|
|
|
Chapter 2 - robinhood.gov (August, 2001)
"Every election is an advance auction on the sale of stolen goods." - H.L. Mencken
What do ECNs, CLECs and ESCOs have in common?96 They are all new businesses created out of thin air by deregulation. Of course the regulators don’t incorporate these new businesses in any direct way themselves. Rather, their rules have the effect of ringing a come-and-get-it dinner bell, inviting everybody and his uncle to line up for a slice of a busted monopoly’s business. The monopolists are required to give up the right to use or dispose of their property as they see fit, or to deny its use to others, thus losing all three of the options normally available to property owners. Most gallingly from their perspective, they are required to let the new competitors hook up to and use their networks, which were their main assets, indeed, their raison d’être.97 Thus, amidst all the excitement about "competition," it is important to remember that antitrust always involves the confiscation and redistribution of property. The new competitors, for their part, have a very simple and attractive business plan. It is, with Government blessing, to steal and sell the monopoly’s product to the monopoly’s customers. The rules prevent the monopolies from stopping the looting or retaliating against the looters. Of course, Government often transfers property or economic advantage from one party to another, and not just via antitrust. Patents being granted or going generic, environmental rules that bar landowners from using their own land, taxes that turn into transfer payments, etc. A complete list would run to thousands of programs and hundreds of millions of individuals and companies whose economic prospects are reshuffled by deliberate or accidental Government action. It is my goal in this final chapter to suggest a means of preventing such transfers. And I mean all such transfers. We will find that the best means of preventing any confiscations is to prevent all of them. While I can’t claim to have done anything like a thorough survey of what the effects of preventing Government from shuffling property would be, from a libertarian standpoint all the ones I have thought of so far seem pleasing. But I make no bones about it: My main goal is to prevent antitrust. If I am right that all antitrust involves property transfers, then preventing such transfers should do the trick – and do it without the Sisyphean chore of arguing over the pros and cons of each policy. I harbor no illusions. Even without the Sisyphean chore, the task appears, and probably is, impossible. Nonetheless, it seems to me that now is the time for radical suggestions. Our nation has long since left the slippery slope and is plunging headlong into a socialist abyss. And, leading superpower that we are, we are taking the rest of Western Capitalism with us. Mine is not the first, and perhaps not the best, of the radical suggestions that have been thrown at this problem. But the more I look at the others, the more they appear both harder to implement and less effective than my suggestion, even though mine is far more radical. Before looking at our suggestions, let’s see why we must find a means to simultaneously attack all interventionist takings, rather than beginning only with one, or a few, or only the weakest, or only antitrust. Why Not Go After Antitrust? Repealing the antitrust laws is the most important thing that could be done in the direction of restoring property rights. First of all, the antitrust takings are the largest. And, because the example set by antitrust lends legitimacy to all the others, its elimination would have wide-ranging indirect as well as direct benefits. Unfortunately, however, debates over repeal would only strengthen its hold. To give a one-sentence summary of the argument in Chapter 1: debates over the details of each policy, one by one, only contribute to the impression that antitrust has been thoroughly vetted and, therefore, strengthen it. Any debates over repeal would consist primarily of such arguments. There is no chance, therefore, to topple antitrust alone, because its rationale already includes the anti-antitrust side of the previous debates, which it has implicitly incorporated as "noted," and thereby rejected. In addition, as a matter of political strategy, going after only one part of Government’s fairness enterprise, such as antitrust, would expose the effort to probably fatal, though only implicit, charges of philosophical inconsistency. Fairness, after all, is a property that compels consistency by its nature. How could you be fair to some and not others without undermining the very concept? An attack on antitrust alone, therefore, would generate an implicit charge of unfairness. That the charge, being implicit, would only effect sentiment, rather than present an explicit intellectual challenge to repeal, would make it all the more devastating to any repeal effort. Because antitrust is certainly the least understood and, perhaps for that reason, the most widely supported of the interventionist rationales, the emotional backlash would be fearsome. The public would have no way of grasping the esoteric and technical case for repeal, but would understand only too well that very rich people and very large companies are the ones in favor of it. Of course those greedy bastards don’t want fairness to apply to them – you wouldn’t either if you had their money. In such an atmosphere, an attack on antitrust alone would be easily countered by demagogue-ing the "fat-cats" behind it who, without hope of reinforcements from other parties aggrieved by takings, would be left twisting in the wind. Even more frail would be efforts to effect the piecemeal repeal of antitrust, beginning with its weakest elements. Bork, for one and Crews, for another, for example, have pointed to the Robinson-Patman price discrimination statute as a good place to begin reform or repeal,98 since it causes much harm and does no good. Moreover, according to Bork, all "respectable scholarship" agrees.99 But any effort to eliminate it – whether or not such effort is successful – would certainly have a negative effect on the effort to get rid of antitrust generally. First of all, price discrimination is a paradigmatic issue for demonstrating how antitrust debates can get bogged down in emotional arguments over fairness. It’s got that ugly word – "discrimination" – to deal with, and what could be more unfair than selling the same product at different prices to different people? These problems mean that, however any debates play out, repeal advocates will need to do plenty of groveling at the feet of the fairness god to avoid the impression that they are just another special interest. It is precisely because of such requisite nods to the prevailing wisdom on antitrust’s core principles that arguments over particular aspects of it cause antitrust to become more firmly established. Keep in mind that Bork is a firm defender of antitrust’s core principles and has already contributed greatly to its strengthening by cleaning up inconsistencies around the edges. Robinson-Patman is, according to Bork, just another such inconsistency that has taken antitrust away from its original consumer welfare goal. And Crews, although he questions the consumer benefits of many of those core principles, still is looking only for weak links to attack to begin the reform process. But the problem with these approaches is that the price of repealing the weak links is an implicit promise to bow all the more obsequiously before the strong ones. Thus, any approach to repeal, whether piecemeal or en masse, if it is based on the pros and cons of each policy separately, will not only fail, but will backfire by making antitrust stronger. This is not say that continued sniping at its flaws is a bad idea. If and when some other approach shows promise, it will be beneficial to have made the case that antitrust will not be missed – indeed, that its withdrawal will cause citizens to rejoice as if freed from an occupying army. But tying any such critical analyses to a specific repeal plan will only undermine the