the term first) in economics. At the same time, he also decried the rise of “moralism”—the belief that we just had to get our ethical foundations right. When challenged on his rejection of natural law as the foundation for justice, he responded that natural law was the “last resting place of the bigot” (Knight 1949). And asked what Jesus’ Sermon on the Mount might say to us today, Knight responded that applying Jesus’ message to economic life in a market society would “wreck evil on the world.”

Knight was well-known for remarks of this kind, but he was also known as someone who trusted that economies organized through free markets would outperform other forms of economic organization. His little textbook, which was actually only four chapters excerpted from a longer manuscript, was aptly called The Economic Organization (Knight 2013). Reading the second chapter on “The Price System and the Economic Process,” one can understand how someone like Jim Buchanan could be won over by Knight from a soft socialism to an ardent appreciation for markets. Throughout his life, Knight argued first and foremost that an understanding of basic market principles was essential to all social and political discourse.

He also made two other arguments over and over again. (Knight often quoted Herbert Spencer: “only by varied iteration can alien conceptions be forced upon reluctant minds.”) First, uncertainty is a feature of the world we live in, not a bug. Knight’s background in German literature and philosophy meant he always saw the dark side. The belief that science can get us to certainty (scientism) is as flawed a belief as the belief that moral certainty is possible (moralism). But the fact that uncertainty plagues human existence does not mean that progress is impossible. It just means that there is no “one” answer. As he said in his American Economic Association Presidential address: the right principle is not to have no principles, but rather, to have lots of principles, and pull them out and see if they work.

In the absence of certainty from either science or morality, Knight argued, secondly, that discussion was essential. A favorite line of his in the latter part of his career was picked up and carried forward by Buchanan: “democracy is government by discussion.” Knight was less optimistic about “cheap talk” than Elinor Ostrom, but he believed democratic discussion accomplishes two tasks. The first is that it leads each of us to revisit our beliefs and values. In the process of discussion, adjustments are made both to what we think about the world, and to the values we hold. In some cases we are confronted by new knowledge or values that we have to accommodate; in other cases, we simply weight our existing knowledge and values differently after conversation with others.

The second thing discussion accomplishes is the coordination of people’s values and knowledge across a wider spectrum of options and configurations. In the first case, our beliefs and values change, and in the second, our actions change as we coordinate them with others. Nassem Taleb (2007), author of the very Knightian The Black Swan, argues that uncertainty requires us to have “skin in the game” in order to make profit. For Knight, discussion is the process of our putting “skin” in the political and social “game” of a democratic society. But, just as entrepreneurs always have to revisit their actions, so to do we as a democratic polity. Hence, nothing in democratic discussion is absolute; it is only, for here and now, a “relatively absolute absolute” (Buchanan 1989).

Knight’s answers were not always right. But he asked great questions. And, like most of us, he always welcomed a good debate; indeed, if not that, what else is liberty good for? That’s why anyone, including libertarians, should read him.

References

Buchanan, James M. 1989. “The Relatively Absolute Absolutes.” In Essays on the Political Economy, 32–46. Honolulu: University of Hawaii Press.

Knight, Frank H. 1923. “The Ethics of Competition.” Quarterly Journal of Economics 37 (4): 579–624.

———. 1949. “Natural Law: Last Refuge of the Bigot.” Ethics 59 (2): 127–35.

———. 2011. “The Ethics of the State.” Research in the History of Economic Thought and Methodology 29-B: 169–83.

———. 2013. The Economic Organization. New Brunswick, NJ: Transaction Publishers.

Nordquist, Gerald L. 2011. “A Conversation with Ethel Verry Knight.” Research in the History of Economic Thought and Methodology 29-B: 1–14.

Taleb, Nassim Nicholas. 2007. The Black Swan: The Impact of the Highly Improbable. New York: Random House.

Abraham Lincoln presents a unique challenge for historical assessment due to the unparalleled political upheaval of the Civil War. The subsequent elevation of Lincoln himself into the American political mythos adds further complexity, as scholars of his presidency must now contend not only with an intricate subject matter but also with Lincoln’s popular veneration in historical memory. The resulting literature encompasses a vast expanse of scholarly biographies, adoring panegyrics, and critical polemics, as well as overtly political works on both the left and right that attempt to appropriate Lincoln’s legacy for their own contemporary causes.

It is not my purpose in this essay tease out a “true” understanding of Lincoln from his many contesting claimants in the present. Nor do I seek to situate the unique events of his presidency against his peers, save to note that most attempts at presidential ranking fail to capture the uncertainties and difficulties of Lincoln’s term while assigning it a preeminent rank from the hindsight of its outcomes.^[1] While comprising a much smaller literature of their own, Lincoln’s critics – including many of the libertarian variety – risk venturing into unwarranted demonization from the opposite direction.^[2] Indeed, grievances with Lincoln are usually prompted by varying degrees of distaste for both real and imagined but also distant political legacies of his administration – the growth of the federal government, the consolidation of executive power, specific disliked policies such as the income tax and tariffs, and constitutional objections involving executive power and federalism.^[3] The task here is to examine the effects of Lincoln’s term in office, not its modern celebrants or detractors.

The first step in critically assessing Lincoln’s presidency is to appropriately credit and contextualize his most famous accomplishment – the abolition of slavery. In barely four years’ time, Lincoln – through personal though not always planned initiative – successfully uprooted the slave system from its previous position of deep political entrenchment. His actions directly freed almost 4 million human beings from a life of coerced labor, brutal physical violence, and a complete deprivation of their individual liberty. Lincoln personally orchestrated the two most significant political steps of attaining this outcome: the Emancipation Proclamation of January 1, 1863, implemented by order as a war measure against the secessionist Confederacy, and the passage of the 13^th Amendment a little over two years later. Although ratified after his assassination, Lincoln publicly campaigned for the amendment and considered its adoption a necessary safeguard of the earlier proclamation’s effects in the event of a legal challenge to its administrative enactment.

Shortly after the Emancipation Proclamation’s announcement, Lord Lyons, the British minister to the United States, reportedly quipped that Lincoln had freed the slaves in precisely the places where he had no effective means of doing so. We should resist this deprecation of the Proclamation’s consequences however, as the battle lines of the war changed daily and the order imbued the Union’s military objectives with an overt anti-slavery motive that it had previously denied itself. The effects of that shift fell short of an abolitionist transformation of the war cause, but they were far from an inconsequential act as their detractors in 1863 maintained.

Abolitionism was a preeminent cause of classical liberal philosophy in the nineteenth century, and those attached to it immediately recognized the 1863 order’s implications. “Lincoln’s Proclamation is a pregnant document,” observed the great free trader and liberal statesman Richard Cobden when news of its issuance first arrived across the Atlantic. “History has few more important incidents than that which mark the overthrow of human slavery in the new world.”^[4] The occasion marked a significant turn in Cobden’s assessment of the war from afar. A little over a year prior he offered a trenchant assessment of the Union’s political position to Sen. Charles Sumner of Massachusetts, identifying the political obstacles abroad presented by its reluctance to move more aggressively against slavery:

“In your case we observe a mighty quarrel: on one side protectionists, on the other slave-owners. The protectionists say they do not seek to put down slavery. The slave-owners say they want Free Trade. Need you wonder at the confusion in John Bull’s poor head?”^[5]

Closer to home the Proclamation carried tangible implications on the battlefield, at least among those most directly affected by its objective. Abolitionist minister Thomas Wentworth Higginson entered into the Union army with the intention of leading the 1st South Carolina Volunteers, an all-black unit composed of escaped slaves. Higginson’s diary recorded the occasion of its reading before his troops, then stationed on a Union-controlled barrier island along the state’s coast: “I proposed to them to hold up their hands and pledge themselves to be faithful to those still in bondage.”^[6] For the former slaves themselves at least, the Union cause was now a war for emancipation.

Lincoln’s guarded personality have given rise to numerous investigations of his motive and agency in bringing about these events, some of them venturing into deeply speculative territory. Historians, for the most part, have moved beyond the once-fashionable contrarian take of Richard Hofstadter, who downplayed the position of emancipation within Lincoln’s political interests, especially prior to his election.^[7] More recent biographical works have swung sharply in the other direction, either suggesting Lincoln underwent a rapid evolutionary growth toward abolitionism while in office or attempting to esoterically discern a coded radicalism in his intentions from the start.^[8] This latter approach carries a celebratory implications that, in turn, credit Lincoln for a deft execution that orchestrated a planned succession of political blows against slavery.

Both miss the mark, albeit in different ways. Lincoln’s position on slavery merged a genuine moral revulsion at the institution with the practical moderation of a northern Whig. From his earliest forays into politics, Lincoln exhibited an affinity for the classical “Whig formula” of Henry Clay that sought to wean the country from slavery by incremental means. As far as Lincoln’s strategy was concerned, this meant adopting a platform of enticing gradual emancipation accompanied by compensation to the slaveowners, and closely pairing the result with the significantly less practical but persistent policy of colonizing the freed slaves abroad in locales such as Liberia or the West Indies.

The features of the Whig formula remained a stable theme of Lincoln’s beliefs across most of his political career and presidency. As late as February 1865 he was still holding forth an offer of compensation as an enticement for the Confederates to lay down their arms, and numerous records from the final months of his life suggest an intention of pursuing colonization in earnest after the cessation of hostilities.^[9] From this moderate yet certain antislavery position Lincoln was also able to move directly against slavery when the political circumstances of the moment permitted it. The course of the war created many such opportunities, almost always unplanned, but Lincoln was able to act advantageously upon them.

Recognition of this skill, sometimes entrepreneurial though also often rooted in luck, helps to explain how Lincoln navigated the slavery issue across his presidency while also subordinating it to the political constraints of the moment, foremost among them the political preservation of the Union. In fact, he assumed office ready to make a stunning concession to the secessionists, having endorsed and likely helped to orchestrate the congressional adoption of the last-ditch Corwin Amendment – a provision that constitutionally affirmed the legality of slavery and devolved all jurisdiction over it to the individual states.^[10] The measure, had it been ratified, would have likely precluded future federal restrictions upon slavery where it existed including a future Emancipation Proclamation, though this was also likely less of an obstacle for the gradualist weaning strategy of Lincoln’s Whig antecedents than for immediate abolitionism sought by his party’s vocal antislavery wing.

Yet opportunities to undermine slavery also emerged throughout the war, and Lincoln generally acted upon them when the circumstances permitted. One of the first occasions arose unexpectedly in late May 1861 when a group of slaves in Virginia seized upon the emerging military conflict to seek refuge in the Union-held Fort Monroe. With their masters demanding the return of their human property, the fort’s commander Gen. Benjamin F. Butler offered an innovative legal solution. Since the slaves were still legally property, and owing to the Confederacy’s use of slave labor in the construction of its own military defenses, they were subject to seizure by the army as contrabands of war. By implication, any slave that could make it to the Union lines could be “seized” as similar contraband and thereby freed.

The contrabands strategy presented a subtler means of moving against slavery than direct military seizure and emancipation. In fact, Lincoln reversed two early attempts to effect military emancipation by Gens. John C. Fremont and David Hunter, deeming each to have acted beyond the scope of the army’s authority and his own orders. But the contrabands strategy eventually opened the door to two successive Confiscation Acts with the aim of incorporating the process into law. Lincoln reluctantly signed the first, a limited statutory specification of the policy, in late 1861. He placed a more direct imprint upon the second, adopted in July of 1862, by offering both legal analysis to ensure its survival under court scrutiny and by incorporating the Whig formula into the doctrine, sending agents to Capitol Hill to secure a colonization provision in the process. The Second Confiscation Act, in turn, provided the legal instrument through which Lincoln issued the Preliminary Emancipation Proclamation of September 1862. In doing so, he created the mechanism for the more famous successor order of January 1863. Ever the perceptive legal mind, Lincoln had effectively enlisted the unfolding circumstances of the war and the opportunity of accompanying legislation to move incrementally against slavery.

This final military measure, though bold, continued to carry the imprints of Lincoln’s weaning strategy. Only an hour before signing the final proclamation, Lincoln finalized a contract to begin a colonization venture in Haiti. Over the next several months Lincoln personally pressed in earnest for state-initiated gradual emancipation in the border state of Missouri and the breakaway Unionist counties that would soon become West Virginia, partially securing the latter as a compromise for its admission to statehood. When the abolition-minded wing of the Republican Party moved in 1864 to secure a constitutional amendment, Lincoln similarly endorsed the measure in his annual address to Congress and lent his energies to securing the necessary votes in the House of Representatives. Through a succession of intentional decisions, dictated by the unfolding circumstances of the war and in Congress, Lincoln was able to secure nearly complete abolition over the course of his presidency.

This outcome was no small accomplishment, but neither was it the carefully orchestrated and planned execution that some modern enthusiasts credit to him. Lincoln himself would have been the first to dispute such a notion. When Sojourner Truth thanked Lincoln for being the first president to act in the interest of the slaves, he answered quite simply that he was the “only one who ever had such opportunity.” “Had our friends in the South behaved themselves, I could have done nothing whatever.”^[11]

While Lincoln’s legacy today owes much to the successful destruction of slavery, his presidency should not be held above reproach on account of its most significant accomplishment. Without denying that achievement, we may also subject other aspects of his legacy to measured scrutiny. Lincoln’s faults generally fall into three thematic areas.

First, and apart from its ultimate and hard-fought military victory, Lincoln’s navigation of the secession crisis and ensuing Civil War can legitimately be described as unprepared at best, and at moments susceptible to severe strategic missteps. Lincoln usually receives credit for his political acumen during the war on account of the hindsight of its outcomes, yet he entered office with an almost naïve underappraisal of the Deep South secessionists’ resolve to separate themselves from the Union.

Perceiving secessionism as a product of a loud but vocal minority that could be tamed with appeals to a sensible remainder, Lincoln largely misjudged the severity of the secessionist threat during the crucial month between his inauguration and the Confederate decision to open fire on Fort Sumter. Although he announced his resolve to preserve the union in his inaugural address, Lincoln struggled to find a footing over the next month and essentially stumbled his way into an armed conflict that quickly outgrew his expectations or ability to contain the hostilities. The rapid degradation of the secession crisis evolved at least in part due to the White House’s unprepared reaction to the political crisis. In the month before Fort Sumter, Lincoln’s surrogates sent confusing and sometimes conflicting signals to the secessionists, as well as to the politically crucial block of conditional unionists in the slaveholding border states of the upper south. The resulting flurry of confusion likely exacerbated the secession crisis.

Initially Lincoln’s Secretary of State William Seward became something of an informal line of communication with the secessionists, first through the intermediary of outgoing California Senator William M. Gwin and then through southern-born Supreme Court Justice John A. Campbell, both of whom maintained personal connections to leading Confederate officials.^[12] Lincoln further tested the diplomatic waters by informally dispatching two known surrogates, Ward Hill Lamon and Stephen A. Hurlbut, to Charleston to assess the situation surrounding the fort with its commander and in discussions with South Carolinian officials.

Little is known about these private communications even to this day. Seward had to navigate the delicate situation of avoiding formal political recognition of the breakaway government by resorting to intrigue, and both Lamon and Hurlbut were political cronies of the president whose reliability as witnesses to their own roles remains questionable. In cumulative however, they likely confused the secessionists about Lincoln’s objectives by conveying an array of conflicting messages about whether or when he intended to resupply the fort. The Confederates responded to word of the impending arrival of a Union resupply ship on April 12, 1861 by opening fire.

Longstanding biographical conventions have credited Lincoln with deftly maneuvering the south into firing the first shot, while his Confederate detractors charged him with intentional deception. A simpler explanation may be found in the chaotic management of the administration’s early days, itself a result of Lincoln underestimating the crisis before him. Gideon Welles, Lincoln’s secretary of the Navy, hinted as much in an unpublished journal a decade later noting that “[o]ne third of the administration of Mr. Lincoln expired before he had a clear and well-defined policy as to the course” of the war.^[13] What is certain however is that the Confederate attack on Fort Sumter ignited a political powder keg across the upper south.

Lincoln appears to have largely misjudged the rapidly degrading situation, expecting southern unionists would assert themselves and respond to his call for 75,000 volunteers to put down the South Carolinians’ rebellion on April 15. Instead the events galvanized the thus-far tepid secessionism of the border states, moving North Carolina, Virginia, Tennessee, and Arkansas into the Confederate column over the next month.^[14] The citizens of the geographically strategic slave states of Kentucky and Missouri resisted secession, but their political climates quickly devolved into a struggle of internal provocation between secession-sympathizing militias and rash Union army officials, the latter often acting without clear direction from Washington. Although wrapped into the national conflict, both states essentially experienced their own internal civil wars within the Civil War, replete with guerilla operations and “irregular” units on both sides that flaunted the conventional rules of warfare and intentionally targeted civilians who were unfortunate enough to reside in the vicinity of their operations.

The Confederate belligerents still carry primary blame for pulling the trigger at Fort Sumter - indeed, they had hoped to instigate further secession in the upper south by sparking an armed conflict. A measured assessment of these events must also include Lincoln’s mistaken perception of border states unionism, particularly after his April 15th call for troops. The chaotic events that followed effectively transformed a regional Deep South rebellion into a national civil war that his administration was not yet prepared to fight.

