Sigh, listening to the likes of Peter Schwiezer and the right wing echo chamber discuss ‘crony capitalism’, one would think that this kind of thing never happened in government before, or that other’s haven’t been complaining about it for years. I say welcome to the party, but you should realize most on the right are still largely ignorant of the true nature of the problem.

Why do I say this? Just listen to what Peter and his fellow travelers suggest as a ‘solution’ – “Throw them all out”. Really, that’s going to solve anything? Hmmm, I’m not nearly as sure that will make any difference at all. In fact, when one considers the broad sweep of how various government interventions actually work in the real world, and how individuals and institutions organize themselves to best suit their interests around these interventions, why is it reasonable to conclude that one set of office inhabitants are “the problem”? If fact, a much smarter observation might be that there is something inherent in the system, in the very nature of what government is up to in the U.S. that causes such uniformly self-serving behavior to become endemic.

I’m not at all sanguine about ‘legal corruption’ – but really, how are you folks cashing social security checks any better morally? Or collecting farm subsidies or just a subsidized student loan? You are all using political power to gain property – and using the law/state to create and protect your perquisites. There is something corrupting in its very nature about government picking winners and losers in society, taking property from one “group” of people and giving it to another “group”. Keep in mind that in actuality, there are no groups in society, nor is there even such a thing as “society” itself, only individuals who lose and gain very unevenly at the effect of these interventions.

There is an entire academic field dedicated to understanding such phenomena, it’s called “Political Economy”. This field considers the consequences of government actions via institutions, regulations and law upon individual actions. It understands, for example, that if you subsidize energy production of one type, that political forces will be drawn into action to promote or defeat it. That individuals will seek to benefit from these interventions, that those who run institutions will seek to reinforce their powers and expand their purview simply due to the individuals involved pursuing their self interest in legal and rational ways.

What it doesn’t do is demonize the individual participants in the system. In fact, once one gets realistic about how politics, regulation and self-interest intersects, it becomes readily apparent that the government cannot intervene in free markets without such behavior that the right is suddenly bemoaning from occurring. It’s axiomatic and unavoidable.

I am very pleased the right is getting worked up about this. Properly understood, this issue could actually be a strong platform to advocate for a real rollback of government, if the philosophical case is advanced properly. But instead, the right is personalizing it, focusing on one elected official or another – which is okay, as far as it goes. But the bigger issue would require right wingers to question their view of “good government” interventions such as social security or drug laws – and if you want to see abuse of power and ridiculous, un-American actions, just look at the drug war – 50% of U.S. criminal justice spending is on drug enforcment now. It is filled with government employees perpetuating their own and their institutions interests, and locking people up who never hurt a soul. Just looking at DEA property seizures should be enough to get Tea Partiers out in the streets, but that would take an actually consistent moral stand, one that I’ve yet to see emanating from them or the other denizens of right wing politics.

Unfortunately, the right isn’t willing to look hard at the basic problems in our society yet and is content to become ever more morally self-righteous. Have at it, I’m sure it feels good, but don’t for a moment think this campaign will result in better government or politics. To believe so is simply wishful thinking.

I’m amazed by the hysteria emerging from the Left on the Supreme Court decision this week, recognizing the unconstitutionality of restrictions on free speech imposed by McCain Feingold.

There are lots of problems with corporations as legal entities in our society. In my estimation, they all stem from the limited liability that a corporation enjoys, which protects owners from the consequences of corporate action. In conjunction with the agent/principal problems introduced by government created securities trading monopolies, and voila, all kinds of whacky stuff happens. This is standard Libertarian fare, the Libertarians actually have a great solution to these kinds of problems – so don’t reject us as defenders of the status quo in our crony-capitalist system. But the fundamental problems with corporations inhere to all forms of corporations, including unions and non-profits. The corporation is by no means solely a tool of the right, as so many would have you think.  A great article on Cato goes into some depth on this topic http://www.cato-at-liberty.org/2010/01/22/if-you-prick-a-corporation-does-it-not-bleed/

Here’s an excerpt:

“… we can happily declare that journalists enjoy full freedom of the press … as long as they don’t plan on using the resources of the New York Times Company or Random House or Comcast, which as mere legal fictions can be barred from using their property to circulate unpatriotic ideas. You’re free to practice your religion without interference — but if it’s an unpopular one, well, let’s hope you don’t expect to send your kids to a religious school or build a church or something, because those tend to involve incorporating. A woman’s right to choose is sacrosanct, but since  clinics and hospitals are mere corporations with no such protection, she’d better hope she knows a doctor who makes house calls. Fill in your own scenarios, it’s easy.”

This issue is really about the limits we place on government, not the status of corporations in our society and legal system. It’s a great win for free speech because is recognizes that the First Amendment to the constitution actually means something, that the federal government cannot attenuate free speech randomly. Who is doing the speaking is another legal issue.

Technorati Tags: first amendment, liber, libertarian, libertarian thought

Pew Research has come out with a fantastic report on global attitudes – they just do a fantastic job of this work. Check out this article for a summary of the findings. I quote from another article they published on the topic.

A 47-nation 2007 Pew Global Attitudes survey found that, among the seven major world regions included in the study, support for free markets was lowest in Eastern Europe and Latin America. Across the six Eastern European countries surveyed — Bulgaria, Czech Republic, Poland, Russia, Slovakia and Ukraine — a median of 56% agreed with the statement “Most people are better off in a free market economy, even though some people are rich and some are poor.”

If you dig into the data, a few things start to emerge. Not surprisingly, both age and one’s perception of how one’s own fortunes have fared under “capitalism” are big drivers. However, I think that something more pernicious is at work. First, if you look at the other drivers, you’ll see that countries with lower support for capitalism have a higher concern about crime and corruption. How can we interpret those data? I suggest that a number of countries that are supposedly “free” in eastern Europe and Latin America actually have crony capitalist systems, which in many ways more resemble the Facism of pre-WWII Italy than of say 19th century Britain or 20th century U.S. What they are really saying is that they are not secure in their property and persons, which has nothing to do with “capitalism” and has everything to do with good government. Without a certain threshold of confidence in these basics, economic liberty will always falter because property rights are fundamental to being free.

I also think there is something even more destructive going on. How much effort is being put into educating people about what it means to be free in a democratic and free market society? One of the basic assumptions (although sadly it’s losing ground in the U.S.) is that the government isn’t the generator of prosperity. It’s individuals acting in their own interests, trading with each other that through the power of comparative advantage creates more wealth for everyone (see this link for a primer on this topic ). Populations of these countries may actually believe politicians when they say that they can create prosperity with their policies, just like the dictators of old did, when in fact the best the pols can do is clear the path for free enterprise to do what it does. Would that our own leaders spoke to the American people in this way, treating us like sentient adults instead of greedy children waiting for goodies from our parent/elected officials. Sadly. classical liberalism seem to be going the way of the do-do bird. The only group that remains faithful to these ideals are the libertarians, and libertarianism has a long way to go before enough people understand it, let alone support it.

Technorati Tags: crony capitalism, libertarian economics