credibility of the points of criticism, and would set back actual chances of repeal. And this is the best that can be expected, and even this would only occur if the criticisms did not include too many "denial defense" arguments designed to get clients off the hook in court (see Chapter 1, "Out of Order"). If they did, then even well-targeted sniping could hurt the cause, by once again expanding the range of opinion that can be included in the foundation of antitrust. Crews and Levy, for example, offer recent arguments that there are 10 (Crews) or 7 (Levy) reasons to reform or repeal antitrust.100 Some of the reasons are valid and well argued; Levy, for example makes the bald assertion that antitrust should go because it "debases the idea of private property." But both include some standard denial defense arguments, such as QWERTY-is-a-myth. And, because both cases are built on an apparent need to get Microsoft off the hook, one gets the feeling that all the arguments amount to special interest pleading and, therefore, have limited potential to result in direct hits on antitrust’s theoretical foundation. While these calls for repeal, as well as some others I have come across from the Public Choice or Austrian schools, are in some ways encouraging to the libertarian in me, I suspect that attaching them to any specific repeal effort could pose dangers. In short, the more components to the argument, the greater the chance that at least some element of antitrust will remain after "repeal." And the entire thing could regenerate, of course, from any single fragment. Indeed, after surviving "repeal," it would soon grow far larger and stronger than ever. Anyway, thoughts of repealing part or all of antitrust are just idle speculation. The most likely scenario is that the repeal flight would never leave the ground, but rather, like Bork’s Antitrust Paradox, lead to reforms that give it greater theoretical consistency and strength. Why Not Go After Taxes, The Deficit, Affirmative Action? The kind of resistance that would meet any effort to repeal antitrust can be expected from every effort to repeal any element of the Government Fairness Enterprise. All of them are susceptible to the appearance of special interest pleading and, thus, can be stopped cold by demagogue-ing. Some get special reputations as "third rail" situations, like Social Security, and all of them exhibit arguments between liberals defending and trying to expand them, and conservatives trying to cut them back a little. But, just as such arguments increase the acceptance of antitrust, the conflict over details only makes all these other programs stronger, too. The debate over whose Medicare prescription drug program should prevail, for example, only makes the continuance of Medicare itself more certain. The conflict over which Social Security reform to use makes it more likely that Social Security will continue. Even ending "Welfare as we know it" with "workfare," which has been a resounding success,101 has made it more, not less, likely that Welfare will continue. And the conflicts over cutting taxes, over eliminating preferences in Government contracts, or over reining in affirmative action, only make it more, not less, likely that Government will stay involved in such property allocation exercises. Since Ronald Reagan left office, conservative Republicans have caught themselves in one trap after another that has damaged their cause as their leaders have schooled the troops in how to couch cuts in liberal language. From President Bush senior’s call for a "kinder and gentler" America, through Newt Gingrich’s Class of ’94 that promised to "reform" or "save" programs with cuts, to President Bush junior’s "compassionate conservatism," not a single conservative leader has ventured to tell the truth. Their word waffles imply correctly that liberals have won the ideological war.102 The only hope for conservatives, they seem to say, is to try to rein in the Welfare State surreptitiously by sneaking in measures that may have the unrecognized effect of slowing its growth. In the process they have given the impression – again, correct – that their real agenda is to aid their supporters: Big Business, Big Oil, Big Drugs and wealthy and productive people, generally. In so doing, they have forfeited whatever claim they might have had to an ideologically pure reputation. Instead, even the wealthy have become just another interest group seeking to wangle some advantages out of the tax committees and rule-making bureaucracies. Just as both sides in an antitrust trial must assume the legitimacy of basic antitrust doctrine to gain any traction for their arguments, all political positions start from the assumption that Government should be in the business of allocating fair outcomes. Thus, the very process of conservative-versus-liberal argument causes the philosophical content of conservatism to blend indistinguishably into the general rent-seeking melee, in which disingenuous dodges are standard. Here, the name of the game is projecting images: of fairness, of caring, of knowledgeable, thoughtful, deliberative leaders balancing the competing claims and deciding what is right for us. The politician who does not accept the premise that doing good things for the people is what politicians should be doing has no chance of getting elected, and no chance of getting benefits for his constituents. Because conservatives are the ones who would be expected to reject such calculus, if rejection were justified, their failure to do so hammers home more firmly than any liberal could the assumptions behind the Welfare State. Typical of the damage from conservative calumnies was that brought about by the deficit debacle. This began when waves of recruits using Gingrich’s how-to-get-elected videotapes were swept into a House majority in 1994 based primarily on the promise to use the need to reduce the deficit as the excuse to cut programs. They didn’t put it that way, of course. The videotapes taught them how to position what they were doing as a way to save the programs. They styled the cuts as unfortunately needed ones in otherwise good and well-intentioned programs. Not a single conservative said these programs should not be funded no matter how much money we had. Not a single one said that their very existence was a violation of property and freedom. They didn’t say these things, because they would not have gotten elected if they did. But it was a Faustian bargain, making the implosion of the conservative majority inevitable from the moment it began. Even before the deficit disappeared, they were clearly fingered by the press and the people as more interested in swinging money from the poor to the rich than in saving or reforming the programs, and – like all politicians – willing to be thoroughly dishonest to achieve their ends. What could be more dishonest than taking money out of poverty programs under the guise of trying to save them? Of course, their arguments came back to haunt them, once the deficit issue turned into a surplus problem. By then, there was no more credible evidence that those programs were valuable than that even conservatives had said so. After the deficit debacle, the perennial conservative ploy of tax cuts has had a harder time, because cuts have been easier to portray as just another giveaway to the wealthy. And this concern has made it particularly difficult to consider serious marginal rate relief, much less flat tax proposals. That’s too bad, because the flat tax could go well beyond its economic effects to symbolically illustrate a point for freedom. Because it would treat all citizens equally, and would have the side effect of taking most or all of the special interest loopholes out of the code, the flat tax is consistent with the Rule of Law. And getting rid of loopholes would also jettison a great deal of the special interest pleading, lobbying and logrolling that politicians engage in. That, of course, is why it will almost certainly never pass. And, even if it did, like every other piecemeal reform, passage would be bought at the cost of conceding greater credibility to the other means by which