Curiously, the stumbling confusion of that war’s unfolding in its early months stands in marked contrast with Lincoln’s acute awareness of its underlying causes. In between his election and inauguration Lincoln evinced as much in a secret letter to Alexander Stephens, soon to be named Vice President of the breakaway Confederacy. “You think slavery is right and ought to be extended; while we think it is wrong and ought to be restricted,” he candidly explained. “That I suppose is the rub.”^[15] Yet a clarity of understanding about the underlying strife did not translate into military or political preparedness, which raises a second fault of Lincoln’s presidency in its execution of the war.

By every indicator, neither Union nor Confederate officials truly grasped the prolonged struggle of the war before them or the resolve of their opposing belligerents. The rhetoric in advance of the first major conflict, fought along Bull Run creek for control of a railway junction at Manassas, Virginia, suggested that each combatant expected a quick and decisive rout of the other that would ultimately resolve the war’s political outcome. Instead, the country descended into four prolonged years of death and destruction.

The political course of the war continued to defy expectations until the fall of Richmond in April 1865. As late as February of that year, Lincoln approached the Confederate government for informal negotiations at Hampton Roads, Virginia under the assumption that the war that might continue for years to come. Jefferson Davis’s government vowed to fight until the bitter end. A staggering toll of death and destruction amassed in intervening years. At least 750,000 soldiers lost their lives during the war according to the most recent estimates, with a majority occurring on the Union side.^[16]

It would be unfair to only lay these losses at Lincoln’s feet, particularly given the Confederacy’s resolve to maintain slavery at all costs.^[17] Yet even after the Emancipation Proclamation secured this cause to the Union’s war effort, the war itself remained a political endeavor with clear political objectives centered upon the capture of Richmond. Lincoln was not above extracting personal political advantage from the war effort either. The Union military command strategically employed furloughs and even altered troop movements to maximize their advantage in delivering votes to Lincoln in the 1864 election. But perhaps even more telling, an empirical analysis of Union casualty rates suggests an inverse relationship between deployment of its soldiers in high-casualty situations and the electoral college clout of the unit’s state.^[18] Whether a conscious strategy or an incidental effect, troop deployments ultimately entail political decisions in addition to their military objectives.

Strategically constrained by but also philosophically wedded to a core philosophy of unionism that consistently took precedence in his mind, Lincoln did not shift its course toward the more overt strategy of liberation desired by abolitionists even though many of them – as the aforementioned example of Higginson illustrates – worked from the ground to inject the Union cause with that objective. The choice may have been advantageous to the goal of capturing the Confederate government, but it often relegated the well-being slaves themselves to a secondary consideration.^[19]

Instead, the Union command perceived the freed slaves already amassing in the north’s “contrabands camps” as a public burden. In the final two years of the war military recruiters also opportunistically preyed upon the able-bodied among them to replenish their ranks, with some evidence suggesting their disproportionate use in high-casualty situations. The United States Colored Troops incurred a substantially higher casualty rate (20.5%) than white Union soldiers (15.2%).^[20] Other relief efforts were at best haphazardly administered, and the postwar Freedmen’s Bureau – though well-intentioned, and indeed created through one of Lincoln’s last legislative initiatives before his assassination – was hamstrung by an ineffectual top-down military organizational model, its inconsistent funding sources, political corruption, and racist political opposition.

The prioritization of the war’s political dimensions over its emancipationist aims also carried harmful implications for the freed slaves themselves. The movement of armies likely displaced hundreds of thousands of African-Americans, and with it unleashed a public health crisis through the mass-transmission of disease. An estimated 60,000 former slaves died from a smallpox epidemic that sprung from the movement of armies, and untold tens of thousands suffered from starvation, homelessness, and related effects of military destruction.^[21]

While it is impossible to predict the results of a counterfactual in which a more overt emancipationist impulse guided military strategy over political unionism, the tangible hardships of the war illustrate the precarious nature of military conflict, and its propensity to inflict its greatest harms upon noncombatants. Truly just wars are a rarity – even when they count a just outcome among their consequences. More often, war enables unscrupulous and violent actors such that misconduct cannot ever be completely dissociated from a war’s causes. To the contrary, it often rises to the top, and the Civil War’s excesses were no exception.

Consider the words of William T. Sherman before his infamous burning of Atlanta in 1864: “We don’t want your negroes or your horses or your houses or your lands or anything you have, but we do want, and will have, a just obedience to the laws of the United States. That we will have, and if it involves the destruction of your improvements we cannot help it.”^[22] Such sentiments simultaneously serviced the political objective of unionism and discarded any concern for the wellbeing of the slaves. Yet they also evince an authoritarianism – an unqualified demand for political obedience - that chafes with any liberal conceptualization of justice in military action.

That the Confederate command, fighting for the unjust cause of slavery, indulged in numerous and far-reaching war crimes of their own – consider the example of Gen. Nathan Bedford Forrest’s massacre of surrendering black soldiers at the battle of Fort Pillow in 1864 – does little to ethically mitigate the Union’s own failings. Col. Robert Gould Shaw, commanding officer of the 54th Massachusetts and subject of the film Glory, candidly acknowledged this moral quandary in a letter after witnessing the sacking and pillaging of Darien, Georgia by Union troops under the eye of a permissive commander:

“The reasons he gave me for destroying Darien were, that the Southerners must be made to feel that this was a real war, and that they were to be swept away by the hand of God, like the Jews of old. In theory it may seem all right to some, but when it comes to being made the instrument of the Lord’s vengeance, I myself don’t like it. Then he says, “We are outlawed, and therefore not bound by the rules of regular warfare” but that makes it none the less revolting to wreak our vengeance on the innocent and defenceless.”^[23]

Shaw’s message pinpointed a moral consideration that he certainly recognized but that also, in the hands of other commanders, succumbed to expedience or worse. War is indeed hell, to further paraphrase Sherman, and faute de mieux tolerance of one belligerent over another does not ethically absolve the decisions and human actors who make it hellish. As with most wartime presidents, Lincoln’s reputation shares culpability with the officers under his command for injustices against noncombatants. These need not define the entirety of his intentions, or supplant the significance of its emancipatory consequences. But neither can they be politely overlooked, as they speak directly to the moral dangers of the war as it actually was waged as distinct from its military celebration and valorization in hindsight

Lincoln’s reputation is also susceptible on account of the precedence that derived from his wartime actions, which forms the basis of my third criticism. Lincoln’s administration vastly expanded the scope of wartime executive power through both his conscious legal decisions and the examples they set for his presidential successors. Subsequent presidential uses and abuses of those same powers, often explicitly cited to Lincoln’s authority and celebrated reputation, accordingly fall within the scope of his legacy.

The most salient example may be found in Lincoln’s unilateral suspension of the writ of habeas corpus, beginning shortly after the outbreak of hostilities in April 1861 while Congress was out of session. Lincoln famously defended this action before Congress that summer, asking “Are all the laws but one to go unexecuted and the government itself go to pieces lest one be violated?”^[24]

Rooted in an appeal to the necessity of the emergency, this defense provided a brilliant rhetorical justification for Lincoln’s actions. Many of his presidential successors as well as historians still defer to it as a conclusive vindication executive war power during an existential crisis for the government. Yet closer scrutiny of Lincoln’s suspension reveals both its dubious legal basis and its ineffectual deployment during the war, calling the very premise of the necessity doctrine into question.

Simply stated, the Constitution places the habeas corpus suspension clause in Article I among the enumerated restrictions upon the legislative branch. Both English common law tradition and textual evidence from the founding era strongly point to the exercise of this power being a legislative prerogative, and American jurisprudence generally affirmed as much prior to the Civil War.^[25] By claiming his own emergency authority to suspend the writ in Congress’s absence, Lincoln pressed executive wartime power into uncharted constitutional territory.

The actual circumstances of the suspension’s occasion are often neglected, compared to the posited exigencies of Lincoln’s rhetorical case. While the chaotic early days of the war arguably imperiled the capital and government itself, particularly as Confederate sympathizers sought to impede railroad transports of troops into Washington through the border state of Maryland by sabotaging the tracks, there’s actually very little evidence that the suspension of habeas corpus meaningfully aided in the government’s ability to weather the emergency. The most notable arrest to take place under the suspension, that of accused saboteur John Merryman, did not occur until over a month after the threat to the capital had passed. Even the military orders to seize him evinced confusion about his exact role in the preceding events, and the nighttime arrest at Merryman’s rural farmhouse had no discernible strategic benefit for military operations.

While subsequent suspensions likely eased the process detaining suspected Confederates, they also quickly became a tool of political abuse to circumvent the civilian courts - including in circumstances far removed from the lines of battle and with little connection to a pressing “emergency” that could not have been handled in the judicial branch. Recent scholarship has uncovered the practice of using the suspension power to deny judicial relief to foreign nationals who were drafted into Union military service, and to prevent courtroom scrutiny of military recruiting practices among “soldier-minors” – a class of underage children who joined the Union army without parental consent. As federal law provided for judicial oversight of both through a writ of habeas corpus, its suspension quickly became a tool of convenience for pressing young men into the army.^[26]

Politically, Lincoln’s habeas suspension planted the seeds of a constitutional crisis that continues to reverberate into the present day. The Merryman incident provoked a judicial rebuke of the administration by Chief Justice Roger B. Taney, writing from the federal circuit bench, in which he declared the president’s actions unconstitutional.^[27] Rather than appeal its course to the Supreme Court, Lincoln essentially opted to ignore the ruling.

Over the following months, the administration settled into a pattern of flaunting judicial oversight that extended well beyond an unpopular and southern-sympathizing Chief Justice. Later that fall, and with direct sanction from the president as reported in the diary of his secretary John Hay, an army Adjutant General stationed armed guards at the residence of a D.C. Circuit Court justice to either intimidate or physically prevent him from issuing a writ of habeas corpus to a soldier-minor. The stunt earned Lincoln another judicial rebuke from the court, which he promptly ignored.^[28] Even if one accepts the necessity argument for effecting a suspension in emergency situations, the administration’s pattern of flaunting direct judicial oversight of its policies portended a practice that has since become a common feature of wartime jurisprudence.^[29]

In total, the writ remained in suspension through unilateral executive action for almost two years until Congress rubber stamped Lincoln’s action on March 3, 1863. Its deleterious constitutional legacy extends far beyond the Civil War, as subsequent presidents have taken refuge in Lincoln’s expansion of executive authority to justify their own far-reaching indulgences in detention during times of war. Franklin Roosevelt’s internment policy against Japanese-Americans, the use of military tribunals as an alternative to civilian courts for wartime prosecutions, and even the infamous “torture memos” from George W. Bush’s global war embrace an expansive view of executive wartime power have roots that trace back to the precedent established by Lincoln’s suspension of habeas corpus in 1861.^[30]

Granting that the circumstances of Lincoln’s wartime administration were extraordinary, it is difficult to avoid the conclusion that he vastly expanded executive power, including in ways that he likely did not anticipate himself. Unfortunately, historical figures do not have the luxury of directing how subsequent generations will use, or abuse, their own decisions in later and unforeseen circumstances. Yet the invocation of Lincoln’s habeas argument to justify expansive war powers remains a clear and recurring theme among his presidential successors in both major parties. It has accordingly become a part of his presidential legacy, and one that has operated to detrimental effect well beyond his own exercise of these powers.

In the end, Lincoln’s presidency occurred during a period of unparalleled political upheaval and conflict that likely exceeded the capabilities of any human actor. His record through the war reflects an enigmatic mixture of principled decisions and short-sighted failings, of prescient political acumen at times and avoidable missteps at others. Lincoln was neither an angel nor a demon – indeed his complicated legacy makes him more interesting than those who portray him as either would permit.

To Lincoln’s enduring credit, his most capable energies were enlisted to a just cause of emancipation. Yet his larger victory in the Civil War also came about through a messy execution which classical liberals, like the abolitionists before them, should approach with a scrutinizing eye on account of the devastation it unleashed and the complicated record of executive precedents it bestowed upon his successors.

Psychologist Stanley Milgram conducted a famous yet controversial experiment known as the Milgram experiment. In 1961, deeply perturbed by the willingness of ordinary people to comply with the Nazi regime and enthusiastically carry out heinous crimes, Milgram devised an experiment to investigate the willingness of people to obey an authority figure who commanded them to undertake tasks which conflicted with their own sense of morality. 

The experiment design was quite simple. Participants would be paid four dollars for an hour of their time, the equivalent of about thirty dollars today, adjusting for inflation. Two volunteers would be introduced to each other by an overseer who would explain the purpose of their tests. The volunteers were told that they were taking part in a study on memory and learning and that each should pick a role as either teacher or learner. 

The experiment could then begin in earnest. The learner was strapped to what looked like an electric chair while the teacher and overseer retired to a room where they could hear but not see the learner. The teacher was told to read aloud a word, followed by four possible answers. If the learner answered incorrectly, they were given a minor electric shock, which was administered by the teacher by simply pressing a button. With each successive incorrect answer, the voltage would increase until reaching 450-volts, enough to kill a person.

Eventually, successive shocks would cause the learner to be in immense pain and they would beg the teacher to stop. If the teacher at any time wished to stop the experiment, the overseer had been primed to given specific verbal cues, such as ‘please continue’, or ‘the experiment requires that you continue’, or ‘it is absolutely essential that you continue’ and ultimately, ‘you have no other choice, you must go on.’

Thankfully, this was all a carefully orchestrated ruse. The learner was always an actor who was in no real danger. 

Of the 40 participants in the original experiment, 26 administered what they thought to be a fatal 450-volt shock to the learner, even after being told that the learner had a heart condition. While there are many criticisms one could mount against the ethics and voyeuristic nature of Milgram’s experiment, no one can dispute that the results are disturbing.

How can regular people be so easily convinced to hurt and possibly kill another human being simply because a person in authority told them to do so? The answer possibly lies in the work of a 16th century writer Étienne De La Boétie, who had attempted to answer this question in his seminal book entitled, A Discourse on Voluntary Servitude. 

The Life of Étienne

In 1530 Étienne was born into an aristocratic family in Sarlat, a small town located in southwest France. At an early age, Étienne was orphaned and raised by his uncle. Despite these hardships, he trained as a lawyer at the University of Orleans and became good friends with the famous Michel de Montaigne, who later penned an essay about his  friendship with Étienne. Sadly, Étienne did not live a long life, dying at the age of 32. Étienne is an obscure figure today; most scholars know of his existence due to works about Montaigne. However, despite his obscurity Étienne is easily the most radical thinker of his century. A Discourse on Voluntary Servitude is a short yet scathing attack on the very nature of political authority.

The Nature of Liberty

Étienne believed that all human beings are equal, that we are all created in the same likeness “so that each of us may find himself reflected in another.” Even if there are inequalities in our abilities or talents this does not give one person the right to dominate another.  “If in distributing her gifts nature has favored some more than others with respect to body or spirit, she has nevertheless not planned to place us within this world as if it were a field of battle.” There is no excuse for the strong to dominate the weak, and violence against another is wholly unnatural since nature “has not endowed the stronger or the cleverer in order that they may act like armed brigands in a forest and attack the weaker.” Equality is the natural order of things while subordination is wholly perverse. For Étienne, “If we led our lives according to the ways intended by nature and the lessons taught by her, we should be intuitively obedient to our parents; later we should adopt reason as our guide and become slaves to nobody.” The only natural authority is parental authority, which ends once a child is capable of reasoning for themselves.

All living things wish to be free. A horse must be broken before it can be ridden without resistance. Étienne believes this urge for freedom is so immense that elephants will break their tusks off against rocks, deterring hunters by yielding their ivory rather than living in slavery. Every animal resists captivity, viciously even, except for one, humans. Étienne believes humans are the only animals in the world who will willingly subject themselves to slavery, misery, and torment despite their unique rational capacities. If all people are free and equal by their very nature, how could one ever justify holding sway over the other? Furthermore, Étienne suggests that if people were given a choice  “there can be no doubt that they would rather follow reason than serve another man.”   

In Étienne’s day, the majority of Europe was ruled by powerful monarchs and most of Étienne’s  contemporaries saw no problem with this state of affairs. Kings were divinely ordained to rule over their people. Contemporary political thinkers theorized that the difference between tyranny and kingship was that a king obeyed the laws and customs of the land while a tyrant ignored these norms.

Étienne disagreed, arguing that absolute power, even if not used, is fundamentally unjust. Its existence puts one at the complete mercy of another’s will. On absolute power Étienne writes “it is a great misfortune to be at the beck and call of one master, for it is impossible to be sure that he is going to be kind, since it is always in his power to be cruel whenever he pleases.” By rejecting the dichotomy between a tyrant and a king, Étienne was denouncing all forms of one-man rule. Whether they have risen to positions of power through elections, conquest, or inheritance, all kings are tyrants; there are no exceptions.

Étienne did not discuss how tyrants came to power nor parse their character. Instead, he wished to answer why people are willing to endure the hardships and humiliations that tyranny inflicts.  Étienne believed that people tacitly consented to their situation and so became voluntary slaves. How could anyone ever consent to such a situation, where one “single little man” held all of the power while the rest kowtowed to his will? Étienne believed there are three reasons that tyranny endures despite humanity’s inseparable traits of liberty and natural equality.

Custom

Étienne believes that men are “born and bred as serfs,” and because of this it never crosses their mind that they are meant to be free by nature. Étienne, in agreement with his good friend Montaigne, holds that nurture holds more sway over us than nature. Étienne explains, “It is true that it is man’s nature to be free and also such that he naturally takes the bent which nurture gives him.” Though it may be in our nature to be free, the force of habit dulls nature’s urges for freedom.  

Étienne compares people who find themselves in a state of involuntary servitude to children who are born in regions where there are months of darkness on end. Since they were born in the dark, they never long for the light. Étienne concludes that “anything comes to be natural to a man if he accustoms himself to it.” Akin to the child in the dark, since we have never experienced this natural and idyllic liberty, we do not long for it. The first generation under a tyrant might grumble and groan about their oppression. However, as Étienne explains, the second generation will reason that their “fathers lived in the same way; they will think they are obliged to suffer this evil.” Habit and custom are the first reason people accept their oppressed state. 

Being Bamboozled

The second method that tyrants use to solidify their rule is trickery. The Roman emperors held lavish games at the colosseum and distributed bread to the public. This led the people to believe  that without their rulers they would not have these wonderful displays or the bounty of food. In reality, Étienne explains they are merely being returned a small portion of the property stolen from them through taxation. 

Other tyrants attempt to convince people that they are something more than human, perhaps even divine. In Étienne’s day both the French and English monarchs claimed to have the divine power to heal the sick. Étienne mocks those who believe a king’s simple touch could cure diseases and explains that it is merely a trick to dupe the desperate.These tyrants attempt to bamboozle their subjects by borrowing a “splinter of divinity.” The modern parallel to this phenomenon is the cult of personality that 20th century dictators cultivated through mass propaganda, a prime example being Kim Il-sung the founding leader of North Korea, who in his life accumulated many grandiose titles such as Heavenly leader.

The Network of Patronage

Rulers’  ability to employ custom and the trickery to their advantage are potent methods of making people tacitly consent to their subjection. However, Étienne believes “the mainspring and secret principle of domination, the support and foundation of tyranny” was the benefits that state give to a select few. Every tyrant has a close cabal of cronies who carry out their bidding. For their subservient loyalty, they are handsomely rewarded. Each of these cronies then hires their own underlings to carry out their bidding, creating a complicated network of patronage. Eventually, through this web of relations “a hundred thousand, and even millions, cling to the tyrant by this cord to which they are tied.” For many entangled in this web of patronage, liberty would mean the end of their livelihoods. Therefore servitude becomes the more profitable and comfortable option. These entrenched soldiers, bureaucrats, and servants fiercely defend the status quo. 

Getting Rid of a Tyrant By Mass Civil Disobedience

The situation Étienne describes is a grim affair. He asks “has so, denatured man that he, the only creature really born to be free, lacks the memory of his original condition and the desire to return to it?” The forces of custom, trickery, and entrenched interests make it seem like reverting to Étienne’s ideal world of equals voluntarily cooperating would be a hopeless task.

Throughout the medieval and early modern period there had been a tradition of theorizing on the topic of tyrannicide, the ethical justification of killing a tyrant. French Protestant writers, due to religious persecution, had been theorizing doctrines of tyrannicide during Étienne’s lifetime. William Barclay later dubbed these thinkers as Monarchomachs, those who fight against monarchs.  

However, Étienne did not advocate for killing tyrants. If one tyrant was killed, another more ruthless might take their place. Étienne’s solution to tyranny is much more radical as it strikes at the root of power. Instead of fighting against the forces of the state, we should withdraw our consent in an act of unprecedented mass civil disobedience.

Étienne reasons that the state is upheld by our tacit consent and reflexive obedience. However, the state is not a magical and transcendent  force. In reality, it is composed of people just like us, people who have no right to demand our obedience. The state is wholly artificial and supported by our contributions. Thus Étienne explains that “if not one thing is yielded to them, if, without any violence they are simply not obeyed, they become naked and undone and as nothing, just as, when the root receives no nourishment, the branch withers and dies.” Étienne reasons that we would then see the truth of political power, that it is illegitimate, against nature, and wholly untenable. Étienne compares a tyrant to a colossus being supported by the people and says that once “you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break in pieces.”

The Legacy of Étienne

Étienne’s work is especially unique for his day as it did not tackle any immediate political issue. Unlike contemporary Huguenots who were attempting to justify resistance against particular regimes, Étienne’s highly abstract and deductive methodology provided a powerful indictment of all central authority. 

Because Étienne did not focus on particular rulers and instead made a concerted effort to attack the very concept of political power, Étienne has found fans in a broad spectrum of ideologies including Anarchists, Marxists, and Libertarians. Leo Tolstoy liberally quoted sections of Étienne in The Law of Love and The Law of Violence, a work that was read by both Mahatma Gandhi and Martin Luther King. The political scientist Gene Sharp, who specializes in non-violent resistance and has been called the Machiavelli of non-violence, refers to Étienne’s work numerous times in his seminal work The Politics of Nonviolent Action.

Étienne’s main focus in the Discourse on Voluntary Servitude is not on the tyrants themselves, but those who serve beneath their reign. He explains that people reflexively and unwittingly obey political authority due to custom enforced over generations, the public works of the state, and, finally, the entrenched interests of those who benefit from the state’s dominance. The simple solution to dissolving state power is to revoke consent on a mass scale. Once the state has been exposed to be not a leviathan but a mouse, liberty will flourish as nature intended. Discourse is not only a scathing attack on all political authority but also a concise strategy on how to overthrow the state.  

Milgram’s experiment had many flaws, there is some evidence that he manipulated the results to get the conclusion he wanted. Contrary to Milgram’s experiments, there are glimmers of hope all over the world as people quietly disobey authority. Recently, over two hundred workers at a tech company quit their jobs after realizing their work was aiding Immigrations and Customs Enforcement. Two hundred people in a world of seven billion barely represents even a drop in the ocean. However, today, the world is more deeply interconnected than ever one example can be seen by millions in an instant. Small acts of resistance in isolation do not stop the leviathan, but they do show that it is possible to oppose the state.

According to Deirdre McCloskey the greatest challenges that humankind faces are tyranny and poverty. McCloskey is a firm believer that if we were to return to true liberal values it would be good for everyone. For examples of true liberal values she refers to philosophers Locke, Smith, Voltaire, and Wollstonecraft.

What is the connection between liberalism and democracy? How is liberalism non-coercive? What fights should libertarians prioritize? How can you be principled advocate for the poor? Who influenced Deirdre McCloskey?

Further Reading:

Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All, written by Deirdre McCloskey

The magic washing machine, Hans Rossling TED Talk

Bourgeois Dignity: A Revolution in Rhetoric, written by Deirdre McCloskey

Related Content:

The Bourgeois Era, Free Thoughts Podcast

Liberalism 1.0, Free Thoughts Podcast

A Review of Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World by Deirdre McCloskey, written by David S. D’Amato

Introduction

Externalities¹ are an economic bugaboo and often lead to calls for government intervention to correct these so-called “market failures.”  In my previous columns here, I discussed some of the issues with externalities, such as when they constitute a market failure and the role they play in public goods theory and practice.  However, those two columns, by themselves, are an incomplete treatment of the topic: there are two types of externalities, and the differences between them matter.

When a person’s behavior, or the behavior of two people entering into an economic exchange, has effects (either positive or negative) on a third party not privy to the original transaction, economists call those positive or negative effects “externalities.”  Indeed, I defined “externality” this way in my December 2018 column.  As such, economists will argue that, since the costs and benefits are not fully felt by the decision-makers, the social benefits/costs will deviate from the private benefits/costs and thus a market failure will occur.  This failure can then be a justification for government intervention. 

But this definition of “externality” describes necessary but not sufficient conditions for identifying a market failure.  As economists since Jacob Viner have discussed, there are two kinds of externalities: “technical externalities” and “pecuniary externalities.”  The former is what we typically think of when we discuss externalities: they are externalities that fall upon a third party that reduce their ability to produce with their given resources and thus potentially affect their profits as well.  The pollution that falls upon the grapes of a winery is a technical externality since, with the same inputs, the winemaker can produce less wine now.  Pecuniary externalities are when actions by trading members affect the profit, or pecuniary gains, of a third party but not their ability to produce.  When a Burger King opens up in town, cutting into the profits of McDonalds, that is a pecuniary externality on McDonalds.  It reduces McDonalds’ profits but not their ability to produce. Another example is if there is a technological innovation that affects workers’ wages in an industry, such as a large-scale adoption of self-checkout machines in the supermarket reducing the demand for (and thus wages of) cashiers.  There is again in this case a third-party effect that impacts the valuation of a group’s profit (labor’s wages) but not its ability to produce.

The distinction between pecuniary and technical externalities is crucial.  Technical externalities can be a form of market failure.  Pecuniary externalities are a sign of the market working.  A competitive market necessarily means that incoming firms are cutting into existing firms’ profits (or, alternatively, incoming buyers are cutting into existing buyers’ profits).  Superficially, these two externalities look the same in that they both affect profits.  But in their operation, they act very differently.  Furthermore, the distinction between the two help us understand why properly assigned property rights are key to market functioning. 

Both Externalities Found in Public Policy

As I discussed in my previous article, “When is a Market Failure Not a Market Failure?,” the public policy implications of a technical externality are fairly straightforward: if a technical externality exists, and if the costs of implementing a policy such as a tax or regulation are sufficiently low, then a government body can step in and correct the externality.  This will bring the market toward a “social optimum” and eliminate the market failure.  For pecuniary externalities, on the other hand, the best policy prescription is to do nothing out of the ordinary.  Pecuniary externalities are a sign of the market working as intended: competition is driving down prices and forcing firms to look for better ways to satisfy buyers. 

Economists tend to ignore pecuniary externalities in their welfare analysis since, in the model, pecuniary externalities show up as a transfer of welfare from existing firms to incoming firms and consumers.  Net welfare at worst doesn’t change and at best increases.  But these are externalities, and as such the existing firms do face real effects to “their” profits.  If the firms have a property right to the value their profits, in theory, the “winners” can compensate the “losers:” if there are zero transaction costs, then existing firms can negotiate with the incoming firms and buyers to offset their pecuniary losses.  If the firms are not assigned property rights to the value of their profits, then the same outcome occurs: new firms enter the market and buyers are better served.

But, in a world like ours where transaction costs exist, the assignment of property rights matters.  If firms are assigned property rights to the value of their profits, and the transaction costs of negotiation are high, then the current firms could block incoming firms on property rights grounds and maintain their monopoly power.  Consumers in the market are served less well since the market process fails to operate. 

Here in the United States, firms are generally not given property rights to the value of their profits.  They have property rights to profits they have earned, but not property rights to future profits not yet earned.  In other words, just because Firm X earns $5 million in profits this year does not mean they have the right to earn $5 million in profits next year.  If Firm X earns $5 million this year and next year earns only $2 million because Firm Y enters the market, Firm X may (rightfully) believe they are “harmed” by Firm Y’s entry since their profits went from $5 million to $2 million. 

Since Firm X, in their view, is “harmed” by Firm Y’s entry, they have some incentive to try and influence public policy.  What’s more, since Firm X can claim that their loss of profit is due to actions beyond their control, they could make an externality argument; they could try to claim a market failure or an unjust takings.  Indeed, this argument has been used recently to justify banning Uber in Chicago.  In Illinois Transportation Trade Association et al. v. City of Chicago, the taxi cartel of Chicago sued the city for allowing Uber and other ridesharing services to operate without a license.  This, they claimed, constituted a 5^th Amendment takings of their property.²  They claimed that, by allowing Uber and other firms to operate, the City of Chicago was taking away the value of their licenses (their private property) and distributing it to other firms (for public use).  In his decision for the 7^th District Federal Court of Appeals, Judge Richard Posner struck down the taxi firms’ argument by pointing out they have no property right to future profits or the value of their licenses. 

If Firm X were to take the route of attempting to influence public policy because of Firm Y’s entry, this is where assignment of property rights becomes crucial.  If the judge were to agree with Firm X that they have the right to a value of their profits, then the government essentially rewards uncompetitive behavior.  Firms can object to competition on pecuniary externality grounds and, despite arguments to the contrary, prevent the market process from working properly.  Buyers will be poorly served, and existing firms will become entrenched. 

If the judge were to disagree with Firm X and state that they do not have a property right to future profits, then the market mechanism will succeed.  New firms could enter, reduce the profits of current firms, and better serve buyers.  Such a property rights regime would encourage, rather than discourage, competitive behavior among firms.

Although technical and pecuniary externalities bear superficial similarities to each other, they can have polar opposite policy implications.  In a market setting, the optimal level of influence a market transaction has on other people is not zero; in some cases (such as competition) the level of “harm” is actually positive!

Property Right Assignments and Pecuniary Externalities

Above, I discussed how assigning property rights based upon pecuniary externalities can lead to consumers being poorly served.  But improper property-rights assignments can have wider implications as well.

Assigning property rights based on pecuniary externalities can have an effect not just upon competition with incoming firms, but among existing firms as well.  If the firms have a right to a given value of profits, it will discourage innovation among the existing firms.  Since any new invention will, all else held equal, increase the profits of one firm at the expense of the other firms, they could be sued and enjoined (or in other ways discouraged) from innovation, as it would violate the pecuniary property rights of the other firms. 

Furthermore, pecuniary property rights can have far reaching consequences throughout the economy.  Competition comes in many forms, not just direct competition between firms in the same industry.  Substitutes abound for goods and the longer prices are relatively high, the more consumers will look for substitutes.  These substitutes may be obvious (such as substituting water for milk as a beverage if the price of milk remains relatively high) or less obvious (substituting phonebooks for firewood if the price of firewood remains relatively high).  If a firm has a pecuniary property right, it could seek to prevent these substitutes from becoming viable.

The common thread here is that resources are diverted from economically valuable uses (that is, serving the consumer), toward efforts of protecting profits, all under the guise of legitimacy given the property rights assignment.  These resources are not going toward “growing the economic pie” but trying to secure shares of it.  And they represent a self-feeding mechanism with no clear delineation for assigning rights: why does Firm X have a right to a certain level of profit but not competing Firm Y?  Every pecuniary property right must come at someone else’s expense and resources will be spent constantly clarifying these inherently unclear property right assignments. Pecuniary property rights turn the positive-sum game of the market process into a zero-sum or negative-sum game of rent-seeking and rent-protection. In short, assignment of property rights is not just important to encourage trade by clarifying who owns what and what is being exchanged, but such assignment is also important for preventing wasteful rent-seeking behavior.

Conclusion

Unfortunately, arguments for pecuniary property rights are pervasive throughout any society; tariffs, income re-distribution, “living wage,” occupational licensing, and student loan forgiveness are all examples of policy prescriptions arising from pecuniary externalities.  Understanding how these externalities differ from technical externalities and how they can harmfully influence policy is crucial for effective policy reform and economic analysis. 

Although public choice and economic analysis can help frame the conversation about property rights, and they can help us see various consequences of differing regimes, no amount of economic analysis can tell us what property rights should be assigned.  For that, we need moral philosophy; we need an idea of just property rights.  What constitutes just property rights?  How are they to be assigned?  These are important questions, but they are questions for another time.

Summary:

American viewers love dystopias that are just eerie enough. In Gilead, a totalitarian theocratic state, reproduction rates are plummeting and women at-large are having trouble conceiving children. The answer to this problem is to institute child-bearing slavery. Elizabeth Nolan Brown, Marianne March, Tess Terrible, and Natalie Dowzicky unpack this controversial and timely television show.

Transcript:

Summary:

On the show today is Peter Suderman and Paul Matzko with our hosts, Natalie Dowzicky & Landry Ayres. Throughout this episode they discuss five distinct Black Mirror episodes and what is or is not scary about the dystopian-thriller. One common theme is that the creators of Black Mirror seem to assume the worst will happen, when many of the technologies introduced in this world could have positive effects as well. 

Transcript:

Prior to November 2018, felons in Florida were barred from the voting booth for life. That meant that about 10% of the voting age population in the state was disenfranchised for having a felony conviction. When someone owes a debt to society, how should we determine when it’s paid in full?