politicians bestow favors, both through the tax code and through all the other benefit programs. The flat tax itself would almost certainly include large deductions for the first, say, $30,000 of income, and one or two traditional loopholes, like home mortgage interest. And no doubt the horse trading to get the votes for passage would include acquiescence in the maintenance or expansion of other programs favored by liberals. Worst of all, the rationales offered in support of the flat tax will steer clear of outright claims of the illegitimacy of Government taking more from one man than from another. Rather, to avoid riling the socialist levelers, the focus will be on efficiency, incentives and other more technical arguments, such as supply-side economics. This failure to straightforwardly address the differential confiscation problem will not only leave intact the egalitarian ethic, which says that Government should do something about economic inequality, but will strengthen it. Even if by some miracle a flat tax passed, sooner or later it would re-occur that one of the best ways to address inequality is through the tax code. And any success it had had in the meantime that might be attributable to efficiency or whatever would be quickly forgotten. Supply-side theories, after all, even after being largely responsible for two decades of economic boom, are more derided than defended now in public debate. That those who always called them "trickle down economics" have the upper hand now is apparent in the conservatives’ continued frantic search for ways to cut the liberals’ programs without saying explicitly that they are doing so, much less explaining why freedom requires it. Conservative evasions are proof positive that we are in a powerful positive feedback loop that is digging us deeper and deeper into a socialist grave. There is no program with enough corruption, waste and abuse that repealing it is politically possible. There is no price support inefficient enough or bureaucracy bumbling enough that a vote-seeking politician can realistically take it on. And even if he did, the result would almost certainly be another setback, both because he would lose, and because the effort to raise support for repeal of any one program would require concessions on the others that would effectively sell out any shot at attacking them. Thus, the net effect of any attempt to rein in socialism is stronger socialism. There is simply no policy or position that conservatives can realistically adopt that doesn’t dig us in deeper, no matter how much they position themselves as anti-Washington. Such grandstanding rarely has any positive effect. And, by teaching supporters to camouflage their conservatism, as Newt Gingrich and the Presidents Bush have done, conservative leaders since Reagan have blown the chance to honestly make their case. So the public debate over cutting programs inevitably leads to greater acceptance of egalitarian theory – and the programs. robinhood.gov The most important reason for this decay of freedom is that today – Constitution or no – there are no effective restraints on the power of Government. Even the most junior Senator has more patronage power than the kings of old in terms of his or her ability to reward supporters as they jointly "fight the special interests." Whether they fight for "our children," for "working families," "the family farm," "working women" or any of the thousands of other categories or causes that politicians can attach themselves to, it is now universally believed that this is what politicians are supposed to do. That is, they are supposed to do good things for us, to fight effectively for our slice of the pie. Their credentials for doing so are ostensibly moral; they are assumed to have the right egalitarian attitudes and to be courageously and fairly trying to order the Government and our environment for the greatest good. But the moral claim is phony as a three-dollar bill. These are the same morals that led to the great evils of the twentieth century, to Hitler, Stalin, Mao and Pol Pot. The view is that trampling on individual rights is OK as long as it’s for a worthy cause. But this is the road to serfdom. That we haven’t gone far enough down it yet to see where it’s heading does not mean that we are not on it, and traveling fast. The best face that can be put on our politicians’ moral claim is that they are acting like official Robin Hoods, taking from the rich to give to the poor. But where would Robin’s reputation be today if, instead of braving the rigors of a highwayman in Sherwood Forest, he lived in a lavish castle and had the Sheriff of Nottingham’s men at his disposal to simultaneously take taxes from all property owners? What if he and the Sheriff had used the proceeds primarily to bribe voters to keep themselves in power? And how would we feel if they had determined on their own how much and what types of property to take, and from whom, and where the proceeds would be most effectively spent as bribes? Even though we have not yet gone far enough down this road to see before us the clear outlines of tyranny, we are far enough along already that the U.S. Government could be thought of as the largest criminal enterprise in human history – call it "robinhood.gov." Its main activity is the ongoing confiscation of property – to the tune of trillions – and the co-opting of every individual citizen’s ability to pursue happiness. The politicians figure they are morally covered provided they take testimony from enough industrial organization experts, enough environmental scientists, enough bio-ethicists etc, to make sure it appears as if the proceeds from their confiscations are spent for the greatest good. And they further justify the ostensible morality of their ministrations by constantly parading victims before the cameras on Capitol Hill to show us how much good they are doing. Victims of this, that and the other disease; of this, that and the other privation; of this, that and the other discrimination – and on and on it goes. They do all of this under the entirely false assumption that only Government can do such good things as provide economic openings for the downtrodden, or discover cures for diseases with stem cell research. The much-noted decline of morals in America has its roots in acceptance of the theft-to-bribe model of Government, and not just because it routinely accepts theft and other violations of individual property rights. The egalitarian ethic underlying the model also requires the suspension of personal morals in service of non-discriminatory Government-defined values. Discrimination, the ability to decide with whom one associates – and with whom one refrains from associating – is the primary mechanism through which values are developed, defined, refined and enforced. It is the carrot and stick for good and bad behavior, and the mechanism underlying marriage, family, religion and all felicitous social organization. Because discrimination is the basis for the development and enforcement of morals, the entire anti-discrimination apparatus of Government is anti-morality. And there is a positive feedback loop operating here too, as every claim for "justice" leads to larger and larger counterclaims, causing the decline into the immorality of Government solutions to lead to more such declines. Just as antitrust lawyers must accept antitrust to gain relevance for their arguments, everyone at all levels of debate on all topics in America today starts by accepting the basic moral legitimacy of Government’s confiscation-to-do-good role. And doing good on Government’s terms always involves the equal, non-discriminatory distribution of the spoils of confiscation. So, if you thought you owned a building or a business, for example, and figured you would rent to or hire people you like – and refuse people you despise – think again. Government effectively owns your property, and will prevent you from exercising your basic right of discrimination with respect to it. Even if your religion tells you that homosexuality is wrong, for example, you will not be allowed to refuse to rent to or hire someone on that basis. It is difficult to overestimate the disorganizing effect that such strictures, multiplied millions upon millions of times a day in each community across the country, have on the disintegration of morals. Even if you would have agreed 99.99% of the time with the Government’s choice, the fact that it is never your choice gradually forces you to abdicate moral responsibility for making it. And the cumulative effect of all these individual abdications drags the whole society down in terms of its power to discriminate between good and evil. In the great stem cell debate leading up to President Bush’s decision on August 9, 2001, for example, the entire argument on all sides was based on the premise that Government should be spending tax money on scientific research. No one questioned the right of Government to take money from citizens and spend it on science.103 Never mind that the exercise of that role violates the basic principles of freedom and property our nation was founded on. Never mind that application of those funds offends the deepest moral beliefs of some of its citizens. Never mind that similar degrees of Government control over property, science and ethics led quickly to the horrors of Nazi Germany. The only issue today seems to be: How do we fine-tune our moral algorithms to maximize the expenditure of these public funds to do the greatest good? Given the moral morass that sole focus on that question fosters, is it any wonder that some today cannot even tell the difference between people dying in gas chambers and cells dying in test tubes?104 With such deranged moral compasses, how could we expect to resolve any of the other moral issues of the day? As long as every Government program is potentially money well spent on good intentions, the only questions, morally, revolve around how to prioritize the taking and the spending. This is the real war of all against all. And it is an essentially evil enterprise, no matter what the bio-ethicists or Government-appointed moral pundits try to tell us.105 The existence of this war, started and sustained by Government’s slice-and-dice role, is the primary fact of political life today. Even those who sense or recognize its basic illegitimacy have no choice but to suck it up – and beg for their piece of the action. In other words, we must all stop whining about the loss of freedom and our basic rights of association and moral choice, and start whining with the rest of them on behalf of our own bigger slice. Every one of us has potential claims to more based on our membership in potentially favored groups. Getting more just involves a little bit of organizing and a lot of demonstrating, donating, lobbying, logrolling and generally loud whining. No one can doubt the success at winning special treatment of the most visible groups in recent decades: working women winning legal rights to quicker jobs and promotions, and protection against sexual harassment and "hostile environments;" blacks to affirmative action in hiring, contracting and school admissions; homosexuals to special non-discriminatory treatment in housing and employment, and to greater funding for medical expenditures to cure AIDS; the disabled who have the ADA to get special facilities in every building, and Government to override the rules of the Professional Golf Association. Not to be outdone, conservatives have joined the chorus of whiners on behalf of families, entrepreneurs, science, economic progress, and soccer moms. Usually camouflaging their efforts behind phrases no one can understand and pushing them with appointees of unknown views (because that is the only way they can get confirmed), they try to roll back or prevent the worst of the confiscations. And conservatives know better than to position their claims as a repudiation of Government’s redistributionist role. Instead, they have focused on getting their own slice of the distribution by pointing out the unfairness of taking property from productive people who also have mouths to feed, kids to send to college, and charity donations to make. In other words, they too whine. Why? Because win or lose, open or hidden, the fact is that whining works. Conservatives, liberals, everybody does it. There is simply no other way to convey one’s status as a victim of the unfair allocation of society’s resources. And unless you can show that you and your groups are more of a victim than the other guys and their groups, you will get the short end of the stick. If this war were only a matter of property, it would be bad enough. But there is another dimension to it that is even more troubling. Government is not only stealing your property; it is stealing your mind. The game of whining for victim status requires you to pretend you don’t see the illegitimacy of taking property from one to give it to another, and it requires you to pretend it doesn’t bother you to have Government’s non-discrimination regime co-opt your own moral obligation to discriminate among associations. All of this pretense is at the bottom of why we are becoming not just an amoral or an immoral nation, but a nation of moral zombies. It is the same phenomenon as what people call "political correctness," but it goes way beyond the stuff of late night talk shows and Broadway plays. The fact is that you are required as a condition of playing the game, as a condition of being a relevant person in today’s world, to accept Government’s right to make moral judgements for you and to accept – or at least pretend that you don’t reject – each and every one of Government’s judgements. Most people who are good at the game get that way by internalizing these requirements. For them, which includes most people – especially the successful ones – not arguing about politically correct issues becomes second nature. But for some the hypocrisy and moral conflict just makes them crazy. How is a white construction worker, shut out of a job by affirmative action, ever going to avoid blaming blacks and feeling racial animosity as a result? And how is a black man ever going to believe that white rage at affirmative action is anything but racism? How is either of them going to accept the other’s rights, when each is schooled by the requirements of the war to think of himself as a victim of the other? Sound explosive? It is, but it gets worse. Even though each is induced to hate the other for not giving him more recognition of his victim status, neither is supposed to actually feel that hatred. If either assaults the other, he will be guilty not only of assault, but also of a hate crime, and subject to a harsher penalty. While most people would not act on any animosities they might feel, the situation is tailor made to incite those on the fringes to react violently. And it is tailor made to multiply both the number and anger of those on the fringes by politically parlaying any violence into further claims of victim status, greater amounts of retributive redistribution, and harsher hate crime penalties. Thus, Government’s anti-discrimination "ethic" induces people to hate each other, then induces them to commit acts that make hatred justified, then fans the flames further in the hate crime hearings. Before you know it, those who may have harbored a little bit of residual racism have become fanatics, those few who had been fanatics before have multiplied like rabbits, and both David Duke and Al Sharpton have political careers. All the while you are supposed to pretend that integration is your highest social goal and, if you don’t, maybe submit to some sensitivity training at work. Nonetheless, it is a fact that even the majority who are not on the violent fringes tend to adopt their side’s view of fairness (their "side" meaning their race), and to categorize people’s probable attitudes according to the color of their skin. And this race-consciousness is increasing. What? Wasn’t that kind of superficial categorization supposed to be what integration and desegregation were meant to prevent? Well, guess what? It is increasing in spite of our efforts at brainwashing people to ignore those politically incorrect attitudes that they actually have. In fact, the more