Mentions:

Throughout this episode Natalie Dowzicky talked with; Julie Ebenstein, Neil Volz, Lance Wissinger, and Ashley Thomas

Image Credit: New York Post

Music by Cellophane Sam

Chester Alan Arthur, twenty-first president of the United States, was an accidental chief executive who never aspired to the nation’s highest office.^[1] His election as vice president on the Republican ticket in 1880 was the first time he had ever run for public office. Since the end of the Civil War, Arthur remained behind-the-scenes, serving as chief lieutenant to controversial New York Senator Roscoe Conkling, and holding the influential and lucrative patronage post of collector of the New York customs house, where he rewarded political loyalty with jobs in exchange for kickbacks to the political machine. His refusal to implement civil service reforms led President Rutherford B. Hayes, a fellow Republican, to fire Arthur in 1878. When Republican presidential candidate James A. Garfield of Ohio approached him with the offer of the vice presidency because he desperately needed a New Yorker on the ticket, Arthur accepted it as vindication for the humiliation he had suffered at Hayes’ hand.^[2]

The thought of Chester Arthur as president of the United States shocked many. His name was synonymous with the corrupt political spoils system of the Gilded Age. Unlike previous vice presidents who remained deep in the background, out of the sight and mind of the public, Vice President Arthur made headlines by siding with his former political master, Senator Roscoe Conkling, and against President Garfield in a nasty dispute over the patronage of the New York custom house. This was probably Arthur’s first serious misstep because it reinforced the public perception of him as a political hack and lacky beholden to one of the most powerful members of the United States Senate. Opinions on the vice president worsened when Charles Guiteau yelled, “I am a stalwart, and Arthur will be president,” after shooting Garfield on July 2, 1881. “Arthur and all those men are my friends,” he told a detective, “and I’ll have you made Chief of Police.”^[3]

Arthur journeyed to Washington at the request of the cabinet, but he sensed the suspicion, if not contempt, in the faces he passed. After this unpleasant experience, it is no wonder that he secluded himself from the press and the public as Garfield’s health ebbed and flowed before succumbing to death on September 20, 1881.^[4] Nor can it be a surprise that both the public and the political establishment held their breath when the twenty-first president of the United States took the oath of office. Would the republic survive an Arthur administration?

If his contemporaries expected little from him, historians have similarly held Arthur to a diminished standard. They have portrayed him – if they mention him at all – as the former machine politician who made good by ushering in civil service reform, vetoing a bloated pork barrel spending measure, purging himself of his former master, Roscoe Conkling, and initiating a naval construction program.^[5] Yet, these were modest, if meaningful, accomplishments. The Pendleton Act applied to fifteen percent of the federal work force, his veto of the Rivers and Harbor Act was overridden, and the naval construction program was greatly limited by a stingy congress. As for Conkling, Arthur nominated him for the United States Supreme Court – an appointment the former senator declined – and, as will be covered below, colluded with him in the 1882 New York state elections.^[6]

It is true that Arthur suffered limitations other than his inexperience, lack of vision, and reputation while in office. Arthur was diagnosed with Bright’s disease (a fatal kidney ailment) in 1882. The White House never informed the public of the president’s condition. Several incidents treated as food poisoning, bouts of common illness, extended periods of rest or vacations, and long stays at the homes of friends or family were actually attempts to hide the painful flare-ups of Bright’s. In Congress, Arthur had a small Republican majority in the House of Representatives until the Democrats took control following the midterm election. In the Senate, the Republicans had a one vote margin.

***

Signing the Chinese Exclusion Act of 1882 was Arthur’s most reprehensible act as president. It is probably the most xenophobic law ever passed in the United States.  

The Workingmen’s Party led by Denis Kearny, himself an immigrant, fanned the flames of anti-Chinese hysteria in California and much of the American West. Relying on the usual immigrant-bashing tropes, these agitators argued that Chinese laborers depressed wages, stole jobs, and rejected American culture. Individual Chinese as well as entire neighborhoods suffered violent attacks and discrimination. Both parties pandered to xenophobia in order to secure California. The elections of 1876 and 1880 were extremely close and California counted among the few swing states in this period. In 1876 the Republican Rutherford B. Hayes carried the state by 2,798 votes. Four years later Democrat Winfield Scott Hancock won California by a miniscule margin of 144 votes.^[7] Americans of the east were prone to the same poisonous prejudices as those of the west, even if they had never seen a Chinese person.

In 1879 Congress forwarded a bill banning the immigration of Chinese laborers to President Rutherford B. Hayes. Citing a treaty with China that prevented the United States from placing unnecessary restraints on immigration, Hayes vetoed the legislation. In 1882 a new congress passed a bill excluding Chinese laborers for a period of twenty years and sent it to the new president. Like Hayes, Arthur vetoed it, but added with a wink that a shorter duration would meet treaty obligations and receive a presidential signature. Congress responded with almost unprecedented alacrity and sent a revised bill with a ten-year exclusion to the White House. President Arthur signed it into law on May 6, 1882. In 1884, the Republicans carried California by 13,000 votes, even though they lost the election.^[8]

Many in the press praised the president for following a reasonable middle course between two extremes. The more vehement anti-Chinese believed that Arthur and the Republicans had betrayed them for not signing the twenty-year ban. On the other side of the spectrum, liberals of the time, including Julia Sand, Arthur’s mysterious pen pal and self-appointed conscience, condemned the president as a sellout.

Ultimately, the duration of the exclusion was irrelevant. In 1892 Congress renewed the exclusion for another ten years. In 1902 it extended the ban indefinitely. The National Origins Act of 1924 banned all Chinese immigration. Restraints on Chinese immigration were not lessened until World War II.^[9] Exclusion of Chinese laborers is another sad example of Americans surrendering to bigotry and denying its professed principles of freedom, liberty, openness, and tolerance. 

***

Presidents are often seen as the party leader during their terms of office and Arthur committed several errors in this capacity that damaged the Republican Party. Possessing little credibility and lacking a strong voting bloc in Congress, Arthur was nearly powerless as a party leader. Unfortunately, that didn’t stop him from trying.

The Republican Party was divided into two factions, stalwarts and half-breeds. The former supported black civil rights, tariffs, and tended to come from contested urban areas or ones dominated by Democrats; the latter came from more reliably Republican districts, tended to prefer lower tariffs, national unity with the south over black civil rights, and more openness to reform.^[10] Arthur’s primary goal was to invigorate the stalwart faction, which had been on a precipitous decline since Ulysses Grant left the White House in 1877. Despite having signed the Pendleton Civil Service Act, Arthur freely dispensed patronage — a classic case of obeying the letter but not the spirit of the law. But his palpable lack of power and prestige meant those whom he attempted to influence could disregard his requests after getting what they wanted. His appointments did more to anger and embolden the rival half-breed faction than to empower his stalwarts. Ironically, Arthur’s presidency just about killed what little strength the stalwarts possessed.

His most glaring failure occurred in the 1882 governor’s race in his home state of New York. The president allied with ex-senator Roscoe Conkling and robber baron Jay Gould, of all people, to replace incumbent Governor Alonzo Cornell, a competent and independent-minded public servant, popular with most upstate Republicans, on the state ticket, because he didn’t support the right legislation or patronage appointments. Instead, Arthur backed Secretary of Treasury Charles Folger, a crony and stout stalwart, for the party’s nomination. Gould persuaded enough delegates at the party’s convention in Saratoga to gain Folger’s nomination. Republican rank and file around the state felt betrayed by their leaders, including their president, for selling out the party. The Democrats nominated the little-known mayor of Buffalo, Grover Cleveland. Considering that Garfield and Arthur carried the state by 21,000 votes in 1880 it was an astonishing reversal that Folger lost by almost 200,000 votes just two years later.^[11] That his hand-picked candidate suffered a crushing defeat in his home state by the largest margin in New York history to that time, was an obvious rebuke of the president. New York’s Republicans demonstrated their anger by denying their support to Arthur at the 1884 Republican presidential convention. 

The election proved disastrous in another way as well: It put Grover Cleveland, as governor of the most populous state in the nation, on track to becoming his party’s presidential nominee in 1884. Propelled to prominence by his spectacular victory over Folger in a state-wide contest, Cleveland became the next Democrat Party superstar, winning the popular vote in three successive presidential elections between 1884 and 1892. If all this was not bad enough for Arthur, Cleveland, who followed him into the White House in 1885, undid many of Arthur’s foreign policy initiatives.

In an attempt to win over white independents in the South, such as readjuster Senator James Mahone of Virginia, Arthur threw in the towel on the mostly black regular Republican party organizations in former confederacy. Mahone caucused with the Republicans who never felt comfortable cavorting with a former rebel general and debt repudiator, but much was lost, though, for this short-term political gain. Crippled by segregation, voting restrictions, and violence, the black Republican Party organizations faded into electoral irrelevance, and they directed their frustration at Arthur.  It was a disappointing outcome for a former abolitionist who defended the rights of blacks in New York City as a young lawyer in the 1850s, who supported Reconstruction after the war, and who as president in 1883 condemned the Supreme Court’s ruling in the Civil Rights cases.

The Republicans reacted to Arthur’s machinations as party leader and his policies by nominating his arch-rival James G. Blaine for president in 1884. It is not clear if Arthur sought the nomination because he desired it, or if his machinations were a ploy to keep it from Blaine, but in either case, he was unsuccessful.  

Arthur was not one of those presidents blessed by a good economy during his years in office. Instead, the nation slipped into a recession in 1882, just in time for the midterm election. Democrats captured control of the House of Representatives and thwarted most of Arthur’s proposals during the last two years of his term. Nor was a recession the only economic concern at the time. In the late 1870s and early 1880s the subject of a federal budget surplus vexed economists and policy makers because it sucked specie out of circulation when it was most needed. The obvious solution was to reduce federal revenue.

In addition, there was a general fear that the home market could no longer purchase all the goods produced by American factories and farms. With memories of the Great Strike of 1877, they feared a surplus of goods would trigger factory shut downs, layoffs, farm foreclosures, and dangerous social upheaval, if not outright revolution.  

The solution to these conundrums appeared to be increasing exports; trade the excess goods, be it industrial or agricultural, abroad, in exchange for gold. A protective tariff encouraged other nations to retaliate with high rates on American products. Both economists and overstretched consumers favored some sort of reduction to the tariff rates. In his 1882 Annual Message Arthur requested that Congress reduce the tariff.

A stronger president might have taken the opportunity to demonstrate leadership, but both personal inclination and the circumstances that propelled him to the White House determined that Arthur would not be that man. Instead of tackling the thorny issue of tariff reform directly he used a tactic that he had deployed effectively to thwart reform when it raised its troublesome head during his tenure as collector of the port of New York: he appointed a commission. After collecting information from a series of hearings throughout the United States, the commission presented its findings to Congress. They recommended significant changes that could range as high as a hefty twenty-five percent reduction.

Congressmen introduced hundreds of amendments to protect industries important to their districts. Arthur made no effort to pressure lawmakers to hold the line on a reduction to rates. The conference committee produced a complicated bill that cut rates on some items, raised them on others, and moved yet others on or off the free list. The final product bore little resemblance to the proposal that the commission forwarded to the Congress in its final report and it favored manufacturing interests over those of raw materials.^[12] Arthur affixed his signature to the “Mongrel Tariff,” in December 1883. The changes amounted to a scant overall cut of less than two percent.

Congress more readily granted Arthur’s requests to cut taxes on bank accounts, luxury goods, and excises. While the federal surplus decreased significantly, it is difficult to distinguish how much of that could be attributed to Arthur’s polices versus what resulted from the recession that depressed the economy at the same time.

***

In foreign affairs, the Arthur administration was as devoid of accomplishment as almost any in American history. Arthur had no experience in foreign affairs, possessed little strategic vision, and lacked the votes in the Senate for ratification. Like his contemporary Gilded Age presidents, his policy vaguely inclined in the imperialist direction, less by grand design than by drift. His one signature contribution, and what biographer Thomas Reeves considered his most important accomplishment, was a modest naval construction and reform program. Stung by their experience with the transcontinental railroad, however, the Congress never supported Arthur’s request to subsidize a federal merchant marine to carry American goods across the seas.

The new president made a clumsy entry on the world stage. Party titan, half-breed leader, and Garfield friend, Secretary of State James G. Blaine steamrolled Arthur into approving and hosting a Pan-American conference to promote intra-continental cooperation and trade. The ultimate aim of the conference was to undercut Great Britain in the Western Hemisphere and extend the economic and political influence of the United States into Central and South America. The strong-willed Blaine – who was a bitter enemy to the new president – argued that Garfield had approved this at the exact moment when Arthur’s every move was calculated to convey a continuity of policies with his slain predecessor.

Arthur appointed Frederick Frelinghuysen, a conservative ex-senator from New Jersey, to be secretary of state following Blaine’s resignation.^[13] In January 1882, after further consultation Arthur announced that he would be rescinding invitations to the conference because the European powers strongly objected. Blaine fired off a scathing thirteen-page letter to his former chief that found its way into the pages of the New York Tribune, calling the decision “a voluntary humiliation.”^[14] Arthur buckled under the criticism. In March he made another unexpected move and punted the final decision on the conference to Congress. He reasoned that since the legislature requested a conference through a resolution, it was proper for the Congress to make the final decision. Congress never voted on the president’s odd proposal. Finally, in August 1882, after realizing that the Congress would not absolve him of the embarrassment, Arthur officially rescinded the invitations.

Growing overseas markets through reciprocity agreements with other countries was the most coherent aim of the Arthur presidency. Historian George Herring notes that “Reciprocity was the linchpin of Arthur and Frelinghuysen’s foreign trade policy.”^[15] Arthur asked Congress to include a reciprocity clause in the tariff bill that would permit the president to negotiate targeted rate reductions with foreign governments in exchange for concessions to American goods without having to secure the Senate’s approval for each agreement. Congress declined to grant the president this power. Reciprocity was the Republican dream solution to the problems of over-production and surplus because, in theory, at least, they could expand trade and keep the protective tariff.  Reciprocity agreements were very far from free trade treaties, which is precisely why anti-tariff and free trade Democrats opposed these agreements in favor of broad, general rate reductions.

      Arthur set about negotiating trade treaties with about a dozen countries in the Caribbean, Central America, and South America. Many of these agreements died in the evenly divided Senate. Grover Cleveland, the Democrat from New York whose rise Arthur had inadvertently aided, withdrew the others from senatorial consideration shortly after taking the oath of office in 1885. 

While Arthur balked at exerting the influence of the United States in the Americas, he unexpectedly opened doors in Korea and Africa. Arthur acted in these two areas on opposite sides of the globe not because they fit a masterplan, but because they appeared to him to be easy opportunities to open new markets for American trade.

In 1883 the Senate ratified a treaty with Korea that had been negotiated by Commodore Robert Shufeldt, USN. This agreement granted the United States most favored nation status. Arthur’s diplomats were not in country long before they foolishly backed an unsuccessful coup launched by a pro-modernization faction to overthrow the king of Korea, an opening that Japan and Russia took full advantage of to expand their own growing spheres of influence, putting them on a collision path that would result in war in 1905.

If big dreams came to naught in Korea, a more embarrassing end awaited Arthur’s adventure in Africa. Lured by Belgian King Leopold II’s promises of open markets for American goods in central Africa, Arthur dispatched diplomats to international negotiations in Berlin, Germany to decide the fate of Africa. This unprecedented move generated a great deal of controversy in the United States, especially on Capitol Hill. The Senate received the treaty just days before Arthur’s term ended, and like almost everything else it lacked the votes for ratification. President Cleveland subsequently withdrew the treaty from consideration. As it turned out, Leopold had peddled many lies to the naive American president. Among other things, the king falsely claimed that he had no personal interest in the region and acted for humanitarian purposes, that the Congo region contained rich agricultural land, as well as cities hungry for overseas goods. These proved to be nothing but self-serving lies. In the end Leopold turned the Congo into his own private estate and initiated eight decades of brutal imperial rule which left behind millions of corpses. Even the otherwise sympathetic historian Justus Doenecke wrote of Arthur’s involvement in Congo: “In short, the noble dream of Arthur and Frelinghuysen had turned out to be something of a nightmare, and the United States, if the truth be known, had been party to a swindle.”^[16]

In another example of Arthur’s foreign policy reacting to events, as opposed to grand design, Frederick Frelinghuysen opened negotiations with Nicaragua to construct a canal across Central America after a French company concluded an agreement regarding Panama. Once again, the ad hoc nature of Arthur’s policies produced decisions, justifications, and explanations that sometimes contradicted each other, sowed confusion both home and abroad, and demonstrated the amateurish nature of his administration. Democrats, who gained control of the House of Representatives in the 1882 mid-term election, saw it as a crass attempt to maintain a protectionist tariff while dissipating the federal budget surplus on a boondoggle of epic proportions. Traditionalists and anti-imperialists saw it as pseudo-colonial venture contradictory to the history of the United States. The British government strenuously objected that any agreement between the United States and Nicaragua over a canal violated the Clayton-Bulwer Treaty of 1850. The secretary of state tossed out five different rationales for why that treaty was null and void, but these convinced few experts, let alone the British. Other nations in Central America objected to the thought of the United States establishing a military alliance with a neighbor. Nonetheless, in December 1884, Arthur sent the Frelinghuysen-Zavala Treaty to the Congress. With objections over its cost, creation of a fortified American zone of control across Nicaragua, and a pledge to defend a foreign state, it failed to gain ratification before President Grover Cleveland withdrew yet another piece of his predecessor’s handiwork.  