we try to brainwash them to not have these attitudes, the more they seem to adopt them – and the more virulent they become. Our efforts to desegregate schools, for example, are a total washout. Not only are people re-segregating themselves, but it seems that the desegregation effort has made them more racist, not less. Researchers are finding that none, absolutely none, of Government’s efforts to promote school integration has worked. In fact it seems now that any apparent success in that direction is being reversed in a re-segregation movement that has all the planners and pundits baffled. Even though surveys show that a majority of people from each race spout the party line preference for integrating, their actions don’t show a willingness to actually do so. All five guests on a News Hour with Jim Lehrer panel discussion (8/17/01) on re-segregation decried the phenomenon and called for greater efforts to attack it by doing something about people who are "segregated by income," as Sheryl Cashin from Georgetown University put it. This is the politically correct way to explain the failure of desegregation. Because there are income differentials, the thinking goes, people won’t or can’t integrate the way the policy wants them to. Well of course people are segregated by income. That is the point of doing well in life. Everyone wants to make more money primarily so that they can move out of the old neighborhood and up to a better one. But Cashin feels that segregation by income is "destabilizing" and leads to segregation by race. Among her utopian solutions is to make sure that "every child has a shot at a world class education." Like every liberal leveler who repeats this mantra, she emphasizes the word "every," as if their chanting could bring it about. And Gary Orfield, the Harvard researcher whose re-segregation study provided the grist for the evening’s mill, argued strenuously for a renewed commitment to desegregation, with a particular focus on addressing the income inequalities that frustrate the policy. Such sentiments are to be expected from liberals, of course, but the evening’s token conservative, Ward Connerly, allowed as how he too was "terribly concerned about class inequities and income inequities." Connerly is the man known best for convincing California (where he is a member of the state university system’s Board of Regents) to drop its affirmative action admission policies. That he apparently feels he must bow to the fairness god on the income question in order to maintain credibility for his conservative view on racial preferences is disturbing, but typical. As discussed in Chapter 1, all conservatives tend to set back their own cause by going with the liberal view in other areas. Thus, even in the doubtful event that California can hang onto its anti-affirmative action policies, the net effect is to hammer home more firmly that inequalities should be addressed. The end result again is that all debate on any issue that could involve Government’s fairness role – regardless of who wins the debates – moves to more firmly establish that role. And the stronger that role gets, the more all people have to position themselves as victims. And the more they try to portray themselves as victims, the more that positioning requires them to hate those who might credibly be called their victimizers. What better way is there to prove you believe you have been victimized? The polarizing effect of Government’s fairness role, in which every word in every debate adds more fuel to the fire, is seen most clearly and chillingly in the lyrics of the songs that are attracting our youth. While the most violent and offensive of them are born on the fringes, the tendency is for everyone eventually to accept the fringe views as containing at least part-truths. It is important to realize that this is another one of those ugly positive feedback loops in operation. As long as Government is in the position of allocating outcomes, racism and other manifestations of the war of all against all will get worse and worse. There is no hope whatsoever that any bring-back-morality efforts, any censorship efforts, any pandering to the no-justice-no-peace chanters will ever produce a reduction in tensions. Nor will any adjustments to desegregation, integration or affirmative action policies. Every one of those efforts, as long as they continue to accept Government’s redistributionist role, will only cause matters to worsen. And matters are clearly bad enough already. Here are some lyrics from rapper Ice T, followed by excerpts from an op-ed about a white power concert. The primary audience, in both cases, is young men and teenage boys.
It is clearly the default assumption of our policymakers that such outrageous views require more in the way of education, sensitivity training etc., as well as paying more attention to whatever the root causes of these kids’ gripes might be. What I am suggesting is that such measures are largely responsible for the virulence of the problem we have today. Doing more of the same will only make things worse. As long as it is believed that Government will distribute "justice" (i.e., outcomes) fairly, it will be a good strategy for all groups – and for every child within each group – to fall into I-am-a-victim mode, and virulence. The only way to get these problems to recede is to remove Government from the role. While it might seem counterintuitive, not to mention frightening, to simply let race relations sort themselves out, that is the only thing that will work. On the current path it is anyone’s guess whether our society will disintegrate first or explode. Of course heightened racial tensions are not the only manifestation of the fight-for-your-slice war. Working women and gays are also becoming alienated from society precisely because of Government efforts to force everyone to include them. Here too the main method to enforce inclusion is brainwashing. This is the effect of all the anti-discrimination and harassment laws, the penalty boosters for "hate," and the sensitivity training for the recalcitrant. These measures work by marginalizing those who refuse to accept politically correct views. But in spite of such coercion to enforce inclusion, most people naturally remain resentful of the groups they are supposed to include, with the result that inclusion, like desegregation, is reversing. The traditionalists are resentful first of all because they disagree with these groups’ sexual mores and attitudes toward work and family, and secondly because they disagree with giving them special rights to enforce their inclusion. But most of all they bridle at having to reprogram their own minds to incorporate these views with which they disagree. Others, of course, might call them backward and bigoted, and perhaps they are. But the fact remains that today you are not allowed to have certain opinions. Forget the First Amendment. Forget any rights you thought you had. If you want to have a job and a career, you will be required to expunge any such thoughts from your mind lest they slip out in front of your boss or your co-workers. The speech police are out in force, as are the thought police looking for bad attitudes. While many people’s moral choices would coincide with those of Government, in a diverse, morally vibrant society it is certain that some would not. Therefore the requirement of everyone to enforce politically correct unanimity is bound to require everyone to participate in coercion. This is, in itself, immoral. It is the "gleichschaltung" of Nazi Germany, and it amounts to the usurpation by Government of every individual’s power to decide for himself what is moral. Most unconscionably, gleichschaltung forces everyone as a matter of moral obligation to participate in the coercion. In fact, though, it amounts to a direct violation of the first words of the First Amendment in the Bill of Rights: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." The religion Congress has established is that which requires the universal belief that the greatest moral good is the right of our politicians to keep themselves in power by deciding what is good for us.