 Critics of American imperialism could certainly applaud the failure of Arthur’s foreign policy. However, the inability of a president to get so many measures through Congress clearly indicates a lack of effectiveness.

*** 

Arthur managed to add one more act that rightly deserves to be accounted as one of the things wrong with him as a president: Before dying of Bright’s disease in 1886, he burned almost all of his personal papers, leaving historians in the dark about his deeds and motives. Instead of letters documenting his actions and decisions, Arthur left posterity scores of receipts for fishing gear and his famously expensive wardrobe, perhaps the one true memorial to a man noted for his vanity and lackluster work ethic.

The “Long Peace” Thesis

Having considered the modern nation-state as a unique subject of historical and political inquiry, we turn to the widely popular notion that we are right now living amidst a “Long Peace,” characterized by falling rates of war and violence more generally. Among the intellectuals notably associated with this thesis is the Harvard cognitive psychologist Steven Pinker, who argues that wars between the world’s great powers have steadily declined, and that even the nightmarish violence and genocide of the last century was, population sizes properly weighed, a move in the right direction. We have described the emergence of the modern state as a process “of centralization, concentration, and absorption,” in which other sources of power in society were consolidated, the state eliminating rivals. This process, a violent one, is among the historical facts generally ignored or downplayed by the Long Peace thesis. As Reinhart Kössler notes, “the pacified environment provided by the modern state (at least, according to its own pretensions), rests on a history not only of violent disarmament of competitors and elimination contests, but also of the equally violent process of disciplining people.” Or as Peter Kropotkin observes of England under Henry VIII, the state forcibly expropriated and supplanted the network of voluntary associations and guilds that had grown up over the course of centuries, robbing them in broad daylight “without bothering with formalities or procedure.” Such episodes, largely forgotten in any case, are not deemed violence or coercion by the contemporary defender of the modern state, who tells us that it ushered in a new age of peace. The acknowledgment or retelling of such crimes doesn’t fit a narrative that sees the birth of the Westphalian nation-state as a propitious event for human liberty and prosperity. To understand the problems with the Long Peace argument thus requires a close reassessment of the bureaucratic state: though today regarded as the benign vehicle of qualified, scientific expertise, this new form of total government creates the preconditions for the worst, most thoughtless exterminations of human beings in the world’s history.

The principle of bureaucracy, Kropotkin says, “destroys everything,” because through it is enforced a suffocating pattern of uniformization, the determined elimination of foci of social power outside of the state and the active preclusion of their reemergence—as well as the erasure of the popular memory of these cooperative alternatives to state power. This accession of unrivaled, anomymous power (and the anonymity of the bureaucratic state is important in this discussion) brings along with it a system of incentives creating a fertile ground for the germination and growth of the mass-murder state. Mary McCarthy has a famous quote on bureaucracy: “Bureaucracy, the rule of no one, has become the modern form of despotism.” The modern nation-state’s characteristic bureaucratic form seems to have made possible the mechanized mass slaughters it has carried out since its appearance. For if no one rules, then no one really kills—that is to say, no one must take responsibility for killing, the murder of millions becoming an exercise in bureaucratic anonymity and detachment, everyone mechanistically following orders, no one choosing.

Political modernity, incarnated in the nation-state, seems, then, to admit the fundamental libertarian truth that no one could attain the right to rule. But instead of treating this as a good reason to subject the state to a searching analysis, it accepts social contract theory’s counterfactual and concludes that we are the authors of our own oppression. As the great liberal Benjamin Constant wrote, the social contract theory articulated by Rousseau is “the most terrible auxiliary of all kinds of despotism,” for it operates to remove all constraints on political power. There can, after all, be no limits on political power in principle if that power only an expression of the citizen’s own will.¹

And indeed the twentieth century was an experiment in limitless political power. The internal logic of the modern nation-state reaches its conclusion in authoritarian political systems like Italian Fascism, German National Socialism, and Chinese and Soviet communism. As I’ve discussed previously, defenders of the modern state have attempted, against the weight of available evidence, to read such brutal, murderous regimes out of the modernist project, to distinguish them as deviations from or deliberate reactions against the dominant trend. Detlev Peukert argued compellingly that in fact German National Socialism “pushed the utopian belief in all-embracing ‘scientific’ final solutions of social problems to the ultimate logical extreme,” stamping out genuine social ties in favor of a bleak coherence derived from “bureaucratic procedures.” An examination of the familial connection between Progressivism and National Socialism reveals that the “logic of segregation and exclusion” was always there, latent in the very Progressive ideas that had been the foundation of the Weimar welfare state.² Making matters even more ridiculous, the horrors of the twentieth century transpired during a period in which the nation-state was supposedly in decline, in which the growth of international organizations (both business corporations and treaty organizations like the League of Nations and, later, the United Nations) grew in power. Premised on the idea that there is a rationally discoverable natural law preceding positive law, international law does, at least in principle, posit a challenge to the sovereignty and authority of the state. But as historian Quentin Skinner has observed, reports of the death of the state have been greatly exaggerated, as states have arguably become “more aggressive of late, patrolling their borders with increasing attention and maintaining an unparalleled level of surveillance over their own citizens.” Skinner further notes that states intervene decisively in the economy (to rescue failing banks, for example), print money, tax and imprison their citizens, and “legislate with an unparalleled degree of complexity.”³

The Devastation of Modern War

Still, notwithstanding the unique power of the modern state and the bloody history of the twentieth century, is it possible that Pinker and others trumpeting the “Long Peace” are right? Will Wilkinson of the Niskanen Center recently assured me that “advent of the Westphalian nation state brings in its wake plummeting death rates from war.” This seems, however, to be far from the truth—indeed, the empirical record shows us that just the opposite is true. In the roughly four centuries since the Westphalian treaties were signed,[4] the world has played host to a series of bloodbaths that would have been inconceivable before the modern era and its unique political institution, the state (on which more below). But during the relevant period, the number of human beings on the planet skyrocketed, from little more than half a billion in 1648 to nearly 8 billion today. The Long Peace theorists argue that “even if wars have become deadlier in absolute terms,” those deaths account for a smaller percentage of the population.

This seems a strange way to think about the destructiveness of war, for we don’t ordinarily believe that the value of one person’s life is reduced by the mere fact that there are more people currently alive on earth. The inexpressible value of any given individual has not been diminished as the global population continues to climb. Human persons are not fungible cogs that can be readily substituted for one another, void of unique characteristics. This kind of statistical analysis reduces the human person to a commodity, a mere chattel. It is, at this juncture, important to point out that this relative vs. absolute debate is a philosophical one, a question that by definition cannot be decided on the basis of the raw data alone (even assuming that the data themselves were perfectly validated and not subject to any meaningful disagreement). The philosophical question precedes, and must precede, the data-analytical question, as any interpretation of the data will assume certain philosophical priors. While proponents of the Long Peace thesis see it as obviously true that we should use the relative standard, this is not at all obvious, and there are compelling reasons that favor the absolute standard when we’re talking about something like the lives of individual human beings. We can’t mitigate the loss of one life with the substitution of another, i.e., by gesturing at the existence of additional other persons. The loss is fundamentally immitigable, because each individual is irreducibly unique. If your empirical approach is telling you, roughly immediately following the bloodiest century ever, that there’s been a “Long Peace,” then that approach is broken at a fundamental level. That this is not immediately obvious reveals much about the normative philosophy that today’s intellectuals use to frame their definition of empirical rigor. Mao’s communist government alone was responsible for approximately 70 million peacetime deaths. Pinker, and his defenders like Wilkinson, apparently mean us to believe that such a staggering, almost unimaginable, death toll is reconcilable with a general downward trend in violence because, well, China has lots of people.⁵

Setting the matter aside, war-related deaths actually increased in absolute terms more than they should have given population growth alone, with exponentially more such deaths in “modern organized societies” than in primitive nomadic societies. Further still, as we shall see, the twentieth century saw a uniquely high death toll, even if we (1) employ the relative/per capita standard preferred, I think implausibly, by the supporters of the Long Peace thesis, and (2) include only deaths in conflicts (see Max Roser’s graph “Global deaths in conflict since 1400”). To reckon that the world has grown more peaceful in the centuries after the Peace of Westphalia, we must define “peace” in a way that can accommodate the liquidation of millions in what is in fact an extremely short period.

Indeed, some estimates of World War II casualties are as high as 120 million, with World War I as high as 65 million. Political scientist Rudolph Rummel, who coined the term “democide,” observes that even looking solely at the number of conflict-related deaths as a share of global population (as opposed to the absolute standard of total conflict-related deaths), the twentieth century comes out on top as compared with the four centuries immediately preceding it; he notes, too, that the conflict-related values do not “take into account the massive democides accounting for about 170 million deaths,” which largely occurred in “peacetime”—for example, the mass murders perpetrated by the Soviets and the Chinese Communists. Rummel later remarked that “this total could even reach near 341,000,000 killed.” Democidal governments have “murdered 6 times more people than died in combat in all the foreign and internal wars of the [twentieth] century.”

There are still other problems: Steven Beard argues that even if we forecast using the data from the more peaceful period following World War II, it is still not at all clear “that that this recent peaceful period represents a long-term decline in interstate war.” Beard goes on to explain that the changes we observe in the data “appear to be either temporary or random variation around a flat base probability.” The idea that we’re living in a uniquely peaceful time is simply not grounded in what we know. We should expect the waxing and waning of war deaths, and thus we don’t yet have sufficient reason to believe the current apparently-peaceful moment is sui generis. Ohio State political scientist Bear Braumoeller agrees that Pinker’s identification of a trend is premature, noting that his research found no “downward trend in the incidence or deadliness of warfare. If anything, the opposite is true.” Braumoeller says that the “escalatory propensity of war is the scariest thing [he] found” in his research, finding a fairly good chance that the world could, within the relatively near term, see a war that kills 70 million. He further points out that war follows what is called a power-law distribution, meaning that while there may be many small wars, random chance can turn one into a catastrophically deadly event—an event “unbelievably huge even by the standards of other unbelievably huge things” (emphasis added). Braumoeller’s work suggests that it would be “frighteningly easy” for humankind to walk a path that is even more violent than ever.

What, then, explains this absurd claim that the Westphalian state has ushered in a new era of peace? Simple myopia provides perhaps the best explanation: that very recent history has been particularly peaceful seems to have left some neoliberal optimists with the misimpression that this as yet short-lived peace represents a sea change. It has simply become too easy for people today—particularly those living in the rich West—to forget both the history of the modern state’s emergence and the horrors it has left in its wake. Exemplifying this myopic, overly sanguine view, Steven Pinker cites a falling rate of deaths in war over the last 25 years in support of his claim that there’s been a “long-term historical trend” of declining violence. Pinker and other such committed Pollyannas have either forgotten the horrors of the last century or are completely immune to evidence. As anthropologist Dean Falk remarked in 2017, even the decades that have passed since the end of World War II represent “a proverbial drop in the bucket compared with the five [million] to seven million years humans and our ancestors have been around.” It is furthermore important to point out that the character of war has changed in the years since World War II, with wars between the great powers being replaced by proxy wars and civil conflicts, the frequency of which have increased.

It must be granted that the Long Peace argument is certainly not without appeal, as another attempt to claim that we have arrived at the end of history. Alas, this is just too easy a story. The modern state was born of and designed for warfare, and it has delivered on the promise of its roots. As Charles Tilly notes, “Preparation for war has been the great state-building activity,” this process continuing largely without interruption for the last 500 years. Christopher W. Morris writes similarly, “The nature and scale of modern wars are made possible by the modern state, and what the future threatens may be worse than what we have already experienced.” Let us hope that Morris is wrong and that a Long Peace does in fact await us. I’m afraid I do not share Pinker’s optimism.

Those with some knowledge of ancient history might assume that the Cato Institute derives its name from the notoriously staunch ancient Roman Cato the Younger. But it does not; instead, it is a reference to Cato’s Letters, a collection of 138 essays written in England during the 18th century. 

On November 5th 1720, John Trenchard and Thomas Gordon published a letter titled Reasons to prove that we are in no Danger of losing Gibraltar, with both men writing under the pseudonym Cato. At first, their work focused on contemporary events such as the South Sea bubble, which exposed rampant corruption in the government. However, these essays quickly evolved from polemics on current events to more fundamental investigations into the nature of liberty and power. Over the next three years, the two men would publish 138 letters on a wide range of topics. They discussed the blessings of liberty, how to prevent tyranny, freedom of speech, the separation of church and state, and the right to resist tyrannical governments.

Cato’s Letters were an instant hit and became extremely popular in both England and the American colonies. Five decades later, the views encapsulated in Cato’s Letters gave American revolutionaries the intellectual ammunition needed to justify their revolt against their British oppressors.

Trenchard and Gordon’s lives

John Trenchard was born into a prominent family in 1662. He attended Trinity College Dublin (as it so happens, my own alma mater). Trenchard lived a very comfortable life; his uncle and parents left him a considerable amount of property through inheritance and he married into an even more affluent family. 

Thomas Gordon is a more obscure figure. Little is known about his life before he started writing, though was born sometime around 1691 in Scotland. Textual evidence suggests he might have attended college to study law, but this is hard to confirm. Gordon began his career writing lighthearted essays, which he compiled in 1720 into a collection entitled the Humorist, jokingly dedicated to “the Man in the Moon.” 

The Pair Meet

Gordon and Trenchard first came into contact due to the Bangorian controversy. Benjamin Hoadley, the Bishop of Bangor, denied the divine right of kings and argued in favour of freedom of conscience. Many criticised Hoadley for questioning the authority of the church and arguing that people should be free to make up their own minds on religious matters. Gordon, writing in favour of Hoadley, defended religious toleration and attacked the church’s influence on the state.

Gordon’s enthusiasm caught the eye of Trenchard, and the pair met in 1719 in London. The duo wrote a weekly pamphlet entitled The Independent Whig. This publication lasted for a year and mainly focused upon religious issues such as toleration and the separation of church and state. After writing a total of 53 essays for the Independent Whig, Gordon and Trenchard began writing for The London Journal, for which they decided to cover a broader variety of topics. 

Why the Name “Cato”?

They wrote under the pseudonym Cato, which referred to Cato the Younger, a Roman statesman from the 1st century BC who had defied the tyrant Julius Caesar. Throughout his life, Cato had been an honest, wise, and prudent statesman as well as a Stoic; he had defended traditional Roman liberties and viciously attacked corruption in the government. By the 18th-century Cato was associated with a love of liberty and a hatred of tyranny. During the fall of the Roman Republic, Cato sided with the senate against Julius Caesar. When civil war broke out, Caesar eventually overcame his foes and became the de facto Roman head of state, which brought the republic to an end. Cato committed suicide rather than accepting a pardon from Caesar, an act that was immortalized by future generations of republicans. In the 18th-century British playwright Joseph Addison wrote a play titled, Cato, A Tragedy, which became hugely popular in both Britain and the American colonies.  

By adopting Cato as their nom de plume, Trenchard and Gordon had adopted a widely recognized symbol of political dissent. It was also an appeal to public fascination with Greco-Roman antiquity that had been sparked by archeological discoveries in the preceding decades. Throughout Cato’s Letters, Trenchard and Gordon liberally quoted various classical works, showing their affinity for the ancients.But the purpose of the work was not merely to show Trenchard and Gordon’s erudition. They expressed a coherent political philosophy; indeed, the liberal views of “Cato” formed the ideological bedrock of the radical Whigs in England and would later influence the American Revolutionaries.

[From this point on I will refer to Trenchard and Gordon as Cato and as a single person for simplicity’s sake.] 

Where Does the State Come From?

The origins and ends of the state are foundational questions in political philosophy. For example, Aristotle conceptualized humans as political animals who need politics and cannot live without it, therefore for a person to fully flourish they must engage with politics. Therefore the end of the state is to promote the moral development of its citizens. English Republicans inherited a tradition of civic republicanism from writers such as Aristotle. This tradition stressed the importance of civic virtue and political participation as essential elements in creating a free republic.

This contrasted with contemporary conservatives, who believed that the authority of the state was based upon Divine right. God chose monarchs and thus we have a duty to obey their commands as representatives of God on earth. Robert Filmer’s book De Patriarcha encapsulated these conservative arguments in favour of a God-given monarchy.

For Cato, the state is not instituted to promote the moral flourishing of people. Instead, he argues that the end of the state is “temporal Felicity” or, in less fancy terms, human happiness which consists of comfort and security rather than moral or philosophical virtue. The state is not a tool for educating people on how to live; rather it is best kept as a guardian of our rights which allow us to pursue the lives we personally wish to lead while not harming or being harmed by others.

Nor is government divinely ordained; instead, it is a wholly human creation. Cato explains that “men are naturally equal, and none ever rose above the rest but by force or consent: No man was ever born above all the rest, nor below them all.” Since all men are equal, no one man has natural authority over the other. Legitimate government must then be founded on consent. Cato believed if there was to be a monarch, it ought to be a constitutional monarch. He was dismissive of theories justifying an unlimited use of arbitrary power.