Constitutional Government So bound up are our pols today in competing to do good things for us that they cannot any longer imagine that that is not what we want, or what we meant when we said, "That to secure these Rights [to ‘Life, Liberty and the Pursuit of Happiness’] Governments were instituted among Men, deriving their just Powers from the Consent of the Governed." Our rights are what the philosophers call "negative" values, which, boiled down, means that we want to be left alone to pursue our own interests, as opposed to having anyone take positive actions to help us. It has long been recognized that political consensus is far easier on negative rights like ours than on positive rights to get Government or other citizens to give us things. In fact if you think about it – which our Founders did – you can see that having positive rights is a formula for disintegration, because it eventually will be impossible to achieve consensus on who gets what and who pays for it. That is why Government in America was instituted to make sure that each citizen had rights to his own protected space, not to be unreasonably encroached upon by other citizens or Government. At least that is the way it was supposed to be, and it worked for a while. But it is incompatible with the task of protecting our original rights for politicians to be taking property from one citizen to give it to another, even if a greater good will result from the transfer. Today, of course, that’s all they do. So locked in to the do-gooder mentality are our politicians that they have long since lost any concept that their powers were to be "limited" or "enumerated," to pick the two words that nostalgic or naïve constitutionalists at the libertarian think tanks like to remind us of. How and why did we get off track? Perhaps we were led astray by the few explicit errors the Founders made in providing for Government roles that were incompatible with the Constitution’s overriding philosophy. Examples might include the Article I, Section 8 authorizations of Congress "To establish Post Offices and post Roads" and "To promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their Writings and Discoveries." Or perhaps, by positively enumerating the Bill of Rights, we diluted our general negative-value rights to life, liberty and the pursuit of happiness. The Founders were apparently worried about this, which is why they included the Ninth Amendment admonition that "The enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people." But the Ninth Amendment has clearly been ignored. The First Amendment’s right to "freedom of speech," for example, originally intended as a protection against suppression of political dissent, has been used to justify all manner of egalitarian claims to the property of others, even a right to sunbathe on a private beach in Greenwich, Connecticut. Or perhaps separation of powers was not as good an idea as the Founders thought it was. It certainly hasn’t prevented the use of the Constitution itself as a principal tool of the courts to effect the disintegration of its original values. Regardless of where the problem came from, its most frightening feature now is that many prominent figures have written eloquently and forcefully about it, but it keeps on getting worse. To see if we can understand why, let’s look at several analyses by thoughtful people, and what they would suggest as remedies. Hayek put the problem this way:
Thus, while Hayek admired democracy as the only form of Government yet devised that can accomplish the peaceful transfer of power, he warned at length of the dangers of unrestrained democracy, which is what he believed America developed in the twentieth century, in spite of its separation of powers. The Legislative and Executive branches, of course, are meant to check any abuses by each other. And, as we all learned in school, the Judicial Branch is there to iron out any disputes, and will be guided by the Constitution in doing so. It was a reasonable idea and, according to Hayek, worked for some time. But eventually, the lure of unlimited power caused any restraints that may have worked to break down, leading all three branches to be more cooperative with than restraining of each others’ abuses. The inescapable conclusion is that the separation of powers concept, or how it was set up, did not work. As remedy, Hayek offers a new Model Constitution, of which he humbly disclaims any intent to recommend that it should be used to replace the constitution of any real nation, such as the United States. Nonetheless, he sounds serious enough, and has a very detailed blueprint, right down to the terms, ages, and election methods for the proposed new Government’s officials. His model would create two separate bodies. A Legislative Assembly would determine " the rules of just conduct" that everyone has to abide by, while a Governmental Assembly would administer the necessary functions of Government according to those rules. Finally, a Constitutional Court would act as a "court of last instance" to resolve any "conflict of competence between the two assemblies [which might arise] through the questioning by one of the validity of the resolution passed by the other." I have no doubt that Hayek’s plan would be an improvement on what we have today, provided that his methods of keeping the Legislative Assembly on task would work. Nonetheless, I think he was unfortunately right that it could not serve as a realistic plan that any country could switch to. Among the difficulties in the United States would be that, although on the surface it looks something like the three-way separation between our Executive, Legislative and Judicial branches, it would in practice require a wholesale replacement of them all. This is not just an amendment. This is a whole new constitution. Even if all the details could be worked out, it is still not clear to me how the Legislative Assembly would get working on the rules of just conduct, or what the first ones would be. Which leads to my even bigger concern with Hayek’s plan: It would be difficult or impossible to gain public understanding of what the problem is, why this major structural overhaul might cure it, and what benefits we could expect and when. Without such understanding, it would be impossible to amass political support for its implementation Another clear thinker on these issues and, by no coincidence, an Austrian School adherent like Hayek, was Bruno Leoni. Hayek considered Leoni’s approach brilliant, but impractical, perhaps because he died suddenly in 1967 before he was able to fully articulate it. Nonetheless, it has to me a certain revolutionary appeal. He begins with the Golden Rule, or, more properly, the negative value version of it.
Leoni, a practicing lawyer in Italy and fluent not only in the languages but in the English, French, German and Italian legal traditions and their ancient antecedents, thought the Golden Rule could re-emerge through an effective return of the common law. This would be brought about by increasing acceptance of the notion that legislation would have to pass through a Golden Rule filter to be considered valid. Leoni believed that legislation, as opposed to the common law that everyone accepts (similar to Hayek’s rules of just conduct), was ephemeral, biased toward the ends of interest groups, and bound to violate freedom eventually. He thought people should reject legislation if it required "constraining any other people to do what they would never do without the constraint." And Leoni didn’t just mean we should reject legislation before it passed. He meant that, if it didn’t measure up, we should collectively ignore it. Leoni had his fingers crossed that when legislation conflicted with a mutual sense of just conduct between parties, those parties might simply ignore legislated law in favor of their contracts and common law treatments of property. Although he provides a few examples of earlier reversions to the common law, he would probably recognize some examples developing today in such phenomena as the sagebrush rebellions in the American West and the backlashes against affirmative action. While I think there is some hope for the reversion to common law that Leoni optimistically envisioned, I suspect the more likely scenario is that any steps in that direction will be overwhelmed by the positive feedback loop driving us in the opposite direction, i.e., toward full socialism. It seems unrealistic to expect piecemeal displeasure with various legislative measures to provide a foundation for the return of freedom in any of the countries whose constitutions or traditions were not able to keep it there in the first place. I would note, however, that both Leoni’s and Hayek’s focus on the Golden Rule110 could eventually provide a philosophical basis for a truly understandable and, therefore, politically viable