For Cato, all people are born free with an inalienable right to liberty. Cato defines liberty comprehensively as “the power which every man has over his own actions, and his right to enjoy the fruit of his labour, art, industry, as far as by it he hurts not the society, or any members of it, by taking from any member, or by hindering him from enjoying what he himself enjoys.” A century before John Stuart Mill, Cato had argued in favour of what libertarians today call the harm principle, which is the idea that actions should only be limited if they harm others.

Human Nature

Cato wrote in the tradition of John Locke, who had argued thirty years before that government exists to protect life, liberty and property. Everyone has an inalienable right to liberty, but that doesn’t mean that people will not interfere and come into conflict with each other. Humanity is not naturally benevolent, kind, or altruistic. According to Cato “Every man loves himself better than he loves his whole species.” Because of this, people will have no qualms in taking advantage of others through theft, fraud or force. Even worse, “men will never think they have enough, whilst they can take more” because by nature they are greedy, acquisitive and self-centred. As Cato pessimistically explains, “Whilst men are men, ambition, avarice, and vanity, and other passions, will govern their actions…they will be ever usurping, or attempting to usurp, upon the liberty and fortunes of one another.”

A Solution to Human Nature

Unlike many of his contemporaries, Cato did not ascribe these vices solely to the men of his day. Instead, he was saying that all of humanity is the same. The essence of human nature is a passion for self-love and because this passion cannot be quelled, “men will be men, in spite of all the lectures of philosophy, virtue, and religion.” Despite this pessimistic picture of human nature, Cato believes that human nature’s depravity is useful.

Because we are selfish by our nature, if we consent to any law that limits our actions,  we expect others also to be bound by its dictates. Cato states that “it is the common interest of all, who unite together in the same society, to establish such rules and maxims for their mutual preservation, that no man can oppress or injure another, without suffering by it himself.” Our mutual fear of one another forms the basis of law, which is defined by Cato as nothing more than “checks upon the unruly and partial appetites of men.” From our desire to hold onto what is ours and our fear of others, we mutually bind ourselves to laws which keep us from infringing upon others.

Those In Power

But binding law introduces a new problem, the power of the state. If Cato is correct, is the state not just an artifice made of flawed people? Given that people are rapacious, greedy and vain, how can we trust those in power not to be the same? Cato affirms that those in power are not a different species to those who are not.  For Cato “all men would be tyrants,and do what they please.” Those in power are equally likely (if not more so) as the common person to dupe, steal, and commit violence upon those they rule over.

If power is not checked, arbitrary tyranny reigns supreme. Living under liberty is living by the rule of law that is mutually applied to all. Tyranny, on the other hand, is the unequal and ad-hoc application of laws; it is arbitrary, biased, and unfair. It is unlimited liberty for some and subordination for the rest. For Cato, tyranny is slavery, which is living “at the mere mercy of another.” Life under slavery is “a continual state of uncertainty and wretchedness, often an apprehension of violence, often the lingering dread of a violent death.” Free people must avoid slavery at all costs.

Preserving Liberty

Consistent in his realistic attitude of human nature, Cato states, “We must not judge of men by what they ought to do, but by what they will do.” Instead of expecting representatives to be virtuous, he argues we should implement institutions to safeguard fragile liberty, namely constitutional restraints, the separation of powers, and free speech. 

Constitutional Restraints

Firstly, Cato argues for constitutional restraints on state power. No matter how virtuous a person might be, power corrupts. Cato refers to lawless or unlimited power as monstrous. Human nature cannot possibly wield unlimited power with restraint,“the mind of man, which is weak and limited, ought never to be trusted with a power that is boundless.” Therefore we must put constitutional restraints on power. Cato explains that “considering what sort of a creature man is, it is scarce possible to put him under too many restraints, when he is possessed of great power.”  

Separation of Powers

Secondly, constitutional restraint means the separation of powers. By dividing power between those within the government, who possess different interests and incentives, we stop power from becoming concentrated. As Cato explains, a regime designed with separation of powers creates paranoia among state representatives, who then limit each other’s power. Cato notes that “their emulation, envy, fear, or interest, always made them spies and checks upon one another.” The separation of powers decentralizes and divides power, stopping any one person or group from completely dominating the rest.

Free Speech

Thirdly, for Cato the ability to freely criticize one’s government is “inseparable from publick liberty.” Freedom of speech is so essential that he refers to it as “the great bulwark of liberty.” Being able to criticize those in power helps rally communities to protest against encroachments upon liberty. Cato believes that if one was an aspiring tyrant, the most important first authoritarian step would be to subdue freedom of speech, silencing any dissent or opposition and creating the illusion of harmony. 

Selfish Patriotism

But what if all of these methods of checking power do not work, what then? Cato believed that the people would rise up to resist the encroachment of illegitimate power. But how could this be the case as Cato states himself that “I think it impossible for any man to act upon any other motive than his own self-interest.” How could anyone expect patriotic and virtuous civic resistance if people are so selfish?

It is because Cato believes that the selfishness inherent in human nature was a crucial element for preserving liberty.  

Government exists to defend people’s rights and property. Therefore it is quite simple to differentiate a good from a bad government. As Cato says, “Every Ploughman knows a good Government from a bad one, from the Effects of it; he knows whether the Fruits of his Labour be his own, and whether he enjoy them in Peace and Security.” The people are to be trusted in their judgements given that what they are deciding upon is a matter for common sense.

Because it is simple to tell when the government is acting poorly, Cato believes people will rise and defend their rights when they are violated. He does not believe they will do this out of an abstracted vision of patriotism, but, instead, out of their own self interest. In the context of the people, he explains that “the Security of their Persons and Property is their highest Aim.” When people’s rights are violated, Cato believes they would “make Virtue of their present anger” and protest and hound officials out of office.  If he had heard JFK’s famous aphorism “ask not what your country can do for you — ask what you can do for your country” he would have scoffed. Cato did not rely upon virtue to preserve liberty but upon realistic self-interest. 

When all Else Fails, Resist Tyranny

According to Cato,“no government ought to take away men’s natural rights, the business and design of government itself being to defend them.” But what if the government deprives people of their natural rights, despite all institutional safeguards and the protests of self-interested citizens? In this final case, Cato advocates for resisting tyranny; the people must decide, according to their own consciences, whether or not the tyrannical actions justifies revolt. Since government is legitimated by the trust of the people, it can also be dissolved when it loses that trust. According to Cato we all have a natural right to oppose tyrannical government and to defend our liberty.

However, Cato was not an anarchist; he believed that we need a government in order to preserve our natural rights. However, a government means power and according to Cato “power is like fire; it warms, scorches, or destroys, according as it is watched, provoked, or increased.” The dilemma that Cato wished to solve was how liberty could coexist with power. Liberty cannot exist without power, but as we have seen throughout history, power can exist without liberty.

The Legacy of Cato’s Letters

The publication of Cato’s Letters ended after the British government convinced the London Journal to discontinue the troublesome series. In their own day, Cato’s Letters attracted both a great deal of praise and criticism. But however famous Cato’s Letters were in Britain, they became an even larger hit in the American colonies, where Gordon and Trenchard became household names. Historians such as Caroline Robbins, Bernard Bailyn, and Robert Shalhope have commented upon the frequency of Cato’s Letters appearing both in libraries and private collections throughout the colonies. Some historians have argued he was as influential as John Locke on the revolutionary generation.

Cato’s writings appealed greatly to the colonists, including several future founding fathers, especially the letters on freedom of religion, free speech, and resisting tyranny. A young Benjamin Franklin, writing under the pseudonym Silence Dogood, liberally quoted Cato’s Letters on free speech. William Livingston, before he became the governor of New Jersey, founded a journal named the Independent Reflector, a reference to Trenchard and Gordon’s Independent Whig. When Josiah Quincy II, a Sons of Liberty member and good friend of John Adams, died, he left his son his collection of books which he believed contained “the spirit of liberty”; among them was Cato’s Letters. John Adams himself said that the writings of Trenchard and Gordon had become “fashionable reading” by 1770.  

Sadly, Cato’s Letters are rarely read outside of academic circles. Yet the letters are passionate, insightful, and still deeply relevant. Cato’s observations on the selfishness of human nature and how it can be fruitfully channeled are timeless and will appeal to anyone who disdains the high minded yet empty rhetoric of contemporary politicians. Thankfully, Cato’s Letters can all be read online for free on the Liberty Fund’s project the Online Library of Liberty.

Cato’s Letters was as much a work of political philosophy as it was of political science. Political philosophers such as John Locke set out a framework for natural rights and government by consent. Cato contributed to this tradition by delving into the practicality of how to maintain liberty in a world where the scales are tipped in favour of tyranny. By taking the approach of assuming the worst of people, Cato aimed to create a rational framework for governance.

It should now be clear why the Cato Institute was named after Gordon and Trenchard’s work. The themes that run throughout Cato’s Letters—inalienable rights, harnessing self-interest, and preserving liberty through limited government—are core libertarian affirmations three centuries later. Unfortunately, Cato’s observations about state power and corruption remain all too relevant to the modern reader.

Clay Routledge joined the show today to talk about how our society has become increasingly individualistic, and how we are still learning the consequences of that. It is human nature to look for some sort of meaning in life. We are social animals, but that isn’t what makes us particularly unique. What makes us unique is that we maintain cultures and practices that make us seem, at least in part, larger than ourselves.

Why do we search for meaning in our lives? How do we know if our life actually means something? Do people feel lonelier than the used to? Why is Western society becoming more secular?

Further Reading:

Human Progress

Supernatural: Death, Meaning, and the Power of the Invisible World, written by Clay Routledge

Why do we feel nostalgia?, Ted-Ed Talk by Clay Routledge

Related Content:

The Collapse of the Local Community (with Tim Carney), Free Thoughts Podcast

Do Socialists Mean Well?, written by Grant Babcock

No Man Is an Island (Not Even Libertarians), written by Aaron Ross Powell

If you had to choose one technology that has done the most to transform peoples’ lives for the better in the past forty years, you could make a strong argument for cellphones. While people in the US have the first world privilege to complain about wasting time on their phones, millions of people in the developing world are using their cellphones to pull themselves out of poverty, move from subsistence farming to global markets, access credit and bank the unbanked, and learn about the broader world.

In this episode, Paul is joined by Katherine Clayton, founder and CEO of Omnivis, a startup that has created a smartphone-based device to cheaply and quickly test for cholera in water. Then he is joined by Marian Tupy and Chelsea Follett from Human Progress to talk about the transformative effects of cellphone technology.

What is the social and economic impact of cellphones in the developing world? How can cellphones be used as medical devices for people who do not have access to medical facilities? Do we rely too much on cellphones?

Further Reading:

OmniVis, Rapid Cholera Detection Platform

Human Progress

The Miracle that Is the Smartphone, written by Marian L. Tupy

Mobile Connectivity in Emerging Economies, by Laura Silver, Aaron Smith, Courtney Johnson, Jingjing Jiang, Monica Anderson, and Lee Rainie

Related Content:

Has Your Phone Hacked Your Brain?, Building Tomorrow Podcast

The World is Getting Better (with Marian Tupy), Free Thoughts Podcast

Making the World Better, written by Aaron Ross Powell

At a height of six feet four inches, President Lyndon Baines Johnson struck an imposing figure. The tall Texan was known for his physical intimidation of balky legislators – a process called “the Johnson treatment” – as he shoved through a raft of legislation establishing new government programs and regulatory bodies and oversaw a disastrous war of choice in Southeast Asia in his five-plus years as president. Johnson was a dedicated New Dealer and Wilsonian interventionist, and his choices as president had consequences that still negatively impact Americans today. Predictably, these qualities have earned him a spot in the top ten rankings by presidential historians.^[i] Johnson’s escalation of the Vietnam War is often presented as the only blemish on his record and Johnson loyalists and mainstream historians have often attempted to resuscitate his popular image by emphasizing instead his supposedly beneficent domestic policies. Despite the special pleading of big-government loving historians, Johnson looms large in the annals of presidential perfidy and disdain for the constitutional limits of federal power.

Johnson’s actions in Southeast Asia are undoubtedly the most notorious aspect of his presidency, both in popular memory and mainstream histories. In fairness to LBJ, the United States had a longstanding and continuously growing involvement in the region by the time he ascended to the presidency in the wake of John F. Kennedy’s assassination on November 22, 1963. Truman and Eisenhower supported the French in their attempt to defeat the Vietnamese nationalists and maintain Vietnam as a semi-autonomous “free state” within a French Union, and Eisenhower then supported “free” South Vietnam as a bulwark against the communist North.  John F. Kennedy grew the American military presence from about 1,000 advisors at the time he entered office to 16,732 in October 1963, and authorized American participation in combat missions and the use of napalm and Agent Orange. The Kennedy administration also oversaw the removal of South Vietnamese President Ngo Dinh Diem on November 1, 1963, a coup ending in Diem’s murder. From that moment on, South Vietnam was nominally ruled by a revolving-door cast of military dictators who relied upon American support to prop up their unelected regimes.^[ii] Johnson therefore became president at a time of Cold War tensions and with a U.S. troop presence in Vietnam that was nearly a decade old.

Johnson also faced political forces that made disengagement from Vietnam difficult in 1963 and 1964, as he ran for election in his own right. With his signing of the Civil Rights Act of 1964 and the aggressive anti-communist rhetoric of Republican presidential nominee Barry Goldwater, Johnson felt vulnerable to attacks from the right that might weaken his position with the conservative Democrat-dominated southern states. Yet few things were stronger than Johnson’s will to power. Determined to win election in 1964, Johnson sought to follow a middle way that would allow him to appear tough on communism but more reasonable than Goldwater, who the Johnson campaign painted as an extremist who would risk nuclear war with the Soviet Union.

With these caveats in mind, Johnson never seriously considered withdrawal from Vietnam or a negotiated end to the conflict during the critical period of 1964–1965. In fact, less than a month after Kennedy’s death, Johnson made it known to his administration that he wanted a more concerted effort to deter North Vietnam from its support of communist insurgencies in Laos and South Vietnam. The result was a campaign of joint American-South Vietnamese amphibious commando raids, known as OPLAN 34A, which targeted North Vietnamese coastal installations in 1964.^[iii]

However, Johnson soon began to contemplate more aggressive measures against North Vietnam. At the president’s direction, in the spring of 1964 the military created a contingency plan for a bombing campaign against North Vietnam. The president’s staff completed a draft memorandum by May 23 that laid out a thirty-day schedule for initiating overt military action. Significantly, the plan called for a congressional resolution on D-20 approving past actions and “authorizing whatever is necessary with respect to Vietnam.” In the spirit of the OPLAN 34A raids, described by historian Edwin Moïse as “an American program carried out with RVN assistance,” the thirty-day countdown to war envisioned by the Johnson administration did not involve the South Vietnamese government until day fifteen. Although Johnson evidently hoped that the situation in South Vietnam would not require the launching of a U.S. bombing campaign, it seems that it was only a matter of time until he chose to openly involve the United States military in the conflict and that the United States would take the leading role in the war.^[iv]

By August 1964, the Johnson administration was desperate for an opportunity to strike the North Vietnamese. Some administration figures, such as Secretary of Defense Robert McNamara, suggested as early as June that American airstrikes in Vietnam and Laos could be justified through the false claim that the aircraft had been fired upon and were acting in self-defense. The Joint Chiefs of Staff ordered on July 8 that an aircraft carrier be stationed off the South Vietnamese coast at all times.^[v] Under these circumstances, U.S. Navy destroyer Maddox conducted a reconnaissance patrol off the North Vietnamese coast beginning on July 31. Unbeknownst to the Maddox’s crew, their patrol was set against a backdrop of recent OPLAN 34A raids, the North Vietnamese capture of several air-dropped South Vietnamese covert agents, and two bombing raids against North Vietnam, all taking place in areas contiguous to the Maddox’s route.^[vi] Viewing Maddox as a hostile ship, three North Vietnamese torpedo boats attacked her on the afternoon of August 2. Maddox repelled her attackers, and jets from the aircraft carrier Ticonderoga responded and attacked the torpedo boats as they retreated.^[vii] Another OPLAN 34A raid – discussed at the White House and authorized by Johnson – struck the North Vietnamese on the night of August 3–4. Johnson also confirmed a decision to resume patrols in the Gulf of Tonkin after the August 2 incident. In accordance with this directive, Maddox and destroyer Turner Joy conducted another patrol on August 4.^[viii] Operating in heavy seas at night, they reported multiple sonar and radar contacts and fired hundreds of shells at what they believed to be hostile ships. Considerable doubt existed about the August 4 incident at the time, and later investigations showed that the two ships had reacted to false contacts in poor conditions.^[ix]

Nonetheless, the August 2 and August 4 incidents gave the Johnson administration an excuse to ask Congress for the type of resolution outlined in the May draft memorandum. As described to key senators by Robert McNamara, the U.S. ships had been operating far out in international waters when they were repeatedly attacked (they had in fact been much closer than he suggested, though not in North Vietnamese waters). McNamara also gave the impression that the North Vietnamese had initiated the action (Maddox opened fire first on August 2, though attack was obviously imminent). Nothing was said about the pursuit and attack of the torpedo boats by American aircraft. To the press and members of Congress, McNamara denied any knowledge of or connection between the OPLAN 34A raids and North Vietnamese actions. Administration officials presented the Gulf of Tonkin incidents as unprovoked attacks on American ships.^[x]

With an aircraft carrier already on station, Johnson launched retaliatory strikes late on August 4. In a televised address explaining the airstrikes, he averred a desire for “no wider war.” With perfunctory debate and little opposition, Congress passed a resolution at Johnson’s request on August 7, 1964, giving the president authority “to take all necessary measures to repel any armed attack against the forces of the United States and to prevent further aggression.”^[xi] Johnson was delighted, explaining that the resolution “was like Grandma’s nightshirt. It covers everything,” and he would later remark that it meant “the sky’s the limit” on Vietnam.^[xii] This resolution would serve as the basis for Johnson’s escalation of and open-ended commitment to the Vietnam War.