plan of action. In his 1996 book, Slouching Towards Gomorrah, Robert Bork makes a clear and compelling case that the courts, and particularly the Supreme Court, are to blame for abandoning the Constitution in service of an activist liberal agenda. His is a particularly cautionary tale for anyone who might naively rely on any written words, such as in a Constitution, to provide meaningful and permanent protections for freedom, because it is clear from Bork that the courts can use those very words to undermine their own intent. He also notes that in earlier days, when the fashion was to leave the Constitution behind in service of conservative activism, Judge Learned Hand suggested repeal of the due process clauses of the Fifth and Fourteenth Amendments, since these were the passages through which activists inserted their "judicial legislation." Bork characterized Hand’s proposal as "extreme," perhaps to make his own seem a little less so. Moreover, he implies that it wouldn’t by itself work, anyway, because other means would later be discovered to accomplish activist ends, such as the equal protection clause. So, rather than impossibly chasing our tail by repealing every new phrase the courts start abusing, Bork would put political restraints on the courts, including especially the Supreme Court. Bork’s amendment would "make any federal or state court decision subject to being overturned by a majority vote of each House of Congress." While I agree with Bork’s analysis of the problem of liberal judicial activism, and I believe his proposed amendment would be beneficial in retarding it, I have two problems with it. First, getting it passed and ratified would suffer from all the problems of Hayek’s Model Constitution in terms of mustering the public understanding of and support for its purposes, and would be just as nebulous and uncertain as to if and when it would do any good with regard to those purposes. Secondly, as Bork clearly articulated in 1978 in The Antitrust Paradox, antitrust law is valid and constitutional as law. And, for all my disagreements with him on the economics of antitrust, I see no reason to doubt his legal and constitutional analysis. Therefore, I would not expect the Bork approach to solve my main problem, however much good it might do elsewhere. William Niskanen offers some intriguing insights into the nature and source of the problem. Like Bork, he sees the courts as having fumbled their role: "Judicial review has not been sufficient to prevent a massive erosion of the limits on the powers of the federal government."111 He points out that, although the Constitution did not contain any provision for resolving disputes, early on the Supreme Court stepped into the role, which Chief Justice John Marshall thought was implied in a Constitution intended to limit the powers of Government. But, in spite of having used the implied limiting function of the Constitution as their authorization for the role, the courts have limited neither the expansion of the other branches, nor their own, demonstrating that "political power rushes to fill a vacuum." Niskanen’s solution is another form of the separation of powers, in this case envisioning a means by which federal and state Governments would check each other’s abuses of power. His analysis is particularly interesting because he finds traces of his remedies in unused or poorly applied provisions already in the Constitution. The federal Government, in Niskanen’s plan, would check the states’ abuses by reasserting "its authority to protect the privileges and immunities of individuals against unjust state actions, so that the rights of individuals are not dependent on the weaker procedural guarantees of due process and equal protection." The states would check federal abuses by allowing a vote by a certain number of them to nullify an unjust action and, perhaps, by allowing states to secede. Needless to say, every aspect of Niskanen’s plan would be highly contentious and, like the other plans mentioned – with the possible exception of Leoni’s – be difficult for the public to understand and, therefore, hard to gather political support for. And, like all the others, because its effects would be distant and uncertain, it is unclear if, how and when its implementation would begin to rein in confiscation or affect the antitrust laws. The nebulous nature of the results of such plans would, in the end, make it very difficult or impossible to gather political support for them. All of the approaches mentioned recognize that the Constitution we have now has somehow failed to produce the limiting effect our Founders had in mind. And this was not a minor error: This is why they wrote it down. So all of these modern redrafters take our Founders’ separation of powers in different directions, repairing and shoring up the loopholes or omissions that kept separation from doing its job. I have no doubt that all these proposals would be improvements on what we have today. I also have no doubt that our society no longer has the energy and attention span to contemplate starting over. Largely because we have lost control of Government, the only initiatives that can get up a head of steam politically are those that have tangible and relatively immediate expected benefits, that is to say, those that are based on the presumed correctness of Government’s redistributionist role. The political questions of the day are all of the "What have you done for me lately" variety, or "What can you do for me today." Nobody has the time for philosophical discursions into the nature and structure of Government. These are the kinds of measures that only a newly forming nation would have the energy to address and implement. It is hard to imagine a country that thinks it’s got it all figured out taking on such wholesale changes, especially when they would take it in the opposite direction. Nonetheless, this is what needs to be done. The question is: Is there a more direct and easily understood way to do it? I think there may be. My approach would leave the structure we have today, but explicitly limit Government confiscation or any other reshuffling of the property or prospects of the people. I believe this is roughly what the Founders had in mind with "Pursuit of Happiness." In any case, I believe it would repair in one fell swoop all the holes in our constitutional dike that socialism is flooding through. While the proposal would have a radical effect across the board, and be opposed by many with an interest in Government, it would also be relatively easy to understand. I would hope, therefore, that it could also develop support across the board from all those interested in Liberty. Specifically, I would propose the following amendment to the Constitution:
I would suggest calling it the Rule of Law Amendment, because I believe it would have the effect of banishing all of the most arbitrary violations of that principle inherent in today’s vote-buying, rent-seeking, influence-peddling America. Alternative names might include the Equal Treatment Amendment or the No Special Rights Amendment. Wags in favor of it might call it the Anti Alphabet Soup Amendment or the Get Off My Back Amendment. Those opposed may settle on the Unfairness Amendment, since it will prohibit all Government efforts to redress inequalities or provide assistance, such as affirmative action, progressive income taxes, Welfare, Medicaid, Medicare, Social Security, public housing and public schools. It would also ban Government-blessed steel cartels, Government-set milk price supports, and Government-organized prescription drug buying cartels. It would nix the minimum wage and the Davis Bacon Act’s requirement to pay the "prevailing wage" on Government construction jobs. Trade would truly be free, because the Government would not be allowed to interfere in setting any import or export quotas, tariffs or other preferences or penalties. It would allow the taking of private property for public purposes, but only if the purpose is sufficiently general that all could be deemed to benefit, and only if the purpose could not and would not be served by private entities (since this would effectively alter the status of citizens involved with those entities). Moreover, takings for public purposes would only be allowed if the owner is sufficiently compensated so that his economic or social standing is not altered. Environmental rules that are effective takings could be enacted, but, again, only if the environmental benefit is sufficiently general, and only if the owner is sufficiently compensated so as not to alter his relative economic or social standing. The Post Office would go, as would the Patent Office. The one being a large Government monopoly, and the other being charged with doling out Government monopolies, both cause major and ongoing alterations in the economic and social standing