The August 5 airstrikes earned widespread approval and Johnson subsequently achieved an overwhelming victory in the election of 1964, yet he still chose to escalate and Americanize the Vietnam War in 1965. Many historians and Johnson loyalists present the Vietnam War as a quagmire from which Johnson could not extricate himself, a situation created by previous presidents and maintained by right-wing anti-communist zealots who would crucify Johnson for displaying any weakness in Southeast Asia.^[xiii] This ignores the fact that escalation before the Gulf of Tonkin incidents was unpopular, that the supposed historical precedent of Harry Truman being punished for “losing” China is erroneous – Johnson surely recognized that Truman lost to Eisenhower in 1952 largely due to the Korean War, an undeclared war to defend the “free” half of a bifurcated country from communist forces – and that polls showing support for Johnson’s policies likely reflected a rally-to-the-flag impulse on the part of the American public rather than an explicit commitment to the war.^[xiv] In the glow of electoral triumph, Johnson decided not to withdraw from the worsening situation in Vietnam, but to instead deliberately mislead Congress and the American people and to commit the country to a widening conflict of dubious legality.

South Vietnam was on the verge of collapse in the fall of 1964, and Johnson was forced to wait until a semblance of stability emerged before he could begin the bombing campaign that by November had become the consensus next step for pressuring North Vietnam. With a new military junta in power and an attack on an American airbase at Pleiku in February 1965, Johnson authorized a series of airstrikes. After another attack on American troops, he launched a gradually escalating bombing campaign known as Rolling Thunder. As predicted by a number of outside observers, the bombing only spurred the North Vietnamese to commit more resources and regular troops to the war in the South.^[xv]

Rolling Thunder naturally paved the way for the introduction of more American troops to defend the air bases used in the campaign. Two battalions of Marines splashed ashore in March; the following month Johnson chose to allow offensive operations within fifty miles of American air bases. Although a temporary halt to the bombing came in May, Johnson was not serious about negotiation and reluctantly called the halt only to defuse mounting domestic criticism. In the same month, he asked Congress for an appropriation of $700 million for military operations in Vietnam, signaling that he would view its passage as an endorsement of his policy. Fearful of being accused of not supporting American troops under fire, Congress dutifully obliged. In late July 1965, Johnson approved the immediate commitment of 50,000 troops with the private agreement to deploy 50,000 more by the end of the year. He approved 100,000 more troops for deployment in 1966.^[xvi]

The United States was now involved in an open-ended but simultaneously limited war. The White House maintained tight controls over bombing targets in North Vietnam, refusing to strike the North’s industrial base or to mine its harbors, and did little to rally the support of either Congress or the American people for victory. Neither would the reserves be called. Instead, Johnson dissembled, admitting publicly only to a deployment of 50,000 troops in 1965 and announcing the decision as a routine item at a noon press conference on July 28. The war would escalate with scant acknowledgment so as not to distract Congress from Johnson’s domestic policy initiatives or risk too much domestic criticism. Without discussing his choices or aims with the country, Johnson committed American forces to major ground combat operations with military victory a secondary concern.^[xvii] At no time did Johnson either seek or desire a declaration of war. Neither did Congress attempt to reclaim its constitutional war-making powers. Between 1965 and 1968, 36,540 Americans and several hundred-thousand Vietnamese would die in the growing conflict.^[xviii]

Why did Johnson choose to escalate a war for a country that neither he nor his advisors considered vital to American interests, and that many in the government quietly believed we could not win? Historian Fredrik Logevall argues that Johnson stubbornly escalated America’s war in Vietnam due to personal reasons. “I will not lose in Vietnam,” Johnson said in November 1963, revealing a preoccupation with his presidential legacy from the beginning of the ambitious politician’s tenure in office. Johnson apologists point to another, supposedly redeeming reason: the connection between the war and Johnson’s so-called Great Society programs. Johnson certainly saw the war as a means to mute conservative critics of his beloved social welfare projects, but a more literal parallel between the Great Society and U.S. intervention in Vietnam also existed. Johnson’s own words reveal this connection in his thinking. In April 1965, as he neared the decision to commit large numbers of U.S. combat troops, Johnson famously spoke at Johns Hopkins University of a billion-dollar campaign of cooperative development for both Vietnams, musing that “The vast Mekong River can provide food and water and power on a scale to dwarf even our own TVA.”^[xix] Nine months later he spoke with civil rights leader Roy Wilkins of his ambitions for overseas development projects:

“I am going to start this year or try as best I can to commence it [Head Start] in the African countries and Latin American countries and Asian countries… . I am going to take some of my AID money and start Headstart Programs in these countries and have the children come in and get examined physically then have a health program where they will all get inoculated for cholera and things of that kind. Then I am going to have them learn how to read and write instead of all these Ph.D.’s coming to exchange under the Fulbright program.”^[xx]

Johnson had a nearly limitless view of the United States government’s power for good. In foreign policy this translated to interventionism, most notably in Vietnam but also in an invasion and occupation of the Dominican Republic in 1965 at the same time that he was escalating U.S. involvement in Southeast Asia. In domestic matters, Johnson was the driving force behind a host of new laws and a massively enlarged welfare and regulatory state. More than any president since Franklin D. Roosevelt, Johnson transformed the federal government, taking it far from any basis in constitutionally enumerated powers and placing it squarely in the midst of Americans’ everyday lives. The anxiety that greeted Donald Trump’s election in 2016 is difficult to imagine without the enactment of numerous laws and regulations building on Johnson’s vision of the central government as an intermediary between consumers and producers, employers and employees, and society and the individual.

In his famous “Great Society” speech that lent a name to Johnson’s ambitious program for an activist central government, Johnson derided “unbridled growth,” calling instead for “a society where progress is the servant of our needs.” In Johnson’s mind, private institutions had manifestly failed to meet the needs of the American people. Johnson called for a “creative federalism” to defeat the “soulless wealth” that apparently confronted America in 1964. The result of Johnson’s Great Society program has of course been quite different from his lofty vision. Rather than “new concepts of cooperation,” the nearly 200 pieces of legislation encompassing Johnson’s agenda have severely eroded the American federal system, making Americans more and more likely to confront policies emanating from Washington, D.C. in their everyday lives.^[xxi] Evaluated on its merits as policy, the Great Society left Americans burdened with ineffective, extraordinarily costly programs that have caused a multitude of unintended consequences and that seem to inexorably expand in their scope and penetration of American life. A few examples reveal the negative impact of Johnson’s legacy of activist government.

Massive government intervention in the healthcare industry is one of the central pillars of Johnson’s legacy of fiscal irresponsibility. Although subsidized healthcare results in greater use of health care services, it is unclear that government healthcare programs actually achieve their purported goal: improved health outcomes.^[xxii] The system is also rife with fraud, with the Government Accountability Office estimating $48 billion in improper payments in 2010.^[xxiii] Moreover, Medicare alone was responsible for 14 percent of federal spending in 2018, and Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) (two other Johnson-era legacies), and Affordable Care Act subsidies now account for more than a quarter of the annual federal budget.^[xxiv] Federal healthcare spending is untenable in its present form, with Medicare spending projected to tally approximately 6 percent of America’s gross domestic product by 2049.^[xxv]

Fiscal recklessness was evident even during Johnson’s presidency, with the $3.6 billion annual cost of the Vietnam War added to large increases in domestic spending to drive up inflation in the late 1960s. With the dollar weakened, the gold crisis of 1968 saw the United States hemorrhaging gold purchases, losing $372 million of gold on March 14 alone. Although Washington was able to pressure Great Britain to close the London gold market, Johnson’s guns and butter policies inexorably led to the collapse of the Bretton Woods system and Richard Nixon’s decision to free-float the dollar in 1971.^[xxvi] Thanks in large part to Johnson, we now live in an era of central banking on a fiat currency basis, with Wall Street reacting dramatically to every utterance of the Federal Reserve chairman.

Federal aid to education serves as a dramatic example of the unintended consequences of government interventions. The modern system of student loans and federal funding for local education began under Johnson. Since that time the federal government has added a Department of Education and student loan debt has ballooned to approximately $1.5 trillion.^[xxvii] Despite increasing constant-dollar annual spending on elementary and secondary education from $13.5 billion in 1965 to $80.1 billion in 2014, American students’ test scores remain flat.^[xxviii] Federal funding for higher education has simultaneously increased the cost of college, devalued college degrees, and served as a tremendously wasteful means of credentialing employees for the corporate world. Studies show that very little actual learning takes place in colleges, yet these programs have only led to growing demands for “free” college.^[xxix]

            Head Start and the Appalachian Regional Commission (ARC) typify the many wasteful and ineffective zombie programs begun under Johnson. Studies have repeatedly shown that Head Start has no appreciable positive impact on early childhood learning – a 2010 study actually demonstrated a negative impact on kindergarten math skills – yet the program continues at a cost of $166 billion over the past forty-five years.^[xxx] With federal early childhood programs normalized over several decades, universal pre-kindergarten is now a trendy proposal among politicians, despite little evidence for its efficacy. Similarly, after spending billions of dollars between 1965 and the present day, many of the counties in the ARC’s purview remain among the nation’s poorest, while others are doing quite well and might be considered for removal from the commission’s purview.^[xxxi] One might be surprised to learn that in a typical bit of grasping at federal dollars, the government’s definition of Appalachia includes counties in north Mississippi, the city of Pittsburgh and most of Pennsylvania, and the suburbs of Atlanta.^[xxxii] The ARC clearly has little to do with the region’s economic performance, whether poor or positive, and functions mostly as a fund for bureaucrats.

Johnson also had much to do with growing the now-omnipresent regulatory state. His statements at the signing of the Child Protection Act in November 1966 reveal a bizarre concept of the malignancy of consumer goods produced in a market setting and an abiding faith that government intervention was the only thing standing between Americans and disaster.

“It will ban the sale or use of toys and other children’s articles that contain dangerous or deadly substances. It will ban the sale of other household articles so hazardous that even labels cannot make them safe. Now there is a law that says the eyes of a doll will not be poisonous beans. Now there is a law that says what looks like candy will not be deadly firecracker balls. Now there is a law that says Johnny will not die because his toy truck was painted with a poison. Both these laws offer sweeping new protection to the American family.”^[xxxiii]

Though many Americans likely assume that killer toys were a real problem prior to federal legislation – why else would we have such a law? – Good Housekeeping Magazine declared the year prior to federal action that “the great majority of toys today are safe when used properly.”^[xxxiv] Nonetheless, the federal government came to the rescue. Regulatory creep throughout the entire range of American economic activity continues apace, subject somewhat to the whims of the occupant of the White House at a given time.

It is clear that most of Johnson’s major initiatives such as the War on Poverty failed or have had damaging consequences. Perhaps more importantly than their failure as matters of policy, Johnson’s expansion of federal spending and oversight helped to dramatically upset the balance between local, state, and federal governments. With huge amounts of state and local funding drawn from Washington and state legislatures rendered largely irrelevant on major issues, national politics have become central to very local and even personal matters. This state of affairs is completely antithetical to the nation’s founding vision of individual liberty, local governance, and federalism.

LBJ opened the door for a host of issues that have only grown in magnitude over time. At one point during the Vietnam War, Robert McNamara declared, “The greatest contribution Vietnam is making is developing an ability in the United States to fight a limited war … without arousing the public ire.” This was necessary “since this is the kind of war we’ll likely be facing for [the] next fifty years.”^[xxxv] McNamara’s vision was derailed by the anti-war movement of the 1960s and 1970s, but must appear familiar to Americans in 2019. Vietnam has now been surpassed by the conflict in Afghanistan as America’s longest war. American troops remain committed to a variety of conflicts around the globe that the nation has no intention of winning, yet cannot seem to disengage from, while the public and Congress dutifully supports the troops but demands neither victory nor withdrawal. The real lessons of Vietnam remain unlearned.

The welfare and regulatory states are similarly woven into the fabric of twenty-first century American life. In 2019, United States senators feel free to demand that federal agencies investigate the dangers of beach umbrellas, while the current Republican administration vows to defend Medicare in its current form against the Democrats’ expansive government-based healthcare proposals.^[xxxvi] The nation’s $21 trillion-plus debt is hardly a topic of political discussion, while nearly all candidates promise new spending on ambitious projects.

The unfortunate truth about Lyndon Johnson is that his presidency was unique in the past half-century more for the scope of his policies than for the substance of his actions. The modern imperial presidency enabled Johnson’s hubris and ruthless ambition to the detriment of the United States. Vast power remains ensconced in the presidency, and Congress prefers that it stay there. In this sense, Johnson was the logical outcome of the system of national governance that emerged over the first half of the twentieth century. Yet with the great power of the modern Oval Office comes greater presidential responsibility. Good intentions do not absolve the powerful of policy outcomes. Lyndon Johnson’s legacy remains with us in the looming national fiscal crisis, the penetration of American everyday life by political conflict, and the thousands of names engraved on the Vietnam War Memorial.  

A column by Claire Miller in the October 3^rd, 2019, New York Times poses the question “Stay-at-Home Parents Work Hard. Should They Be Paid?”  I couldn’t even get past the headline without asking “paid by whom?”  The idea that the working parent should pay a salary to the stay-home parent seems like plugging the extension cord into itself and hoping for unlimited power.  Of course what is meant is that there should be a government payment. The column notes that both support for, and opposition to, this idea can be found from both liberals and conservatives. However, the column, which seems generally sympathetic to the idea, focuses on the recent resurgence of this idea among Democratic presidential candidates. Sadly, the main arguments offered are examples of fallacious reasoning.

Andrew Yang, for example, is quoted as explaining the concept thus: “‘The question is: What do we mean by work?’ Andrew Yang said on The Daily last month, and gave as an example his wife, who stays home with their sons. ‘I know my wife is working harder than I am, and I’m running for president. And right now, the market values her work at zero.’”

But that’s entirely incorrect. The market does not value her work at zero. We don’t know exactly what the market would value it at for the simple reason that she is not selling it in a market. She is doing the work on a voluntary basis as a way of contributing to the sort of family she has. It’s excellent that Yang appreciates her contribution and doesn’t take it for granted that she is working hard, but it doesn’t follow from that a family is a market.  Wealthy people actually pay a lot of money in order to have a maid, personal chef, nanny, chauffeur. No one pays me to mow my lawn—does that mean the market values lawnmowing at zero? Of course not. If one wanted to pay for lawnmowing services, one would quickly discover that it has a non-zero market value. 

In fairness, Yang may be referring to the fact that when the work is done voluntarily, it doesn’t have market value, so it seems like something that society doesn’t recognize the importance of.  But surely it would be odd to suggest that something isn’t regarded as important because it doesn’t have a market value. There’s no market value per se for loving relationships, but that doesn’t imply that society doesn’t recognize the importance of love.  Indeed, progressives often criticize classical liberals for thinking there are or could be “markets in everything,” yet here the objection seems to be that there should be one where there isn’t. But families aren’t markets.

Yang’s error has another dimension. Strictly speaking, “the market” doesn’t value his wife’s work, or anything else, at any rate.  Individual consumers value goods and services, and market prices reflect a rough aggregation of that.  So, the “market value” isn’t what any one person values.  It’s approximately a hundred dollars for a professional lawn service to come do my work for me, but I choose to do it myself.  That’s a hundred dollars I have to spend on other things.  I also drive myself to work rather than hiring a chauffeur.  That doesn’t mean the market value of chauffeuring is zero—it just means that, whatever the market value is, I choose not to pay it, but plenty of wealthy people do in fact have chauffeurs. 

Of course, it’s true that the less wealth you have, the fewer choices you’ll be able to make about many of these options, so if the concern is “we need to find a way to help poor people,” that’s fine, but the idea of subsidizing this particular choice isn’t it.  It’s correct that we should appreciate the work that goes into running a household, but aren’t working parents running households also?   So a stay-at-home parent doesn’t get paid to clean the house, cook, take care of the kids, etc.—but a working parent also doesn’t get paid to clean the house, cook, take care of the kids, etc.  Redistributing wealth from working parents to stay-at-home parents thus seems not to show respect for parents’ work, but in fact to show disrespect to people who have to (or even just choose to) do both kinds of work.

The Role of Legal-Institutional-Political Substructure in Promoting Trust in Currency

Urs Birchler, a famous Swiss emeritus professor of banking at the University of Zurich, recently diagnosed Bitcoin as having what he calls “the birth defect of crypto money.” Birchler considers the design of Bitcoin, which replaces trust in a central monetary policy authority with an algorithm, to be brilliant in terms of programming but rather silly from an economic point of view.

For Birchler, cryptocurrencies like Bitcoin are “entries in a ledger of nothing.” His statement echoes how many other people still feel about Bitcoin, that it is a virtual, digital thing that is neither tangible nor graspable, which is why–unlike physical, analog things–they lack a real basis of value.

Anticipating criticism of his take, Urs Birchler nods toward an oft heard objection: isn’t a paper currency like the Swiss franc just as fictitious as a digital currency like Bitcoin? He does not immediately discard the proposition that the Swiss franc is a pure collective illusion; however, Birchler points out that the Swiss currency is based on a legal, institutional, and political foundation which provides the Swiss National Bank with the public trust it needs to issue a fiat currency. In his view, paper currencies owe their value only superficially to the individual laws that make them legal tender and a medium of exchange. What is more decisive is the fact that the franc functions as a lubricant for a functioning economy, imparting a sense of public confidence which is fortified by healthy public finances and a stable political framework. While the Swiss Franc is ultimately backed by “Switzerland,” there is nothing similar backing Bitcoin and therefore it has no value, or so Birchler’s argument goes.

The Nation-State as a Fictious Mega Tribe

What undergirds Birchler’s concept of a legal-institutional-political substructure are the modern achievements of participatory democracy, the rule of law, and the market economy. These have evolved over the past two centuries, merging into a single entity: the territorial nation-state. In the early 1970s, in the wake of the devastating world wars and reconstruction, the Great Moderation ushered in a period of low volatility and reasonably stable economic cycles. The world economy seemed to be in order. And with the collapse of the Eastern bloc in 1989, it seemed to be the end of history, as the political scientist Francis Fukuyama wrote in his book of the same name from 1992.

But then came the terrorist attacks of September 11, 2001, and the financial crisis of 2008/09. The latter in particular shattered confidence in the nation-state’s core institutions. As numerous surveys show, institutional confidence has reached a low point among the general public. Nation-states are often perceived as powerless, which nurtures that sense of mistrust. In the face of this crisis of public confidence, modern nation-states have to use a series of ornate fictions to maintain the semblance of legitimacy: democracy, the rule of law, and paper currency. The largest of these illusions is the nation state itself. It functions as a symbolic but fictitious mega tribe, appealing to the intuitions and feelings that the human animal has inherited from a time when people still lived in small tribal communities, as F. A. Hayek so brilliantly showed in his works.

It is also an echo of 19^th century French economist Frédéric Bastiat who stated, “The state is that great fiction by which everyone tries to live at the expense of everyone else.” Today, Bastiat’s critical view has new validation from how national currencies contribute to that myth-making habit. In addition to direct redistribution of wealth, the costs of maintaining our fictitious national mega tribes is being redistributed into the future via the public-private monetary system: a triad of government, central banks, and commercial banks. On the basis of tax debts, i.e. government bonds, capital markets are cleverly leveraged in order to push unsustainable present obligations onto unwilling future backs.

Dependence on money creation

One essential fiction that nourishes dependency on the nation-state is to regard government securities as risk-free, which they cannot be. These sovereign bonds serve as the foundation for a financial pyramid of debt securities that encompasses everything from electronic cash holdings to marketable securities to volatile financial derivatives. Another fiction is built on top of this, that our current financial system, which has been decoupled from gold for quite a while now, can indefinitely operate in a permanent deficit. Although every financial liability is backed by a corresponding asset, neither the quality nor the liquidity of the latter is assured. If a critical mass of debt-holders ever tried to liquidate their assets and assert their claims to repayment, this fiction would suddenly be exposed as an empty promise. Dire financial and economic collapse could result.

Modern society, with its economic and political structure, is more dependent on money creation by central banks than it should be. Pumping liquidity into the system is supposed to be the last resort by which the central banks try to keep the economy growing, but it has become a first rather than last resort. In the US, the interest rate hikes announced for 2019 were not implemented; on the contrary, rates were cut once again. In addition, the Federal Reserve announced that it would stop its balance sheet contraction by September 2019 in order to pump new liquidity into the market. In Europe, the zero-interest rate trap runs even deeper. With Christine Lagarde as the head of the European Central Bank (ECB), it is the first time the position was occupied not by an economist but by a thoroughbred politician. Those responsible for her appointment may have supported her because she seems to be a suitably compliant companion on the path to more money creation.

The Swiss National Bank (SNB) has also ventured into this uncertain territory by massively expanding its balance sheet, especially in equities. Its US equity portfolio reached a new record high of CHF 91.2 billion at the end of March 2019. The reason for its numerous foreign currency purchases, of which equities account for 20 percent, is the strong Swiss franc. Doing so allows the SNB to justify the negative interest rates it has been charging on deposits of commercial banks since the end of 2014. Of course, this policy is not to the advantage of savers, but what else should the SNB do? It continues to enjoy a good reputation and behaves in an exemplary manner relative to other countries’ central banks. Nevertheless, it is being dragged along by global pressure to expand the money supply ever further. As Erasmus of Rotterdam once said: “In the land of the blind, the one-eyed man is king.” Switzerland is a one-eyed king who thinks that makes him Thor.

Who’s the Experimenter and Who’s the Experiment?

Bitcoin is often described as a grand experiment. That’s not wrong, as those who have been developing the core code for years would affirm. To be fair, however, the monetary policy interventions of the last decade should also be dubbed a profound experiment. Their medium to long-term effectiveness is disputed by mainstream economists. And new, more unusual experiments have been proposed, from proponents of “helicopter money,” the outright abolition of cash, new sovereign money, or Modern Monetary Theory (MMT). The stability of our financial system may be overrated.

As a reminder: Bitcoin was born in 2008 at the height of the financial crisis, in the midst of a vacuum of fiscal uncertainty. Cryptocurrency can be seen as the antithesis to the existing financial order and was deliberately not embedded in the existing structures nor based on their parameters and premises. It is therefore logical that it is precisely the “nothing” nature that Birchler spoke of which gives Bitcoin its value. This “nothing” means that the cryptocurrency is “not issued by central banks.” There is no central bank behind Bitcoin, and that is the very purpose of the project. Bitcoin thus creates a conscious alternative to a monetary system via central banks. It is a deliberate counterpart whose symbolic as well as real-life power should not be underestimated.

To put an even finer point on it, Bitcoin represents an attempt to take money out of the hands of the self-described central guardians planning our economy, politics, and social order. With Bitcoin, money is supposed to be like gold once again: scarce and decentralized. As such, it is meant to curb the endless appetite of politicians, functionaries, and empty business suits for power and control. The fact that these sorts of people are either mocking Bitcoin or are afraid of it is understandable, but at the same time it is quite pitiful.

Parallels to the 19th Century

One of the last periods of major social disruption - the liftoff into modernity in the 19th century - unfolded in a similar manner. In Switzerland, for example, the Gründerzeit (industrialization) , which finally ended in the Gründerkrach, was by no means received without skepticism. Swiss farmers, in particular, were unwilling to accede to this dynamic development. The Swiss agricultural landscape had long been capitalized as the country was embedded in the continental monetary economy thanks to the Gotthard Pass and the Bündner Passes. Interestingly, the Swiss Confederation had long been regarded as protoindustrialized. Why would Switzerland then need new investment banks with their odd financing practices? Which is why the Swiss farmers of the 19th century reacted with great skepticism to the newly emerging system of bank “notes.”

There are clear parallels between the creation of bank notes in the 19^th century and the founding of cryptocurrency today. The 19th century was also characterized by euphoria and excess. Just like today, it was a time when speculators and entrepreneurs could seemingly get rich overnight. Critical reactions now and then are very alike as big landowners protested against the fact that they had to pay property taxes, while factory owners had to pay relatively low corporate taxes. The same accusation is heard today, with critics saying that crypto projects operate in a legal vacuum, while traditional companies have to obey a vast array of laws and regulations.

At that time, the old feudal system, marked by large landowners controlling many small tenant farmers, was being broken up. It was replaced by the modern age of urban employer-employee relationships, but the 19^th century was also the moment when many of our most important institutions—such as companies, banks and nation-states—coalesced. Today, it is becoming obvious that we are on the threshold of another new era, a digital age in which non-central networks such as Bitcoin are likely to play a major role.

Bitcoin’s strength as an antidote to the existing financial and social system is also due to the fact that the cryptocurrency does not promote the current system’s fictions. Due to the transparent nature of a public blockchain and its game theoretically-sophisticated incentive structure, unbacked value claims are not possible. Bitcoin is based on the principle of “do not trust but verify.”

People like Professor Birchler cannot see through the nation-state’s fantasies. In their eyes Bitcoin suffers from an inherent birth defect. But to extend the metaphor, what he and others consider to be birth defects are more like ordinary childhood illnesses, things which were once possibly fatal but which have become curable in the modern world. That marks a complete contrast to our current financial order, which seems to be afflicted by a late-stage cancerous tumor.

Is the Development of Bitcoin and the Lightning Network Sustainable?

Professor Birchler also criticized how much power Bitcoin consumes as it runs the mathematical calculations necessary to validate additions to its blockchain. He is correct that Bitcoin imports scarcity from the real world by relying on energy, a finite resource. However, that power consumption is not wasteful. It makes Bitcoin secure, allowing the spread of this global, permissionless, and censorship-resistant network. The more energy consumed by the network, the higher its security and reliability. Just because the energy consumption in Bitcoin mining is currently increasing, there is no reason to believe that this will continue forever. The more Bitcoin matures, both in terms of price and user base, the more value that a single Bitcoin transaction will have. In relative terms, fewer transactions will take place but each will transfer more value, making the network more energy efficient.

People who believe that Bitcoin has reached some kind of development plateau because of excessive power consumption fail to appreciate that power generation technology is also likely to change for the better, which should make Bitcoin mining more energy efficient in the future. In this context, Bitcoin enthusiast Andreas Antonopoulos makes the pointed analogy of a doctor telling a pregnant patient, “Madam, I’m concerned about the progress of your pregnancy. At the current rate of growth, your belly will be the size of this building in just five years.”

It is also not a birth defect that Bitcoin is not yet really suitable as a means of payment for everyday business. With the basic blockchain, which prioritizes decentralization and security and is conducive to the monetary function of storing value, Bitcoin has committed itself to being modular (i.e. having a layered scaling roadmap) just as the Internet today consists of several layers. But we may not have to wait much longer for that new layer; an additional protocol called Lightning is currently being implemented based on the mainchain, i.e. the base layer within a blockchain. It enables so-called off-chain payment channels through which Bitcoin—in the form of cryptographically-secured full reserve “promissory notes”—can be exchanged as often as required and do so immediately and at lower transaction fees. The Lightning network thus creates the basis for using Bitcoin as an efficient medium of exchange.

Admittedly, since it is still a developmental network, Bitcoin is similar to a chaotic construction site; accidents are the order of the day and optimal workplace solutions have not yet been found. Nevertheless, more and more people are spending their time building out the network. Our established structures, on the other hand, look like an outdated palace. The shine of the façade has not yet fully faded and speaks of a grand past, but yawning cracks are appearing in the foundation. Likewise, in the financial realm, mistrust and suspicion are on the rise, fueling support for an alternative that makes money no longer dependent on trust in a central bank or a legal-institutional-political framework, but instead builds trust through mathematics and cryptography.

This article was first published in German with the Swiss magazine Schweizer Monat.

David Starkey explains the origins of UK Parliament so that we can understand how it differs from the U.S. government. He claims that Parliament is not too dissimilar from Congress. However, one key difference from the system in the UK and our own is the position of Prime Minister. Unlike our President, the Prime Minister is not subject to a general election for that specific position. Towards the end of the episode they also discuss what is going on with Brexit.

What is English common law? Is English government known for being too nice? What impact did the Magna Carta have on the structure of the English government? Why doesn’t the separation of powers in government work?

Further Reading:

David Starkey explains simple but infuriating reason behind Brexit impasse, written by Martina Bet

Dr. David Starkey - Uncut: Assaults on Brexit, British Identity & History, So What You’re Saying Is Show

Six Wives of Henry VIII, BBC Documentary

David Starkey’s Magna Carta

Related Content:

Magna Carta Influence in the U.S. Constitution, written by David Edwards

The Ancient Rights of Englishmen, written by David Edwards

Radical Weirdness in the English Civil Wars, podcast with Anthony Comegna and Caleb O. Brown

If you are convicted of a crime, can the police take hold of your personal property as part of your sentence? Forfeiture has resulted in many individuals losing some of their most valuable possessions. It has not helped police fight the War on Drugs and it remains one of the largest threat to personal property rights.

Mentions:

Throughout this episode Tess Terrible talked with; Tyson Timbs, Sam Gedge, Theshia Naidoo, Solicitor General Fisher, and Natalie Dowzicky.

We also included Oral Argument from Timbs v. Indiana at the Supreme Court of the United States

Image Credit: Institute for Justice

Music by Cellophane Sam

After the economic disaster of the Great Leap Forward that claimed tens of millions of lives from 1958–1962, an aging Mao Zedong launched an ambitious scheme to shore up his reputation and eliminate those he viewed as a threat to his legacy. He called this The Cultural Revolution. Trevor and Aaron ask Frank Dikötter about Mao’s legacy and how he came to power, which leads to a larger discussion about the nature of dictatorships.

Where did Mao come from? What is the history of the Communist Party of China? What happened in China during the Great Leap Forward? Why does communism lead to millions of deaths? Why do dictators hate ideology? How unfree is daily life in China?

Further Reading:

How to Be a Dictator: The Cult of Personality in the Twentieth Century, written by Frank Dikötter

Mao’s Little Red Book

The Cultural Revolution: A People’s History, 1962―1976, written by Frank Dikötter

‘The Cultural Revolution: A People’s History, 1962-1976,’ by Frank Dikotter, book review in the New York Times

Related Content:

China: The Annihilation of Human Rights, written by David Hart

Chinese Communism and the Economic Revolution, written by Leonard P. Liggio

Fifty Years after the Cultural Revolution, written by David Boaz

Matthew Feeney and Peter Van Doren interview Hal Varian about his professional experience starting with his economics column at the New York Times. They also cover other topics like the Google search engine, autonomous vehicles, and working in the age of automation. Varian even suggests that problem with autonomous vehicles is not the vehicle, but the humans that interfere with them.

Is there a market for search engines? How do people use search engines? Is Google a monopoly? Which country has the shortest workweek in the developed world? Is our labor market tightening?

Further Reading:

Sometimes the Stock Does Better Than the Investor That Buys the Stock, written by Hal R. Varian

Googlenomics: A long-read Q&A with chief economist Hal Varian, written by James Pethokoukis

Google chief economist Hal Varian says a robot isn’t after your job, written by Olivera Perkins

Hal Varian on Taking the Academic Approach to Business (Ep. 69), Conversations with Tyler

Related Content:

Will Artificial Intelligence Take Your Job?, Building Tomorrow Podcast

Does More Technology Create Unemployment?, written by A.D. Sharplin and R. H. Mabry

The Ethics of Artificial Intelligence is Best Left to Researchers, written by Ryan Khurana

Helena Rosenblatt and Daniel Klein debate the origins of liberalism. Rosenblatt believes that Klein misuses Adam Smith. However, there is no way to know how Adam Smith would have acted in today’s political climate.

What is liberalism? What is the political meaning of liberalism? How old is the idea of liberty? Was Edmund Burke thought of himself as a conservative? Is it a mistake to think that libertarians are part of the liberal tradition? At what point for example, does John Locke become called a liberal?

Further Reading:

The Lost History of Liberalism, written by Helena Rosenblatt

Liberty Between the Lines in a Statist and Modernist Age, written by Daniel Klein

The Wealth of Nations, Adam Smith

Related Content:

Was Adam Smith a Libertarian?, written by Paul Mueller

Self-Interest and Social Order in Classical Liberalism: Thomas Hobbes, written by George H. Smith

The Levelers: Libertarian Revolutionaries, written by Nicholas Elliott

It is often assumed that libertarianism depends on thinking that property rights are absolute, or on fetishizing individual liberty. But, Dan Moller argues that the foundations of libertarianism lie in widely shared, everyday moral beliefs, especially regarding restrictions on shifting our burdens onto others.

What does it mean to shift burdens? Where do rights come from? Why do some people find redistribution of wealth appealing? Why is utilitarianism self-deception? How utopian should you be in your political philosophy?

Further Reading:

Governing Least: A New England Libertarianism, written by Dan Moller

Locke and Nozick on the Justification of Property, written by Matt Zwolinski

Related Content:

A Libertarian Model of the Social Safety Net, written by David S. D’Amato

Government Money and Bureaucratic Control, written by Grant Babcock

A Libertarian Perspective on the Modern American Welfare State, written by Michael D. Tanner