of U.S. citizens. And both functions can readily be replaced by private entities (such as UPS or Federal Express, and the privately won network monopolies that actually have value to consumers rather than to lawyers and bureaucrats). There would be no FCC, FTC, Department of Commerce or Department of Energy, except to the degree their activities involve policing functions, such as for fraud. Ditto for the SEC, which has both a legitimate policing function and an illegitimate market design function, which regularly creates or destroys businesses and thereby has an ongoing effect on the relative economic or social standing of citizens. The Department of Justice would drop its Antitrust Division, which, like the SEC’s National Market System, has major status-altering effects on U.S. citizens, and stick to administering the courts and legitimate policing functions, such as the FBI. Similarly, the FDA would focus on making sure food and drugs are safe, a policing function, and drop worrying about whether they are effective. (All drugs now must be proven to be both "safe and effective" before they are approved.) Drug companies would be free to conduct any tests of their choosing to determine effectiveness, provided participants were informed of the nature and risks of the tests. They would also be free to market unproved drugs, provided they did not fail to inform buyers of pertinent known facts, or lack thereof, regarding the expected efficacy and/or dangers of taking the drugs. The FDA and perhaps other policing agencies, such as the FBI, would protect citizens from harm due to fraudulent claims (which is theft) or physical violence due to undisclosed but known dangers from bad food or drugs. Justice would be required to be blind; it would not be allowed to discriminate. There would be no special laws protecting particular groups of people and no hate crime laws. Laws to redress past grievances or to forcibly "level the playing field" would be banned, because they alter the status of individuals and groups. Laws that protect everyone against assault, murder, fraud, theft, impersonation or other forms of violence to person or property, being general, would not be affected by the Amendment. Note that the Rule of Law Amendment would prohibit Government policies that alter status. It would leave alone any private efforts to adopt such policies, neither discouraging nor encouraging them. This would allow the natural organization of economic and social life. Cartels would be OK, as would consumer boycotts, direct or secondary. Union organizing would be fine, as would firing union organizers. People and groups would be allowed to associate or refrain from associating with whomever they want, for any reason. Owners of buildings and businesses would be free to rent to or hire anyone they want, or refuse to do so for any reason. While they would be free to not rent to or hire women or minorities, so would corporations and consumers be free to organize groups that buy only from all-women or all-minority firms, or only from firms with affirmative action programs. They could also organize boycotts of businesses that arbitrarily discriminate. Restaurants would be free to allow or disallow anyone on their premises, and diners and businesses would be free to organize boycotts of any restaurant for any reason. There would be no Government funding of education or science, and no auctions of spectrum. There would be no Government-administered affirmative action or other preferences in hiring, promotion, admission, or contracting. Private educational or scientific institutions (and there would no longer be any other kind) would be free to adopt any preferential programs they choose. Civil rights advocates may expect setbacks from these changes. But I don’t think that is how it would turn out. In the first place, the Rule of Law Amendment would outlaw any Government discrimination, such as in policies that deny voting rights to anyone, or try to gerrymander voting districts to neutralize or disenfranchise certain groups of voters. And it would require blind administration of such Government matters as trials and penalties for crimes. Blind, that is, to race, sex, national origin, religion, sexual preference etc. – the list is infinitely long because it includes all persons. In the second place, any dispassionate observer of the application of preferential policies by Government is himself blind if he cannot see that such policies have become the chief cause today of the ugly kinds of discrimination that hold minorities back. They contribute to the presumption that minority and women applicants are less likely to be qualified for the positions they are seeking, for example, and are more likely to cause huge legal headaches if hired. Moreover, the "rainbow coalition" is splintering as the war of all against all heats up. Blacks, for example, might reasonably resent the inclusion of gays as deserving of the same preferences they get, both because most of them consider non-heterosexuals immoral, and because they know that potential employers do, too. This means that employers are likely to put them both in the same preferential pot – i.e., as preferred not-hires if they can possibly get away with it. And women must know by now that one reason they are not advancing even to the glass ceiling anymore is the danger employers face from discrimination and sexual harassment suits. Worst of all, by forcing all of these groups to compete for preferenced positions, they are all bound to become jealous, suspicious, resentful and even hateful of each other. The result is an increasing unwillingness to deal with people on merit, and a virtual requirement to see them for their surface qualities – race, sex, national origin etc. If that’s not discrimination, what is it? The bottom line is that the Rule of Law Amendment would allow the natural progress of minorities to resume, and racism – which had been on the decline until affirmative action came around – to again recede. Taxes could be raised to fund the legitimate defense, policing and other functions of Government, provided such functions are either exempt, such as defense and policing, or are sufficiently general as to be non-altering of the economic or social status of citizens. The method of taxation would also have to be general and non-altering. Income taxes would probably pass muster, as would sales or consumption taxes. Taxing different citizens at different rates, however, would not. Nor would loopholes, credits, exemptions, or other preferences for any purpose. Anyone nostalgic over the loss of all those fun and games at 1040 time can console himself with the thought that Government would cost so much less that taxes would drop drastically. The flat taxes of Steve Forbes and others have been projecting "revenue neutral" rates (i.e., rates that would raise the same amounts as the current progressive system, perhaps dynamically adjusted a little for presumed stronger growth) of 17 or 18% with an exemption for the first $30,000 or $35,000. My guess is that the Rule of Law Amendment would cut the cost of discretionary Government spending by 90% and enable a flat tax rate of 5%, even with generous defense and policing budgets, and fully covering non-discretionary items like interest on the debt. And speaking of the debt, that would quickly melt away and never come back, because the growth released by removing the dysfunctional intrusions of Government would likely raise far more revenues than imagined, even at 5% or less. State and city costs of Government – and intrusions – would come down drastically too, causing their tax rates to crash as well. In the end it may be possible to fund all levels of legitimate Government at 5% or less of our income or consumption. The transition to a Rule of Law America would take time, although some effects would be immediate. The issuing of new patents and copyrights would cease, for example, as would antitrust enforcement. In contrast, existing patents or previously arranged property distributions under the settlement terms of past enforcement actions would probably remain until scheduled expiration, if any. For most patents that would be 17 years from issuance. All obligations of the Government that have been actually or implicitly incurred, such as to all the reasonably imminent retirees expecting Social Security, including those over, say, 50 years of age, would be honored. Similarly, in the degree to which people have adjusted their financial arrangements in anticipation of current or reasonably imminent future benefits, those benefits would be paid (although it may be tricky determining how much and for how long). For Government employees who would become redundant, it would be appropriate to provide some level of transitional financial assistance, as well perhaps as job training and placement help.
|